Convenience TV 10Q 2012 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 Form 10-Q

(Mark One)

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

For the quarterly period endedDecember 31, 2011

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from___________ to ______________

Commission File Number005-86532

CONVENIENCE TV INC.
(Exact name of registrant as specified in its charter)

Nevada	30-0518293
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

248 Main Street, Venice, CA	90291
(Address of principal executive offices)	(Zip Code)

877-943-3210
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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.
[X] YES [ ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] YES [ ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[ ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange after the distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
105,647,684 common shares issued and outstanding as of February 13, 2012.

CONVENIENCE TV INC.

FORM 10-Q
December 31, 2011

INDEX

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited consolidated interim financial statements for the three and nine month periods ended December 31, 2011 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

CONVENIENCE TV INC.
(A Development Stage Company)
December 31, 2011
(Expressed in US dollars)
(unaudited)

	Index
Consolidated Balance Sheets	F–1
Consolidated Statements of Operations	F–2
Consolidated Statements of Cash Flows	F–3
Notes to the Consolidated Financial Statements	F–4

CONVENIENCE TV INC.

(A Development Stage Company)

Consolidated Balance Sheets

(Expressed in US Dollars)

	December 31,		March 31,
	2011		2011
	$		$
	(unaudited)

ASSETS
Current Assets
Cash	1,128		51,518
Due from related party (Note 6)	19,161		19,161
Total Current Assets	20,289		70,679
Property and equipment (Note 3)	4,562		37,140
Deferred financing costs (Note 4(e))	2,867		3,472
Total Assets	27,718		111,291

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable	23,378		3,324
Accrued liabilities	12,356		2,155
Convertible debt, less unamortized discount of $60,812 (Note 4)	62,188		63,065
Derivative liabilities (Note 5)	133,148		–
Total Liabilities	231,070		68,544

Going Concern (Note 1)
Subsequent Events (Note 10)

Stockholders’ Equity (Deficit)
Preferred Stock Authorized: 100,000,000 preferred shares, $0.00001 par value Issued and outstanding: no shares	–		–
Common Stock Authorized: 600,000,000 common shares, $0.00001 par value Issued and outstanding: 97,769,272 shares (March 31, 2011 - 56,070,000)	979		561
Additional paid-in capital	1,061,629		788,025
Deficit accumulated during the development stage	(1,265,960	)	(745,839	)
Total Stockholders' Equity (Deficit)	(203,352	)	42,747
Total Liabilities and Stockholders' Equity (Deficit)	27,718		111,291

(The accompanying notes are an integral part of these consolidated financial statements)

F-1

CONVENIENCE TV INC.

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed in US Dollars)

(unaudited)

									Accumulated
									from March 31,
	Three Months		Three Months		Nine months		Nine months		2008 (date of
	Ended		Ended		Ended		Ended		inception) to
	December 31,		December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010		2011
	$		$		$		$		$

Revenue	–		–		6,628		–		20,954

Expenses
Amortization	10,282		13,090		32,578		39,131		151,254
Consulting fees	22,098		2,500		28,098		13,800		41,298
Content services	–		–		–		–		6,470
Foreign exchange loss (gain)	384		95		309		(2,705	)	17,359
Investor relations	–		4,140		–		94,140		112,840
Management fees (Note 6)	4,500		30,000		34,500		80,000		270,805
Network management	3,962		17,510		34,000		75,083		178,245
Office and general	328		2,972		2,964		7,071		17,760
Professional fees	11,368		11,931		41,777		49,937		90,590
Transfer agent and filing fees	2,964		6,276		12,958		12,798		21,746
Travel and promotion	40		63		220		63		24,331
Total Operating Expenses	55,926		88,577		187,404		369,318		932,698
Loss from Operations	(55,926	)	(88,577	)	(180,776	)	(369,318	)	(911,744	)
Other Income (Expense)
Accretion of discounts on convertible debt	(15,002	)	(1,446	)	(98,628	)	(1,446	)	(109,316	)
Amortization of deferred financing costs	(1,704	)	–		(5,605	)	–		(7,633	)
Interest expense	(2,965	)	(362	)	(7,045	)	(362	)	(9,200	)
Gain (loss) on change in fair value of derivative liabilities	335,058		–		(193,196	)	–		(193,196	)
Loss on extinguishment of debt	(34,871	)	–		(34,871	)	–		(34,871	)
Total Other Income (Expense)	280,516		(1,808	)	(339,345	)	(1,808	)	(354,216	)
Net Income (Loss) for the Period	224,590		(90,385	)	(520,121	)	(371,126	)	(1,265,960	)

