UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934 For the quarterly period ended: June 30, 2003 [ ] Transition Report under Section 13 or 15(d) of the Exchange Act For the Transition period from to ------------- -------------- Commission file number: 333-81520 MEDIATELEVISION.TV, INC. (Exact name of small business issuer as specified in its charter) Delaware 98-0361568 (State or other jurisdiction of (IRS Employee Identification No.) incorporation or organization) 1904 West 16th Avenue, Suite 1 Vancouver, BC V6J 2M4 (Address of principal executive offices) (604) 605-0507 (Issuer's telephone number) APPLICABLE ONL TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, $0.0001 par value 2,313,912 (Class) (Outstanding as of August 1, 2003) Transitional Small Business Disclosure format (Check one): Yes [ ] No [X] MEDIATELEVISION.TV, INC. FORM 10-QSB INDEX Page ---- Part I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Condensed Consolidated Balance Sheet........................................F-1 Condensed Consolidated Statement of Losses..................................F-2 Condensed Consolidated Statement of Cash Flows..............................F-3 Notes to Financial Statements...............................................F-4 Notes to Financial Statements...............................................F-5 Notes to Financial Statements...............................................F-6 Notes to Financial Statements...............................................F-7 Item 2 Management's Discussion and Analysis or Plan of Operation..........3 Item 3 Controls and Procedures............................................9 Part II OTHER INFORMATION..................................................10 Item 1 Legal Proceedings Item 2 Changes in Securities Item 3 Defaults Upon Senior Securitities Item 4 Submission of Matters to a vote of security holders Item 5 Other Information Item 6 Exhibits and Reports on Form 8-K...................................11 Signatures..................................................................11 Certifications..............................................................12 PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MEDIA TELEVISION. TV, INC (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2003 AND SEPTEMBER 30, 2002 SEPTEMBER 30, JUNE 30, 2003 2002 (UNAUDITED) (AUDITED) ---------- ---------- ASSETS Current Assets: Cash $ 19 $ 327 Deposits 1,028 877 Advances to related parties -- 2,496 ---------- ---------- TOTAL CURRENT ASSETS $ 1,047 $ 3,700 ---------- ---------- PROPERTY AND EQUIPMENT-AT COST Furniture , Equipment & Leasehold Improvements 1,038 887 Less : Accumulated Depreciation (495) (289) ---------- ---------- 543 598 TOTAL ASSETS $ 1,590 $ 4,298 ========== ========== LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $ 43,550 $ 31,664 Advances from shareholder 21,751 20,925 ---------- ---------- TOTAL CURRENT LIABILITIES $ 65,301 $ 52,589 ========== ========== Commitments and contingencies -- -- DEFICIENCY IN STOCKHOLDERS' EQUITY Preferred Stock, $.001 par value per share; 20,000,000 shares authorized, none issued and outstanding at June 30, 2003 -- -- Common Stock, $.001 par value per share, 80,000,000 shares authorized, 2,313,912 and 2,296,632 shares issued and outstanding at June 30, 2003 233 230 Additional paid in capital 82,381 79,097 Deficit accumulated during development stage (146,325) (127,618) ---------- ---------- Deficiency in stockholder's equity (63,711) (48,291) --------- --------- $ 1,590 $ 4,298 ========== ========== (See accompanying notes to financial statements) F-1 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENT OF LOSSES ( UNAUDITED ) For the Period October 14, For three For three For the Nine For the Nine 1999 (Date of months ended months ended months ended months ended Inception) to June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 June 30, 2003 ------------ ------------ ------------ ------------ ------------ REVENUES: Internet Service and Design $ -- $ 7 $ -- $ 958 $ 958 Promotional fees -- 349 -- 349 -- ------------ ------------ ------------ ------------ ------------ TOTAL REVENUE -- 356 -- 1,307 1,307 ------------ ------------ ------------ ------------ ------------ Costs and expenses: General and administrative 2,261 35,782 14,803 47,314 155,008 ------------ ------------ ------------ ------------ ------------ Depreciation 50 49 141 133 430 ------------ ------------ ------------ ------------ ------------ TOTAL COSTS AND EXPENSES 2,311 35,831 14,944 47,447 155,438 Other income and (expenses): Miscellaneous Income -- -- -- -- 10,918 ------------ ------------ ------------ ------------ ------------ Foreign currency translation Gain (loss) (1,666) 2,485 (3,766) (1,429) (2,164) ------------ ------------ ------------ ------------ ------------ Loss before Taxes $ (3,977) (32,990) (18,710) (47,569) (146,328) Income (taxes) benefit -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Net loss $ (3,977) $ (32,990) $ (18,710) $ (47,569) $ (146,328) ============ ============ ============ ============ ============ Loss per common share (basic and assuming dilution) $ (0.00) $ (0.01) $ (0.01) $ (0.02) $ (0.05) ============ ============ ============ ============ ============ Weighted average shares outstanding 2,909,137 2,294,539 2,909,137 2,273,928 2,909,137 ============ ============ ============ ============ ============ (See accompanying notes to financial