SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000.
[ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ________________
Commission file number: 033-22264-FW
Interruption Television Inc.
(Exact name of small business as specified in its charter)
Nevada 33-0840184
--------------------- ----------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
11 Ann Siang Road
Singapore 069691
(Address of principal executive offices)
(011)-(65)-327 1090
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports) and
(2) has been subject to such filing requirements for the past 90 days.
Yes No
---- ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable dated : 26 November 2000, 557,592 shares
Transitional Small Business Disclosure Format (check one) :
Yes No
---- ----
<PAGE>
TABLE OF CONTENTS
PAGE
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PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Condensed Statements of Income (unaudited)
for the three months ended September 30, 2000 and 15 months
ended 30 June 2000 3
Consolidated Condensed Balance Sheets (unaudited)
at September 30, 2000 and June 30, 2000 4
Consolidated Condensed Statements of Cash Flows (unaudited)
for the three months ended September 30, 2000 and 15 months
ended 30 June 2000 5
Notes to Consolidated Condensed Financial Statements (unaudited)
for the three months ended September 30, 2000 and 15 months
ended 30 June 2000 6-9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 10-11
PART II -OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 12
ITEM 2 - CHANGES IN SECURITIES 12
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5 - OTHER INFORMATION 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 12
2
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INTERRUPTION TELEVISION INC
----------------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
-------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 15 MONTHS ENDED JUNE 30, 2000
(Amounts in thousands)
Three Months Ended 15 Months Ended
-------------------- --------------------
30 SEP 2000 30 JUN 2000
-------------------- --------------------
US$ SGD$ US$ SGD$
Net sales 0 0 160 278
Cost of sales 117 204 430 748
------- ------- ------- -------
Gross profit (117) (204) (270) (470)
Selling, General and
Administrative expenses 133 232 430 749
------- ------- ------- -------
Operating loss (250) (436) (700) (1,219)
Interest income 0 0 0 0
Interest expenses 0 0 0 0
------- ------- ------- -------
Loss before income tax (250) (436) (700) (1,219)
Provision for income taxes 0 0 6 10
======= ======= ======= =======
Net loss (250) (436) (694) (1,209)
======= ======= ======= =======
Translations of amounts from Singapore Dollar (SGD$) into United States Dollars
(US$) for the convenience of the reader has been made at the exchange rate
quoted by the Straits Times on September 30, 2000 of US$1.00=SGD$1.74. No
representation is made that the Singapore Dollar amounts could have been, or
could be, converted into United States Dollars at any other rate.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
INTERRUPTION TELEVISION INC
-------------------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
-------------------------------------------------
SEPTEMBER 30, 2000 AND JUNE 30, 2000
(Amounts in thousands)
<CAPTION>
September September June June
30, 2000 30, 2000 30, 2000 30, 2000
---------- ---------- ---------- ----------
US$ SGD$ US$ SGD$
<S> <C> <C> <C> <C>
ASSETS
------
Current assets
Cash and bank deposits 21 36 100 174
Accounts receivable, net 142 248 102 178
Deposits and prepayment 39 68 15 27
Due from directors 159 276 159 276
------- ------- ------- -------
Total current assets 361 628 376 655
Long Term Assets
Fixed Assets 80 139 28 49
Capitalized Production Costs 414 721 414 721
------- ------- ------- -------
Total assets 855 1,488 818 1,425
======= ======= ======= =======
LIABILITIES AND SHAREHOLDERS EQUITY
-----------------------------------
Current liabilities
Accounts payable 216 376 194 338
Accrued expenses and other payables 12 20 23 40
Due to parent company 397 691 397 691
Taxation payable 80 140 80 140
Loans from third parties (secured) 240 417 293 510
Loans from shareholders' 334 581 4 7
------- ------- ------- -------
Total current liabilities 1,279 2,225 991 1,726
------- ------- ------- -------
Total liabilities 1,279 2,225 991 1,726
------- ------- ------- -------
Shareholders' equity:
Common stock, par value SGD$1.00
authorized - 2,000,000 shares
issued and outstanding - 320 558 320 558
at September 30, 2000 and June 30, 2000
