================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  ------------

                                   FORM 10-Q/A

(Mark One)

|X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 2002

                                       OR

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from ______________to________________


                                    ITSA LTD.
             (Exact name of Registrant as Specified in its Charter)

                         Commission File Number: 0-31247

          CAYMAN ISLANDS                                    NOT APPLICABLE
(State or Other Jurisdiction of                  (I.R.S. Employer Identification
 Incorporation or Organization)                   Number)

                C/O ITSA-INTERCONTINENTAL TELECOMUNICACOES LTDA.
                               SCS, QUADRA 07-BL.A
                        ED. TORRE PATIO BRASIL, SALA 601
                             70.307-901 BRASILIA-DF
                                     BRAZIL
          (Address, Including Zip Code, of Principal Executive Offices)

                               011-55-61-314-9904
              (Registrant's Telephone Number, Including Area Code)


         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 filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. |X|Yes |_| No

         Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.

               Class                                          Outstanding
               -----                                          -----------

         Ordinary Shares, par value $0.01                     10,000,000 shares
         per share.                                           as of May 15, 2002

================================================================================

<page>

                                       1

                                    ITSA LTD.



                                      INDEX

<table>
<caption>


        <C>                                                                                    <C>
                                                                                                  Page No.
                                                                                                  --------




PART I.    FINANCIAL INFORMATION

ITEM 1.    Financial Statements

           Consolidated Balance Sheets as of December 31, 2001 (Audited)
           and March 31, 2002 (Unaudited and Restated)...........................................        2

           Unaudited Consolidated Statements of Operations for the Three Months
           Ended March 31, 2001 and March 31, 2002 (Restated)....................................        3

           Consolidated Statements of Changes in Stockholders' Deficiency and Other
           Comprehensive Loss for the Year Ended December 31, 2001 (Audited)
           and the Three Months Ended March 31, 2002 (Unaudited and Restated)....................        4

           Unaudited Consolidated Statements of Cash Flows for the Three Months Ended
           March 31, 2001 and March 31, 2002 (Restated)..........................................        5

           Notes to Unaudited Consolidated Financial Statements..................................        6

ITEM 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations.............................................................       14

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk............................       20


PART II.   OTHER INFORMATION

ITEM 1.    Legal Proceedings.....................................................................       22

ITEM 2.    Changes in Securities and Use of Proceeds.............................................       22

ITEM 3.    Defaults Upon Senior Securities.......................................................       22

ITEM 4.    Submission of Matters to a Vote of Security Holders...................................       22

ITEM 5.    Other Information.....................................................................       22

ITEM 6.    Exhibits and Reports on Form 8-K......................................................       22

SIGNATURES.......................................................................................       23

</table>


                                       1
<page>

           ITSA LTD. (SUCCESSOR TO TV FILME, INC.) AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                          (IN THOUSANDS OF US DOLLARS)

<table>
<caption>

                                                                                  AUDITED                    UNADITED
                                                                                  -------                    --------
                                                                             DECEMBER 31, 2001            MARCH 31, 2002


                                                                             <c>                       <c>
ASSETS                                                                                                    (as Restated - see
                                                                                                                Note 4)
Current assets:
     Cash and cash equivalents..................................                $        2,358            $         2,880
     Trade accounts receivable, less allowance of $561 at
         Decembeer 31, 2001 and $589 at March 31, 2002..........                           589                        388
     Prepaid expenses and other current assets..................                           447                        503
                                                                              -----------------         ------------------
          Total current assets..................................                         3,394                      3,771

Non-current assets:
     Recoverable taxes..........................................                         2,711                      2,834
     Judicial deposits..........................................                         1,259                      1,529
     Other assets...............................................                           985                        969

     Property, plant and equipment, net.........................                        13,665                     13,077
     Reorganization value in excess of amounts allocable to
         identifiable assets (see note 4).......................                        20,161                          -
     Licenses...................................................                         4,324                      4,216
                                                                              -----------------         ------------------
         Total non-current assets...............................                        43,105                     22,625

                                                                              -----------------         ------------------
             Total assets.......................................                $      46,499             $        26,396
                                                                              =================         ==================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
     Accounts payable...........................................                $        2,560            $         2,919
     Payroll and other benefits payable.........................                           699                        648
     Accrued interest payable...................................                           147                      1,468
     Accrued liabilities and taxes payable......................                         3,546                      4,055
                                                                              -----------------         ------------------
         Total current liabilities..............................                         6,952                      9,090

Non-current liabilities:
     12% Senior Secured Notes...................................                        44,045                     44,045
     Deferred installation fees.................................                           251                        248
     Reserve for tax, labor proceedings and other
         contingencies..........................................                         5,296                      5,270
                                                                              -----------------         ------------------
         Total non-current liabilities..........................                        49,592                     49,563

Stockholders' deficiency:
     Common stock, $.01 par value,
         shares authorized - 20,000,000 at December 31, 2001 and
         March 31, 2002; shares issued and outstanding -
         10,000,000 at December 31, 2001 and March 31, 2002                                100                        100
     Additional paid-in capital.................................                        24,938                     24,938
     Accumulated deficit........................................                      (32,490)                    (54,701)
     Cumulative other comprehensive loss........................                       (2,593)                     (2,594)
                                                                              -----------------         ------------------
        Total stockholders' deficiency..........................                      (10,045)                    (32,257)
                                                                              -----------------         ------------------
        Total liabilities and stockholders' deficiency..........                $      46,499             $        26,396
                                                                              =================         ==================
</table>

        See accompanying notes to the consolidated financial statements.

                                       2

<page>



            ITSA LTD. (SUCCESSOR TO TV FILME, INC.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

               (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<table>
<caption>




                                                                     THREE MONTHS ENDED MARCH 31,
                                                              ---------------------------------------
                                                                      2001                 2002
                                                              -----------------        --------------
                                                                                      (as Restated - see
                                                                                             Note 4)
    
                                                       <c>                  <c>
    Revenues................................................  $          6,408     $           4,797
    Operating costs and expenses:
         System operating (exclusive of depreciation and
            amortization shown below).......................             3,657                 2,572
         Selling, general and administrative (exclusive of
            depreciation and amortization shown below)......             4,323                 1,996
         Depreciation and amortization......................             2,668                   988
                                                              -----------------    ------------------
            Total operating costs and expenses..............            10,648                 5,556
                                                              -----------------    ------------------
            Operating loss..................................           (4,240)                 (759)

    Other income (expense):
         Interest and other expense.........................           (1,258)               (1,387)
         Interest and other income..........................              174                   151
         Foreign exchange loss..............................           (3,950)                  (55)
                                                              -----------------    ------------------
            Total other expense, net........................           (5,034)               (1,291)
                                                              -----------------    ------------------

    Loss before cumulative effect of change in accounting
       principle............................................  $        (9,274)     $         (2,050)
    Cumulative effect of change in accounting principle, net
       of tax (see note 4)..................................  $            --      $        (20,161)
                                                              -----------------    ------------------

    Net loss................................................  $        (9,274)     $        (22,211)
                                                              =================    ==================

    Basic and diluted net loss per share before cumulative
       effect of change in accounting principle.............  $         (0.93)     $          (0.20)
                                                              =================    ==================
    Basic and diluted loss per share from cumulative effect
       of change in accounting principle, net of tax........  $             --     $          (2.02)
                                                              =================    ==================

    Basic and diluted net loss per share....................  $         (0.93)     $          (2.22)
                                                              =================    ==================

    Weighted average number of shares outstanding...........            10,000                10,000




        See accompanying notes to the consolidated financial statements.