statements) F-2 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ( UNAUDITED ) For the Period For Nine For the Nine October 11, 2000 Months Ended months Ended (Date of Inception) June 30, 2003 June 30, 2002 to June 30, 2003 ---------- ---------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (18,710) $ (47,569) $(146,325) Translation gain or loss 3,766 1,429 -- Common stock issued to founders in exchange for services -- -- 10,000 Common stock issued in exchange for services -- 1,410 22,943 Common stock issued to founders in exchange for license agreement -- -- 10,000 Depreciation 141 133 495 CHANGES IN ASSETS AND LIABILITIES Prepaid expenses and other assets (151) -- (1,028) Advances to related parties 2,496 8,523 -- Accounts payable 8,188 23,917 43,550 NET CASH USED IN OPERATING ACTIVITIES (4,270) (12,157) (60,365) CASH FLOWS USED IN INVESTING ACTIVITIES : Capital expenditure, net of disposals (151) -- (1,038) ---------- ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES (151) -- (1,038) CASH PROVIDED (USED) BY FINANCING ACTIVITIES Proceeds from stockholder advances 826 4,323 21,751 Proceeds from issuance of common stock 3,287 7,992 39,671 ---------- ---------- ---------- NET CASH PROVIDED IN FINANCING ACTIVITIES 4,113 12,315 61,422 ---------- ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (308) 158 19 Cash and cash equivalents, beginning of year / period 327 6 -- ---------- ---------- ---------- Cash and cash equivalents, end of the year / period $ 19 $ 164 $ 19 ========== ========== ========== SUPPLEMENTAL INFORMATION: Cash paid during the period for interest $ -- $ -- $ -- Cash paid during the period for taxes $ -- $ -- $ -- NON CASH DISCLOSURES : Common Stock issued in exchange for services $ -- $ -- $ 22,943 Common Stock issued to founders in exchange for services $ -- $ 1,410 $ 10,000 Common Stock issued in exchange for License agreement $ -- $ -- $ 10,000 (See accompanying notes to financial statements) F-3 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS ( UN AUDITED ) NOTE A-SUMMARY OF ACCOUNTING POLICIES General - ------- The accompanying un audited condensed Consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10QSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments ( consisting of normal recurring accruals ) considered necessary for a fair presentation have been included. Accordingly, the results from operations for the nine months period ended June 30, 2003, are not necessarily indicative of the results that may expected for the year ending September 30, 2003. The unaudited condensed financial statements should be read in conjunction with the September 30, 2002 financial statements and footnotes thereto included in the Company's SEC Form 10 QSB. Business and Basis of Presentation - ---------------------------------- Mediatelevision, tv, inc ("Company") was formed on October 11, 2000 under the laws of the state of Delaware. The Company is a development stage enterprise, as defined by Statement of Financial Accounting Standards No. 7 ("SFAS No. 7") and is in the business of producing, acquiring and syndicating episodic series designed especially for the Internet. From its inception through the date of these financial statements the Company has recognized limited revenues and has incurred significant operating expenses. Consequently, its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception through June 30, 2003, the Company has accumulated losses of $ 146,325. The Consolidated financial statements include the accounts of the Company, and its wholly owned subsidiary, Mediatelevision.tv Distribution, Ltd. Significant inter company transactions have been eliminated in consolidation. Reclassification - ---------------- Certain prior period amounts have been reclassified for comparative purposes. F-4 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS ( UN AUDITED ) New Accounting Pronouncements - ----------------------------- Effective January 1, 2002, the Company adopted SFAS No.142. Under the new rules, the Company will no longer amortize goodwill and other intangible assets with definitive lives, but such assets will be subject to periodic testing for impairment. On an annual basis, and when there is reason to suspect that their values have been diminished or impaired, these assets must be tested for impairment, and write downs to be included in results from operations may be necessary. SFAS No.142 also requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. Any goodwill impairment loss recognized as a result of the transitional goodwill impairment test is recorded as a cumulative effect of a change in accounting principle. The adoption of SFAS 142 had no material impact on the Company's condensed financial statements. SFAS No. 143 establishes accounting standards for the recognition and measurement of an asset retirement obligation and its associated asset retirement cost. It also provides accounting guidance for legal obligations associated with the retirement of tangible long-lived assets. SFAS No. 143 is effective in fiscal years beginning after June 15, 2002, with early adoption permitted. The Company expects that the provisions of SFAS No. 143 will not have a material impact on its consolidated results of operations and financial position upon adoption. The Company plans to adopt SFAS No. 143 effective January 1, 2003. SFAS No. 144 establishes a single accounting model for the impairment or disposal