UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A-2
[X] Quarterly report filed under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended September 30, 2002.
or
[ ] Transitional report filed under Section 13 or 15 (d) of the
Exchange Act.
Commission File No. 0-23365
BONGIOVI ENTERTAINMENT, INC.
--------------------------
(Name of Small Business Issuer in its Charter)
Nevada 33-0840184
-------- -------------
State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization
649 SW Whitmore Drive, Port Saint Lucie, Florida 34984
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(Address of principal executive office)
Issuer's telephone number:(772) 879-0578
--------------
Check whether the issuer: (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) been
subject to such filing requirements for the past ninety (90) days.
Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: As of October 31, 2002, there were
20,000,000 shares of Common Stock, par value $.001 per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
1
TABLE OF CONTENTS
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PART I FINANCIAL INFORMATION
Page
----
Item 1. FINANCIAL STATEMENTS
a. Balance Sheet 3
b. Statements of Operations 4
c. Statements of Cash Flows 5
d. Notes to Financial Statements 6-7
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 8-9
Item 3. CONTROLS AND PROCEDURES 9
PART II OTHER INFORMATION 10
Item 1. LEGAL PROCEEDINGS
Item 2. CHANGES IN SECURITIES
Item 3. DEFAULTS ON SENIOR SECURITIES
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON 8-K
SIGNATURE PAGE 11
CERTIFICATION 12
2
BONGIOVI ENTERTAINMENT, INC.
(FORMERLY INTERRUPTION TELEVISION, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002
(RESTATED)
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 7,098
Receivable from officer 22,500
Advance royalties 276,883
------------
Total current assets $ 306,481
============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Due to shareholders $ 266,825
Convertible debentures 127,000
Loans payable 50,000
Note payable 600,000
Accrued expenses - shareholders 11,392
Accounts payable and accrued expenses 55,207
------------
Total current liabilities 1,110,424
------------
STOCKHOLDERS' (DEFICIT)
Preferred stock, $.001 par value, 10,000,000 shares
authorized, none issued and outstanding --
Common stock, $.001 par value, 100,000,000
shares authorized, 20,000,000 shares
issued and outstanding 20,000
Additional paid in capital 437,000
(Deficit) accumulated during the development stage (1,260,943)
------------
(803,943)
------------
$ 306,481
============
See the accompanying notes to the consolidated financial statements.
3
BONGIOVI ENTERTAINMENT, INC.
(FORMERLY INTERRUPTION TELEVISION, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001, AND
THE PERIOD FROM INCEPTION (May 8, 2000) TO SEPTEMBER 30, 2002
(UNAUDITED)
Three Months Nine Months Inception to
------------------------------ ------------------------------ September 30,
2002 2001 2002 2001 2002
------------- ------------- ------------- ------------- -------------
(Restated) (Restated) (Restated)
REVENUE
Net sales $ -- $ -- $ -- $ -- $ --
------------- ------------- ------------- ------------- -------------
OPERATING COSTS AND EXPENSES
General and administrative 754,423 69,463 913,037 174,608 1,243,767
------------- ------------- ------------- ------------- -------------
OTHER EXPENSES:
Interest expense 5,800 1,692 11,565 3,200 17,176
------------- ------------- ------------- ------------- -------------
NET (LOSS) $ (760,223) $ (71,155) $ (924,602) $ (177,808) $ (1,260,943)
============= ============= ============= ============= =============
PER SHARE INFORMATION (basic and fully diluted)
Weighted average common shares outstanding 17,304,348 16,000,000 16,439,560 16,000,000 16,137,143
============= ============= ============= ============= =============
(Loss) per share $ (0.04) $ (0.00) $ (0.06) $ (0.01) $ (0.08)
============= ============= ============= ============= =============
See the accompanying notes to the consolidated financial statements.
4
BONGIOVI ENTERTAINMENT, INC.
(FORMERLY INTERRUPTION TELEVISION, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001, AND
THE PERIOD FROM INCEPTION (May 8, 2000) TO SEPTEMBER 30, 2002
(UNAUDITED)
Inception to
September 30,
2002 2001 2002
---------- ---------- ----------
(Restated) (Restated)
Cash flow from operating activities:
Net cash (used in) operating activities $(185,846) $(100,023) $(340,253)
---------- ---------- ----------
Cash flows from investing activities:
Net cash provided by investing activities -- -- --
---------- ---------- ----------
Cash flows from financing activities:
Net cash provided by financing activities 192,802 105,200 347,351
---------- ---------- ----------
Increase in cash 6,956 5,177 7,098
Cash - beginning of period 142 -- --
---------- ---------- ----------
Cash - end of period $ 7,098 $ 5,177 $ 7,098
========== ========== ==========
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest $ -- $ -- $ --
========== ========== ==========
Income taxes $ -- $ -- $ --
========== ========== ==========
See the accompanying notes to the consolidated financial statements.
