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

                                         FORM 10-Q

(Mark One)

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

      For the quarterly period ended June 30, 2000

                                       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: 0-28670

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

                      C/O ITSA-INTERCONTINENTAL TELECOMUNICACOES LTDA.
                                    SCS, QUADRA 07-BL.A
                               ED. EXECUTIVE TOWER, SALA 601
                                   70.300-911 BRASILIA-DF
                                           BRAZIL
               (Address, Including Zip Code, of Principal Executive Offices)

                                     011-55-61-314-9908
                    (Registrant's Telephone Number, Including Area Code)

                                       TV FILME, INC.*
                        (Former Name, if Changed Since Last Report)

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
[   ] Yes  [ X ] 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*

      *Registrant became subject to filing  requirements  pursuant to Rule 12g-3
under the Securities  Exchange Act of 1934 on July 21, 2000,  when it became the
successor in interest to TV Filme, Inc., a Delaware corporation.

      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 August 11, 2000



<PAGE>







                         TV FILME, INC. (PREDECESSOR TO ITSA LTD.)

                                           INDEX



PART I.  FINANCIAL INFORMATION                                       PAGE NO.

ITEM 1.Financial Statements

       Consolidated Balance Sheets as of December 31, 1999
       and June 30, 2000 (Unaudited).................................    2

       Unaudited Consolidated Statements of Operations for the Six
       Months Ended June 30, 1999 and the Six Months Ended
       June 30, 2000.................................................    3

       Unaudited Consolidated Statement of Changes in Stockholders'
       Equity at June 30, 2000.......................................    4

       Unaudited Consolidated Statements of Cash Flows for the Six
       Months Ended June 30, 1999 and June 30, 2000..................    5

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

ITEM 2.Management's Discussion and Analysis of Financial Condition
       and Results of Operations.....................................    8

ITEM 3.Quantitative and Qualitative Disclosures About Market Risk....   12


PART II.OTHER INFORMATION

ITEM 1.Legal Proceedings.............................................   13

ITEM 2.Changes in Securities and Use of Proceeds.....................   13

ITEM 3.Defaults Upon Senior Securities...............................   14

ITEM 4.Submission of Matters to a Vote of Security Holders...........   14

ITEM 5.Other Information.............................................   14

ITEM 6.Exhibits and Reports on Form 8-K..............................   14

SIGNATURES...........................................................   15




<PAGE>





                         PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

                           TV FILME, INC. (PREDECESSOR
                         TO ITSA LTD.) AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                              DECEMBER 31,      JUNE 30,
                                                  1999            2000
                                              --------------  --------------
                                                              (UNAUDITED)
                                                     (IN THOUSANDS)
ASSETS
Current assets:
   Cash and cash equivalents............      $ 42,175           $36,533
   Accounts receivable, net.............         2,474             1,448
   Supplies.............................         2,750             3,016
   Prepaid expenses and other current assets     5,700             6,849
                                             --------------  --------------
     Total current assets...............        53,099            47,846
Property, plant and equipment, net......        25,005            22,320
Debt issuance costs, net................             0                 0
Other assets............................         5,218             7,170
                                              --------------  --------------
     Total assets.......................      $ 83,322           $77,336
                                              ==============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable.....................      $  6,168           $ 8,448
   Payroll and other benefits payable...         1,577             1,833
   Accrued interest payable.............        18,776            27,538
   Accrued liabilities and taxes payable         7,543             8,819
   Senior Notes in default - Note 4.....       140,000           140,000
                                             --------------  --------------
     Total current liabilities..........       174,064           186,638
Deferred installation fees..............           900               507
Capital deficiency:
   Cumulative translation adjustment....        (7,182)           (6,387)
   Preferred stock, $.01 par value,
     1,000,000 shares
     authorized, no shares issued.......           --                --
   Common stock, $.01 par value,
     50,000,000 shares
     authorized, 10,824,594 and
     10,824,594 shares
     issued and outstanding............            108               108

   Additional paid-in capital...........        45,657            45,657
   Accumulated deficit..................      (130,225)         (149,187)
                                             --------------  --------------
     Total capital deficiency...........       (91,642)         (109,809)
                                             --------------  --------------
     Total liabilities and capital
          deficiency....................      $ 83,322          $ 77,336
                                              ==============  ==============

                             See accompanying notes.



