<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year Commission File
June 30, 2000 Number 33-22264-FW
Interruption Television, Inc.
(Exact name of registrant as specified in its charter)
NEVADA 33-084010184
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification No.)
11 Ann Siang Road, Singapore 069691
(Address of principal executive offices)
011-65-327-1090
(Registrant's telephone number, including area code)
Time Financial Services, Inc.
1040 E. Katella Ave. Suite B1, Orange, California 92867
(Former Name or Former Address, if Changed Since Last Report)
Name of each exchange on which registered: N/A
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months or for such shorter period that the registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and do disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy of information statements
incorporated by reference in Part III of this Form 10KSB or any amendment to
this Form 10-KSB. [X]
The aggregate market value of the 1,590,689 shares of common stock of the
Registrant held by non-affiliates on June 30, 2000 was approximately $1,193,017.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
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 COMPANY MAY
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.
PART I
Item 1. Business
TIME FINANCIAL SERVICES, INC., which has been renamed "Interruption Television,
Inc." (the "Company") following the acquisition which took place as of July 20,
2000 (the "Acquisition") had three major income producing segments as of June
30, 2000. The information provided in this report is as of the end of the fiscal
year, June 30, 2000, and does not include the information on the Company
following the Acquisition.
Time Lending, California (TLC) is a wholly owned subsidiary located in Orange,
California. TLC is a Mortgage and Real Estate Company under Mike Pope, Broker.
He is an approved broker for Countrywide Mortgage, 1st Union, Homeside Mortgage,
North American Mortgage, World Class Mortgage and various others. TLC generates
its loan business through the marketing efforts of the Direct Mail Marketing
Division which sends out mail pieces on behalf of TLC.
In addition to mortgages, TLC buys and sells real estate for profit. The Company
currently owns six single family homes in California and Nevada. The Company
intends to buy and sell homes in its normal course of business. The Company will
purchase foreclosures, repair them and resell them at market, capturing a gain
on sales.
TLC has liquidated its joint venture agreement with Signature Marketing and has
set up its own direct mail business separate from Signature Marketing
Associates. The Company intends to continue growing this segment.
The Text Division published Wall Street Whispers a daily digest of Wall Street
Newsletters. This publication was sold to Lela Elliot of Houston, Texas on June
1, 1999 for $120,000 in the form of a note payable in monthly installments of
$5,000 per month over two years.
The competition in each segment is as always strong, yet, because of the
Company's low overhead, it is able to remain competitive in price and service.
Management with its many years of real estate and mortgage experience is able to
respond quickly to market shifts and provide excellent service in all areas.
There is no dependence on a single customer or product/service line. The Company
is dependent on the mortgage and real estate markets, which are now and look to
remain strong over the year. Interest rates always remain the biggest factor in
business volume. The Federal Reserve is slowly raising rates to head off
inflation. In an election year, rates are expected to hold steady.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's plan for the fiscal year was to find a merger partner that would
benefit shareholders by offering a growth opportunity. Many companies were
examined. One was chosen and a letter of intent was signed with Holoworld
Restaurants in September 1999. After several months of due diligence, management
decided against continuing with the merger and cancelled the letter of intent.
Subsequently, Management began negotiating with Interruption Television; a
Singapore based producer of "Extreme Sports" style television programming in
Asia. A definitive agreement was signed between Time Financial Services and
Interruption Television and the share exchange agreement (merger) completed on
July 20, 2000. As a part of that transaction, the wholly owned subsidiary, Time
Lending California was sold to Management for the purposes of creating a new
public company and distributing shares to the shareholders of Time Financial
Services, Inc. of record on July 20, 2000. At closing on July 20, 2000 the
outstanding shares of Time Financial Services, Inc. were reversed 3 to 1, and
the company changed its name to Interruption Television and the symbol changed
to ITTV. All Time Financial shares held in Time Lending, California were
cancelled.
2
<PAGE>
The remaining discussion is for Time Financial Services, Inc. prior to the
merger.
Revenues were down 55.2% or ($474,192) in for the Fiscal Year ended June 30,
2000. The Company experienced a loss of ($304,956) for this period. This loss
was a reflection of Management's emphasis on finding a merger partner, and
declining mortgage markets with the loss of the Money Store as a large buyer of
125% LTV equity loans. This cut out a large component of the direct mail
business.
The Company's cash position declined (22.5%) or $22,079 to $25,897 by year-end.