5
Bongiovi Entertainment, Inc.
(Formerly Interruption Television, Inc.)
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2002
(Unaudited)
(1) Basis Of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP") for interim financial information. They do not include all
of the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) considered necessary for a fair presentation have
been included. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year. For
further information refer to the financial statements of Bongiovi Entertainment,
Inc. (formerly Interruption Television, Inc.) for the years ended June 30, 2002
and 2001 included in the filing on Form 10-KSB.
(2) Acquisitions
During September 2002 Interruption Television, Inc. (ITV) issued 16,000,000
shares of its common stock to the shareholders of the Bongiovi Entertainment,
Inc. (Bongiovi) in exchange for all of the issued and outstanding common shares
of Bongiovi pursuant to an Agreement and Plan of Reorganization. In addition,
ITV issued 73,411 shares of common stock for services related to the
reorganization. Concurrent with the exchange of shares, ITV changed its name to
Bongiovi Entertainment, Inc. Bongiovi is an entertainment content provider and
independent record label, whose market is the global entertainment/music
consumer.
This acquisition of Bongiovi, the accounting acquirer, by ITV a non-operating
entity, is considered in substance a capital transaction by the issuance of
3,926,589 shares of common stock by Bongiovi for all of the issued and
outstanding common shares of ITV, and will be accounted for as a reverse
acquisition, and no goodwill or other intangible assets will be recorded. On
this basis, the historical financial statements as of and prior to the
acquisition date will represent the operations of Bongiovi.
(3) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents were not considered, as their effect would be anti dilutive.
(4) Notes payable
Related Parties
Through September 2002 certain affiliates of the Company advanced the Company an
aggregate of $266,825. These advances bear interest at 6% per annum and are due
on demand.
6
Other
During August and September 2002 the Company borrowed $50,000 pursuant to demand
notes with interest at 8% per annum.
In conjunction with the recapitalization of the Company in September 2002 (see
Note 2) the Company incurred debt for services provided pursuant to a promissory
note in the amount of $600,000 with interest at 8% per annum exclusive of
interest charged for late payments. The note is payable in monthly installments
commencing on November 10, 2002. Each payment shall be the greater of $100,000
or 20% of the net equity proceeds received by the Company in the period since
the last payment date. The balance of the note is due on April 30, 2003. The
holder is entitled to convert any unpaid principal at April 30, 2003 into common
shares of the Company at a conversion price equal to 70% of the average closing
bid price of the Company's common stock for the 10 lowest of the 30 days
preceding the conversion date. To date no payments have been made.
(5) Convertible Debentures
Through September 2002 the Company borrowed an aggregate of $127,000 pursuant to
the issuance of convertible debentures. The debentures bear interest at a rate
of 8% per annum and are due 1 year from the date of issuance. An aggregate of
$32,000 of the debentures are in default and are convertible into 12,800 shares
of the Company's common stock at the option of the holder and an aggregate of
$95,000 of the debentures are due between April 2003 and August 2003 and are
convertible into 19,000 shares of the Company's common stock at the option of
the holder.
(6) Stockholders' (Deficit)
During the period ended September 30, 2002 and from inception officers of the
Company contributed an aggregate of $150,000 and $450,000 in unpaid salaries to
the capital of the Company.
(7) Going Concern
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the period ended September 30, 2002 and from inception, the Company
incurred net losses of $924,602 and $1,260,943 and has working capital and
stockholder deficits of $803,943 at September 30, 2002.
The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations and secure financing. In addition, the
Company's ability to continue as a going concern must be considered in light of
the problems, expenses and complications frequently encountered by entrance into
established markets and the competitive environment in which the Company
operates.
The Company is pursuing equity financing for its operations. Failure to secure
such financing or to raise additional capital or borrow additional funds may
result in the Company depleting its available funds and not being able pay its
obligations.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
(8) Correction of An Error
During April 2003 the Company determined that a certain note in the amount of
$600,000 had not been recorded on its books (see Note 4).
The accompanying financial statements have been restated to reflect the above
correction. The adjustment increased the net loss for the nine months and three
months ended September 30, 2002 as previously reported from $(324,602) and
$(160,223) to $(924,602) and $(760,223) or $(.04) and $(.03) per share.
7
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
based upon current conditions and the most recent results of operations.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "project," "expect," "believe," "estimate,"
"anticipate," "intends," "continue", "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other
variations of those terms or comparable words or expressions. (See the Company's
Form 10SB for a description of certain of the known risks and uncertainties of
the Company.)