Retained earnings (744) (1,295) (493) (859)
------- ------- ------- -------
Total shareholders' equity (424) (737) (173) (301)
------- ------- ------- -------
Total liabilities and shareholders' equity 855 1,488 818 1,425
======= ======= ======= =======
</TABLE>
Translations of amounts from Singapore Dollar (SGD$) into United States Dollars
(US$) for the convenience of the reader has been made at the exchange rate
quoted by the Straits Times on September 30, 2000 of US$1.00=SGD$1.74. No
representation is made that the Singapore Dollar amounts could have been, or
could be, converted into United States Dollars at any other rate.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
INTERRUPTION TELEVISION INC
-----------------------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
-----------------------------------------------------------
SEPTEMBER 30, 2000 AND JUNE 30, 2000
(Amounts in thousands)
<CAPTION>
September September June June
30, 2000 30, 2000 30, 2000 30, 2000
---------- ---------- ---------- ----------
US$ SGD$ US$000 SGD$000
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net Income
Income from continuing operations (251) (436) (695) (1,209)
Depreciation and amortization 7 12 8 14
Deferred income taxes 0 0 (6) (10)
(Increase) decrease in assets:
Accounts receivable, net (41) (70) (24) (42)
Deposits and prepayments (23) (41) (6) (10)
Amount due from director 0 0 100 175
Increase (decrease) in liabilities:
Accounts payable 22 38 90 156
Accrued expenses and
other payables (11) (20) (33) (57)
------- ------- ------- -------
Net cash used in operating activities (297) (517) (566) (983)
Cash flows from investing activities:
Acquisition of Fixed Assets (58) (102) (12) (21)
Capitalized Production costs 0 0 (295) (514)
------- ------- ------- -------
Net cash (used in) provided by
investing activities (355) (619) (873) (1,518)
------- ------- ------- -------
Cash flows from financing activities:
Increase in share capital 0 0 321 558
Loans from third parties (53) (93) 293 510
Loan from holding company 0 0 397 691
(Decrease) increase in
due from shareholders 330 574 (37) (64)
------- ------- ------- -------
Net cash provided by
financing activities 277 481 974 1,695
------- ------- ------- -------
Net increase (decrease) in cash
and cash equivalents (78) (138) 101 176
Cash and cash equivalents,
at beginning of period 100 175 (1) (1)
------- ------- ------- -------
Cash and cash equivalents,
at end of period 22 36 100 175
======= ======= ======= =======
</TABLE>
Translations of amounts from Singapore Dollar (SGD$) into United States Dollars
(US$) for the convenience of the reader has been made at the exchange rate
quoted by the Straits Times on September 30, 2000 of US$1.00=SGD$1.74. No
representation is made that the Singapore Dollar amounts could have been, or
could be, converted into United States Dollars at any other rate.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
INTERRUPTION TELEVISION INC
------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(UNAUDITED)
-----------
(Amounts expressed in Singapore dollars unless otherwise stated)
1. Organization and principle activities
Interruption Television, Inc., a Nevada corporation has two wholly-owned
subsidiaries:Interruption Television Pte Limited, a Singapore corporation and
ITV, Inc., a Nevada corporation (collectively, "the Company"). Interruption
Television Pte Ltd. is the Company's operating subsidiary, and is principally
engaged in the conceptualisation and production of Television programs for
worldwide distribution across multiple media platforms. Additionally, the
Company drives traffic from its branded programs on traditional television
medium to multiple media platforms and seeks sponsorship opportunities for this
traffic.
2. Acquisition by Interruption Television, Inc.
On July 20, 2000, Interruption Television, Inc. (formerly "Time Financial
Services, Inc.") (the "Company") completed the acquisition of 100% of the
outstanding common stock of ITV, Inc., a Nevada corporation ("ITV"), in exchange
for 17,012,666 shares of the Company's Common Stock (approximately 85% of the
shares now outstanding).
As a result of the transaction with ITV, the issuance of the 17,012,666 shares
of the Company's Common Stock to the ITV shareholders.
3. Summary of significant accounting policies
a. Capitalised Production Costs
Capitalized Production costs comprises materials, direct labour,
sub-contractors' costs and an appropriate proportion of production overheads.
These costs are amortized over 5 years commencing from the date of commercial
production.