of long-lived assets, including discontinued operations. SFAS No. 144 superseded Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS No. 121), and APB Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions". The Company adopted SFAS No. 144 effective January 1, 2002. The adoption of SFAS No. 144 had no material impact on Company's consolidated financial statements. F-5 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS ( UN AUDITED ) New Accounting Pronouncements ( Continued ) - ------------------------------------------- In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt", and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements" and FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers". This Statement amends FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that a similar to sale-leaseback transactions. The Company does not expect the adoption to have a material impact to the Company's financial position or results of operations. In June 2002, the FASB issued Statement No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The Company does not expect the adoption to have a material impact to the Company's financial position or results of operations. In October 2002, the FASB issued Statement No. 147, "Acquisitions of Certain Financial Institutions-an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9", which removes acquisitions of financial institutions from the scope of both Statement 72 and Interpretation 9 and requires that those transactions be accounted for in accordance with Statements No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. In addition, this Statement amends SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to include in its scope long-term customer relationship intangible assets of financial institutions such as depositor- and borrower-relationship intangible assets and credit cardholder intangible assets. The requirements relating to acquisitions of financial institutions are effective for acquisitions for which the date of acquisition is on or after October 1, 2002. The provisions related to accounting for the impairment or disposal of certain long-term customer-relationship intangible assets are effective on October 1, 2002. The adoption of this Statement did not have a material impact to the Company's financial position or results of operations as the Company has not engaged in either of these activities. F-6 MEDIATELEVISION.TV, INC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS ( UN AUDITED ) New Accounting Pronouncements ( Continued ) - ------------------------------------------- In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure", which amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition guidance and annual disclosure provisions of Statement 148 are effective for fiscal years ending after December 15, 2002, with earlier application permitted in certain circumstances. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The adoption of this statement did not have a material impact on the Company's financial position or results of operations as the Company has not elected to change to the fair value based method of accounting for stock-based employee compensation. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities." Interpretation 46 changes the criteria by which one company includes another entity in its consolidated financial statements. Previously, the criteria were based on control through voting interest. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. A company that consolidates a variable interest entity is called the primary beneficiary of that entity. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The Company does not expect the adoption to have a material impact to the Company's financial position or results of operations. F-7 In April 2003, the FASB issued Statement No.149, " Amendment of Statement of 133 on Derivative Instruments and Hedging Activities ", which amends Statement 133, Accounting for Derivative Instruments and Hedging Activities. The adoption of this statement did not have a material impact on the Company's financial position. In May 2003, the FASB issued Statement No. 150, " Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The adoption of this statement did not have a material impact on the Company's financial position. F-8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The following discussion should be read in conjunction with the Company's Condensed Financial Statements and Notes thereto, included elsewhere within this report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue in the future. Overview - -------- Mediatelevision.tv, Inc, is a development stage company whose efforts have been principally devoted to the business of producing, acquiring, and syndicating episodic series designed especially for the Internet. The Company anticipates that its business will incur significant operating losses in the future. At this time, the Company believes that its success depends on its ability to build a selection of quality content available for distribution on the Internet. As of June 30, 2003, the Company had a cash balance of $19. The Company's existence is dependent upon management's ability to develop profitable operations and resolve it's liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through the continued developing of its products, establishing a profitable market for the Company's products and