Overview of the Company's Business
- ----------------------------------
Bongiovi Entertainment, Inc. ("the Company") is a Nevada corporation.
The Company's previous name was "Interruption Television, Inc." The Company
changed its name in September, 2002 in connection with the share exchange
transaction described below.
As of September 10, 2002, the Company consummated a transaction,
whereby the Company acquired all of the issued and outstanding shares of
Bongiovi Entertainment, Inc., a Florida corporation ("Bongiovi") in exchange for
the issuance by the Company of a total of 16,000,000 newly issued restricted
shares of common voting stock to Bongiovi shareholders pursuant to the Agreement
and Plan of Reorganization, as amended (the "Agreement"), dated as of September
10, 2002, by and between the Company and Bongiovi. Immediately prior to the
share exchange, there were 4,000,000 shares of the Company's common stock issued
and outstanding. The Company effected a 1-for 11.5 reverse stock split of its
common stock as of September 3, 2002. As a result of the acquisition, there were
20,000,000 shares of common stock issued and outstanding.
Bongiovi is an entertainment content provider and independent record
label, whose market is the global entertainment/music consumer. Bongiovi has put
together a management team consisting of several well-known music and recording
industry professionals, including: Anthony Bongiovi, Anthony Ferguson and Don
Dempsey. The Company has established relationships with multiple service
providers for the purposes of record/CD pressing, product promotion and product
distribution to retail.
Our new corporate offices are located at 649 South West Whitmore Drive,
Port St. Lucie, Florida 34984. Our telephone number is (772) 879-0578.
Plan of Operations
- ------------------
The Company intends to continue to develop new artists for future
release. Over a twelve to eighteen month period, the company intends to release
into the marketplace up to four acts that have completed their development
phase. It may also identify, acquire and release up to two independent
recordings (if available) that show promising sales trends and are in need of
independent distribution.
The Company anticipates that it will generate revenues from "musical
unit" sales and licensing fees in the next 12 months from its musical catalogue
and other entertainment related activities.
The company intends to raise up to US$5 million dollars in operating
capital via private placement. We expect that $1.3 million dollars should be
sufficient to carry out all of the functions necessary to execute our twelve
month operating plan. This fund raising activity begins in the Company's second
quarter.
8
Our net loss for the three months period ending September 30, 2002 was
($760,223) (unaudited)compared to our net loss for the three months period
ending September 30, 2001 which was ($71,155).
Our general and administrative expenses from inception until September
30, 2002 were $1,243,767. Our general and administrative expenses for the three
months ended September 30, 2001 were $69,463 (unaudited). Our general and
administrative expenses for the three months ended September 30, 2002 were
$754,423 (unaudited), which primarily include contributed officer salaries and
legal and accounting fees.
Currently there are no signed contracts that will produce revenue and
there can be no assurances that management will be successful in negotiating
such contracts.
Since inception, the Company has been in development mode of musical
content. Additional expenses were incurred as part of the transaction
consummated September 10, 2002 for professional services and other expenses
relative to filing of reporting requirements.
Item 3. Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer evaluated the
Company's disclosure controls and procedures within the 90 days preceding the
filing date of this quarterly report. Based upon this evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in ensuring that material
information required to be disclosed is included in the reports that it files
with the Securities and Exchange Commission. There were no significant changes
in the Company's internal controls or, to the knowledge of the management
of the Company, in other factors that could significantly affect these
controls subsequent to the evaluation date.
9
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
NONE
ITEM 2 - CHANGES IN SECURITIES
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
NONE
ITEM 5 - OTHER INFORMATION
NONE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
No reports on Form 8-K were filed during the quarter ended
September 30, 2002.
10
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BONGIOVI ENTERTAINMENT, INC.
By: \s\ Ronald E. Simmons
--------------------------------------
Ronald E. Simmons, Chief Executive Officer
By: \s\ Joe Butera
--------------------------------------
Joe Butera, Chief Financial Officer
Dated: May 14, 2003
11
CERTIFICATION
We, Ronald E. Simmons, Chairman and CEO, and Joe Butera, Chief Financial
Officer, certify that:
1. We have reviewed this quarterly report on Form 10-QSB/A-2 of Bongiovi
Entertainment, Inc. (the "registrant");
2. Based on our knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on our knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and we are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and we have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and we have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
5/14/03 /s/ Ronald E. Simmons
- --------------- -------------------------------------
Date Chairman and Chief Executive Officer
5/14/03 /s/Joseph G. Butera, Jr.
- --------------- -------------------------------------
Date Principal Financial Officer
12