The California and Nevada real estate markets continue to be strong and will
remain so over the next two years. Management intends to sell all four remaining
properties through the next year.
A summary of these transactions is below:
<TABLE>
<CAPTION>
Property Market Assumed Equity at Common Value
Loans Market Issued
Est,Market
Lauglin, NV
-----------
<S> <C> <C> <C> <C> <C>
1. 1683 Esteban $97,000 $71,831 $25,169 8,427 $105,000
2. 1692 Esteban 97,000 65,677 31,323 10,487 100,000 Sold
3. 30 Palm Garden 100,000 83,813 16,187 5,419 110,000
Rialto, CA
----------
4. 216 E. Morgan 94,000 70,000 24,000 110,000 Sold
5. 216 Van Kovering 88,000 68,000 20,000 100,000
6. 1550 Etiwanda 75,000 58,000 17,000 95,000
</TABLE>
The Company has two full time, and three part time employees, plus three
commissioned loan officers.
3
<PAGE>
Business Plans for Fiscal 2000.
The Company plans to increase its emphasis on its direct mail segment and its
mortgage lending segment under Time Lending, California.
In the mortgage brokering segment, there is minimal fixed costs. Most of the
fixed costs are attributed to the direct mail business. The direct mail business
is basically prepaid before each mailing. There is little risk.
The mortgage segment specializes in specialty loan programs, such as loans for
homeowners who went through a bankruptcy, home improvement loans for homeowners
who recently purchased their home. This type of home loan is less rate sensitive
than traditional mortgage refinancing.
The Company business plan calls for increased marketing costs. These dollars
will be generated by sales and put back into the business to create additional
growth. Loan marketing will include increasing the number of loan officers by
20% and increasing direct mail to generate leads for them. The direct mail
marketing will be increased by focusing on home equity lenders.
Item 2. Description of Property
Time Lending (TLC) presently leases 2100 square feet in Orange, California. This
lease was signed on January 1999 and will expire December 2002.
Item 3. Legal Proceedings
None
Item 4. Submission of matters to a vote of security holders
None
4
<PAGE>
PART II
Item 5. Market for the Company's Common Stock and Related Stockholder Matters.
The common stock of the Company commenced trading in the over-the-counter market
on November 19, 1988. The following table sets forth, for the periods indicated
through the fiscal year ended June 30, 2000, the range of high and low bid
quotations for Company's stock as reported by a market-maker in the Company's
securities. The quotations, which appear below, reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not represent actual
transactions.
Quarter Ended High Bid Low Bid
September 30, 1995 $ 0.50 $ 0.38
December 31, 1995 $ 0.38 $ 0.25
March 31, 1996 $ 0.62 $ 0.25
June 30, 1996 $ 0.50 $ 0.25
September 30, 1996 $ 0.1875 $ 0.1875
December 31, 1996 $ 0.1875 $ 0.1250
March 31, 1997 $ 0.21 $ 0.0875
June 30, 1997 $ 0.10 $ 0.75
September 30, 1997 $ 1.25 $ 0.75
December 31, 1997 $ 1.25 $ 0.75
March 31, 1998 $ 1.25 $ 0.75
June 30, 1998 $ 1.25
September 30, 1998 $ 1.25 $ 0.71
December 31, 1998 $ 1.25 $ 0.75
March 31, 1999 $ 1.25 $ 0.71
June 30, 1999 $ 1.25 $ 0.71
September 30, 1999 $ 1.25 $ 0.71
December 31, 1999 $ 1.25 $ 0.75
March 31, 2000 $ 1.25 $ 0.75
June 30, 2000 $ 1.25 $ 0.75
5
<PAGE>
The Company has not paid any dividends on its common stock and the Board of
Directors of the Company presently intends to pursue a policy of retaining
earnings, if any, for use in the Company. The Company has not paid any dividends
on its common stock and the Board of Directors of the Company presently intends
to pursue a policy of retaining earnings, if any, for use in the Company's
operations and to finance expansion of the business. The declaration and payment
of dividends in the future, of which there can be no assurances, will be
determined by the Board of Directors in light of conditions then existing,
including the Company's earnings, financial conditions, capital requirements,
and other factors.
As of June 30, 2000, the Company had 170 shareholders of record, which does not
include shareholders whose shares are held in street or nominee names.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
2000 Compared to 1999
During the fiscal year ended June 30, 2000, the Company incurred $100,000 in
services of officers. In 2000, the Company incurred $238,420 in General and
Administrative expenses, and $474,192 business income from operations.