additional equity investment in the Company. In order to improve the Company's liquidity, the Company is actively pursuing additional equity financing through discussion with investment bankers and private investors. There can be no assurance the Company will be successful in its effort to secure additional equity financing. If operations and cash flow continue to improve through these efforts, management believes that the Company can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. If the Company is able to raise sufficient funds, it intends to spend $10,000 over the course of the next year in the development of its contacts for a distribution and licensing network in North America, and in the release and marketing of a FashionFreakz DVD. If the Company is able raise additional financing , it expects to expand operations with the purchase of $3,000 worth of major equipment. The Company's business plan provides for an increase of four part time contractors in the next 12 months. 3 NINE MONTHS ENDED JUNE 30, 2003 Results Of Operations - --------------------- During the quarterly period covered by this Report, the Company received minimal revenues from operations and incurred expenses of $2,311 as compared to $35,831 for the same period last year. The expenses stem from general, administrative and development expenses relating to the development of the Company's websites and administrative fees. The Company intends to continue negotiating with a large media company for licensing of episodes of Fashionfreakz.com. The Company has also been negotiating with several content producers regarding acquiring their content for distribution by the Company. These alliances may involve significant amounts of intangible assets, or non-cash charges that may affect operating results over the next several fiscal periods. The Company has been negotiating with companies to build marketing alliances. These alliances may involve significant amounts of intangible assets, or non-cash charges that may affect operating results over the next several fiscal periods. Liquidity - --------- As of June 30, 2003, we had a working capital deficit of $64,254. As a result of our operating losses from our inception through June 30, 2003, we generated a cash flow deficit of $ 60,365 from operating activities. We met our cash requirements during this period from advances of $21,751 from the Company's Officers and shareholders, cash proceeds received of $39,671 for shares sold. While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development. We are seeking financing in the form of equity through a Private Placement Memorandum in order to provide the necessary working capital. We currently have no commitments for financing. There is no guarantee that we will be successful in raising the funds required. By adjusting its operations and development to the level of capitalization , management believes it has sufficient capital resources to meet projected cash flow deficits through the next twelve months. However, if thereafter, we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition. The Company's independent certified public accountants have stated in their report included in the Company's Form 10KSB, filed January 14, 2003, that the Company has incurred operating losses since inception, and that the Company is dependent upon managements ability to develop profitable operations. These factors among others may raise substantial doubt about the Company's ability to continue as a going concern. 4 Discussion and Analysis of Financial Condition - ---------------------------------------------- OPERATIONS AND RESULTS FOR SIX MONTHS ENDED JUNE 30, 2003. Activity during the past quarter has been confined to testing the viability of the Company's business model, the identification of markets, development of products, and acquisition of complementary businesses. FUTURE PROSPECTS: The Company is unable to predict when it may launch intended operations, or failing to do so, when and if it may elect to participate in a business acquisition opportunity. The reason for this uncertainty arises from its limited resources, and competitive disadvantage to other public or semi-public issuers. REVERSE ACQUISITION CANDIDATE: The Company is not currently searching for a profitable business opportunity. This contingency is disclosed for the possibility that the Company's intended business might fail. The Company is not presently a reverse acquisition candidate. Should the Company's business fail, management does not believe the Company would be able to effectively, under current laws and regulations, attract capital, and would be required to seek such an acquisition to achieve profitability for shareholders. Factors That May Affect Future Results and Market Price of Stock. - ----------------------------------------------------------------- The business of the Company involves a number of risks and uncertainties that could cause actual results to differ materially from results projected in any forward-looking statement, or statements, made in this report. These risks and uncertainties include, but are not necessarily limited to the risks set forth below. The Company's securities are speculative and investment in the Company's securities involves a high degree of risk and the possibility that the investor will suffer the loss of the entire amount invested. NO OPERATING HISTORY; POTENTIAL OF INCREASED