</table>

                                       3
<page>


<table>
<caption>



            ITSA LTD. (SUCCESSOR TO TV FILME, INC.) AND SUBSIDIARIES

         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                          AND OTHER COMPREHENSIVE LOSS

 FOR YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND FOR THE THREE MONTHS ENDED MARCH 31, 2002
                            (UNAUDITED AND RESTATED)
                 (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)


                                                                                                  CUMULATIVE
                                         COMMON STOCK          ADDITIONAL                           OTHER
                                   --------------------------   PAID-IN       ACCUMULATED       COMPREHENSIVE
                                       SHARES      PAR VALUE     CAPITAL        DEFICIT             LOSS           TOTAL
                                       ------      ---------   ----------     -----------       -------------      -----

                                  <c>                <c>       <c>           <c>                 <c>          <c>
BALANCE AT
   DECEMBER 31, 2000..........       10,000,000         $100      $24,938       $(12,131)           $(1,819)     $  11,088
Cumulative translation
 adjustment...................               --           --           --             --            $  (774)     $    (774)
Net loss......................               --           --           --       $(20,359)                --      $ (20,359)
                                                                                                                -------------
Comprehensive loss............                                                                                   $ (21,133)
                                   ------------------------------------------------------------------------------------------

BALANCE AT
   DECEMBER 31, 2001..........       10,000,000         $100      $24,938       $(32,490)           $(2,593)     $ (10,045)

Cumulative translation
 adjustment...................               --           --           --             --            $    (1)     $      (1)
Net loss......................               --           --           --       $(22,211)                --      $ (22,211)
                                                                                                                -------------
Comprehensive loss............                                                                                   $ (22,212)
                                   ------------------------------------------------------------------------------------------

BALANCE AT
   MARCH 31, 2002.............       10,000,000         $100      $24,938       $ (54,701)          $ (2,594)    $ (32,257)
                                     ==========         ====      =======       ==========          =========    ==========


                         See accompanying notes to the consolidated financial statements.

</table>
                                                       4
<page>



            ITSA LTD. (SUCCESSOR TO TV FILME, INC.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                          (IN THOUSANDS OF US DOLLARS)
                                   (UNAUDITED)

<table>
<caption>


                                                                  THREE MONTHS ENDED MARCH 31,
                                                         --------------------------------------------
                                                               2001                     2002
                                                         -----------------      ---------------------
                                                                                 (as Restated - see
                                                                                        Note 4)


                                                      <c>                        <c>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss..............................................   $         (9,274)          $        (22,211)
Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
   Depreciation and amortization......................              2,668                        988
   Cumulative effect of change in accounting
      principle, net of tax...........................                 --                     20,161
   Provision for doubtful accounts....................                508                        251
   Deferred installation fees.........................                (51)                        (3)
   Gain on disposal of property, plant and equipment..                (15)                        --
   Foreign exchange loss..............................              3,950                         55
Changes in operating assets and liabilities:
   Accounts receivable................................               (654)                       (54)
   Prepaid expenses and other current assets..........                918                       (179)
   Other assets.......................................                184                       (251)
   Accounts payable...................................                530                        369
   Payroll and other accrued benefits.................                (79)                       (49)
   Accrued interest...................................              1,176                      1,311
   Accrued liabilities and taxes payable..............               (379)                       407
   Sale of operating loss carryforwards...............                264                         --
                                                         -----------------         ------------------
Net cash provided by (used in) operating activities...               (254)                       795
                                                         -----------------         ------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment.............               (903)                      (283)
Sales of property, plant and equipment................                166                         --
                                                         -----------------         ------------------
Net cash used in investing activities.................               (737)                      (283)
                                                         -----------------         ------------------

Effect of exchange rate changes on cash and cash
   equivalents........................................               (298)                        10
                                                         -----------------         ------------------
Net increase (decrease) in cash and cash equivalents..             (1,289)                       522

Cash and cash equivalents at beginning of period......   $          3,858          $           2,358
                                                         -----------------         ------------------
Cash and cash equivalents at end of period............   $          2,569          $           2,880
                                                         =================         ==================

SUPPLEMENTAL NONCASH FINANCING AND INVESTING
ACTIVITIES:
Accrued interest on loans refinanced..................   $             --          $           1,320

</table>



        See accompanying notes to the consolidated financial statements.

                                       5
<page>



            ITSA LTD. (SUCCESSOR TO TV FILME, INC.) AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

            (IN THOUSANDS OF US DOLLARS, UNLESS OTHERWISE INDICATED)
                            (UNAUDITED AND RESTATED)

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.  COMPANY BACKGROUND

         On July 21,  2000,  ITSA Ltd.,  a Cayman  Islands  company,  became the
successor to TV Filme, Inc., a Delaware corporation, following the successful
completion of a debt restructuring pursuant to a plan of reorganization of TV
Filme, Inc. under Chapter 11 of the United States Bankruptcy Code. On March 18,
2002, the U.S. Bankruptcy Court for the District of Delaware closed the Chapter
11 bankruptcy case involving TV Filme, Inc. Unless otherwise indicated, ITSA
Ltd., the successor company to TV Filme, Inc., and its subsidiaries will
hereinafter be referred to as the "Company," and TV Filme, Inc., the predecessor
company to ITSA Ltd., will hereinafter be referred to as "TV Filme."

         As of July 21, 2000, the Company adopted fresh-start reporting (see
Note 3).

         Following financial difficulties in the years 1998 and 1999, TV Filme
selected a financial advisor to assist in evaluating strategic alternatives for
the restructuring of its long-term debt, represented by the 12-7/8% Senior Notes
due 2004 (the "TV Filme Senior Notes"). On August 13, 1999, TV Filme reached an
agreement in principle with a committee representing holders of the TV Filme
Senior Notes. On January 26, 2000, TV Filme filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code, together with a pre-negotiated
Plan of Reorganization and the Disclosure Statement relating to such Plan, with
the U.S. Bankruptcy Court for the District of Delaware. The court approved the
Disclosure Statement on March 1, 2000. Following approval of the Disclosure
Statement, ballots respecting the Plan were circulated to those parties entitled
to vote on the Plan, and the Plan was confirmed at a hearing by the court on
April 10, 2000. Consummation of the Plan was completed on July 21, 2000,
following approval of ANATEL (the Brazilian Telecommunications Agency) and the
Central Bank of Brazil.

         In accordance with the terms of the Plan of Reorganization, the TV
Filme Senior Note holders received a $25 million cash payment and their existing
notes were converted into (i) secured notes in the aggregate principal amount of
$35 million, due 2004, at an interest rate of 12% per annum (the "12% Senior
Secured Notes"), and (ii) 80% of the new common equity of the reorganized
company. Current management received 15% of the new common equity, and the
existing common stockholders of TV Filme received 5% of the new common equity of
the reorganized company. Shares granted to current management have been expensed
in the financial statements of the successor based on the fair value at that
date. They have been expensed in the period as there are no contractual
requirements in connection with the issuance of these shares. TV Filme's stock
option plan and outstanding stock options under the plan were cancelled. ITSA
Ltd. (the reorganized company) is a Cayman Islands holding company and is the
successor issuer to TV Filme. The TV Filme Senior Notes were cancelled upon
surrender. The 12% Senior Secured Notes were issued by ITSA-Intercontinental
Telecommunicacoes Ltda., a wholly-owned subsidiary of the Company.

         The Company develops, owns and operates broadband wireless
telecommunications systems in markets in Brazil, offering video, high-speed
Internet and data communications services. Through its subsidiaries, the Company
has licenses in the cities of Brasilia, Goiania, Belem, Campina Grande, Caruaru,
Porto Velho, Presidente Prudente, Bauru, Franca, Uberaba, Belo Horizonte and
Vitoria, covering over 3 million households and approximately 13 million people.

         The Company offers a pre-paid subscription video service, called Mais
TV, which is comprised of a self-install kit available in retail stores in most
of the cities where the Company has operations.

         ITSA was also the first company in Brazil to launch a high-speed
Internet access system using the technology of high-speed modems. The system,
called LinkExpress, has been available on a commercial basis in the city of
Brasilia since 1998.

                                       6
<page>


         Although the economic situation in Brazil has remained relatively
stable in recent years, a return to higher levels of inflation and currency
fluctuations could adversely affect the Company's operations. The devaluation of
the Brazilian real in relation to the U.S. dollar has had significant effects on
the Company's financial statements. The exchange rate of the Brazilian real
("R$") to the U.S. dollar was R$1.9554:US$1.00 at December 31, 2000 and
R$2.3204:US$1.00 at December 31, 2001. At March 31, 2002, the exchange rate was
R$2.3236:US$1.00.

