1   UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM
10-Q  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the
quarterly period ended March 31, 2009  Commission file number: 0-29651  USA
VIDEO INTERACTIVE CORP. (Exact name of registrant as specified in its charter)  WYOMING
                                                                 06-1576391 (State
or Other Jurisdiction of
                              (I.R.S.
Employer Identification No.) Incorporation
or Organization)  8
West Main Street, Niantic, Connecticut
                           06357 (Address
of principal executive offices)
                            (ZIP
code)  (860) 739-8030 (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.  Yes
 [ X ]       No  [   ]  Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
See definition of accelerated filer and large accelerated filer in Rule
12b-2 of the Exchange Act. (Check one):  Large
accelerated filer [   ] Accelerated
filer [   ] Non-accelerated
filer [   ] Small
reporting company [ X ]  Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   [   ]
      No [ X ]  At May
11, 2009, there were 178,526,363 shares of the registrant's common stock
outstanding.   2     PART
I. FINANCIAL
INFORMATION  Item
1. Financial
Statements    3


USA
VIDEO INTERACTIVE CORP.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  MARCH
31, 2009 (Unaudited)  (Stated in US Dollars)


4


USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Stated in US Dollars)  March 31,
December 31,2009
2008(Unaudited)ASSETSCurrent
Assets:Cash
and cash equivalents
$      3,182
$
             65Accounts
Receivable
6,000
-Prepaid
expenses and other current assets
1,533
2,990Total
current assets
10,715
3,055Property and
Equipment - at cost, net
-
-Deferred Tax
Assets, net of valuation allowanceof
$9,722,000 and $9,683,000, respectively
-
-Total
Assets
$   10,715
$       3,055LIABILITIES
AND STOCKHOLDERS' DEFICIENCYCurrent
Liabilities:Accounts
payable and accrued expenses
$  545,574
$  423,973Due
to related parties
160
160Total
current liabilities
545,734
424,133Commitments and
ContingenciesStockholders'
Deficiency:Preferred
stock - no par value; authorized 250,000,000 shares,none
issuedCommon
stock and additional paid-in capital -no
par value; authorized 250,000,000 shares,issued
and outstanding 178,526,363
37,764,019
37,764,019Accumulated
deficit
(38,299,038)
(38,185,097)Stockholders'
deficiency
(535,019)
(421,078)Total
Liabilities and Stockholders' Deficiency
$    10,715
$      3,055  SEE ACCOMPANYING NOTES


5


USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Stated in US Dollars)  Three months
ended March 31,
2009
2008(Unaudited)Revenue

$
         6,000
$
         6,000Expenses:Cost
of sales

-
750Research
and development
9,000
29,350Selling,
general and administrative
110,941
228,625Depreciation
and amortization
-
831Total
expenses

119,941
259,556Loss from
operations
(113,941)
(253,556)Other income
(expense)Interest
(expense)
-
251Gain on
settlement of accounts payable
-
-Gain on sale of
equipment
-
--
251Net loss

$    (113,941)
$    (253,305)Net loss per
share - basic and diluted
$
            (.00)
$
           (.00)Weighted-average
number of commonshares
outstanding - basic and diluted
178,526,364
170,440,331        SEE ACCOMPANYING NOTES


6


USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS'
DEFICIENCY(Stated in US Dollars)(Unaudited)  Common StockAccumulated
Stockholders'Shares
Amount
Deficit
DeficiencyBalance at
December 31, 2008
178,526,363
$    37,764,019
$
       (38,185,097)
$
          (421,078)Issuance of
common stock uponexercise of
warrants
-
-
-
-Issuance of
common stock uponexercise of
stock options

-
-
-Noncash
compensation charges

-
-
-Net loss

-
(113,941)
(113,941)Balance at March
31, 2009
178,526,363
$    37,764,019
$
       (38,299,038)
$
          (535,019)        SEE ACCOMPANYING NOTES





7


USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Stated in US Dollars)  Three months
ended March 31,
2009
2008(Unaudited)Cash flows from
operating activities:Net
loss
$  (113,941)
$    (253,305)Adjustments
to reconcile net loss to net cashused
in operating activities:Depreciation
and amortization
-
831Noncash
compensation charge
-
37,650Gain
on settlement of accounts payable
-
-Gain
on sale of equipment
-
-Changes
in operating assets and liabilities:Increase
in accounts receivables
(6,000)
-Decrease
in prepaid expenses and other current assets
1,457
676(Decrease)
in accounts payable and accrued expenses
121,601
125,031Net
cash used in operating activities
3,117
(89,117)Cash flows from
investing activities:Proceeds
from sale of equipment
-
-Net
cash provided by investing activities
-
-Cash flows from
financing activities:Proceeds
from the issuance of common stock and warrants
-
60,927Net
cash provided by financing activities
-
60,927Net (decrease)
in cash and cash equivalents
3,117
(28,190)Cash and cash
equivalents at beginning of period
65
36,700Cash and cash
equivalents at end of period
$       3,182
$
         8,510     SEE ACCOMPANYING NOTES