                                       2
<PAGE>


                           TV FILME, INC. (PREDECESSOR
                         TO ITSA LTD.) AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (UNAUDITED)
<TABLE>


                                          THREE MONTHS ENDED       SIX MONTHS ENDED
                                               JUNE 30,                JUNE 30,
                                         ----------------------   -------------------
                                            1999        2000       1999       2000
                                         -----------  ---------   --------   --------
<S>                                     <C>           <C>         <C>        <C>

Revenues..............................   $   6,812    $  5,675    $13,388    $11,585
Operating costs and expenses:
  System operating - Note 2...........       3,075       2,925      6,304      5,524
  Selling, general and administrative.       4,694       6,702      8,300     10,720
  Depreciation and amortization.......       3,728       2,869      7,760      5,964
                                         -----------  ---------   --------   --------
    Total operating costs and expenses.     11,497      12,496     22,364     22,208
                                         -----------  ---------   --------   --------
    Operating loss.....................     (4,685)     (6,821)    (8,976)   (10,623)

Other (expense) income:
  Interest and other expense - Note 5.       (4,761)     (4,679)   (10,633)   (10,473)
  Interest income.....................        1,788       1,387      3,931      2,769
                                         -----------  ---------   --------   --------
  Interest (expense) income, net......       (2,973)     (3,292)    (6,702)    (7,704)
  Monetary loss.......................       (2,414)     (2,824)   (29,408)     (635)
                                         -----------  ---------   --------   --------
    Total other (expense) income.......      (5,387)     (6,116)   (36,110)    (8,339)
                                         -----------  ---------   --------   --------
Net loss..............................   $  (10,072)   $(12,937)  $(45,086)  $(18,962)
                                         ===========  =========   ========   ========

Net loss per share, basic and diluted.   $    (0.93)  $   (1.20)  $  (4.16)  $  (1.75)
                                         ===========  =========   ========   ========
Weighted average number of shares of
  common stock and common stock
  equivalents outstanding.............       10,825      10,825     10,825     10,825
                                         ===========  =========   ========   ========

</TABLE>

















                                  See accompanying notes.



                                       3
<PAGE>


                         TV FILME, INC. (PREDECESSOR TO
                           ITSA LTD.) AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                   (UNAUDITED)

                     FOR THE SIX MONTHS ENDED JUNE 30, 2000


<TABLE>


                                                       ADDITIONAL          OTHER
                                                        PAID-IN       COMPREHENSIVE       ACCUMULATED
                            COMMON STOCK                CAPITAL            LOSS             DEFICIT       TOTAL
                              SHARES     PAR VALUE
                                                       (IN THOUSANDS, EXCEPT SHARES)
<S>                           <C>          <C>         <C>               <C>              <C>           <C>

BALANCE AT DECEMBER 31, 1999  10,824,594   $108         $45,657          $(7,182)         $(130,225)    $ (91,642)

Cumulative translation
     adjustment..............         --     --             --               795                 --            795
Net loss for the period......         --     --             --                --            (18,962)      (18,962)

                              ----------   ----         -------          -------          ---------     ----------
BALANCE AT JUNE 30, 2000..... 10,824,594   $108         $45,657          $(6,387)         ($149,187)    $(109,809)
                              ==========   ====         =======          =======          ==========    ==========

</TABLE>


































                             See accompanying notes.



                                       4
<PAGE>

                         TV FILME, INC. (PREDECESSOR TO
                           ITSA LTD.) AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                                SIX MONTHS ENDED JUNE 30,
                                                -------------------------
                                                 1999              2000
                                                 ----              ----
                                                     (IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss............................          $(45,086)         $(18,962)
Adjustments to reconcile net loss to
     net cash used in operating
     activities:
   Depreciation and amortization....             7,760             5,964
   Provision for losses on accounts
       receivable...................               631               247
   Amortization of debt issuance
     costs..........................            (1,535)                0
   Increase (decrease) in deferred
       installation fees............              (113)             (420)
   Monetary loss (gain).............            25,195              (635)
Changes in operating assets and
     liabilities:
   Increase (decrease) in accounts
       receivable...................              (920)              809
   Increase in supplies.............              (167)             (246)
   Increase in prepaid expenses and
       other current assets.........            (1,809)           (1,137)
   Decrease (increase) in other
       assets.......................               746            (1,920)
   Increase in accounts payable.....             1,722             2,261
   Decrease (increase) in payroll
       and other benefits payable...              (634)              248
   Increase in accrued interest
       payable......................             9,207             8,762
   Decrease (increase) in accrued
       liabilities and taxes
         payable....................              (131)            1,271
                                              ---------         --------
Net cash used for operating
  activities........................            (5,134)           (3,759)
                                              ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions:
     Property, plant and equipment...           (1,731)           (3,048)
                                              --------          --------
Net cash used in investing
  activities.........................           (1,731)           (3,048)
                                              --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in payables to affiliates...                0                 0
                                              --------          --------
Net cash used for financing
  activities.........................                0                 0
                                              --------          --------
Effect of exchange rate changes on
  cash...............................           (7,556)            1,165
                                              --------          --------
Net change in cash and cash
  equivalents........................          (14,421)           (5,642)
                                              --------          --------
Cash and cash equivalents at
       beginning of period...........           57,492            42,175
                                              --------          --------
Cash and cash equivalents at end of
       period........................         $ 43,071          $ 36,533
                                              ========          ========


                             See accompanying notes.