Accordingly, the reported financial information herein may not be indicative of
future operating results. For the period ended June 30, 2000 the loss from
operations was ($304,000) compared to a profit on operations for the period
ended June 30, 1999 of $140,303. This was a loss per share of ($0.19), compared
to a gain of $0.11 per share for fiscal 1999.
1999 Compared to 1998
During the fiscal year ended June 30, 1999, the Company incurred $327,986 in
general and administrative expenses and $84,000 for services contributed by
officers. In 1998, the Company incurred $312,910 in General and Administrative
expenses and $84,000 for services rendered by officers. Profit on operations in
1999 was $140,303 compared to the 1998 loss on operations of ($65,478).
6
<PAGE>
Segment Results
Time Lending California is the mortgage operation. The revenue for fiscal 2000
was $84,793 an decrease of $168,944 or 61.7% over 1999. This was primarily in
mortgage loan commissions.
Two properties were sold for a total of $210,000 that were originally purchased
for $191,000.
Time Lending's Direct Mail Marketing segment generated $350,401 in revenue to
the Company in fiscal 2000 an increase of $14,773 or 4.4% over fiscal 1999. The
total revenue for the Company for fiscal 2000 was $474,192. This is an decrease
of $584,904 or 55.2% over 1999.
Net Income
The Company lost ($304,956) in operations for 2000; the result of increased
sales in the Marketing and a significant decrease in the Mortgage segment
revenue. This compares to a profit of $140,303 for 1999. Overall expenses were
$684,148 including a decrease of $234,645 or 25.5% over 1999. Expenses did not
decline as quickly as revenues.
Item 7. Financial Statements and Supplementary Data
Please refer to pages F-1 through F5.
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosures.
There were no changes or disagreements with the Company's public accountants.
In connection with the audits of the two most recent fiscal years and any
interim period preceding resignation, no disagreements exist with practices,
financial statement disclosure, or auditing scope of procedure, which
disagreements if not resolved to the satisfaction of the former accountant would
have caused him to make reference in connection with his report to the subject
matter of he disagreement(s).
The principal accounts' reports on the financial statements for any of the past
two years contained no adverse opinion or a disclaimer of opinion nor was
qualified as to uncertainty, audit scope, or accounting principles except for
the "going concern" qualification.
7
<PAGE>
Item 9. Director and Executive Officers of Registrant
The following table sets forth the names and positions of the directors and
executive officers of the Company as of October 1, 2000:
Name Age Position Since
Danny L. McGill 39 Director July 20, 2000
President, CEO July 20, 2000
Kevin McGrath -- Director July 20, 2000
Jeffrey Lim 29 Director July 20, 2000
Secretary
Previous officers and directors of the Company, Michael F. Pope, Victoria A.
Pope and Philip C. La Puma resigned as July 20, 2000.
The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director of officer
has been previously employed is an affiliate, parent, or subsidiary of the
Company.
Business Experience
The following is a brief account of the business experience during at least the
past five years of each director and executive officer, including the principal
occupation and employment during that period, and the name and principal
business of the organization in which such occupation and employment were
carried out.
DANNY L. MCGILL -PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. McGill has
served as President, CEO and a Director of Interruption Television, Inc. (the
"Company") since July 20, 2000, when the Company acquired ITV, Inc., a Nevada
Corporation. He has served as President and a director of ITV since it was
founded in May 2000 to acquire Interruption Television Pte Ltd, a Singapore
corporation, which was formed by Mr. McGill in September 1997.
Mr. McGill obtained his BFA at London's St. Martin's School of Design. After
graduation he went to work for Flamingo Knitwear in London as head designer.
After a year he formed his own business, Robert Maxwell Menswear. From there he
returned to Asia to work for the Beijing Automation Institute where he set up
three turnkey suit manufacturing plants, all within one year. Chauvin
International, a US menswear company, then recruited him. It was there that he
created the highly successful line, B.U.M. Equipment. He spent a further six
years as Vice President of Design and Marketing for several large garment
companies including the popular line, Bugle Boy.
8
<PAGE>
Mr. McGill was instrumental in launching MTV Asia in 1991 under the Star TV
banner. He then launched Channel [V] for News Corp. and finally MTV India in
1996.