Net Earnings (Loss) Per Share, Basic and Diluted	–		–		(0.01	)	(0.01	)

Weighted Average Shares Outstanding	82,270,000		56,070,000		66,569,000		52,857,000

(The accompanying notes are an integral part of these consolidated financial statements)

F-2

CONVENIENCE TV INC.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US Dollars)

(unaudited)

					Accumulated from
	Nine months		Nine months		March 31, 2008
	Ended		Ended		(date of inception) to
	December 31,		December 31,		December 31,
	2011		2010		2011
	$		$		$

Operating Activities
Net loss	(520,121	)	(371,126	)	(1,265,960	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discounts on convertible debt	98,628		1,446		109,316
Amortization of property and equipment	32,578		39,131		151,254
Amortization of deferred financing costs	5,605		–		7,633
Loss on change in fair value of derivative liabilities	193,196		–		193,196
Loss on extinguishment of debt	34,871		–		34,871
Stock-based compensation	9,598		90,000		99,598
Changes in operating assets and liabilities:
Due from related party	–		–		(19,161	)
Prepaid expenses	–		8,457		–
Accounts payable	20,054		(1,687	)	20,424
Accrued liabilities	10,201		(775	)	12,356
Net Cash Used In Operating Activities	(115,390	)	(234,554	)	(656,473	)
Investing Activities
Acquisition of property and equipment	–		–		(155,816	)
Net cash acquired on acquisition of subsidiary	–		6,755		6,755
Net Cash Provided By (Used In) Investing Activities	–		6,755		(149,061	)
Financing Activities
Advances from related party	–		–		348,482
Proceeds from convertible debt	65,000		55,000		162,500
Deferred financing costs	–		–		(5,500	)
Proceeds from issuance of common stock	–		278,700		278,701
Net Cash Provided By Financing Activities	65,000		333,700		784,183
Effect of Exchange Rate Changes on Cash	–		(17,063	)	22,479
Change in Cash	(50,390	)	88,838		1,128
Cash, Beginning of Period	51,518		–		–
Cash, End of Period	1,128		88,838		1,128

Supplemental Disclosures:
Interest paid	–		–		–
Income taxes paid	–		–		–

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

1.	Basis of Presentation

	The accompanying financial statements of Convenience TV Inc. (the “Company”) should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2011. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

	The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

	These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at December 31, 2011, the Company has not generated significant revenues, has a working capital deficit of $210,781, and has accumulated losses of $1,265,960 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Recent Accounting Pronouncements

	In January 2010, the FASB issued an amendment to ASC 820, “Fair Value Measurements and Disclosures”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of the applicable standard on April 1, 2011 did not have a material effect on the Company’s consolidated financial statements.

	The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.	Property and Equipment

			December 31,	March 31,
			2011	2011
		Accumulated	Net Carrying	Net Carrying
	Cost	Amortization	Value	Value
	$	$	$	$
Computer equipment	16,147	16,147	–	1,517
Equipment	139,669	135,107	4,562	35,623
	155,816	151,254	4,562	37,140

F-4

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

4.	Convertible Debt

	(a)	On December 3, 2010, the Company issued a $55,000 convertible note which bears interest at 8% per annum and matures on September 3, 2011. The note is convertible into shares of common stock 180 days after the date of issuance (June 1, 2011) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. On July 25, 2011, the conversion rate was amended to 31% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date of conversion. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum.