                                       5
<PAGE>


                         TV FILME, INC. (PREDECESSOR TO
                           ITSA LTD.) AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

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.  Unless
otherwise  indicated,  ITSA Ltd., the successor company to TV Filme,  Inc., 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."

      The   Company   develops,    owns   and   operates    broadband   wireless
telecommunications  systems in markets in  Brazil,  offering  video,  high-speed
Internet and data communications services. Through it 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.

      As a result of the economic slowdown in Brazil in years 1998 and 1999, and
the  devaluation  of the  Brazilian  currency  (the REAL) in 1999,  among  other
factors,  TV Filme selected a financial  advisor,  BT Alex.  Brown (now Deutsche
Bank), 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
"12-7/8%  Senior  Notes").  On August 13, 1999, TV Filme reached an agreement in
principle  with a  committee  representing  holders  of TV  Filme's  outstanding
12-7/8% Senior Notes. This agreement was effected on July 21, 2000 pursuant to a
pre-arranged plan of reorganization  which received court approval under Chapter
11 of the U.S.  Bankruptcy  Code on April 10, 2000. In accordance with the terms
of the plan of  reorganization,  the 12-7/8% Senior  Noteholders  received a $25
million cash payment and their  existing  notes were  converted  into (i) Senior
Secured Notes in the aggregate principal amount of $35 million,  due 2004, at an
interest rate of 12% per annum (interest payable-in-kind at the Company's option
through its first four interest payments), 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.  All  outstanding  stock options were
cancelled. ITSA Ltd., (the reorganized Company) is a newly-formed Cayman Islands
holding company and is the successor issuer to TV Filme,  Inc.  pursuant to Rule
12g-3 under the  Securities  Exchange  Act.  The 12% Senior  Secured  Notes were
issued  by   ITSA-Intercontinental   Telecommunicacoes   Ltda.,  a  wholly-owned
subsidiary of the Company.

      On January 26, 2000, as part of the restructuring  process, TV Filme filed
a voluntary  petition  under  Chapter 11 of the United States  Bankruptcy  Code,
together with a pre-negotiated  Plan of  Reorganization  implementing the agreed
upon restructuring 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 adequacy 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.  Overwhelming  majorities  of holders of TV Filme's
12-7/8%  Senior  Notes and holders of TV Filme's  common stock voted in favor of
the restructuring set forth in the Plan.  Effectuation of the Plan was completed
on   July   21,   2000,   following   support   from   ANATEL   (the   Brazilian
Telecommunications  Agency)  and the  Central  Bank  of  Brazil.  The  Financial
Statements do not include any adjustments to reflect the possible future effects
on  the   recoverability  and  classification  of  assets  or  the  amounts  and
classification  of  liabilities  that  may  result  from  the  outcome  of  this
reorganization.

      B.  METHOD OF PRESENTATION

      The  consolidated  financial  statements  of TV  Filme  were  prepared  in
accordance with generally accepted accounting principles in the United States in


                                       6
<PAGE>

U.S. dollars.  Effective January 1, 1998, TV Filme determined that Brazil ceased
to be a highly  inflationary  economy  under  Statement of Financial  Accounting
Standards No. 52.  Accordingly,  as of January 1, 1998, TV Filme began using the
REAL as the functional currency of its Brazilian subsidiaries.  As a result, all
assets and  liabilities are translated into dollars at period end exchange rates
and all income and expense items are translated into U.S. dollars at the average
exchange rate prevailing during the period.

      C.  ALLOWANCE FOR DOUBTFUL ACCOUNTS

      TV Filme had an allowance  for  doubtful  accounts of $651,000 at December
31, 1999 and $645,000 at June 30, 2000.  Charges to the allowance during the six
months ended June 30, 2000 were $490,000.

2.    RELATED PARTY TRANSACTIONS

      Substantially  all programming is supplied by a subsidiary of Tevecap S.A.
("Tevecap"),  a stockholder of the Company,  pursuant to a programming contract.
Amounts  paid to such  affiliate  during the six months  ended June 30, 1999 and
2000 were approximately $3,999,000 and $1,615,000, respectively.

3.    STOCK OPTIONS

      All  outstanding  stock  options  of  TV  Filme  have  been  cancelled  in
conjunction with TV Filme's  restructuring  process under Chapter 11 of the U.S.
Bankruptcy Code (see Note 1). The Company  currently has no stock option plan in
place.