         ITSA Ltd. (the parent company) has no material assets of its own other
than the investment in its subsidiaries. All assets of the subsidiaries are
restricted.

         The Company is dependent upon a single supplier of decoders to serve
its operating markets. This supplier announced that it was planning to
discontinue production of these decoders in the future and gave the Company a
limited time in which to give additional orders for the manufacturing of this
product. While the Company has a sufficient inventory of decoders to serve new
subscribers based on the projections of future subscribers' activity, the
technology used in the decoding process is proprietary and no other supplier
currently could provide the Company with additional decoders should they become
necessary. The Company is currently exploring alternatives, including the
possibility of the supplier licensing its technology for production of such
decoders in Brazil. If the Company encounters an interruption in the supply or
limited availability of these decoders, it could have a material adverse effect
on the Company's financial condition or results of operations, including current
estimates on recoverability of long-lived assets being currently held and used
by the Company.

         Stockholders (Deficiency)

         The Company's management is concentrating its efforts to address the
Company's negative stockholders' equity and negative working capital. To this
end, the Company initiated and still continues to undertake a short-term action
plan of reducing selling, general and administrative expenses. Further, the
Company continues its efforts to restructuring its organization and downsizing
its work force, renegotiating its supply contracts, and creating a Survey and
Development Group to provide the Company with new services and products.

         Future Operations and Liquidity

         The Company has incurred operating losses since inception and had a
working capital and stockholders' deficiency at March 31, 2002. Operating losses
are expected to continue in the future until such time as the Company is
successful in securing a subscriber base capable of generating a significantly
higher level of operating revenues.

         The Company has limited capital resources available to fund capital
expenditures, fund maturities of debt as they become due and to support its
operations until such time the Company is able to generate significant levels of
positive cash flow from operations.

         The Company is therefore dependent upon obtaining additional financing
to provide funds to support operations and fund maturities of debt as they
become due. The Company is negotiating with certain of its stockholders to
provide additional equity or debt financing, but the Company can give no
assurance that acceptable agreements for such financing will be reached. The
future success of the Company is dependent upon its ability to increase its
subscriber base and to obtain additional financing.

         B.  BASIS OF PRESENTATION

         The unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP") for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by U.S. GAAP 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. Operating results for the three months ended
March 31, 2002 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2002.

                                       7
<page>


         The balance sheet at December 31, 2001 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by U.S. GAAP for complete financial
statements.

         The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany balances have been
eliminated in consolidation.

         Revenue Recognition

         Pay Television Services. The Company charges subscribers for its pay
television services on a monthly basis. Subscription revenues are recorded in
the month the service is provided. The Company also charges subscribers a fee
for the installation of the equipment and connections necessary to receive the
pay television services. Installation fees, net of direct sales costs
specifically incurred for the acquisition or origination of a new customer
contract, are deferred and recognized over a period of four years, the average
life of a subscriber. Revenues from magazine and electronic advertising sales
are recognized as services are rendered.

         Internet Access and Data Communication Services. The Company charges
subscribers for its Internet access services and data communication services on
a monthly basis. Subscription revenues are recorded in the month the service is
provided.

         The Company has client acceptance and discontinuance of service
policies and procedures to ensure revenues collectibility is reasonably assured.

         Provision for Doubtful Accounts

         The provision for doubtful accounts is established in an amount which
is considered sufficient to cover any probable losses on realization of the
accounts receivable from the Company's customers and is recorded in selling,
general and administrative expenses. The Company's accounting policy for
establishing the provision is consistent with the billing and collection
process and historical experience. This provision is established progressively
as follows:


<table>
<caption>


           
                       <C>                                       <C>
           OVERDUE BILLS                     COLLECTION PROCESS                % LOSS PROVIDED FOR
           -------------                     ------------------                -------------------
            1 to 30 days             Administrative collection;                         5
                                     disconnect service after 7 days,
                                     with no further revenue
                                     recognition

           31 to 60 days             Administrative collection; cancel                  50
                                     contract after 60 days

            Over 61 days             Administrative collection; cancel                 100
                                     contract after 60 days
</table>


         Property, Plant and Equipment

         Property, plant and equipment are stated at cost. The Company
capitalizes materials, subcontractor costs, labor and overhead incurred
associated with initial subscriber installations.

         Depreciation is computed on the straight-line basis using estimated
useful lives ranging from five to ten years for buildings and leasehold
improvements (limited to the shorter of the lease term or the useful life) and
five years for machinery and equipment, furniture and fixtures. Depreciation
expense for leased assets is included in depreciation expense.

         Depreciation of property, plant and equipment is provided using the
straight-line method based on the estimated useful lives. The application of the
Company's property, plant and equipment accounting policies also includes
estimates, assumptions, and judgments by management with respect to the
estimated useful lives. Changes in circumstances, such as technological
advances, changes to the Company's business model or changes in the Company's
capital and investment strategy, can result in the actual useful lives differing
from the prior estimates. As a result,

                                       8
<page>


management may revise useful lives which may result in the useful lives for
certain asset categories being either shortened or extended, depending on the
judgments made by the Company.

         Use of Estimates

         The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

         Cash and Cash Equivalents

         The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.

         Recoverability of Long-Lived Assets to be Held and Used in the Business

         The Company follows the provisions of SFAS No. 144 "Accounting for the
Impairment of Disposal of Long-lived Assets" to evaluate the need to record
impairment on its property, plant and equipment and licenses.  The Company
periodically evaluates the carrying value of long-lived assets to be held and
used, when events and circumstances warrant such a review. The carrying value of
long-lived assets is considered impaired when the anticipated undiscounted
operating cash flow from such assets is less than their carrying value. In that
event, a loss is recognized based on the amount by which the carrying value
exceeds the fair value market value of the assets. This assessment is based upon
projections of future operations that assume certain levels of revenues,
subscribers and gross margin percentages would be achieved. There is no
assurance that the Company will be successful in achieving these levels of
revenues, subscribers and gross margin percentages. If the Company is unable to
achieve such projections of future operations, it could result in a significant
impairment provision being recorded in future periods related to its investment
in its long-lived assets.

         Licenses

         Licenses are comprised of wireless and data communications licenses,
which are amortized on a straight-line basis over the period of the license.
Amortization expense for the three months ended March 31, 2001 and 2002 was $71
and $70, respectively.






                                                        MARCH 31,      MARCH 31,
                                                          2001          2002
                                                     -------------  ------------



Licenses..........................................        $ 5,109        $4,954
Accumulated amortization..........................           (458)         (738)
                                                          $ 4,651        $4,216
                                                          =======        ======


           Estimated Amortization Expense:

                    For quarter ended 03/31/2003                  $ 280
                    For quarter ended 03/31/2004                  $ 280
                    For quarter ended 03/31/2005                  $ 280


                                       9
<page>


         Income Taxes

         The Company uses the asset and liability method for the recognition of
deferred tax assets and liabilities for expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns. Deferred income tax assets and liabilities are determined for
differences between financial statements tax bases of assets and liabilities
that will result in taxable or deductible amounts in the future. The computation
is based on enacted tax laws and rules applicable to periods in which the
temporary differences are expected to be recovered or settled. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. Future adjustments to such valuation allowances
could have a significant impact in the Company's financial condition and results
of operations.