		In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $16,019 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. On June 1, 2011, the Company recorded a derivative liability of $89,014 and a further discount of $38,981 which will be charged to operations over the term of the convertible note. During the nine months ended December 31, 2011, the Company issued 41,699,272 shares of common stock pursuant to the conversion of $44,500 of the convertible note. The fair value of the conversion option derivative liability related to this converted amount of $157,548 was recorded as additional paid-in capital. As at December 31, 2011, $10,500 had been accreted increasing the carrying value of the convertible note to $10,500. During the nine months ended December 31, 2011, the Company recorded a loss on the change in fair value of the conversion option derivative liability of $128,936 and as of December 31, 2011, the fair value of the conversion option derivative liability was $26,385.

	(b)	On January 14, 2011, the Company issued a $42,500 convertible note which bears interest at 8% per annum and matures on October 18, 2011. The note is convertible into shares of common stock 180 days after the date of issuance (July 13, 2011) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. On July 25, 2011, the conversion rate was amended to 31% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date of conversion. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum.

		In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $29,105 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. On July 13, 2011, the Company recorded a derivative liability of $60,250 and a further discount of $13,395 which will be charged to operations over the term of the convertible note. The Company records accretion expense over the term of the convertible note up to its face value of $42,500. As at December 31, 2011, $42,500 had been accreted increasing the carrying value of the convertible note to $42,500. During the nine months ended December 31, 2011, the Company recorded a loss on the change in fair value of the conversion option derivative liability of $64,260 and as of December 31, 2011, the fair value of the conversion option derivative liability was $106,763.

	(c)	On July 26, 2011, the Company issued a $37,500 convertible note which bears interest at 8% per annum and matures on April 30, 2012. The note is convertible into shares of common stock 180 days after the date of issuance (January 22, 2012) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum.

		In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $37,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. The Company records accretion expense over the term of the convertible note up to its face value of $37,500.

		On October 6, 2011, the conversion rate was amended to be 35% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date of conversion.

F-5

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

4.	Convertible Debt (continued)

		In accordance with ASC 470-60, “Debt - Troubled Debt Restructurings by Debtors”, the Company determined that the creditor did not grant a concession as the only modification to the debt was the decrease in the conversion price.

		The modification was then analyzed under ASC 470-50, “Debt - Modifications and Extinguishments”. The change of the fair value of the conversion feature was greater than 10% of the carrying value of the debt. As a result, in accordance with ASC 470-50, the Company determined the terms of the amendment to be substantially different and treated the July 26, 2011 convertible note extinguished and exchanged for a new convertible note. The Company recorded a loss on extinguishment of debt of $34,871.

		Prior to the modification, the Company recorded $2,629 of accretion expense related to the original convertible debt, and the carrying value of the original note was $2,629 at October 6, 2011. In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $37,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the modified convertible note. The Company will record accretion expense over the term of the modified convertible note up to its face value of $37,500.

		As at December 31, 2011, the Company recorded $6,991 of accretion expense related to the modified convertible note increase the carrying value of the convertible note to $6,991.The Company paid $8,000 in financing costs relating to the convertible debt.

	(d)	On October 12, 2011, the Company issued a $32,500 convertible note which bears interest at 8% per annum and matures on July 17, 2012. The note is convertible into shares of common stock 180 days after the date of issuance (April 10, 2011) at a conversion rate of 35% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum.

		In accordance with ASC 470-20, “Debt with Conversion and Other Options”, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. The Company records accretion expense over the term of the convertible note up to its face value of $32,500.

		As at December 31, 2011, $2,197 had been accreted increasing the carrying value of the convertible note to $2,197. The Company paid $2,500 in financing costs relating to the convertible debt.

	(e)	The Company paid a total of $10,500 in financing costs relating to the above convertible debt. As at December 31, 2011, the Company had deferred financing costs of $2,867 (March 31, 2011 – $3,472).

5.	Derivative Liabilities

The conversion options of the convertible debt disclosed in Notes 4(a) and 4(b) are required to record a derivative at their estimated fair values on each balance sheet date with changes in fair value reflected in the statement of operations.

The fair value of the derivative liability for the December 3, 2010 convertible note was $89,014 on vesting. The fair value of the derivative liability for the January 14, 2011 convertible note was $60,250 on vesting.