4.    LONG-TERM DEBT

      On December 20, 1996,  TV Filme  issued $140 million  principal  amount of
12-7/8%  Senior Notes due December 15, 2004.  The proceeds of the 12-7/8% Senior
Notes  were  loaned  to  ITSA-Intercontinental  Telecomunicacoes  S.A.  and  its
subsidiaries  ("ITSA")  and  evidenced  by an  intercompany  note.  Interest was
payable  semi-annually  in  arrears  on June 15 and  December  15 of each  year,
commencing on June 15, 1997. Of the $140 million  loaned to ITSA,  approximately
$33.5 million was used to purchase  U.S.  government  securities.  Cash received
from scheduled interest and principal payments on such government securities was
in an amount  sufficient  to provide  for  payment in full when due of the first
four scheduled  interest payments on the 12-7/8% Senior Notes, the last of which
occurred on December 15, 1998.  Until the third  quarter of 1999,  debt issuance
costs  were  capitalized  and  amortized  over the  period of the debt under the
effective yield method (see below).

      Under the  provisions of the 12-7/8% Senior Note  indenture,  TV Filme was
required to make  semi-annual  interest  payments on June 15 and  December 15 of
each  year to the  noteholders.  On June 15,  1999,  TV  Filme  did not make the
required interest payment, and did not make the payment within the subsequent 30
day grace period  allowable  under the terms of the  indenture,  which caused an
event of  default  to occur.  As a result  of this  event of  default,  TV Filme
classified the 12-7/8% Senior Notes as a current  liability as of June 30, 2000,
in the accompanying balance sheet

      As  discussed  in  Note 1,  all  outstanding  12-7/8%  Senior  Notes  were
exchanged in  conjunction  with TV Filme's  reorganization  for a combination of
cash, 12% Senior Secured Notes of ITSA-Intercontinental  Telecomunicacoes,  Inc.
(the Company's Brazilian  subsidiary) and new common equity of the Company.  The
12-7/8% Senior Notes were cancelled upon surrender.

5.    FOREIGN EXCHANGE CONTRACTS

      At December  31, 1999 and June 30,  2000,  TV Filme had $28.0  million and
$25.0  million,   respectively,  of  foreign  exchange  contracts.  The  Company
regularly enters into such contracts  typically with a duration of six months or
less.  The contracts  held at December 31, 1999 expired in February 2000 and the
contracts  held as of June 30,  2000  expired in July 2000.  In  general,  these
contracts  permit  the  Company to receive  in REAIS,  at  maturity,  the dollar
equivalent of the contract  value  calculated  using the exchange rate as of the
maturity  date. At maturity,  the Company is required to pay the contract  value
plus interest using the Brazilian  interbank lending rate during the life of the
contract. Net contract gains, if any, are subject to a 20% tax levied in Brazil.
Realized gains and losses are reported in "Interest and other expense."


                                       7
<PAGE>

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

      This Form 10-Q contains  forward-looking  statements,  including pro forma
information, which involve risks and uncertainties. The Company's actual results
may differ  significantly  from the results  discussed in these  forward-looking
statements.  The following  discussion  should be read in  conjunction  with the
Consolidated  Financial  Statements,   including  the  notes  thereto,  included
elsewhere in this Form 10-Q.

RESULTS OF OPERATIONS

      Although TV Filme's financial  statements are presented pursuant to United
States generally accepted accounting  principles in U.S. dollars,  the Company's
transactions  are  consummated  in both REAIS and U.S.  dollars.  Inflation  and
devaluation in Brazil have had, and are currently having, substantial 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 TV Filme's  results of operations are not
necessarily  meaningful and should not be relied upon as an indication of future
performance of the Company.
<TABLE>
                                                       Three Months Ended June 30
                                            ----------------------------------------------
                                            1999       % OF REVENUE    2000    % OF REVENUE
                                           ------      ------------    ----    ------------

                                        (In thousands, except subscriber, per share and share data)
<S>                                         <C>          <C>          <C>           <C>

Revenue..............................       $ 6,812      100%         $ 5,675       100%
Operating costs and expenses:
  System operating................            3,075       45%           2,925        52%
  Selling, general and administrative         4,694       69%           6,702       118%
  Depreciation and amortization......         3,728       55%           2,869        51%
                                              ------      ------        ------      ----
    Total operating costs and expenses       11,497      169%          12,496       220%
                                             ------      ------        ------       ----
    Operating loss...................        (4,685)     (69%)         (6,821)     (120%)
Other income (expense):
  Interest and other expense........         (4,761)     (70%)         (4,679)      (82%)
  Interest  income..................          1,788       26%           1,387        24%
                                             ------      ------        ------       ----
  Interest income (expense), net....         (2,973)     (44%)         (3,292)      (58%)
  Monetary loss.....................         (2,414)     (35%)         (2,824)      (50%)
                                             -------     ------        --------     -----
    Total other income (expense)....          (5,387)     (79%)         (6,116)     (108%)
                                             -------     ------       --------     ------
Net loss............................        $(10,072)     (148%)      $(12,937)     (228%)
                                           =========     ========     ========    =======
Net loss per share..................        $  (0.93)                    (1.20)
                                           =========                  ========
Weighted average number of shares of
  Common stock and common stock
  Equivalents.......................          10,825                    10,825
                                           =========                   ========
Other Data:
  EBITDA (a)........................        $   (957)                  $(3,952)
                                           =========                  ========
  Number  of  subscribers  at  end of
  period ...........................          74,271                    73,637
                                           =========                  ========
  Number of operating  systems at end
  of period.........................               4                         4
                                           =========                  ========
  Exchange rate (R $: US $) at end
  of period.........................        1.7695:1                   1.800:1
                                           =========                  ========