EXPENSES. The Company was organized in 2000, and has no operating history upon which an evaluation of its business and prospects can be based. There can be no assurance that the Company will be profitable on a quarterly or annual basis. In addition, as the Company expands its business network and marketing operations it will likely need to increase its operating expenses, broaden its customer support capabilities, and increase its administrative resources. POSSIBLE NEED FOR ADDITIONAL FINANCING. It is possible that revenues from the Company's operations may not be sufficient to finance its initial operating cost to reach breakeven. If this were to occur, the Company would need to raise or find additional capital. While the Company expects to be able to meet its financial obligations for approximately the next twelve months, there is no assurance that, after such period, the Company will be operating profitably. If they are not, there can be no assurance that any 5 required capital will be obtained on terms favorable to the Company. Failure to obtain adequate additional capital on favorable terms could result in significant delays in the expansion of new services and market share and could even result in the substantial curtailment of existing operations and services to clients. UNPREDICTABILITY OF FUTURE REVENUES; POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS. As a result of the Company's lack of operating history and the emerging nature of the market in which it competes, the Company is unable to forecast its revenues accurately. The Company's current and future expense levels are based largely on its investment/operating plans and estimates of future revenue and are to a large extent based on the Company's own estimates. Sales and operating results generally depend on the volume of, timing of, and ability to obtain customers, orders for services received, and revenues therefrom generated. These are, by their nature, difficult at best to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall or delay. Accordingly, any significant shortfall or delay in revenue in relation to the Company's planned expenditures would have an immediate adverse affect on the Company's business, financial condition, and results of operations. Further, in response to changes in the competitive environment, the Company may from time to time make certain pricing, service, or marketing decisions that could have a material adverse effect on the Company's business, financial condition, operating results, and cash flows. DEVELOPING MARKET; ACCEPTANCE OF THE INTERNET AS A MEDIUM FOR COMMERCE JUST NOW BEING PROVEN. The Company's long-term viability is substantially dependent upon the continued widespread acceptance and use of the Internet as a medium for business commerce, in terms of the sales of both products and services to businesses and individuals. The use of the Internet as a means of business sales and commerce has only recently reached a point where many companies are making reasonable profits from their endeavors therein, and there can be no assurance that this trend will continue. The Internet has experienced, and is expected to continue to experience, significant growth in the number of users and amount of traffic. There can be no assurance that the Internet infrastructure will continue to be able to support the demands placed on it by this continued growth. In addition, delays in the development or adoption of new standards and protocols to handle increased levels of Internet activity or increased governmental regulation could slow or stop the growth of the Internet as a viable medium for business commerce. Moreover, critical issues concerning the commercial use of the Internet (including security, reliability, accessibility and quality of service) remain unresolved and may adversely affect the growth of Internet use or the attractiveness of its use for business commerce. 6 The failure of the necessary infrastructure to further develop in a timely manner, or the failure of the Internet to continue to develop rapidly as a valid medium for business would have a material adverse effect on the Company's business, financial condition, operating results, and cash flows. UNPROVEN ACCEPTANCE OF THE COMPANY'S SERVICES AND/OR PRODUCTS. The Company is still in its development stage. As a result, it does not know with any certainty whether its services and/or products will be accepted within the business marketplace. If the Company's services and/or products prove to be unsuccessful within the marketplace, or if the Company fails to attain market acceptance, it could materially adversely affect the Company's financial condition, operating results, and cash flows. DEPENDENCE ON KEY PERSONNEL. The Company's performance and operating results are substantially dependent on the continued service and performance of its officer and directors. The Company intends to hire additional technical, sales, and other personnel as they move forward with their business model. Competition for such personnel is intense, and there can be no assurance that the Company can retain its key technical employees, or that it will be able to attract or retain highly qualified technical and managerial personnel in the future. The loss of the services of any of the Company's key employees or the inability to attract and retain the necessary technical, sales, and other personnel could have a material adverse