Any capitalized production costs that can not reasonably be recovered from
related future revenue is written-off to The profit and loss account.
b. Fixed Assets
Fixed assets are recorded at cost. Gains or losses on disposals are reflected in
current operations. Depreciation for financial reporting purposes is provided
using the straight-line method over the estimated useful lives of the assets as
follows:
Office Equipment 3-5 years
Furniture and fixtures 3-5 years
Leasehold Improvements 3-5 years
Fully depreciated assets are retained in the accounts until they are no longer
in use. Any gain or loss on disposal of fixed assets is recognised in the profit
and loss account currently.
c. Net sales
Net sales represent the income taken from contracts signed and programs that
have gone to air.
d. Income taxes
The tax expense is determined on the basis of tax effect accounting using the
liability method and it is applied to all significant timing differences which
arise from the differences in accounting and tax treatment of certain income and
expense items. A deferred tax benefit is not recognised in the accounts unless
there is a reasonable expectation of realisation
e. Operating leases
Operating leases represent those leases under which substantially all the risks
and rewards of ownership of the leased assets remain with the lessors. Rental
payments under operating leases are charged to expense on the straight-line
basis over the period of the relevant leases.
f. Foreign currency translation
Foreign currency transactions are converted at exchange rates approximating
those ruling at transaction dates. Foreign currency monetary assets as at
year-end are converted at rates of exchange approximating those ruling at that
date. Exchange differences are recognised in the profit and loss account
currently.
6
<PAGE>
g. Revenue Recognition
Income from production of programs is recognised upon initial airing of the
program on any given broadcaster.
h. Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles in Singapore requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
i. Fair value of financial instruments
The Company's financial instruments consist of cash, cash equivalents, trade
receivables, short-term borrowings, capital leases and trade payables. The book
values of these instruments are considered to be representative of their fair
values.
4. Accounts receivable
Accounts receivable comprised:
<TABLE>
<CAPTION>
As at September 30, 2000 As at June 30, 2000
$ $
<S> <C> <C>
Trade receivables 265 195
Less: Allowance for doubtful accounts 17 17
------- -------
Accounts receivable, net 248 178
5. Deposits and prepayments
Deposits and prepayments comprised:
As at September 30, 2000 As at June 30, 2000
$ $
Rental and utility deposits 68 19
Prepayments 0 0
Others 0 8
------- -------
68 27
6. Capitalised Production Costs
Capitalised Production Costs Comprised
As at September 30, 2000 As at June 30, 2000
$ $
Planet Ex 714 714
MuchMusic 0 0
Extreme Asia 7 7
------- -------
721 721
7
<PAGE>
7. Fixed Assets
Fixed Assets comprised:
As at September 30, 2000 As at June 30, 2000
$ $
Cost
Office Equipment 44 44
Furniture and Fixtures 23 23
Leasehold improvements 4 4
Computer 90 0
Less: Accumulated depreciation
Office Equipment (12) (12)
Furniture and Fixtures ( 8) ( 8)
Leasehold improvements ( 2) ( 2)
------- -------
Fixed Assets net 139 49
8. Other Creditors and Accruals
Other Creditors and Accruals comprised:
As at September 30, 2000 As at June 30, 2000
$ $
Other Creditors 0 10
Accruals 20 30
------- -------
20 40
</TABLE>
9. Income taxes
The Company is subject to Singapore tax at a rate of 25.5%
9. Share capital
AS of July 17 2000, Interruption Television Inc sold its entire shareholding to
Interruption Television, Inc. There has been no change in share capital during
the period 1st July to 30th September 2000.
10. Operating lease commitments
At balance sheet, the Company has the following outstanding lease commitments in
respect of its office premise payable as follows:-
As at September 30, 2000 As at June 30, 2000
$ $
Within one year nil 10
After one year nil nil
11. Related party transactions
a. There are no related party transactions for this period.
b. Details of amounts due from directors of the Company as of September 30, 2000
are as follows:-
As at September 30, 2000 As at June 30, 2000
$ $
Danny McGill 276 276
----- -----
The amounts due from directors are unsecured, non-interest bearing and without
pre-determined repayment terms.
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<PAGE>
c. Details of amount due to holding company as of September 30,2000 and
September 30, 1999, are as follows:
As at September 30, 2000 As at June 30, 2000
$ $
Interruption Television Inc. 691 691
The amount due to the parent company was unsecured, non-interest bearing and
without pre-determined repayment terms.
12. Segmental analysis
a. Net sales
Net sales comprised:
<TABLE>
<CAPTION>
3 Months Ended September 30, 2000 15 Months ended June 30, 2000
$'000 $'000
<S> <C> <C>
Licensing Agreements 0 278
Sponsorship Agreements 0 0
Others
------- -------
0 278
All Company sales are generated from Singapore.
b. Assets
Substantially all of the Company's assets are located in Singapore.
c. Major customers
Details of individual customers accounting for more than 5% of the Company's
sales are as follows:
3 Months Ended September 30, 2000 15 Months ended June 30, 2000
$'000 $'000
Columbia Tristar International Television NIL 191
Coca Cola 87
</TABLE>
13. Operating risks
a. Country risk
The Company's operations are conducted in Singapore. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in Singapore, and by the general
state of the Singapore economy.