         New Accounting Pronouncements

         During June 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 141 ("SFAS 141"),
"Business Combinations." SFAS 141 addresses financial accounting and reporting
for business combinations and supersedes APB Opinion No. 16 ("APB 16"),
"Business Combinations" and SFAS 38, "Accounting for Preacquisition
Contingencies of Purchased Enterprises." All business combinations in the scope
of SFAS 141 are to be accounted for using the purchase method. In addition, SFAS
141 requires that intangible assets be recognized as assets apart from goodwill
if they meet two criteria: the contractual-legal criterion or the separability
criterion. To assist in identifying acquired intangible assets, SFAS 141 also
provides a list of intangible assets that meet either of those criteria. In
addition to the disclosure requirements prescribed in APB 16, SFAS 141 requires
disclosure of the primary reasons for a business combination and the allocation
of the purchase price paid to the assets acquired and liabilities assumed by
major balance sheet caption. SFAS 141 also requires that when the amounts of
goodwill and intangible assets acquired are significant to the purchase price
paid, disclosure of other information about those assets is provided, such as
the amount of goodwill by reportable segment and the amount of the purchase
price assigned to each major intangible asset class. The provisions of SFAS 141
apply to all business combinations initiated after June 30, 2001. SFAS 141 also
applies to all business combinations accounted for using the purchase method for
which the date of acquisition is July 1, 2001 or later. The Company has adopted
the provisions of SFAS 141 and such adoption did not have a material impact on
the Company's consolidated financial position and results of operations.

         During June 2001, FASB issued Statement of Financial Accounting
Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets." SFAS 142
addresses financial accounting and reporting for acquired goodwill and other
intangible assets. SFAS 142 supersedes APB Opinion No. 17 ("APB 17"),
"Intangible Assets" and also amends SFAS 121, "Accounting for the Impairment of
Long Lived Assets and for Long Lived Assets to Be Disposed Of," to exclude from
its scope goodwill and intangible assets that are not amortized. SFAS 142
addresses how intangible assets that are acquired individually or with a group
of other assets (but not those acquired in a business combination) should be
accounted for in financial statements upon their acquisition. SFAS 142 also
addresses how goodwill and other intangible assets should be accounted for after
they have been initially recognized in the financial statements. The provisions
of SFAS 142 are required to be applied starting with fiscal years beginning
after December 15, 2001. SFAS 142 does not permit the amortization of goodwill
as required by APB 17. Rather, goodwill will be subject to a periodic impairment
test, using a two-step process. The first step is to identify a potential
impairment. The second step of the goodwill impairment test measures the amount
of the impairment loss, using a fair value-based approach. Under SFAS 142,
Reorganization Value in Excess of Amounts Allocable to Identifiable Assets
("ERV") shall be reported and accounted for in the same manner as goodwill. Upon
adoption of this statement on January 1, 2002, the Company, based on an
independent valuation of the Company, recorded an impairment loss of $20,161 on
ERV. The impairment loss of $20,161 was recognized as the cumulative effect of a
change in accounting principle in the Company's consolidated statement of
operations as of January 1, 2002, resulting in a restatement of the net loss and
loss per share. In addition, a valuation allowance for 100% of the related tax
benefit of approximately $6,855 resulting from this impairment loss has been
recognized due to the current uncertainty regarding the realization of this
asset.

                                       10

<page>



         The following table shows the effect on the three months ended March
31, 2002 of applying the change in accounting principle retroactively:

<table>
<caption>

                                                                         THREE MONTHS ENDED
                                                                           MARCH 31, 2002
                                                                   -----------------------------


         
                                                      <c>               <c>
         Reported net loss.....................................   $                  (2,050)
         Cumulative effect of change in accounting principle...                     (20,161)
                                                                   =============================

         Adjusted net loss.....................................   $                 (22,211)
                                                                   =============================

         Basic and diluted reported net loss per share before
           cumulative effect of change in accounting principle.   $                   (0.20)
                                                                   =============================

         Basic and diluted loss per share from cumulative
           effect of change in accounting principle, net
           of tax..............................................   $                   (2.02)
                                                                   =============================


         Basic and diluted adjusted net loss per share.........   $                   (2.22)
                                                                   =============================


         Weighted average number of shares outstanding.........                       10,000

</table>

         During June 2001, FASB issued Statement of Financial Accounting
Standards No. 143 ("SFAS 143"), "Accounting for Asset Retirement Obligations."
SFAS No. 143 basically requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
Under SFAS 143, the liability for an asset retirement obligation is discounted
and accretion expense is recognized using the credit-adjusted risk-free interest
rate in effect when the liability was initially recognized. In addition,
disclosure requirements contained in SFAS 143 will provide more information
about asset retirement obligations. SFAS 143 is effective for financial
statements issued for fiscal years beginning after June 15, 2002 with earlier
application encouraged. The Company has evaluated the impact of the provisions
of SFAS 143 on its financial statements and believes that the adoption of SFAS
143 will not have a material impact on the Company's financial position and
results of operations.

         During August 2001, FASB issued Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets," which supersedes Statement of Financial Accounting Standards
No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," but retains SFAS 121 fundamental
provisions for (a) recognition/measurement of impairment of long-lived assets to
be held and used and (b) measurement of long-lived assets to be disposed of by
sale. SFAS 144 also supersedes the accounting and reporting provisions of APB
Opinion No. 30 ("APB 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," for segments of a business to
be disposed of but retains APB 30's requirement to report discontinued
operations separately from continuing operations and extends that reporting to a
component of an entity that either has been disposed of or it is classified as
held for sale. SFAS 144 is effective for fiscal years beginning after December
15, 2001. The Company adopted the provisions of SFAS 144 on January 1, 2002. The
adoption of SFAS 142 did not have a material impact on the Company's
consolidated financial position and results of operations.

                                       11

<page>


2.       LONG-TERM DEBT

         The 12% Senior Secured Notes ($44,045 outstanding at March 31, 2002)
are U.S. dollar denominated and are due on December 20, 2004. Interest payments
are due on June 20 and December 20 of each year until maturity. Interest is
payable in kind at the Company's option through its first four payment dates.
The Company exercised its option at December 31, 2001 and issued additional
notes for the $9,045 interest accrued to that date representing three of the
four exempted payment dates. The 12% Senior Secured Notes are secured by all of
the assets of the Company. In the event of a default on the 12% Senior Secured
Notes, 25% or more of the lenders thereunder may declare the unpaid principal
or, and any accrued interest on, all the 12% Senior Secured Notes to be due and
payable immediately. In the event the Company becomes subject to a voluntary or
involuntary insolvency proceeding, the 12% Senior Secured Notes become
immediately due and payable.

3.       FRESH START REPORTING AND REORGANIZATION

         As of July 21, 2000, the Company adopted fresh-start reporting in
accordance with AICPA Statement of Position 90-7, "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code." Fresh-start reporting
resulted in significant changes to the consolidated balance sheet based upon the
appraised reorganization value of the Company.

         TV Filme's reorganization value of $76,184 was based on a valuation
performed by an independent firm using 10-year forecasted discounted cash flows
and other economic measures. The value resulted in a greater value than the fair
value of the tangible net assets. As such, the difference of $31,413 was
recorded as Reorganization value in excess of amounts allocable to identifiable
assets.

         The effect of the plan of reorganization and adoption of fresh-start
reporting was as follows:

<table>
<caption>


                                                             DEBT       EXCHANGE      FRESH
                                      PRE-CONFIRMATION     DISCHARGE    OF STOCK      START     REORGANIZED
                                      ------------------  ------------ ------------ ---------- --------------

                                   <c>                 <c>           <c>         <c>          <c>
ASSETS

CURRENT ASSETS
   Cash and cash equivalents........  $          36,163   $  (27,902)   $     --    $       --   $      8,261
   Accounts receivable, net.........              1,380           --          --            --          1,380
   Prepaid expense and other current
    assets.........................               6,964                                                 6,964
                                      -----------------   ----------    --------    ----------   ------------
     Total current assets...........             44,507      (27,902)         --            --         16,605

Property, plant and equipment.......             25,369           --          --        (3,221)        22,148
Reorganization value in excess of
   amounts allocable to identifiable
   assets...........................                 --           --          --        31,413         31,413
Licenses............................              5,638           --          --            --          5,638
Other assets........................                380           --          --            --            380

                                      -----------------   ----------    --------    ----------   ------------
TOTAL ASSETS........................  $          75,894   $  (27,902)   $     --    $   28,192   $     76,184
                                      =================   ==========    ========    ==========   ============
</table>