</TABLE>


                                       8
<PAGE>
<TABLE>
                                                       Six Months Ended June 30
                                              -------------------------------------------
                                              1999     % OF REVENUE    2000    % OF REVENUE
                                            --------   ------------    ----    ------------
                                      (In thousands, except subscriber, per share and share data)
<S>                                        <C>           <C>       <C>            <C>
Revenue.................................   $  13,388      100%     $ 11,585       100%
Operating costs and expenses:
   System operating.....................       6,304       47%        5,524        48%
   Selling, general and administrative..       8,300       62%       10,720        93%
   Depreciation and amortization........       7,760       58%        5,964        51%
                                             -------     ------     -------       -----
    Total operating costs and expenses..      22,364      167%       22,208       192%
                                             -------     ------     -------       -----
    Operating loss......................      (8,976)     (68%)     (10,623)       (9%)
Other income (expense):
  Interest and other expense............     (10,633)     (79%)     (10,473)      (90%)
  Interest and other income.............       3,931       29%        2,769        24%
                                             -------     ------     -------       -----
  Interest income (expense), net........      (6,702)     (50%)      (7,704)      (66%)
  Monetary loss.........................     (29,408)    (220%)        (635)       (5%)
                                             --------   -------     -------       -----
    Total other  income  (expense), net      (36,110)    (270%)      (8,339)      (72%)
                                             -------    -------     -------       -----
Net loss................................    $(45,086)    (337%)    $(18,962)     (164%)
                                            ========    ======     ========      ======
Net loss per share......................    $  (4.16)              $  (1.75)
                                            ========               ========
Weighted average number of shares of
   common stock and common stock
   equivalents..........................      10,825                 10,825
                                            ========               ========
Other Data:
   EBITDA (a)...........................   $  (1,216)              $ (4,659)
                                           =========               ========
   Number  of  subscribers  at end of
    period..............................      74,271                 73,637
                                           =========               ========
   Number  of  operating  systems  at
    end of period.......................           4                      4
                                           =========               ========
   Exchange rate (R $: US $) at end
    of period...........................    1.7695:1               1.8000:1
                                           =========               ========
</TABLE>
---------------
(a) EBITDA is defined as  operating  loss plus  depreciation,  amortization  and
non-cash  charges.  While EBITDA  should not be  construed  as a substitute  for
operating  loss or a better  measure of liquidity  than cash flow from operating
activities,  which are  determined in accordance  with U.S. GAAP, it is included
herein to provide additional information regarding the ability of the Company to
meet its capital  expenditures,  working capital  requirements and debt service.
EBITDA,  however,  is not necessarily a measure of the Company's ability to fund
its cash needs.

      NET LOSS.  For the three months ended June 30, 2000  compared to the three
months ended June 30, 1999, net loss increased to $(12.9) million versus $(10.1)
million,  or 28%,  primarily due to the  restructuring  costs associated with TV
Filme's restructuring. Net loss for the six months ended June 30, 2000 decreased
from $(45.1) million for the six months ended June 30, 1999 to $(19.0)  million,
or 58%,  primarily  due to  recovery  from a monetary  loss  associated  with TV
Filme's net dollar-denominated liability position caused by a 51% devaluation of
the REAL  against the U.S.  dollar in 1999,  offset by the  restructuring  costs
associated with TV Filme's restructuring.

      REVENUES.  For the three months ended June 30, 2000  compared to the three
months  ended  June  30,  1999,  revenues  decreased  by 17%,  primarily  due to
converting  from a  post-paid  to a  pre-paid  subscription  model in two of the
Company's  markets,  Brasilia and Belem.  Revenues for the six months ended June
30, 2000  decreased by 13%  compared to the six months ended June 30, 1999,  due
primarily to converting from a post-paid to a pre-paid subscription model in two
of the Company's markets, Brasilia and Belem.