14. Other supplemental information
The following items were included in the statements of operations:
<TABLE>
<CAPTION>
3-months Ended September 30,2000 15 Months Ended 30 June 2000
$'000 $'000
<S> <C> <C>
Auditor's remuneration 1 3
Depreciation of Fixed Assets 12 14
Director's Remuneration 63 70
Gain on Exchange 3 0
Gain on disposal of fixed assets 0 0
</TABLE>
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 THE 1995 ACT SHAREHOLDERS AND
PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER
ANY FORWARD - LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY
ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED HEREIN. THESE FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND
OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES
RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY.
ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG
OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE
BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE
DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT
ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE
COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD - LOOKING
STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE
INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS
CONTEMPLATED IN ANY OF THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN WILL BE
REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE IMPACT OF
WHICH MAY CAUSE THE COMPANY TO ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR
OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN
LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD - LOOKING
STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE
REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER PERSON THAT THE
OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.
Overview of Company's Business:
The Company, conceptualises, produces and distributes television
programming for worldwide distribution on various media platforms, from
traditional television broadcasters, either terrestrial or cable/satellite to
internet and broadband. The Company also uses a unique marketing system, driving
traffic from brand built television programs on traditional television mediums
and seeks sponsorship opportunities through directing this traffic. Currently,
these programs include, Kamal's Planet Ex, MuchMusic and Extreme Asia with plans
for further programming in the future. These programs are licensed to global
broadcasters including Columbia Tristar International Television. MuchMusic is
currently sponsored by Coca Cola Far Eat Ltd.
On July 20, 2000, Interruption Television, Inc. (formerly "Time Financial
Services, Inc.") (the "Company") completed the acquisition of 100% of the
outstanding common stock of ITV, Inc., a Nevada corporation ("ITV"), in
exchange for 17,012,666 shares of the Company's Common Stock (approximately
85% of the shares now outstanding).
As a result of the transaction with ITV, the issuance of the 17,012,666
shares of the Company's Common Stock to the ITV shareholders.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
Selling, general and administrative expenses totalled $232 for the three months
ended September 30, 2000. Selling, general and administrative expenses
constitute of administrative and personnel costs to support the increase in
sales and manufacturing capacity.
OPERATING LOSS. Operating loss from operations was $436 for the three months
ended September 30 2000 and this loss is caused by the continued investment in
programming.
INTEREST INCOME. Interest income was not material for the three months ended
September 30 2000 and in the three months ended June 30, 2000.
INTEREST EXPENSES. Interest expense was not material for the three months ended
September 30 2000 and in the three months ended June 30, 2000.
PROVISION FOR INCOME TAXES. There are no provisions for income taxes for the
three months ended September 30 2000 and in the fifteen months ended June 30,
2000 as the company made taxable losses in both periods.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended September 30 2000, the Company's operations absorbed
cash resources of $138. The Company's cash balance reduced by $175 to $36 at
September 30 2000.
The Company's capitalized production costs remained at $721 at September 30
2000. The Company anticipates that additional investment in connection with the
continuing expansion and improvement of programme production.
The Company's accounts payable and accrued liabilities increased by $18 to $396
at September 30 2000.
The Company anticipates that its operating cashflow, combined with cash on hand,
bank lines of credit and other external credit sources, and credit facilities
provided by affiliates or related parties, are adequate to satisfy the Company's
working capital requirements for the year ending of June 30 2001.
FOREIGN EXCHANGE. All of the Company's sales are denominated either in
U.S. Dollars or Singapore Dollars. The largest portion of the Company's expenses
are denominated in Singapore Dollars.
11
<PAGE>
PART II -OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
ITEM 2 - CHANGES IN SECURITIES
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Approval of the name change and reverse stock split of the majority shareholders
by written consent in July, 2000.
ITEM 5 - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
Form 8-K filed in August, 2000 for the event dated July 20, 2000.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Interruption Television, Inc.
(Registrant)
Date: December 6, 2000 /S/ Danny McGill
----------------------------------
Managing Director
Date: December 6, 2000 /S/ Jeffery Lim
----------------------------------
Director
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