                                       12
<page>


<table>
<caption>
                                                             DEBT       EXCHANGE      FRESH
                                      PRE-CONFIRMATION     DISCHARGE    OF STOCK      START     REORGANIZED
                                      ------------------  ------------ ------------ ---------- --------------


                                   <c>                 <c>           <c>         <c>          <c>
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)

CURRENT LIABILITIES
   Accounts payable.................  $           9,908   $   (2,902)   $     --    $       --   $      7,006
   Payroll and other accrued benefits             2,243           --          --            --          2,243
   Accrued interest.................             28,646      (26,196)         --            --          2,450
   Accrued liabilities and taxes
    payable.........................              7,238           --          --            --          7,238
   Senior notes in default..........            140,000     (140,000)         --            --             --
                                      -----------------  -----------    --------    ----------   ------------
     Total current liabilities......            188,035     (169,098)         --            --         18,937

12% Senior Secured Notes............                 --       35,000          --            --         35,000
Deferred installation fees..........                479           --          --            --            479

Minority interest...................               (21)           --          --            21             --

STOCKHOLDERS' EQUITY (DEFICIENCY)
   Common stock.....................                108           86         (94)           --            100
   Additional paid-in capital.......             45,657       17,329          94       (41,412)        21,668
   Accumulated deficit..............           (152,865)      88,781          --        64,084             --
Cumulative translation adjustment                (5,499)          --          --         5,499             --
                                      -----------------   ----------    --------    ----------   ------------
     Total stockholders' equity                (112,599)     106,196          --        28,171         21,768
      (deficiency)..................


                                      -----------------  -----------    --------    ----------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY (DEFICIENCY)...............  $          75,894   $  (27,902)    $    --    $   28,192   $     76,184
                                      ==================  ============  =========== ===========  ============

</table>

4.       REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCABLE TO IDENTIFIABLE
         ASSETS

         Until December 31, 2001, the Company's reorganization value in excess
of amounts allocable to identifiable assets, or ERV, was being amortized over
ten years. During June 2001, FASB issued SFAS 142. SFAS 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB 17. SFAS 142 also amends SFAS 121 to exclude from its scope
goodwill and intangible assets that are not amortized. SFAS 142 addresses how
intangible assets that are acquired individually or with a group of other assets
(but not those acquired in a business combination) should be accounted for in
financial statements upon their acquisition. SFAS 142 also addresses how
goodwill and other intangible assets should be accounted for after they have
been initially recognized in the financial statements. The provisions of SFAS
142 are required to be applied starting with fiscal years beginning after
December 15, 2001. SFAS 142 does not permit the amortization of goodwill as
required by APB 17. Rather, goodwill will be subject to a periodic impairment
test, using a two-step process. The first step is to identify a potential
impairment. The second step of the goodwill impairment test measures the amount
of the impairment loss, using a fair value-based approach. Under SFAS 142, ERV
shall be reported and accounted for in the same manner as goodwill. Upon
adoption of this statement on January 1, 2002, the Company, based on an
independent valuation of the Company, recorded an impairment loss of $20,161 on
ERV. The impairment loss of $20,161 was recognized as the cumulative effect of a
change in accounting principle in the Company's consolidated statement of
operations as of January 1, 2002, resulting in a restatement of the net loss and
loss per share. In addition, a valuation allowance for 100% of the related tax
benefit of approximately $6,855 resulting from this impairment loss has been
recognized due to the current uncertainty regarding the realization of this
asset.

                                       13
<page>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

         Statements in this Quarterly Report on Form 10-Q/A that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding the Company's expectations, hopes,
intentions or strategies regarding the future. Forward-looking statements
include: statements regarding the Company's expansion plans, the start-up of
certain operations and trends affecting the Company's financial condition and
results of operations, including the Company's ability to meet future cash
requirements. All forward-looking statements in this Report are based on
information available to the Company as of the date of this Report and the
Company assumes no obligation to update any such forward-looking statements.
Factors that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements include, but are not
limited to, the factors set forth below under "Certain Factors Which May Affect
the Company's Future Results."

RESULTS OF OPERATIONS

         Although the Company's  financial  statements are presented in U.S.
dollars and pursuant to U.S. GAAP, the Company's transactions are consummated in
both reais and U.S. dollars. Inflation and devaluation in Brazil have had
significant effects on the Company's results of operations and financial
condition. See "Inflation and Exchange Rates."

         As a result of the changes in exchange rates during the periods
presented, the period-to-period comparisons of the Company's results of
operations are not necessarily meaningful and should not be relied upon as an
indication of future performance of the Company.

         The following table is included solely for use in comparative analysis
of results of operations, and to complement management's discussions and
analysis:

<table>
<caption>


                                                                                            THREE MONTHS
                                                       THREE MONTHS                            ENDED
                                                      ENDED MARCH 31,       % OF           MARCH 31, 2002            % OF
                                                           2001            REVENUE         (AS RESTATED)            REVENUE
                                                     ------------------------------------------------------------------------------
                                                          (IN THOUSANDS OF US DOLLARS, EXCEPT SUBSCRIBER AND PER SHARE DATA)


                                                    <c>                    <c>        <c>                             <c>
STATEMENT OF OPERATIONS DATA:
Revenues............................................   $       6,408          100%       $         4,797                 100%
Operating costs and expenses:
     System operating (exclusive of depreciation
       and amortization shown below)................           3,657           57%                 2,572                  54%
     Selling, general and administrative
      (exclusive of depreciation and amortization
        shown below)................................           4,323           67%                 1,996                  42%
     Depreciation and amortization..................           2,668           42%                   988                  21%
                                                     ----------------  ----------------- -----------------   ----------------
         Total operating costs and expenses.........          10,648          166%                 5,556                 116%
                                                     ----------------  ----------------- -----------------   ----------------
         Operating loss.............................          (4,240)         (66%)                 (759)                (16%)

Other income (expense):
     Interest and other expense.....................          (1,258)         (20%)               (1,387)               (29%)
     Interest and other income......................             174            3%                   151                  3%
                                                         ------------  -----------------    --------------   ----------------
     Interest and other income (expense), net.......          (1,084)         (17%)               (1,236)               (26%)
     Foreign exchange loss..........................          (3,950)         (62%)                  (55)                (1%)
                                                     ----------------  ----------------- -----------------   ----------------
         Total other expense, net...................          (5,034)         (79%)               (1,291)               (27%)
                                                     ================  ================= =================   ================
</table>
                                       14

<page>


<table>
<caption>


                                                                                            THREE MONTHS
                                                       THREE MONTHS                            ENDED
                                                      ENDED MARCH 31,       % OF           MARCH 31, 2002            % OF
                                                           2001            REVENUE         (AS RESTATED)            REVENUE
                                                     ------------------------------------------------------------------------------
                                                          (IN THOUSANDS OF US DOLLARS, EXCEPT SUBSCRIBER AND PER SHARE DATA)


                                                    <c>                    <c>        <c>                             <c>

Loss before cumulative effect of change in
   accounting principle.............................   $     (9,274)         (145%)      $        (2,050)              (43%)

Cumulative effect of change in accounting
   principle, net of tax............................   $           -            -        $       (20,161)             (420%)

         Net loss...................................   $     (9,274)         (145%)      $       (22,211)             (463%)

Basic and diluted net loss per share before
   cumulative effect of change in accounting
   principle........................................   $      (0.93)                     $         (0.20)
                                                     ================                    =================

Basic and diluted loss per share from
   cumulative effect of change in accounting
   principle, net of tax............................   $      (0.93)                     $         (2.02)
                                                     ================                    =================

Basic and diluted net loss per share................   $      (0.93)                     $         (2.22)
                                                     ================                    =================
Weighted average number of shares outstanding.......          10,000                              10,000

BALANCE SHEET DATA:
Working capital (deficiency)........................   $        (850)                    $        (5,319)
Property, plant and equipment, net..................          16,789                              13,977
Total assets........................................          54,265                              26,396
Total long-term debt................................          39,200                              44,045
Stockholders' equity (deficiency)...................           1,985                             (32,257)

OTHER DATA:
Number of subscribers at end of period..............          82,630                              66,492
                                                     ================                    =================
Exchange rate (R $: US $) at end of period..........        2.1616:1                            2.3236:1
                                                     ================                    ================
</table>


         REVENUES. The Company's revenues consist primarily of subscription
revenues (which are principally monthly fees paid by subscribers for the
Company's pay television and Internet access and data communication services and
equipment use), installation fees and advertising revenues. The Company's
revenues for the three months ended March 31, 2002 decreased by 25% compared to
the three months ended March 31, 2001, primarily due to a decrease in the
average number of subscribers.