The fair values of these convertible notes as at December 31, 2011 and March 31, 2011 are as follows:

	December 31,	March 31,
	2011	2011
	$	$

$10,500 convertible debenture issued December 3, 2010	26,385	–
$42,500 convertible debenture issued January 14, 2011	106,763	–
	133,148	–

During the nine months ended December 31, 2011, the Company recorded a loss on the change in fair value of the derivative liabilities of $193,196.

F-6

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

5.	Derivative Liabilities (continued)

The Company uses the Black-Scholes option pricing model to calculate the fair values of the derivative liabilities. The following table shows the assumptions used in the calculations:

		Risk-free	Expected	Expected
	Expected	Interest	Dividend	Life (in
	Volatility	Rate	Yield	years)
December 3, 2010 convertible note:
As at June 1, 2011 (date of vesting)	388%	0.05%	0%	0.26

January 14, 2011 convertible note:
As at July 13, 2011 (date of vesting)	392%	0.01%	0%	0.27

As at December 31, 2011	326%	0.02%	0%	0.25

6.	Related Party Transactions

	(a)	As at December 31, 2011, the Company is owed $19,161 (March 31, 2011 – $19,161) from a company under common control which is unsecured, non-interest bearing and due on demand.

	(b)	During the nine months ended December 31, 2011, the Company paid $17,500 (2010 - $40,000) in management fees to a company controlled by the President of the Company.

	(c)	During the nine months ended December 31, 2011, the Company paid $17,000 (2010 - $40,000) in management fees to the Chief Financial Officer of the Company.

7.	Common Stock

	(a)	Effective July 20, 2011, the Company increased the authorized number of shares of common stock from 100,000,000 to 600,000,000 shares, with no change in par value.

	(b)	On June 10, 2011, the Company issued 1,690,141 shares of common stock pursuant to the conversion of $12,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $35,830 on the date of conversion and was recorded as additional paid-in capital.

	(c)	On August 10, 2011, the Company issued 2,500,000 shares of common stock pursuant to the conversion of $4,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $14,291 on the date of conversion and was recorded as additional paid-in capital.

	(d)	On August 22, 2011, the Company issued 2,500,000 shares of common stock pursuant to the conversion of $3,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $7,113 on the date of conversion and was recorded as additional paid-in capital.

	(e)	On September 15, 2011, the Company issued 2,500,000 shares of common stock pursuant to the conversion of $1,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $8,881 on the date of conversion and was recorded as additional paid-in capital.

	(f)	On September 20, 2011, the Company issued 2,500,000 shares of common stock pursuant to the conversion of $1,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $6,238 on the date of conversion and was recorded as additional paid-in capital.

	(g)	On October 14, 2011, the Company issued 2,777,778 shares of common stock pursuant to the conversion of $2,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $6,533 on the date of conversion and was recorded as additional paid-in capital.

	(h)	On October 20, 2011, the Company issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $13,090 on the date of conversion and was recorded as additional paid-in capital.

	(i)	On October 21, 2011, the Company issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $8,640 on the date of conversion and was recorded as additional paid-in capital.

F-7

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

7.	Common Stock (continued)

	(j)	On October 31, 2011, the Company issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $7,082 on the date of conversion and was recorded as additional paid-in capital.

	(k)	On November 10, 2011, the Company issued 3,424,658 shares of common stock pursuant to the conversion of $2,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $6,675 on the date of conversion and was recorded as additional paid-in capital.

	(l)	On November 21, 2011, the Company issued 3,571,429 shares of common stock pursuant to the conversion of $2,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $14,588 on the date of conversion and was recorded as additional paid-in capital.

	(m)	On December 1, 2011, the Company issued 3,684,211 shares of common stock pursuant to the conversion of $3,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $9,987 on the date of conversion and was recorded as additional paid-in capital.

	(n)	On December 13, 2011, the Company issued 3,947,368 shares of common stock pursuant to the conversion of $3,000 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $11,210 on the date of conversion and was recorded as additional paid-in capital.

	(o)	On December 22, 2011, the Company issued 4,032,258 shares of common stock pursuant to the conversion of $2,500 of the convertible note described in Note 4(a). The fair value of the conversion option was determined to be $7,390 on the date of conversion and was recorded as additional paid-in capital.