effect upon the Company's business, financial condition, operating results, and cash flows. The Company does not currently maintain "key man" insurance for any of its key employees. LIABILITY FOR INFORMATION DISPLAYED ON THE COMPANY'S INTERNET WEB SITES. The Company may be subjected to claims for defamation, negligence, copyright, or trademark infringement and various other claims relating to the nature and content of materials it publishes on its Internet Web site, or those set up for its clients. These types of claims have been brought, sometimes successfully, against online businesses in the past. The Company could also face claims based on the content that is accessible from its own, or its clients' Internet Web sites through links to other Web sites. DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET. The success of the Company's business depends, in part, on continued acceptance and growth in the use of the Internet for business commerce and would suffer if Internet usage does not continue to grow. Internet usage may be inhibited for a number of reasons, such as: o Inadequate network infrastructure. o Security concerns. o Inconsistent quality of service. o Lack of available cost-effective, high-speed service. o The adoption of new standards or protocols for the Internet. o Changes or increases in government regulation. 7 Online companies have experienced interruptions in their services as a result of outages and other delays occurring due to problems with the Internet network infrastructure, disruptions in Internet access provided by third-party providers or failure of third party providers to handle higher volumes of user traffic. If Internet usage grows, the Internet infrastructure or third-party service providers may be unable to support the increased demands which may result in a decline of performance, reliability or ability to access the Internet. If outages or delays frequently occur in the future, Internet usage, as well as usage of the Company's Internet Web-sites, could grow more slowly or decline. RELIANCE ON OTHER THIRD PARTIES. The Company's and its clients' operations may depend, to a significant degree, on a number of other third parties, including but not limited to ISPs. The Company has no effective control over these third parties and no long-term contractual relationships with any of them. From time to time, the Company and/or its clients could experience temporary interruptions in their Internet Web-site connections and related communications access. Continuous or prolonged interruptions in the Internet Web-site connections or communications access would have a material adverse effect on the Company's business, financial condition and results of operations. Most agreements with ISPs place certain limits on a company's ability to obtain damages from the service providers for failure to maintain the company's connection to the Internet. COMPETITION. The business of online entertainment is very competitive and the Company believes such competition will continue to grow and intensify. In addition to competition on the Internet, the Company faces competition from new forms of digital entertainment distribution such as DVDs. The Company also competes with other forms of leisure for consumer spending, such as sports. The Company will be competing with more established on-line entertainment distribution companies. These competitors may include major music labels, movie studios, major technology companies, as well as established on-line companies. Many of these competitors have substantially greater access to capital, greater financial, technical, marketing, sales and distribution resources, and more experience in distribution of on-line entertainment and in the production of entertainment. Some of the Company's competitors for content distribution are: Screaming Media Inc., which is in the business of content aggregation and distribution, iSyndicate, a provider of syndication solutions and content, and Atom Films Inc., which is in the business of distributing short films. RISKS OF POTENTIAL GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES RELATING TO THE INTERNET. The Company is not currently subject to direct federal, state, or local regulation in the United States and Canada other than regulations applicable to businesses generally or directly applicable to electronic commerce. However, because the Internet is becoming increasingly popular, it is possible that a number of laws and regulations may be adopted with respect to the Internet. 8 These laws may cover issues such as user privacy, freedom of expression, pricing, content, and quality of products and services, taxation, advertising, intellectual property rights and information security. Furthermore, the growth of electronic commerce may prompt calls for more stringent consumer protection laws. The adoption of such consumer protection laws could create uncertainty in Internet usage and reduce the demand for all products and services. In addition, the Company is not certain how its business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption, and other intellectual property issues, taxation, libel, obscenity, and export or import matters. It is possible that future applications of these laws to the Company's business could reduce demand for its products and services or increase the cost of doing business as a result of litigation costs or increased service delivery