         SYSTEM OPERATING EXPENSES. System operating expenses include
programming costs, certain payroll and employee benefit costs, vehicle rentals,
the costs of providing the Mais TV magazine and other costs. For the three
months ended March 31, 2002, system operating expenses decreased by 30% compared
to the three months ended March 31, 2001, primarily due to a reduction of the
Company's costs (Payroll and Benefits, programming costs, vehicle rentals)
resulting from the decrease in the average number of subscribers.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses include certain payroll and employee benefit
costs, rental costs, advertising and promotional expenses and other
administrative expenses. For the three months ended March 31, 2002, SG&A
expenses decreased by 54% compared to the three months ended March 31, 2001,
primarily due to the reorganization of the Company's internal structure, which
consisted of a reduction in the number of employees and in other administrative
expenses.

         DEPRECIATION AND AMORTIZATION. Depreciation and amortization includes
depreciation of systems, equipment, installation material and amortization of
licenses. For the three months ended March 31, 2002, depreciation and


                                       15
<page>

amortization decreased by 63% compared to the three months ended March 31, 2001,
primarily due to assets becoming fully depreciated and the fact that the
Company's reorganization value in excess of amounts allocable to identifiable
assets was not amortized in the three months ended March 31, 2002 in accordance
with SFAS No.142.

         INTEREST EXPENSE. For the three months ended March 31, 2002, interest
expense increased by 10% compared to the three months ended March 31, 2001,
primarily due to a increase in liability position from $39,200 to $44,045 in the
mentioned periods.

         INTEREST INCOME. For the three months ended March 31, 2002, interest
income decreased by 13% compared to the three months ended March 31, 2001,
primarily due to a decrease in average cash balances between the two periods.

         FOREIGN EXCHANGE LOSS. For the three months ended March 31, 2002,
foreign exchange loss expense decreased by 99% compared to the three months
ended March 31, 2001, due to the appreciation of the real against the U.S.
dollar during the first quarter of 2002. For the first quarter of 2001, the real
suffered a devaluation against the U.S. dollar.

         LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE. For
the three months ended March 31, 2002, loss before cumulative effect of change
in accounting principle decreased by 78% compared to the three months ended
March 31, 2001, primarily due to the reorganization of the Company's internal
structure, which consisted of a reduction in the number of employees and in
administrative and system operating expenses.

         CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE. The Company
adopted SFAS No. 142 and recorded the effects of adoption in March 2002 on a
cumulative effect basis as of the first day of the 2002 fiscal year. Under SFAS
No. 142, the Company was required to perform an impairment analysis of its ERV.
The impairment loss of $20,161 was recognized as the cumulative effect of change
in accounting principle in the Company's consolidated statement of operations
(as restated).

         NET LOSS. For the three months ended March 31, 2002, net loss increased
by 140% compared to the three months ended March 31, 2001, primarily due to the
adoption of the SFAS No. 142 and the impairment loss recognized as a result of
the Company's impairment analysis of its ERV.

LIQUIDITY AND CAPITAL RESOURCES

<table>
<caption>

                                                                             THREE MONTHS ENDED MARCH 31,
                                                                              ---------------------------
                                                                                2001              2002
                                                                                ----              ----
          
                                                              <c>                 <c>
          CASH FLOWS DATA :
          Net cash provided by (used in) operating activities.........     $     (254)         $    795
          Net cash used in investing activities.......................           (737)             (283)
          Net cash used in financing activities.......................             --               --
          Capital expenditures........................................            737               283

</table>


         Although the Company generated net cash provided by operating
activities of $795,000 during the first quarter of 2002, loss before cumulative
effect of change in accounting principle amounted to $2,050,000. Net cash
provided by operating activities in the first quarter of 2002 can be attributed
to depreciation and amortization of $988, cumulative effect of change in
accounting principle, net of tax of $20,161,000, provision for doubtful accounts
of $251,000and foreign exchange loss of $55,000, which are items or adjustments
that are made to reconcile the net loss to cash provided by operating
activities. In addition, accounts payable and accrued liabilities increased by
$2,038,000 in the first quarter of 2002 as compared to the first quarter of
2001. Net cash used in operating activities of $254,000 in the first quarter of
2001 primarily resulted from operating losses experienced during the first
quarter of 2001.

         The Company's business is capital intensive. In previous years, the
Company made a substantial amount of import purchases of equipment with the use
of letters of credit provided by banks in Brazil. As of March 31, 2002, the
Company had no amounts outstanding under letters of credit. While the Company
believes that additional vendor financing may be available, the Company
currently has no lines of credit or other credit facilities available. Although

                                       16
<page>

the Company is in negotiations to obtain a line of credit, there can be no
assurance that the Company will be successful in such negotiations or that any
such line of credit will be on terms favorable to the Company.

         The Company's Ordinary Shares are currently tradable in the
over-the-counter market and are listed on the OTC Bulletin Board. The effects of
shares trading in the over-the-counter market, as opposed and to being listed on
a national exchange, include, without limitation, the limited release of market
prices of the Ordinary Shares, limited news coverage of the Company, and
restriction of investors' interest in the Company. These factors may have a
significant adverse effect on the trading market and prices for the Ordinary
Shares, thereby affecting the Company's ability to issue additional securities
or secure additional financing. In addition, because the Ordinary Shares are
deemed penny stock under the Securities Enforcement Penny Stock Reform Act of
1990, additional disclosure is required in connection with trading in the
Ordinary Shares, including delivery of a disclosure schedule explaining the
nature and risk of the penny stock market. These requirements could further
limit the liquidity of the Ordinary Shares.

         The Company made capital expenditures of approximately $0.3 million and
$0.8 million during the three months ended March 31, 2002 and 2001,
respectively. These capital expenditures were financed with available cash.

         The Company had approximately $2.9 and $2.6 million in cash and cash
equivalents during the three months ended March 31, 2002 and 2001, respectively.
The Company has incurred operating losses since inception and had a working
capital and stockholders' deficiency of $5,319,000 and $32,257,000, respectively
at March 31, 2002. Operating losses are expected to continue in the future until
such time as the Company is successful in securing a subscriber base capable of
generating a significantly higher level of operating revenues.

         The Company has limited capital resources available to fund capital
expenditures, fund maturities of debt as they become due and to support its
operations until such time the Company is able to generate significant levels of
positive cash flow from operations.

         The Company is therefore dependent upon obtaining additional financing
to provide funds to support operations and to fund maturities of debt as they
become due. The Company is negotiating with certain of its stockholders to
provide additional equity or debt financing, but the Company can give no
assurance that acceptable agreements for such financing will be reached. The
Company also can give no assurance that it will be able to obtain sufficient
financing from sources other than its stockholders on commercially reasonable
terms, or at all. Furthermore, the indenture under which the Company's
outstanding debt was issued restricts the amount of additional indebtedness
which the Company may incur. Failure to obtain any required additional financing
could adversely affect the Company's growth and, ultimately, could have a
material adverse effect on the Company's business, results of operations and
financial condition. The future success of the Company is dependent upon its
ability to increase its subscriber base and to obtain additional financing.

         In order to improve its operating results in the current difficult
economic environment, the Company has reduced its work force in the first
quarter of 2002, which the Company expects will result in considerable savings
in labor expenses.