KEVIN MCGRATH - DIRECTOR. Mr. McGrath has served as a Director of Interruption
Television, Inc. since July 20, 2000. He is a Chartered Accountant who worked as
a manager for Arthur Anderson & Co. from 1984 to 1987. He was the manager of the
Hong Kong office of KPMG Peat Marwick from 1987 to 1992. From 1992 until 1999,
he served as CFO and a Partner of Global Strategy Consulting House, which
performed consulting services for a number of Fortune 500 companies. Since 1999
he has been a partner in a venture capital firm.
JEFFREY LIM - SECRETARY AND DIRECTOR. Mr. Lim has served as Secretary and
Director of Interruption Television since July 20, 2000. He has served as
Director of Business Development for Interruption Television Pte Ltd since it
was formed in 1997.
Mr. Lim studied law at King's College in London, where he graduated with honors.
Upon graduation, he returned to Singapore where he took up a position with the
Kuok Group of Companies as legal counsel, dealing primarily with corporate law
issues for Pacific Carriers Ltd, Kuok Singapore Ltd and Kuok Oils and Grains.
Expressing a desire to be more hands-on with company operations and marketing,
he was placed with Royal Ahold - Kerry, a Kuok subsidiary company, as executive
assistant to the Executive committee, which handled the acquisition of property,
set up and managed the TOPs supermarket chain. He left the Kuok Group to help
start Interruption Television Pte Ltd in 1997.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors, and greater that 10% shareholders are required to furnish the Company
with copies of all Section 16(1) filings.
The following people did not file any reports under Section 16(A) during the
most recent year:
a. Michael F. Pope President and Director
b. Philip C. La Puma Secretary and Director
c. Victoria A. Pope Director
9
<PAGE>
Item 11. Executive Compensation
The following table sets forth the summary compensation for all officers for
services during three fiscal years ended June 30, 2000.
Name & Period Annual Compensation Long Term
Principal Position Salary Bonus Options
Michael F. Pope 6/30/00 $50,000 0 0
Director 6/30/99 $48,000
President 6/30/98 $48,000
Philip C. La Puma 6/30/00 $50,000 0 0
Director 6/30/99 $48,000
Sec.-Treasurer 6/30/98 $48,000
The Company does not have any long-term incentive plans nor pension plans.
(Except for compensation of Officers who are Directors which Compensation is
listed in Summary Compensation Table of Executives)
Cash Compensation Security Grants
Name Annual Meeting Consulting Number of Number of
Retainer Fees ($) Fees/Other Shares (#) Securities
Fees($) Fees($) UnderlyingOptions/SARs
Michael F. Pope 0 0 0 3623 0
Philip C. LaPuma 0 0 0 3622 0
Victoria A. Pope 0 0 0 0 0
10
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of June 30, 2000 no officer or director was know to own or control
beneficially more than 5% of the Company's stock. The table below sets forth the
total number of shares of the Company's outstanding voting stock owned by
individuals, organizations, and officers of the Company and of all officers and
directors as a group.
Common Stock Percentage
Time Lending, California 289,201 18.1%
1040 E. Katella Ave. Suite B1
Orange, California 92867
Steve Naramore 121,365 7.6%
3910 FM 1960 W. #130
Houston, TX 77068
10th Street Inc. 75,000 4.75%
1182 N. Tustin Street
Orange, CA 92867
Joseph George, Inc. 75,000 4.75%
CorteCosco
Carlsbad, CA 92009
Common Stock.
All officers and 10,954 0.7%
Directors
Following the Acquisition in July, 2000 and as a result of the Acquisition and
the issuance of the 17,012,666 shares of the Company's Common Stock to the ITV
shareholders, and the issuance of 2,504,000 shares to several persons as
consultants' fees, following are those persons known by the Company to own 5% or
more of the Company's Voting Stock as of the date of this report:
Percent of
Number of Outstanding
Name and Address Voting Shares Voting Shares
---------------- ------------- -------------
Danny L. McGill 9,284,789 46.3%
11 Ann Siang Road
Singapore 069691
Kamal Sidhu 1,181,873 5.9%
11 Ann Siang Road
Singapore 069691
Kevin F. McGrath 1,416,441 7.1%
11 Ann Siang Road
Singapore 069691
SIS Netrepreneur 2,551,906 12.7%
4 Leng Kee Road
#02-08 SiS Building
Singapore 159088
John Michael Berman 1,560,788 7.8%
14 Caroline Terrace
London SW1 8JS
UK
All directors and officers 11,207,712 55.9%
as a group (3 persons)
There were no transactions, or series of transactions, for the fiscal year ended
June 30, 2000, nor are there any current proposed transactions, or series of the
same, to which the Company is a party, in which the amount exceeds $60,000 and
in which, to the knowledge of the Company, any director, executive officers,
nominee, five % shareholders of any member of the immediate family of the
foregoing person, have or will have a direct of indirect material interest.