      SYSTEM  OPERATING  EXPENSES.  For the three  months  ended  June 30,  2000
compared to the three  months  ended June 30, 1999,  system  operating  expenses
decreased by 5%,  primarily  due to a decrease in  programming  costs related to
lower priced packages now offered by the Company.  System operating expenses for
the six months ended June 30, 2000 decreased by 12%,  compared to the six months
ended June 30, 1999,  primarily due to a decrease in programming costs (14%) and
a decrease in  compensation  and benefits  expenses (9%).

      SELLING,  GENERAL  AND  ADMINISTRATIVE  ("SG&A")  EXPENSES.  For the three
months  ended June 30, 2000  compared to the three  months  ended June 30, 1999,
SG&A  expenses  increased  by  43%  primarily  due to  the  restructuring  costs
associated with TV Filme's  restructuring  as well as due to expenses related
to the  transition to the new pre-paid  subscription  model in the Belem system.
SG&A  expenses  for the six month  period  ended June 30, 2000  increased by 29%
compared  to  the  six  months  ended  June  30,  1999,  primarily  due  to  the
restructuring  costs associated with TV Filme's  restructuring as well as due
to expenses related to the transition to the new pre-paid  subscription model in
the Brasilia and Belem systems.

                                       9
<PAGE>


      DEPRECIATION  AND  AMORTIZATION.  For the three months ended June 30, 2000
compared to the three months ended June 30, 1999,  depreciation and amortization
decreased  by  23%,   primarily  due  to  assets  becoming  fully   depreciated.
Depreciation  and  amortization  for the six month  period  ended June 30,  2000
decreased by 23% compared to the six months ended June 30, 1999,  primarily  due
to the reduction in asset values on a dollar basis,  and assets  becoming  fully
depreciated.

      INTEREST  AND OTHER  EXPENSE.  For the three  months  ended June 30,  2000
compared to the three months ended June 30, 1999,  interest expense decreased by
2%.  Interest  expense for the six month period ended June 30, 2000 decreased by
2% compared to the six months ended June 30, 1999.

      INTEREST INCOME.  For the three months ended June 30, 2000 compared to the
three months ended June 30, 1999,  interest income  decreased by 22%,  primarily
due to a decrease in the average cash balance between the two periods.  Interest
income for the six month period ended June 30, 2000 decreased by 30% compared to
the six months ended June 30, 1999,  primarily  due to a decrease in the average
cash balance between the two periods.

      MONETARY LOSS. Due to its net  dollar-denominated  liability position, the
Company generates  monetary losses in any reporting period in which the value of
the REAL depreciates in relation to the value of the U.S.  dollar.  In the three
months ended June 30, 2000, TV Filme  generated a monetary loss of $2.8 million,
compared to a monetary  loss of $2.4  million in the three months ended June 30,
1999. In the six months ended June 30, 2000, TV Filme  generated a monetary loss
of $0.6 million,  compared to a monetary loss of $29.4 million in the six months
ended June 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

      The  telecommunications  business is capital intensive.  From 1993 through
the first part of 1996,  TV Filme  raised an aggregate  of  approximately  $16.8
million  through a series of private  equity  placements to Tevecap and Warburg,
Pincus  Investors,  L.P. In August 1996,  TV Filme  completed an initial  public
offering  with net proceeds to TV Filme of $24.4 million and in December 1996 TV
Filme  completed  the sale of the 12-7/8%  Senior Notes with net proceeds to the
Company  of  approximately   $134.0  million.   In  the  past,  working  capital
requirements  have been primarily met by (i) venture  capital  financings,  (ii)
capital markets  financings,  (iii) vendor  financing  which generally  requires
payment  within  420 days of  shipment,  some of which  had  been  supported  by
irrevocable  letters of credit guaranteed by Abril and certain of its affiliates
and (iv) borrowings from Abril and certain  affiliates.  As of June 30, 2000, TV
Filme  had no  outstanding  borrowings  from  Abril and its  affiliates  and the
Company does not expect to borrow from Abril or its affiliates in the future.

      In previous years, TV Filme made a substantial  amount of import purchases
of equipment with the use of letters of credit  provided by banks in Brazil.  As
of June 30, 2000, TV Filme had no amounts  outstanding  under letters of credit.
While the Company believes that lines of credit, additional vendor financing and
other  credit  facilities  are  available,  the  terms  and  conditions  of such
financing vehicles are uncertain and may not be available on terms acceptable to
the Company.  As a result of reclassifying its 12-7/8% Senior Notes as a current
liability,  TV Filme had  negative  working  capital at June 30,  2000 of $138.8
million.  Net cash used in operating  activities for the three months ended June
30, 2000 was $2.8 million.