8.	Stock Options

On October 18, 2011, the Company granted 4,000,000 stock options to consultants, employees and a director which are exercisable at $0.0024 per share and expire on October 18, 2013. The fair value of these stock options was estimated at the date of grant using the Black-Scholes option-pricing model assuming an expected life of 2 years, a risk-free rate of 0.05%, an expected volatility of 522%, and a 0% dividend yield. The weighted average fair value of stock options granted was $0.0024 per share.

During the nine month period ended December 31, 2011, the Company recorded stock-based compensation of $9,598 (2010 - $nil), as consulting fees.

A summary of the Company’s stock option activity is as follows:

		Weighted
		Average	Aggregate
		Exercise	Intrinsic
	Number of	Price	Value
	Options	$	$
Outstanding, March 31, 2011	–
Granted	4,000,000	0.0024
Outstanding and exercisable, December 31, 2011	4,000,000	0.0024	–

As at December 31, 2011, the weighted average remaining contractual life was 1.8 years and there was no unrecognized compensation costs related to non-vested share-based compensation.

9.	Proposed Acquisition

During the nine months ended December 31, 2011, the Company entered into a Letter of Intent with HFT Management Inc. (“HFT”) to purchase the static advertising business known as Go Media for $2,000,000 to be paid in cash. The terms and conditions will be outlined in an Asset Purchase Agreement. In conjunction with the closing of the Asset Purchase Agreement, the parties will sign an agreement with HFT to manage the acquired static advertising business. As of December 31, 2011, the transaction had not been completed.

F-8

CONVENIENCE TV INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(unaudited)

10.

Subsequent Events

	(a)	On January 10, 2012, the Company signed a term sheet for a $3,250,000 credit facility to finance the acquisition of Go Media. The term of the financing is 3 years and any amounts borrowed would bear interest at 6.5% and a default interest rate of 10%. The financing would be secured by all of the assets of Go Media and by the revenue stream of all current and future service contracts. During the first 18 months following the financing, the Company would be required to make interest payments only. During the next 12 months the Company would be required to make interest and principal payments and fully repay the financing prior to the third anniversary. The Company paid an origination fee of $12,500.

	(b)	Subsequent to December 31, 2011, the Company converted $4,500 of the convertible note payable described in Note 4(a) into 7,878,412 shares of the Company’s common stock.

F-9

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this annual report, the terms we", "us", "our" and "our company" mean Convenience TV Inc. and our wholly owned subsidiary, C-Store Networks LLC, unless otherwise indicated.

General Overview

We were incorporated in Nevada on December 4, 2008, under the name "Costa Rica Paradise Inc.", to engage in the business of real estate investment consulting with respect to properties located in Costa Rica. On April 23, 2010 our board of directors authorized a change in name to “Convenience TV Inc.” and a forward split of our common stock on a basis of 7 for 1 which became effective with the OTC Bulletin Board on June 15, 2010. On May 5, 2010 we experienced a change of control upon the closing of the acquisition of C-Store Networks LLC. Our statutory registered agent is National Registered Agents Inc. of Nevada located at 1000 East William Street, Suite 204, Carson City, Nevada 89701. Our business office is located at 248 Main Street, Venice, CA, 90219 and our telephone number is 877-943-3210.

Effective July 20, 2011, our authorized shares of common stock increased from 100,000,000 to 600,000,000 shares of common stock, par value of $0.00001 per share. Our preferred stock remains unchanged.

Our Current Business

We are engaged in the provision of advertising services through a network of in-location televisions installed at various convenience store locations.

Results of Operations

For the three and six month periods ended December 31, 2011 and December 31, 2010

		Three Months Ended				Nine Months Ended
		December 31,				December 31,
		2011		2010		2011		2010
Revenue	$	Nil	$	Nil		6,628		Nil
Operating Expenses	$	55,926	$	88,577		187,404		369,318
Net Income (Loss)	$	224,590	$	(90,385	)	(520,121	)	(371,126	)

Revenues

During the three months ended December 31, 2011 we earned $Nil in revenues and incurred a net income of $224,590 compared to a net loss of $90,385 for the three months ended December 31, 2010. During the nine months ended December 31, 2011 we earned $6,628 in revenues and incurred a net loss of $520,121 compared to a net loss of $371,126 for the nine months ended December 31, 2010.