11
<PAGE>
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
The following document is filed as part of this report:
Exhibits:
Financial Data Schedule
Form 8K filed July 20, 2000. RE: Interruption Television, Inc. Commission File
No.:033-22264-FW
INDEX
S-K Number
27.1 Financial Data Schedule
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements F-1 to F-11
Consolidated
Independent Auditors' Report
Balance Sheet for year ended June 30, 2000
Statement of Operations for year ended June 30, 2000
Statement of Cash Flows for year ended June 30, 2000
Statement of Stockholders' Equity for the year ended June 30, 2000
Notes to financial statements
(1) Financial Statement Schedules
12
<PAGE>
TIME FINANCIAL SERVICES, INC.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
Time Financial Services, Inc.
Orange, CA
We have audited the accompanying balance sheet of Time Financial Services, Inc.
as of June 30, 2000 and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Time Financial Services, Inc.
as of June 30, 2000, and the results of it's operations and cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/ Michael Johnson & Co., LLC
Denver, Colorado
September 6, 2000
F-1
<PAGE>
<TABLE>
TIME FINANCIAL SERVICES, INC.
BALANCE SHEET
FOR YEAR ENDED JUNE 30, 2000
<CAPTION>
ASSETS: 2000 1999
------- ---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 75,897 $ 97,976
Accounts receivable - 8,900
---------- ----------
TOTAL CURRENT ASSETS 75,897 106,876
PROPERTY AND EQUIPMENT, NET OF ACCUMULATED depreciation of
$26,931 and $24,431 at June 30, 2000
and 1999 respectively 4,989 7,489
OTHER ASSETS:
Employee advance 5,244 5,000
Deposit 110 800
Note Receivable 12,245 120,000
Property investment 296,699 491,699
---------- ----------
TOTAL OTHER ASSETS 314,298 617,499
---------- ----------
TOTAL ASSETS $ 395,184 $ 731,864
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
-------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 14,705 $ 12,649
Accrued expenses 101,795 28,825
Current portion of long-term debt 7,155 10,750
---------- ----------
TOTAL CURRENT LIABILITIES 123,655 52,224
Long-Term Debt 261,125 392,717
---------- ----------
TOTAL LIABILITIES 384,780 444,941
STOCKHOLDERS' EQUITY:
Preferred stock, no par value 100,000
Shares authorized, none outstanding at
June 30, 2000, none outstanding as of June 30, 1999 - -
Common stock, $.001 par value; 50,000,000 shares
authorized, 1,600,000 and 1,562,755
issued and outstanding at June 30, 2000
and June 30, 1999, respectively 1,600 1,562
Additional paid-in capital 591,676 573,346
Retained earnings (deficit) (582,872) (287,985)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 10,404 286,923
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 395,184 $ 731,864
========== ==========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
F-2
<PAGE>
TIME FINANCIAL SERVICES, INC.
STATEMENT OF OPERATIONS
FOR YEAR ENDED JUNE 30, 2000
2000 1999
------------ ------------
REVENUE:
Marketing income $ 350,401 $ 335,628
Product and software sales - 133,721
Loan fees 84,793 253,737
Rent Income 34,459 -
Gain on Sales of Property & Stocks 1,821 273,393
Other revenue 2,718 62,617
------------ ------------
TOTAL REVENUE 474,192 1,059,096
COSTS AND EXPENSES:
Loan officer commissions 183,358 266,125
Operating costs & Marketing expenses 262,370 324,682
General and administrative 238,420 327,986
------------ ------------
TOTAL OPERATING EXPENSES 684,148 918,793
------------ ------------
Extraordinary Loss (95,000) -
NET INCOME (LOSS) $ (304,956) $ 140,303
============ ============
BASIC (LOSS) PER SHARE $ (0.19) $ 0.11
============ ============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 1,590,689 1,265,246
============ ============
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
TIME FINANCIAL SERVICES, INC.