         In developing its subscriber base, the Company initially adopted an
aggressive policy of adding new subscribers, which included relaxed customer
credit requirements. Since 1997, and especially during 1998 and 1999, Brazil has
suffered economic downturns that resulted in increases in the Company's past-due
accounts. The Company's business is affected by its customers' ability to pay
for the services they receive. If the Brazilian economy worsens because of a
decrease in the level of economic activity, devaluation of the real, inflation
or an increase in domestic interest rates, then a greater portion of the
Company's customers may not be able to pay their bills, which would increase the
Company's bad debts and provision for doubtful accounts. The economic recession
in the United States of America that commenced in 2001, coupled with investor
reluctance to invest in developing countries after the September 11, 2001
terrorist attacks in the U.S., contributed to bring an economic slowdown and
unemployment in Brazil. This is turn has led to higher interest rates and
greater devaluation. Higher interest rates and devaluation generally result in a
significant decrease in purchasing power of Brazilian consumers, resulting in a
decrease in the demand for services, such as cable television services, and
higher accounts receivable delinquency. All of the foregoing has contributed to
an increase in the Company's level of past-due accounts. Past-due balances have
had a significant adverse effect on the Company's liquidity and financial
condition since increases in these balances reduce the amount of funds available
to meet its working capital, debt service and capital expenditure requirements.
To mitigate the

                                       17
<page>


effects of this situation, since 2000, the Company has implemented a program to
strengthen its customer credit requirements policy and to reduce the number of
days past due bills are permitted to be outstanding before disconnecting
service. Furthermore, the Company's adoption of its pre-paid subscription
service, Mais TV, is also intended to minimize the level of the Company's
past-due accounts and its impact on the Company's financial condition. The
Company decreased its allowance for uncollectible accounts by $505,000 in the
first quarter of 2001 and $92,000 in the first quarter of 2002. These amounts
represented approximately 7% and 2% of gross revenues for the three months ended
March 31, 2001 and 2002, respectively. As a result, the Company reduced its
accounts receivable balance from approximately $0.6 million at March 31, 2001 to
approximately $0.4 million at March 31, 2002, and reduced its allowance for
doubtful accounts from approximately $0.8 million at March 31, 2001 to
approximately $0.6 million at March 31, 2002.

INFLATION AND EXCHANGE RATES

         Inflation and exchange rate variations have had, and are expected to
continue to have for the foreseeable future, substantial effects on the
Company's results of operations and financial condition. In periods of
inflation, many of the Company's expenses will tend to increase. Generally, in
periods of inflation, a company is able to raise its prices to offset the rise
of its expenses and may set its prices without governmental regulation. However,
under a Brazilian law designed to reduce inflation, the prices which the Company
may charge to a particular subscriber may not be increased until the next
anniversary of the subscriber's initial subscription date and may only be
increased by a percentage no greater than the percentage of the increase in the
general inflation rate which occurred during the subscriber's contract year.
Thus, the Company is less able to offset expense increases with revenue
increases. Accordingly, inflation may have a material adverse effect on the
Company's results of operations and financial condition.

         Generally, inflation in Brazil has been accompanied by devaluation of
the Brazilian currency relative to the U.S. dollar. The Company collects
substantially all of its revenues in reais, but pays certain of its expenses,
including a significant portion of its equipment costs, substantially all
interest expense and most of its programming costs, in U.S. dollars. To the
extent the real depreciates at a rate greater than the rate at which the Company
is able to raise prices, the value of the Company's revenues (as expressed in
U.S. dollars) is adversely affected. This effect on the Company's revenues also
negatively impacts the Company's ability to fund U.S. dollar-based expenditures.

         The Company's financial statements reflect foreign exchange gains and
losses associated with monetary assets and liabilities denominated in currencies
other than the real. As a result, the devaluation of the real against the U.S.
dollar has caused, and is expected to cause, for the foreseeable future, the
Company to record a loss associated with its U.S. dollar monetary liabilities
and a gain associated with its U.S. dollar monetary assets. Given that the
Company has a net U.S. dollar monetary liability position, the net effect of the
devaluation of the real against the U.S. dollar is to generate losses in the
Company's financial statements. In order to protect against a possible further
devaluation of the real, the Company may from time to time enter into certain
derivative foreign exchange contracts. As of and for the year ended December 31,
2001 and the quarter ended March 31, 2002, respectively, the Company did not
have any derivative instruments outstanding.

CERTAIN FACTORS WHICH MAY AFFECT THE COMPANY'S FUTURE RESULTS

FACTORS RELATING TO BRAZIL GENERALLY

         THE COMPANY'S BUSINESS COULD SUFFER FROM POLITICAL AND ECONOMIC
UNCERTAINTIES IN BRAZIL. Changes in policies involving, among other things,
tariffs, exchange controls, regulatory policy and taxation, as well as events
such as inflation, currency devaluation, social instability or other political,
economic or diplomatic developments could adversely affect the Company's
business, results of operations and financial condition.

         GOVERNMENT RESTRICTIONS ON THE CONVERSION AND REMITTANCE OF FUNDS
ABROAD COULD HINDER THE COMPANY'S ABILITY TO OPERATE ITS BUSINESS. The Brazilian
government has the authority to restrict the transfer of funds abroad. If the
Brazilian government were to exercise this power, as it has done in the past,
the Company's subsidiaries could be prevented from purchasing equipment required
to be paid for in U.S. dollars and from transferring funds to the Company, which
are required in order for the Company to make scheduled interest payments on its
outstanding 12%

                                       18
<page>

Senior Secured Notes. Either of these events could have a material adverse
impact on the Company's business, operating results and financial condition.

FACTORS RELATING TO THE COMPANY

         THE COMPANY'S SUBSTANTIAL LEVERAGE COULD ADVERSELY AFFECT ITS ABILITY
TO RUN ITS BUSINESS. The Company has a significant amount of indebtedness. This
substantial indebtedness could have important consequences. For example, it
could:

o    limit the Company's ability to obtain additional financing in the future to
     refinance existing indebtedness and for working capital, capital
     expenditures, acquisitions and general corporate purposes or other
     purposes;

o    require the Company to dedicate a substantial portion of its cash flow from
     operations and cash and/or marketable securities on hand to the payment of
     principal and interest on the Company's indebtedness, thereby reducing
     funds available for market expansion and additional market development;

o    hinder the Company's ability to adjust rapidly to changing market
     conditions; and

o    make the Company more vulnerable to economic downturns, limiting its
     ability to withstand competitive pressures and reduce the Company's
     flexibility in responding to changing business and economic conditions.

         THE COMPANY'S ABILITY TO DISTRIBUTE DIVIDENDS AND MEET DEBT OBLIGATIONS
IS DEPENDENT ON ITS Subsidiaries. Because the Company is a holding company, the
Company's ability to distribute dividends and meet its debt obligations are
dependent upon the earnings of its subsidiaries and the distribution of those
earnings to, or upon loans or other payment of funds by the subsidiaries to, the
Company. The Company's subsidiaries may be obligated as guarantors of the
Company's debt to pay any amounts to its creditors or to make any funds
available to its creditors. The payment of dividends from the Company's
subsidiaries and the payment of any interest on or the repayment of any
principal of any loans or advances made to the Company by its subsidiaries, or
by the Company to its subsidiaries (1) may be subject to statutory or
contractual restriction, (2) are contingent upon the earnings of such
subsidiaries and (3) are subject to various business considerations.

         THE COMPANY HAS A HISTORY OF LOSSES AND MAY NEVER ACHIEVE
PROFITABILITY. The Company has incurred net losses from operations since its
formation. The Company expects that it will continue to incur losses from
operations in the foreseeable future. The Company can give no assurance that it
will ever become profitable in the future.

         A FAILURE TO EFFECTIVELY MANAGE INTERNAL GROWTH WOULD ADVERSELY AFFECT
THE COMPANY'S BUSINESS. The Company's growth has placed a significant strain on
managerial and operation resources. Any inability to manage growth effectively,
or a drop in productivity of the Company's employees could have a material
adverse effect on the Company's business, results of operations and financial
condition.

         THE COMPANY WILL NEED ADDITIONAL CAPITAL TO FINANCE GROWTH. The
Company's business requires substantial investment on a continuing basis to
finance:

o    debt service obligations;

o    capital expenditures and expenses related to subscriber growth and system
     development;

o    the acquisition of new wireless licenses and operations; and

o    net losses.