costs. Because the Company's services will likely be available over the Internet in multiple states, and possibly foreign countries, other jurisdictions may claim that the Company is required to qualify to do business and pay taxes in each state or foreign country. The Company's failure to qualify in other jurisdictions when it is required to do so could subject the Company to penalties and could restrict the Company's ability to enforce contracts in those jurisdictions. The application of laws or regulations from jurisdictions whose laws do not currently apply to the Company's business may have a material adverse affect on its business, results of operations and financial condition. INTELLECTUAL PROPERTY RIGHTS. As part of its confidentiality procedures, the Company expects to enter into nondisclosure and confidentiality agreements with its key employees, and any consultants and/or business partners and will limit access to and distribution of its technology, documentation, and other proprietary information. Despite the Company's efforts to protect any intellectual property rights it may have, unauthorized third parties, including competitors, may from time to time copy or reverse-engineer certain portions of the Company's technology and use such information to create competitive services and/or products. It is possible that the scope, validity, and/or enforceability of the Company's intellectual property rights could be challenged by other parties, including competitors. The results of such challenges before administrative bodies or courts depend on many factors which cannot be accurately assessed at this time. Unfavorable decisions by such administrative bodies or courts could have a negative impact on the Company's intellectual property rights. Any such challenges, whether with or without merit, could be time consuming, result in costly litigation and diversion of resources, and cause service or product delays. If such events should occur, the Company's business, operating results and financial condition could be materially adversely affected. ITEM 3. CONTROLS AND PROCEDURES The Company's management including the Chief Executive Officer, President and Chief Financial Officer, have evaluated, within 90 days prior to the filing of this quarterly report, the effectiveness of the design, maintenance, and operation of the Company's disclosure controls and procedures. Management determined that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in the reports that it files under the Exchange Act is accurate and is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. 9 Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity's disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process. There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation thereof, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 3. CONTROLS AND PROCEDURES The registrant's Principal executive officers and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rules 13a-14 ( c ) of the Securities Exchange Act of 1934 ) as of June 30, 2003 have concluded that the registrants' disclosure controls and procedures are adequate and effective to ensure that material information relating to the registrants and their consolidated subsidiaries is recorded, processed , summarized and reported within the time periods specified by the SEC' s rules and forms, particularly during the period in which this quarterly report has been prepared. The registrants' principal executive officers and principal financial officer have concluded that there were no significant changes in the registrants' internal controls or in other factors that could significantly affect these controls subsequent to February 28, 2003 the date of their most recent evaluation of such controls, and that there was no significant deficiencies or material weaknesses in the registrant's internal controls. PART II: OTHER INFORMATION Item 1 Legal Proceedings - ------------------------ None Item 2 Changes in Securities - ---------------------------- None Item 3 Defaults Upon Senior Securitities - ---------------------------------------- None Item 4 Submission of Matters to a vote of security holders - ---------------------------------------------------------- None Item 5 Other Information - ------------------------ None 10 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits 3.1 Articles of Incorporation of the Registrant* 3.2 By-laws of the Registrant* 99.1 Certification of CEO 99.2 Certification of CFO - --------------------------- * Previously filed as an exhibit to the Company's Form SB-2 dated January 29, 2002 (b) Reports on Form 8-K filed during the three months ended June 30, 2003. No Current Reports on Form 8-K were filed during the three months ended June 30, 2003 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 14, 2003 Mediatelevision.tv, Inc. /s/ Penny Green ----------------------------------- Penny Green President 11 CERTIFICATIONS I, Penny Green, certify that: 1) I have reviewed this quarterly report on Form 10-QSB of Mediatelevision.tv, Inc.; 2) Based on my knowledge, this 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 report; 3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4) The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5) The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date : August 14, 2003 /s/ Penny Green - ------------------------------------ Penny Green President 12