STATEMENT OF CASH FLOWS
FOR YEAR ENDED JUNE 30, 2000
2000 1999
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(304,956) $ 140,303
Depreciation and amortization 2,500 2,513
(INCREASE) DECREASE IN:
Accounts receivable - (8,900)
Employee advance - -
Prepaid expenses 800 (800)
Notes Receivable 107,755 (120,000)
Investment 195,000 295,000
INCREASE (DECREASE) IN:
Accounts payable (2,056) 11,537
Accrued expenses 72,970 (18,221)
---------- ----------
Net Cash Provided by (Used in) Operating Activities 72,013 301,432
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Issuance of preferred stock - (83,000)
Issuance of common stock 38 113,643
Real Estate property mortgages (94,130) (265,854)
---------- ----------
Net Cash from Financing Activities (94,092) (235,211)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (22,079) 66,221
Cash and Cash Equivalents -
Beginning of Period 97,976 31,755
---------- ----------
Cash and Cash equivalents -
End of Period $ 75,897 $ 97,976
========== ==========
SUPPLEMENTAL DISCLOSURE
CASH PAID DURING THE YEAR FOR:
Interest $ 44,073 $ 36,432
---------- ----------
Income Taxes - -
---------- ----------
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
TIME FINANCIAL SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR YEAR ENDED JUNE 30, 2000
<CAPTION>
PREFERRED STOCK COMMON STOCK Additional Retained Total
------------------- ------------------- Paid-in Earnings Stockholders'
Shares Amount Shares Amount Capital (Deficit) Equity
------ ------ ------ ------ ------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE - JUNE 30, 1996 (1) - $ - 838,327 $ 838 $ 314,560 $ 201,097 $ 516,495
Net Loss - - - - - (563,907) (563,907)
BALANCE - JUNE 30, 1997 - - 838,327 838 314,560 (362,810) (47,412)
Issuance of Stock 83 83,000 - - - - 83,000
Issuance of Stock - - 367,417 367 145,143 - 145,510
Net Loss - - - - - (55,409) (55,409)
BALANCE - JUNE 30, 1998 83 83,000 1,205,744 1,205 459,703 (418,219) 125,689
Conversion of Pref. Stock to Common Stock (83) (83,000) 202,011 202 82,798 - -
Issuance of Stock for Services - - 155,000 155 30,845 - 31,000
Net Income - - - - - 140,303 140,303
BALANCE - JUNE 30, 1999 - - 1,562,755 1,562 573,346 (277,916) 296,992
Issuance of Stock for Services - - 30,000 30 7,470 - 7,500
Issuance of Stock for Services - - 7,245 8 10,860 - 10,868
Net Loss - - - - - (304,956) (304,956)
BALANCE - JUNE 30, 2000 - - 1,600,000 $ 1,600 $ 591,676 $(582,872) $ 10,404
(1) REFLECTING 20 TO 1 REVERSE STOCK SPLIT EFFECTIVE JULY 1, 1997
The accompanying notes are an integral part of
these financial statements.
</TABLE>
F-5
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - ORGANIZATION AND PRESENTATION:
------------------------------
Market Data Corporation was incorporated in the state of Texas on March
15, 1988. Market Data Corporation, a Texas Corporation, and Renet
Financial Corporation, a California corporation, merged on March 1,
1996. During November 1996 the California Corporation was demerged and
the shares of the Corporation were distributed to the shareholders of
the Company.
The Company, at a shareholders' meeting on January 7, 1997, completed
its name change to Time Financial Service, Inc. effective July 1, 1997.
Market Data Corporation also changed its state of domicile from Texas
to Nevada by merging with Time Financial Service, Inc., a Nevada
corporation. In the articles of merger, the Board of Directors of each
company deem it advisable and generally to the welfare of each company
that the Texas Company merge with and into the Nevada Company under and
pursuant to the provisions of Section 5.07 of the Texas Business
Corporation Act and Section 78.475 of the Nevada Revised Statues and in
accordance with Section 368(a)(1)(f) of the Internal Revenue Code of
1986 as amended in order to change the domicile of the Texas Company to
the State of Nevada.
The merger was treated as a reverse acquisition for accounting purposes
with Time Financial Services, Inc. as the acquirer and Market Data
Corp. as the acquiree based upon Time Financial Services, Inc.'s then
current officers and directors assuming management control of the
resulting entity and the value and ownership interest being received by
current Time Financial Services, Inc. stockholders exceeding that
received by Market Data Corp. stockholders. The Merger, for accounting
purposes, was treated as if Time Financial Services, Inc. issued
additional capital stock to Market Data Corp. shareholders for cash.