8   USA
VIDEO INTERACTIVE CORP. NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March
31, 2009 (Unaudited) (Stated in US Dollars)   NOTE A  BASIS OF PRESENTATION  The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01(a)(5) of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of the management, all
adjustments (consisting of normal recurring accruals) considered necessary for
fair presentation have been included.  The results for the interim periods
are not necessarily indicative of the results that may be attained for an entire
year or any future periods.  For further information, refer to the
Financial Statements and footnotes thereto in the Companys annual report on
Form 10-K for the fiscal year ended December 31, 2008  NOTE B  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  The accompanying condensed consolidated financial statements have
been prepared assuming the Company will continue as a going concern.  As
shown in the financial statements, the Company has incurred losses of $113,941
for the three month period ended March 31, 2009 and, in addition the Company
incurred losses of $915,918 and $1,784,193 for the years ended December 31, 2008
and 2007, respectively. As of March 31, 2009, the Company had an accumulated
deficit of $38,299,038 and a working capital deficit of $535,019. These
conditions raise doubt about the Company's ability to continue as a going
concern.  The Company's ability to continue as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its obligations as
they come due which management believes it will be able to do.  To date,
the Company has funded operations primarily through the issuance of common stock
and warrants to outside investors and the Company's management.  The
Company believes that its operations will generate additional funds and that
additional funding from outside investors and the Company's management will
continue to be available to the Company when needed.  The Company also has
certain lawsuits pending which could result in additional liabilities.  The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classifications of liabilities that might be necessary in the event the Company
cannot continue as a going concern.  Basic loss per common share (EPS) is computed as net loss
divided by the weighted-average number of common shares outstanding during the
period. Diluted EPS includes the impact of common stock potentially issuable
upon the exercise of options and warrants. Potential common stock has been
excluded from the computation of diluted net loss per share as their inclusion
would be anti-dilutive.  The assets and liabilities of the Companys foreign subsidiaries
are translated into U.S. dollars at current exchange rates, and revenue and
expenses are translated at average rates of exchange prevailing during the
period. The aggregate effect of translation adjustments is immaterial at March
31, 2009 and 2008.  NOTE C  COMMON STOCK  No shares of common stock was issued from January 1, 2009 to March
31, 2009.