      TV Filme's common stock outstanding  before the  reorganization was quoted
on the OTC Bulletin  Board.  The ordinary shares of ITSA Ltd. issued in exchange
for  the   outstanding   shares  of  TV  Filme  common  stock  pursuant  to  the
reorganization    are   currently    tradeable   in   the   non-bulletin   board
over-the-counter  market. The Company expects the new shares to be listed on the
OTC Bulletin Board following  successful  application by an OTC market maker and
SEC  approval  of the  Company's  Current  Report on Form 8-K filed on August 5,
2000,  announcing that ITSA Ltd. is the successor company to TV Filme,  pursuant
to Rule 12g-3 under the  Securities  Exchange Act of 1934. The effects of shares
trading in the over-the-counter market, as opposed 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,  and may have a material  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.  Such  requirements  could  severely limit the liquidity of the ordinary
shares.

                                       10
<PAGE>

      As a result of the economic slowdown in Brazil in years 1998 and 1999, and
the  devaluation  of the  Brazilian  currency  (the REAL) in 1999,  among  other
factors,  TV Filme selected a financial  advisor,  BT Alex.  Brown (now Deutsche
Bank), to assist in evaluating  strategic  alternatives for the restructuring of
its long term debt, represented by the 12-7/8% Senior Notes. On August 13, 1999,
TV Filme Company reached an agreement in principle with a committee representing
holders of TV Filme's  outstanding  12-7/8%  Senior  Notes.  This  agreement was
effected on July 21,  2000  pursuant to a  pre-arranged  plan of  reorganization
which received court  approval under Chapter 11 of the U.S.  Bankruptcy  Code on
April 10, 2000. In accordance with the terms of the plan of reorganization,  the
12-7/8%  Senior  Noteholders  received  a $25  million  cash  payment  and their
existing  notes were  converted  into (i) Senior  Secured Notes in the aggregate
principal amount of $35 million,  due 2004, at an interest rate of 12% per annum
(interest  payable-in-kind  at the  Company's  option  through  its  first  four
interest  payments),  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. All outstanding stock options were cancelled. ITSA Ltd.
(the reorganized  Company) is a newly-formed  Cayman Islands holding company and
is the  successor  issuer to TV Filme,  Inc.  pursuant  to Rule 12g-3  under the
Securities   Exchange  Act.  The  12%  Senior   Secured  Notes  were  issued  by
ITSA-Intercontinental  Telecommunicacoes Ltda., a wholly-owned subsidiary of the
Company.

      TV Filme made capital  expenditures of  approximately  $1.4 million during
the three months ended June 30, 2000.  Such capital  expenditures  were financed
with the proceeds from the 12-7/8% Senior Notes offering and from cash generated
from the Company's operations.

      In September 1997, the Brazilian Ministry of Communications  announced the
bidding  process by which  additional  licenses for wireless  services  would be
awarded  throughout the country.  This award process  commenced in October 1997.
Due to legal  challenges  made to the bidding  process by several  bidders,  the
bidding  process had been  postponed for all markets.  In July 1998, the license
process for the  smaller  markets was  reinstated  and in the fourth  quarter of
1998,  TV Filme  was  awarded  licenses  to  operate  wireless  services  in the
following seven additional cities: Campina Grande, Caruaru, Presidente Prudente,
Bauru,  Franca,  Porto Velho and  Uberaba.  TV Filme paid an  aggregate  of $5.0
million for these seven  licenses.  In October  1999, TV Filme  participated  in
another  bidding  process  and won  additional  licenses  for the cities of Belo
Horizonte and Vitoria, for which it offered a total of $2.3 million.

      The Company,  from time to time, may selectively  pursue joint ventures or
acquisitions in the broadband telecommunications industry, although it currently
has no  understanding,  commitment  or agreement  with respect to any such joint
venture or acquisition.  As of June 30, 2000, of TV Filme's  approximately $36.5
million in cash and cash  equivalents,  approximately  $29.4  million  (80%) was
invested in U.S. dollar denominated securities.  In the long term, the Company's
funding  needs are  subject to a variety of factors,  including,  the number and
size of new system launches or acquisitions,  the  implementation of alternative
transmission  technologies  and the  offering of  additional  telecommunications
services.  Accordingly,  there can be no assurance that the Company will be able
to meet its future funding needs.

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.



                                       11
<PAGE>

      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.

      As of January 1, 1998, TV Filme'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 foreign  exchange  contracts.  See "Item 3.  Quantitative and
Qualitative Disclosures about Market Risk."

RECENT ECONOMIC EVENTS

      The economic and financial turmoil in Southeast Asia and the former Soviet
Republics  during  1997 and 1998 has had an  impact  on many  emerging  markets,
including  Brazil.  As a  result  of  these  events,  the  Brazilian  government
originally took  significant  measures to protect the REAL, as well as the gains
achieved  over the last  several  years by the REAL Plan.  Among other  actions,
Brazil's  Central Bank  significantly  raised  short-term  interest rates during
certain  periods of time,  and the  Brazilian  government  announced a series of
austerity  measures,  generally  including  budget cuts,  restrictions on public
indebtedness,  tax increases,  export  incentives and  restrictions  on imports.
These measures were designed to improve the country's fiscal and current account
deficits and relieve pressure on the REAL. While short-term  interest rates have
declined over the past few months, the Brazilian government and the Central Bank
of Brazil may take additional  measures which could impact  Company's  financial
results.