The Nevada Company is a corporation duly organized under the laws of
the State of Nevada having been incorporated January 29, 1997, has
authorized capital stock consisting of 5,100,000 shares of which,
5,000,000 are voting shares of common stock $.001 par value. 100,000
are non-voting shares of preferred stock with no par value. This change
also includes a reverse split of the stock. For every twenty shares of
Market Data Corporation common stock the shareholder received one share
of Time Financial Services stock.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting principles.
Significant principles followed by the Company and the methods of
applying those principles, which materially affect the determination of
financial position and cash flows, are summarized below:
Description of Business
-----------------------
Time Financial Services, Inc. markets financial information systems,
software and on-line subscription financial data. The Company develops
subscription based, daily financial text products that are marketed
throughout the financial community. The company also receives mortgage
origination fees and marketing service fees.
F-6
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
-------------------------------------------------------
Revenue Recognition
-------------------
MARKETING INCOME is from a direct mail marketing joint venture project.
Time Financial Services, Inc. records its income on a cash basis as it
is received from the joint venture project.
LOAN FEES are primarily mortgaged origination fees. Revenue is recorded
at the time of mortgage closing.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid debt instruments, purchased
with an original maturity of three months or less, to be cash
equivalents.
ACCOUNTING FOR IMPAIRMENTS IN LONG-LIVED ASSETS:
------------------------------------------------
Long-lived assets and identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amounts of assets may not be recoverable. Management
periodically evaluates the carrying value and the economic useful life
of its long-lived assets based on the Company's operating performance
and the expected future undiscounted cash flows and will adjust the
carrying amount of assets which may not be recoverable.
Property and Equipment
----------------------
Property and equipment is stated at cost. The cost of ordinary
maintenance and repairs is charged to operations while renewals and
replacements are capitalized. Depreciation is computed on the
straight-line method over the following estimated useful lives:
Furniture and fixtures 5 years
Computer equipment and software 3-5 years
Demonstration equipment 5 years
Leased equipment 3 years
FEDERAL INCOME TAX:
-------------------
The Company accounts for income taxes under SFAS No. 109, which
requires the asset and liability approach to accounting for income
taxes. Under this approach, deferred income taxes are determined based
upon differences between the financial statement and tax bases of the
Company's assets and liabilities and operating loss carryforwards using
enacted tax rates in effect for the years in which the differences are
expected to reverse. Deferred tax assets are recognized if it is more
likely than not that the future tax benefit will be realized.
USE OF ESTIMATES:
-----------------
The preparation of 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 amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
F-7
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
-------------------------------------------------------
OPERATING SEGMENTS:
-------------------
In 1998, the Company adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION. This statement requires the
disclosure of certain information regarding the Company's operating
segments
FAIR VALUE OF FINANCIAL INSTRUMENTS:
------------------------------------
The Company's financial instruments include cash, cash equivalents and
notes payable. Estimates of fair value of these instruments are as
follows:
Cash and cash equivalents - The carrying amount of cash and cash
equivalents approximates fair value due to the relatively short
maturity of these instruments.
Notes payable - The carrying amount of the Company's notes payable
approximate fair value based on borrowing rates currently available to
the Company for borrowings with comparable terms and conditions.
NOTE 3 - PROPERTY AND EQUIPMENT:
-----------------------
Property and equipment consist of the following:
June 30, 2000 June 30, 1999
------------- -------------
Furniture and fixtures $ 30,270 $ 30,270
Leased equipment 1,650 1,650
--------- ---------
31,920 31,920
Less: Accumulated depreciation 26,931 24,431
--------- ---------
$ 4,989 $ 7,489
========= =========
NOTE 4 - OPERATING LEASES:
-----------------
The Company leases office space from it's joint venture partner on a
month to month basis
NOTE 5 - PROPERTY INVESTMENT:
--------------------
The real estate division acquired seven single-family rental properties
in August 1997. Three have been sold. These properties are located in
Laughlin, Nevada and Southern California.
F-8
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 6 - OPERATING SEGMENTS AND RELATED INFORMATION:
-------------------------------------------
In 1998, the Company adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION. This statement requires the
disclosure of certain information regarding the Company's operating
segments. The Company operates principally in four industry segments.