9   NOTE D - CONTINGENT LIABILITY  The
Compays patent infringement litigation against Movielink LLC came to a
substantive conclusion on September 8, 2006, when the U.S. Court of Appeals for
the Federal Circuit affirmed certain rulings of the U.S. District Court for the
District of Delaware granting Movielink summary judgment of non-infringement. A
further procedural determination was entered on September 26, 2007, taxing
litigation costs against the Company  On
September 13, 2006, USA Video Technology Corp., our wholly-owned subsidiary,
filed suit in the U.S. District Court for the Eastern District of Texas,
alleging that its U.S. Patent No. 5,130,792 is infringed by cable technology
interests including Time Warner, Inc., Charter Communications, Inc., and Comcast
Cable Communications LLC, and seeking statutory compensation and a court
injunction against further infringement.  In December 2007, the court
issued rulings adverse to our interests: a claim construction ruling
interpreting certain terms in the patent's claims, and a related summary
judgment of non-infringement.  Defendants then filed motions for costs and
attorney fees.  The court denied defendants' motions for attorney fees and
granted the motions for costs, so that we now have a remaining liability from
this litigation in the amount of approximately $30,000, not counting our own
remaining attorney fees and litigation expenses.  Our subsidiary filed
notice of appeal from the district court's adverse substantive decisions, but
was unable to prosecute the appeal and so it was dismissed.   The Company is party to a default judgment entered against one of
the Company's subsidiaries.  During the year ended December 31, 1995, a
claim was made against the Company for the total amount payable under the terms
of a lease with one of the Company's subsidiaries for office space in Dallas,
Texas through 2002.  The Company's management is of the opinion that the
amount payable under the terms of this judgment is not estimable or determinable
at this time and may be substantially mitigated by the landlords renting the
property to another party.  The range of possible loss is from $-0- to
approximately $500,000.  Any settlement resulting from the resolution of
this contingency will be accounted for in the period of settlement when such
amounts are estimable or determinable.  The Company leases its United States office space under a
non-cancelable operating lease, expiring in July 2010.  The minimum rental
commitment of this lease is approximately $13,560 annually.  The Company
leases its Canadian office space on a month to month basis.  Rent expense
United States and Canada amounted to $10,001 and $11,004 for the three months
ended March 31, 2009 and 2008, respectively.  NOTE E  SHARE  BASED COMPENSATION  Effective January 1, 2006, the Company adopted
FAS No. 123 (R) utilizing the modified prospective method. FAS No. 123 (R)
requires the recognition of share-based compensation expense in the financial
statements.  Under the modified prospective method, the
provisions of FAS No. 123 (R) apply to all awards granted or modified on or
after the date of adoption. In addition, the unrecognized expense of awards not
yet vested at the date of adoption, determined under the original provisions of
FAS 123, Accounting for Stock Based Compensation, is in net earnings in the
periods after the date of adoption. Stock based compensation consists primarily
of stock options. Stock options are granted to employees at exercise prices
equal to the fair market value of the Companys stock at the dates of grant.
Stock options generally vest over three years and have a term of seven years.
Compensation expense for stock options is recognized on a straight line basis
over the period of the award.    10    The fair value for options issued was estimated at the date of
grant using a Black-Scholes option-pricing model. The risk free rate was derived
from the U.S. Treasury yield curve in effect at the time of the grant. The
volatility factor was determined based on our historical stock prices. The
Black-Scholes option-pricing model was developed for use in estimating the fair
value of traded options that have no vesting restrictions and are fully
transferable. In addition, option-pricing models require the input of highly
subjective assumptions including the expected stock price volatility.  During the three month period ended March 31, 2009, the Company
granted no options.  The fair value of each option grant was estimated at the date of
grant using the Black-Scholes option pricing model with the following
weighted-average assumptions:  A
summary of the status of the Company's options and changes for the three months
ended March 31, 2009 is presented below:  Number of Shares
Weighted Average Exercise Price
Remaining   life
Aggregate intrinsic ValueOutstanding
at beginning of period
8,000,000
$0.10
$0.14Granted
-0-
n/aExercised
-0-
n/aCancelled/expired
250,000
$0.155Outstanding
at end of period
7,750,000
$0.10
-$0.14
0.6years
$899,000Options
exercisable at end of period
7,750,000  As of
March 31, 2009 all options are fully vested.  NOTE  F  INCOME TAXES  Effective January 1, 2007, the Company adopted the provisions of
FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income
Taxes  An Interpretation of FASB Statement No. 109. FIN 48 provides detailed
guidance for the financial statement recognition, measurement and disclosure of
uncertain tax positions recognized in the financial statements in accordance
with SFAS No. 109. Tax positions must meet a more-likely-than-not recognition
threshold at the effective date to be recognized upon the adoption of FIN 48 and
in subsequent periods. Upon the adoption of FIN 48, the Company had no
unrecognized tax benefits. During the first quarter of 2009, the Company
recognized no adjustments for uncertain tax benefits.  Income
taxes are computed using the asset and liability method of accounting. Under the
asset and liability method, a deferred tax asset or liability is recognized for
estimated future tax effects attributable to temporary differences and
carry-forwards. The measurement of deferred income tax assets is adjusted by a
valuation allowance, if necessary, to recognize future tax benefits only to the
extent, based on available evidence, it is more likely than not such benefits
will be realized. The Companys deferred tax assets were fully reserved at March
31, 2009 and December 31, 2008.     11   The
Company recognizes interest and penalties, if any, related to uncertain tax
positions in selling, general and administrative expenses.  No interest and
penalties related to uncertain tax positions were accrued at March 31, 2009.  The
tax years 2005 through 2008 remain open to examination by the major taxing