The amount and timing of the Company's future capital requirements will depend
upon a number of factors, many of which are not within the Company's control,
including:

                                       19
<page>


o    programming costs;

o    backbone and infrastructure costs;

o    capital costs;

o    competitive conditions; and

o    the costs of any necessary implementation of technological innovations or
     alternative technologies.

         The Company can give no assurance that it will be able to obtain
additional debt or equity capital on satisfactory terms, or at all, to meet the
Company's future financing needs. Furthermore, the indenture under which the
Company's outstanding debt was issued restricts the amount of additional
indebtedness which the Company may incur. Failure to obtain any required
additional financing could adversely affect the Company's growth and,
ultimately, could have a material adverse effect on the Company's business,
results of operations and financial condition.

         THE COMPANY IS IN A COMPETITIVE BUSINESS. The Company faces potential
competition from hardwire cable operators, direct broadcasting satellite systems
("DBS"), local off-air VHF/UHF channels, telecommunications operators, home
videocassette recorders and out-of-home theaters. Currently, there are three DBS
providers in Brazil and the private telephone companies have started offering
high-speed Internet access services, using DSL technologies, in some markets.
Legislative, regulatory and technological developments may result in additional
and significant competition. Many of the Company's actual and potential
competitors have greater financial, marketing and other resources than does the
Company.

         THE COMPANY'S BUSINESS COULD SUFFER FROM CHANGES IN GOVERNMENT
REGULATION. Changes in the regulation of the Company's business activities,
including decisions by regulators affecting the Company's operations, could have
an adverse effect on the Company's business.

         THE COMPANY IS DEPENDENT ON CERTAIN KEY SUPPLIERS. The Company
currently purchases decoders, modems and antennas from a limited number of
sources. The Company's inability to obtain sufficient components as required
from these sources, or to develop alternative sources if and as required in the
future, could result in delays or reductions in customer installations which, in
turn, could have a material adverse effect on the Company's results of
operations and financial condition.

         In February 2000, the Company's only supplier of decoders (General
Instruments, which has been acquired by Motorola) in its four operating markets
announced that it was planning to discontinue production for this product in the
future, and gave the Company a limited time in which to give additional orders
for the manufacturing of this product. While the Company has a substantial
inventory of decoders available for use for new subscribers, the technology used
in the decoding process is proprietary and no other supplier currently could
provide the Company with additional decoders should they become necessary.
Discussions between the Company, Motorola and several other operators in Brazil
have raised the possibility of Motorola licensing its technology for production
of the decoders in Brazil. The Company and other operators in Brazil continue to
negotiate this matter with Motorola. It is unclear if Motorola will license its
proprietary decoding technology to any other manufacturer or if it will continue
to manufacture the decoders. If Motorola does not continue production of this
decoder, or permit any other manufacturer to do so, and if the Company requires
additional decoders for subscriber use, it could have a material adverse effect
on the Company's results of operations and financial condition.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company's primary market risk exposure is foreign currency exchange
rate risk between the U.S. dollar and the Brazilian real due to the Company
having all of its operations based in Brazil, and most of its revenues and some
of its expenses denominated in reais while substantially all of its debt and
many of its expenses and capital equipment needs are denominated in dollars. In
addition, for operating purposes, the Company holds a significant portion of its
available cash in reais.

                                       20
<page>


         The Company manages its risk exposure on its available cash held in
reais by purchasing, from time to time, foreign currency exchange contracts
which have the effect of "locking-in" a dollar based exchange rate for the
Company's cash held in Brazil. No such contracts were outstanding as of March
31, 2001 and 2002.

         The Company currently believes that the cost of managing risk exposure
to its dollar-denominated debt and expenses is too high to warrant an attempt at
mitigating this risk.

         The Company's interest rate risk is considerably low because its only
relevant financial instruments subject to market risk are its 12% Senior Secured
Notes, which is fixed rate, U.S. dollar denominated debt due in 2004. Interest
payments are due on June 20 and December 20 of each year until maturity.
Interest is payable in kind at the Company's option through the June 20, 2002
interest payment. The table below provides information on the Company's
outstanding debt as of March 31, 2002.

<table>
<caption>


                                 -----------------------------------------------------------------------------
                                                             AS OF MARCH 31, 2002
                                 ---------------------------------------------------
                                                EXPECTED MATURITY DATE
                                                                           AFTER                     FAIR
                                    2000         2001         2002         2002         TOTAL      VALUE(1)
                                    ----         ----         ----         ----         -----      --------
                                                         (U.S. DOLLARS IN THOUSANDS)



                                                                          <c>          <c>          <c>
Long-term debt:
U.S. dollars                           --            --           --         44,045       44,045       44,045
                                 --------     ---------   ----------         ------       ------       ------
Total long-term debt                   --            --           --         44,045       44,045       44,045
                                 --------     ---------   ----------         ------       ------       ------
</table>


---------------
(1)  The fair value and the carrying amount in the balance sheet for the debt
     are basically the same since this debt carries terms and bears interest
     that are similar to those being currently offered in the market.

         In addition to the $44 million principal amount debt outstanding, the
Company is subject to the payment of the interest on this debt, which is also
U.S. dollar-denominated. Assuming the Company exercises its option of
capitalizing the interest portion due on June 20, 2002, the Company expects
total interest to be paid in 2002 will be approximately $2.8 million. Although
the Company's reporting currency is the U.S. dollar, the cash flow required to
service its indebtedness is generated in reais (R$). Using the year-end 2001
exchange rate (R$ 2.3204 per US$ 1.00), the cash flow in reais to pay interest
($2.8 million) due in 2002 would be R$6.5 million. A devaluation of the real to
R$2.80 per U.S. dollar would require cash flow of R$7.8 million to pay the
interest ($2.8 million). If the real devalued to R$3.00 per U.S. dollar, the
cash flow in reais to pay the interest due in 2002 would be R$8.4 million.

                                       21

<page>



PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
         -----------------

         No significant legal proceedings in which the Company or any of its
subsidiaries is a party, or of which any of their property is subject, are
currently pending, nor have any such proceedings been terminated during the
first quarter of 2002.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.
         -----------------------------------------

         None.

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

         99.1     Certification  Pursuant to 18. U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
         99.2     Certification  Pursuant to 18. U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sabarnes-Oxley Act of 2002.

         (b)    Reports on Form 8-K

         None.

                                       22
<page>



                                   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.

DATED:   February 21, 2003

                              ITSA LTD.
                              --------------------------------------------------
                              (Registrant)

                              /s/  Hermano Studart Lins de Albuquerque
                              --------------------------------------------------
                              Hermano Studart Lins de Albuquerque
                              Chief Executive Officer (Principal
                              Executive Officer)


                              /s/  Carlos Andre Studart Lins de Albuquerque
                              --------------------------------------------------
                              Carlos Andre Studart Lins de Albuquerque
                              Acting Chief Financial Officer  (Principal
                              Financial and Accounting Officer)

         I, Hermano Studart Lins de Albuquerque, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of ITSA Ltd.;

2.   Based on my 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, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report; and

3.   Based on my 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.


Date:  February 21, 2003


                              By: /s/ Hermano Studart Lins de Albuquerque
                                  ----------------------------------------------
                                  Hermano Studart Lins de Albuquerque
                                  Chief Executive Officer


         I, Carlos Andre Studart Lins de Albuquerque, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of ITSA Ltd.;

2.   Based on my 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, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report; and

                                       23
<page>


3.   Based on my 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.


Date:  February 21, 2003


                              By:  /s/  Carlos Andre Studart Lins de Albuquerque
                                   ---------------------------------------------
                                   Carlos Andre Studart Lins de Albuquerque
                                   Acting Chief Financial Officer


                                       24

<page>




                                  EXHIBIT INDEX

   EXHIBIT
    NUMBER                      DESCRIPTION OF DOCUMENT
   -------                      -----------------------

     99.1         Certification  Pursuant to 18. U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     99.2         Certification  Pursuant to 18. U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.