Direct mail marketing, product and software mortgage loan origination,
and other revenues, which are primarily rental income. The following
table sets forth key operating information for each business segment:
Year Ended June 30,
-------------------
2000 1999
------------ ------------
Operating Revenue
Marketing $ 350,401 $ 335,628
Product & Software Sales 2,718 133,721
Loan Fees 84,203 253,737
Other Revenue (58,130) 336,010
------------ ------------
$ 379,192 $ 1,059,096
============ ============
Operating Profit (Loss)
Marketing $ 49,184 $ 45,792
Product & Software Sales (19,543) (4,849)
Loan Fees (195,525) (32,709)
Other Revenue (139,072) 132,069
------------ ------------
$ (304,956) $ 140,303
============ ============
Identifiable Assets
Marketing $ 88,142 $ 53,281
Product & Software Sales -0- 8,900
Loan Fees 10,343 27,984
Other Revenue 296,699 641,699
----------- -----------
$ 395,184 $ 731,864
=========== ===========
F-9
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 7 - INCOME TAXES:
-------------
Significant components of the Company's deferred tax liabilities and
assets are as follows:
June 30
-------
2000 1999
---------- ----------
Deferred Tax Liability $ - $ -
========== ==========
Deferred Tax Assets
Net Operating Loss Carryforwards 582,872 287,900
Book/Tax Differences in Bases of Assets 2,513 103,000
Less Valuation Allowance (585,385) (390,900)
---------- ----------
Total Deferred Tax Assets $ - $ -
========== ==========
Net Deferred Tax Liability $ - $ -
========== ==========
As of June 30, 2000, the Company had a net operating loss carryforward for
federal income tax purposes approximately equal to the accumulated deficit
recognized for book purposes, which will be available to reduce future taxable
income. The full realization of the tax benefit associated with the carryforward
depends predominantly upon the Company's ability to generate taxable income
during the carryforward period. Because of the current uncertainty of realizing
such tax assets in the future, a valuation allowance has been recorded equal to
the amount of the net deferred tax asset, which caused the Company's effective
tax rate to differ from the statutory income tax rate. The net operating loss
carryforward, if not utilized, will begin to expire in the year 2009.
NOTE 8 - LONG-TERM DEBT:
---------------
Following is a summary of long-term debt at June 30, 2000
AMOUNT
------
7.5% Notes Payable to Chase Manhattan with monthly payments
of $521, maturity date is March 1, 2019 $ 68,732
10.125% Note Payable to First Union Mortgage Corporation with monthly
payments of $777, maturity date is April 1, 2020 80,443
7.48% Note Payable to Washington Mutual with monthly payments
of $585, maturity date is February 10, 2019 54,005
11.0% Note Payable to GMAC Mortgage with monthly payments
of $813, maturity date is October 1, 2018 65,100
---------
Total 268,280
Less Current Maturities 7,155
---------
$261,125
=========
F-10
<PAGE>
TIME FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
The following are maturities of long-term debt for each of the next
five years:
2001 7,155
2002 8,586
2003 10,303
2004 12,364
Remaining Balance 229,872
---------
Total Long-Term Debt $268,280
=========
NOTE 9 - EXTRAORDINARY LOSS:
-------------------
IN FISCAL YEAR 2000, MANAGEMENT DETERMINED THAT THE NOTE FROM LELA ELLIOT FOR
-----------------------------------------------------------------------------
PURCHASE OF THE WALL STREET WHISPERS IS UNCOLLECTIBLE IN THE AMOUNT OF $95,000.
-------------------------------------------------------------------------------
NOTE 10 - SUBSEQUENT EVENT:
-----------------
In fiscal year 2000 an agreement was reached to sell Time Financial Services,
Inc. to Interrupt TV. The original agreement was to be completed by June 30,
2000, however, the closing was not completed until July 2000. Management will
maintain the marketing and mortgage portion of the original company. The name of
Time Financial Services is to be relinquished to Interrupt TV.
F-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
10/13/00
____________________ INTERRUPTION TELEVISION, INC..
(Date) (Registrant)
/S/ Danny McGill 10/13/00
---------- -------------
Danny McGill, President & CEO (Date)
/S/ Jeffrey Lim 10/13/00
------------------ -------------
Jeffrey Lim, Chief Financial Officer (Date)