		Three Months Ended				Nine Months Ended
		December 31,				December 31,
		2011		2010		2011		2010
Amortization of property and equipment	$	10,282	$	13,090	$	32,578	$	39,131
Consulting fees	$	22,098	$	2,500	$	28,098	$	13,800
Foreign exchange loss (gain)	$	384	$	95	$	309	$	(2,705	)
Investor relations	$	Nil	$	4,140	$	Nil	$	94,140
Management fees	$	4,500	$	30,000	$	34,500	$	80,000
Network management	$	3,962	$	17,510	$	34,000	$	75,083
Office and general	$	328	$	2,972	$	2,964	$	7,071
Professional fees	$	11,368	$	11,931	$	41,777	$	49,937
Transfer agent and filing fees	$	2,964	$	6,276	$	12,958	$	12,798
Travel and promotion	$	40	$	63	$	220	$	63

Expenses

Operating expenses for three month period ended December 31, 2011 decreased by 58.38% as compared to the comparative period in 2010 primarily as a result of decreased expenses for amortization of property and equipment, investor relations, management fees, network management, office and general, professional fees and transfer agent and filing fees. Operating expenses for nine month period ended December 31, 2011 decreased by 49.26% as compared to the comparative period in 2010 primarily as a result of decreased expenses for amortization of property and equipment, investor relations, management fees, network management, office and general and professional fees.

Liquidity and Capital Resources

For the nine months ended December 31, 2011

Working Capital

		At			At	Percentage
		December 31,			March 31,	Increase/
		2011			2011	(Decrease)
Current Assets	$	20,289		$	70,679	(84.03	)%
Current Liabilities	$	231,070		$	68,544	70.34%
Working Capital (Deficit)	$	(210,781	)	$	2,135	(9772.65	)%

Cash Flows

		Nine Months			Nine Months
		Ended			Ended
		December 31,			December 31,
		2011			2010
Net Cash used in Operating Activities	$	(115,390	)	$	(234,544	)
Net Cash provided by (used in) Investing Activities	$	Nil		$	6,755
Net Cash provided by Financing Activities	$	65,000		$	333,700
Cash – End of Period	$	1,128		$	88,838

On May 5, 2010 we closed the acquisition of C-Store Network, LLC and have since adopted the business of C-Store Network, LLC, which is now our wholly owned subsidiary. We anticipate that we will meet our ongoing cash requirements by retaining income as well as through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.

We estimate that our expenses over the next 12 months will be approximately $1,202,600 as described in the table below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.

	Estimated	Estimated
Description	Completion Date	Expenses
		($)
Legal and accounting fees	12 months	100,000
Marketing and advertising	12 months	17,600
Management and operating costs	12 months	250,000
Salaries and consulting fees	12 months	100,000
Fixed asset purchases	12 months	660,000
General and administrative expenses	12 months	75,000
Total		1,202,600

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any private placement financings. If we are not able to successfully complete any private placement financings, we plan to cooperate with film and television producers or obtain shareholder loans to meet our cash requirements. However, there is no assurance that any such financing will be available or if available, on terms that will be acceptable to us. We may not raise sufficient funds to fully carry out our business plan.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Inflation

The effect of inflation on our revenues and operating results has not been significant.

Critical Accounting Policies

Basis of Presentation

The accompanying financial statements of our company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in our company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2011. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly our company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These financial statements have been prepared on a going concern basis, which implies our company will continue to realize its assets and discharge its liabilities in the normal course of business. Our company has not generated significant revenues since inception and is unlikely generate earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from its shareholders, the ability of our company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at December 31, 2011, our company has not generated significant revenues, has a working capital deficit of $210,781, and has accumulated losses of $1,265,960 since inception. These factors raise substantial doubt regarding our company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should our company be unable to continue as a going concern.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

We are a smaller reporting company and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls were not effective as of the end of the period covered by this report.