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.  This is due to the
fact that the Company has all of its operations based in Brazil, and most of its
revenues and some of its expenses are  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.

      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.  The Company 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.


                                       12
<PAGE>

      In an effort to protect  against a possible  devaluation  of the REAL,  TV
Filme entered into the following  foreign  currency  hedge  contract,  which was
outstanding  as of June 30, 2000 (this  contract  was entered  into for purposes
other than trading purposes):

-------------------------------------------------------------------------------
CONTRACT VALUE  EXCHANGE RATE  PREMIUM %  %CDI  CONTRACT DATE   EXPIRATION DATE

US$25,000,000   R$1.804:US$1   +2.5%      99.5% JUNE 12, 2000   JULY 11, 2000

-------------------------------------------------------------------------------

The above contract  required TV Filme to pay, on the expiration  date, an amount
equal to the calculated  interest (CDI--see below) on the contract value. On the
expiration  date TV  Filme  paid  R$495,380.84,  which  amount,  in  REAIS,  was
calculated as follows:  the "Contract  Value R$" divided by the "Exchange  Rate"
times the sum of (the R$/US$ exchange rate in effect on the expiration date plus
the "Premium %) less the "Contract Value R$."

"CDI"  is the  CERTIFICADO  DE  DEPOSITO  INTERBANCARIO,  or the  interbank
lending rate within Brazil.

The Company is currently not party to any  outstanding  foreign  currency  hedge
contracts.

The Company has not entered into contracts for market risk sensitive instruments
for trading purposes.

                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

      On January 26, 2000, as part of its restructuring  process, 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  adequacy  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.
Overwhelming majorities of holders of the 12-7/8% Senior Notes and holders of TV
Filme's common stock voted in favor of the  restructuring set forth in the Plan.
The Brazilian  Telecommunications  Agency  ("ANATEL") issued a response on April
28th, 2000, indicating full support for the restructuring and indicating that no
further  approval was necessary  from the Agency.  Effectuation  of the Plan was
completed  on July 21,  2000,  after  receiving  approval  of the  restructuring
contemplated by the Plan from the Central Bank of Brazil.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

      As   discussed  in  Note  1,  the  Company   recently   underwent  a  debt
restructuring  and  reorganization,  pursuant to which  holders of the Company's
outstanding  12-7/8%  Senior Notes received a $25 million cash payment and their
existing  notes were  converted  into (i) Senior  Secured Notes in the aggregate
principal amount of $35 million,  due 2004, at an interest rate of 12% per annum
(interest  payable-in-kind  at the  Company's  option  through  the  first  four
interest  payments),  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. All outstanding stock options were cancelled.

      The 12% Senior Secured Notes were issued  pursuant to an Indenture,  dated
as of July 20, 2000,  among  ITSA-Intercontinental  Telecomunicacoes  Ltda.,  as
issuer,  the several  Guarantors  named  therein,  and The Bank of New York,  as
trustee. The new common equity securities of the Company were issued pursuant to
an exemption from securities law registration  requirements  provided by Section
1145(a)  of the  United  States  Bankruptcy  Code and  consist  of one  class of
ordinary shares, $0.01 par value per share.


                                       13
<PAGE>

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

      No defaults upon senior securities  occurred during the quarter ended June
30, 2000.

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

      27.   Financial Data Schedule.

      (b)   REPORTS ON FORM 8-K

      During the second  quarter of 2000,  the Company filed a Current Report on
Form 8-K on April 25,  2000,  pursuant to Item 3 thereof,  announcing  that,  on
April 10, 2000, the United States  Bankruptcy Court for the District of Delaware
confirmed the Company's First Amended Plan of Reorganization under chapter 11 of
the United States Bankruptcy Code.



                                       14
<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:   August 14, 2000



                                    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)



                                       15
<PAGE>



                                  EXHIBIT INDEX



NO.              DESCRIPTION

2.1              Reorganization  and  Transfer  Agreement,  dated as of July 20,
                 2000,  by and between TV Filme,  Inc., a Delaware  corporation,
                 ITSA Ltd., a Cayman Islands corporation (incorporated herein by
                 reference  to Exhibit 2.1 of the  Company's  Current  Report on
                 Form 8-K, filed on August 5, 2000).

4.1              Indenture,    dated    as   of    July    20,    2000,    among
                 ITSA-Intercontinental  Telecomunicacoes  Ltda., as issuer,  the
                 several Guarantors named therein,  and The Bank of New York, as
                 trustee.

27               Financial Data Schedule








                                       16