Changes in Internal Controls

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

We are a smaller reporting company and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On October 14, 2011, we issued 2,777,778 shares of common stock pursuant to the conversion of $2,500 of a convertible note. The fair value of the conversion option was determined to be $6,533 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On October 20, 2011, we issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of a convertible note. The fair value of the conversion option was determined to be $13,090 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On October 21, 2011, we issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of a convertible note. The fair value of the conversion option was determined to be $8,640 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On October 31, 2011, we issued 2,857,143 shares of common stock pursuant to the conversion of $2,000 of a convertible note. The fair value of the conversion option was determined to be $7,082 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On November 10, 2011, we issued 3,424,658 shares of common stock pursuant to the conversion of $2,500 of a convertible note. The fair value of the conversion option was determined to be $6,675 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On November 21, 2011, we issued 3,571,429 shares of common stock pursuant to the conversion of $2,500 of a convertible note. The fair value of the conversion option was determined to be $14,588 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On December 1, 2011, we issued 3,684,211 shares of common stock pursuant to the conversion of $3,500 of a convertible note. The fair value of the conversion option was determined to be $9,987 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On December 13, 2011, we issued 3,947,368 shares of common stock pursuant to the conversion of $3,000 of a convertible note. The fair value of the conversion option was determined to be $11,210 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

On December 22, 2011, we issued 4,032,258 shares of common stock pursuant to the conversion of $2,500 of a convertible note. The fair value of the conversion option was determined to be $7,390 on the date of conversion. These shares were issued pursuant to an exemption from registration relying on Section 4(2) of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mining Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit
No.	Document Description
(2)	Plan of acquisition, reorganization, arrangement, liquidation or succession
2.1	Acquisition Agreement between our company and Global Fusion Media Inc. dated April 1, 2010 (incorporated by reference to our Current Report on Form 8-K filed on April 9, 2010).
(3)	(i) Articles of Incorporation; (ii) By-laws
3.1	Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on February 2, 2009).
3.2	By-laws (incorporated by reference to our Registration Statement on Form S-1 filed on February 2, 2009).
3.3	Certificate of Amendment filed with the Nevada Secretary of State on May 4, 2010 (incorporated by reference to our Current Report on Form 8-K filed on February 2, 2009).
3.4	Certificate of Amendment filed with the Nevada Secretary of State on July 20, 2011 (incorporated by reference to our Current Report on Form 8-K filed on July 26, 2011).
(10)	Material Contracts
10.1	Share Cancellation Agreement with Rhonda Esparza dated May 4, 2010 (incorporated by reference to our Quarterly Report on Form 10-Q filed on May 18, 2010).
(14)	Code of Ethics
14.1	Code of Ethics 2010 (incorporated by reference to our Quarterly Report on Form 10-Q filed on March 31, 2010).
(21)	Subsidiaries of Registrant
21.1	C-Store Networks LLC
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1*	Section 302 Certifications under Sarbanes-Oxley act of 2002 of Norman Knowles (Chief Executive Officer)
31.2*	Section 302 Certifications under Sarbanes-Oxley act of 2002 of Greg Trevor (Chief Financial Officer and Chief Accounting Officer)
(32)	Section 1350 Certifications
32.1*	Section 906 Certifications under Sarbanes-Oxley act of 2002 of Norman Knowles (Chief Executive Officer)
32.2*	Section 906 Certifications under Sarbanes-Oxley act of 2002 of Greg Trevor (Chief Financial Officer and Chief Accounting Officer)
101**	Interactive Data File
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

**	Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

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.

		CONVENIENCE TV INC.



Date: February 14, 2012		/s/ Norman Knowles
		Norman Knowles
		President and Director
		(Principal Executive Officer)


Date: February 14, 2012		/s/ Greg Trevor
		Greg Trevor
		Chief Financial Officer, Secretary, Treasurer and Director
		(Principal Financial Officer and Principal Accounting
		Officer)

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Convenience TV (CRPZ) Inactive 10-Q2012 Q3 Quarterly report

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