jurisdictions in which the Company operates. The Company expects no material
changes to unrecognized tax positions within the next twelve months.  NOTE  G  NEW
ACCOUNTING PRONOUNCEMENTS  Effective for
financial statements issued for fiscal years beginning after December 15, 2008
FSP EITF 03-6-1 Determining whether instruments granted in share-based payment
transactions are participating securities has been issued in June 2008. The
effect on the financial statements has not yet been evaluated by management.
 Effective for financial statements issued for fiscal years beginning after
December 15, 2008 FSP FAS 142-3 Determination of the useful life of intangible
assets has been issued in April 2008. The effect on the financial statements
has not yet been evaluated by management.  **NOTE H 
SUBSEQUENT EVENTS**  From April 1, 2009 to May
11, 2009, the Company granted stock options to purchase up to 650,000 shares of
common stock, exercisable at a price of $0.05US per share, expiring two years
from the date of grant, which option grants are subject to regulatory
approval.      12    Item
2. Management's
Discussion and Analysis of Financial Condition and Results
of Operations  CAUTIONARY
STATEMENT  This
document includes statements that may constitute forward-looking statements made
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. We caution readers regarding certain forward-looking
statements in this document, press releases, securities filings, and all other
documents and communications.  All statements, other than statements of
historical fact, including statements regarding industry prospects and future
results of operations or financial position, made in this Quarterly Report on
Form 10-Q ("Report") are forward looking.  The words
"believes," "anticipates," "estimates," "expects,"
and words of similar import, constitute "forward-looking statements."
 While we believe in the veracity of all statements made herein,
forward-looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by us, are inherently subject to
significant business, economic and competitive uncertainties and contingencies
and known and unknown risks.  As a result of such risks, our actual results
could differ materially from those expressed in any forward-looking statements
made by, or on behalf of, our company.  We will not necessarily update
information if any forward-looking statement later turns out to be inaccurate.
 Our actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including risks and uncertainties
set forth in our Annual Report on Form 10-K, as well as in other documents we
file with the Securities and Exchange Commission ("SEC").  The
following information has not been audited.  You should read this
information in conjunction with the unaudited financial statements and related
notes to the financial statements included in this report.  OVERVIEW OF THE COMPANY  We
design and market to business customers digital watermarking, streaming video
and video-on-demand systems, services and source-to-destination digital media
delivery solutions that allow live or recorded digitized and compressed video to
be transmitted through Internet, intranet, satellite or wireless connectivity.
 Our systems, services and delivery solutions include digital watermark
solutions and video content production, content encoding, media asset
management, media and application hosting, multi-mode content distribution,
transaction data capture and reporting, e-commerce, specialized engineering
services, and Internet streaming hardware.  Although we have generated nominal sales for the initial quarter
of 2009, we continue to explore opportunities that will result in new products
for new revenue streams, but there can be no assurances that such efforts will
be successful.  We hold
the patent for Store-and-Forward Video-on-Demand (#5,130,792), filed in 1990 and
issued by the United States Patent and Trademark Office on July 14, 1992.
 Our patent is expected to expire in February 2010.  It has been cited
by at least 145 subsequent patents.  We hold similar patents in England,
France, Spain, Italy, Germany, Canada, and Japan.  We anticipate actively
engaging in licensing this patent.  Our
Store and Forward Video-on-Demand ("VoD") intellectual property
potentially reaches across the VoD market.  Our patented technique covers
the transmission of video content over networks faster than "real time."
 VoD is the mechanism by which the delivery of compressed video is managed
and, together with compression technology, facilitates the delivery of video to
an end user in a timely and interactive fashion.    13    We have
developed a number of specific products and services based on these
technologies. These include MediaSentinel and SmartMarks a process that
watermarks digital video content, StreamHQ, a collection of
source-to-destination media delivery services marketed to businesses; EncodeHQ,
a service that digitizes and compresses analog-source video; hardware server and
encoder system applications under the brand name Hurricane Mediacaster; ZMail,
a service that delivers web and rich media content to targeted audiences;
mediaClix, a service that delivers content similar to Zmail but originating
from an existing web presence; and MediaSentinel, a patent-pending digital
watermarking technology to deter digital video piracy.  We were
incorporated on April 18, 1986, as First Commercial Financial Group Inc.
in the Province of Alberta, Canada.  In 1989, our name was changed to
Micron Metals Canada Corp., which purchased 100% of the outstanding
shares of USA Video Inc., a Texas corporation, in order to focus on the digital
media business.  In 1995, we changed our name to USA Video Interactive
Corp. and continued our corporate existence to the State of Wyoming.
 We have five wholly-owned subsidiaries:  USA Video (California)
Corp., USA Video Corp., Old Lyme Productions Inc., USA Video Technologies, Inc.,
and USVO, Inc.  Our executive and corporate offices are located in Niantic,
Connecticut, and our Canadian offices are located in Vancouver, British
Columbia.  BUSINESS OBJECTIVES:  We have established the following near-term business
objectives:  1. Leverage our digital VoD patent for licensing fees and
partnerships in the United States and internationally;  2. Patent and license new technology developed within the corporate
research and development program;  3. Attain industry recognition for the superior architectural,
functional, and business differentiators of our MediaSentinel
architecture;  4. Demonstrate proof of concept on a commercial project with
MediaSentinel architecture;  5. Establish StreamHQas the industry standard in the
streaming video and rich media marketplace;  6. Expand StreamHQ functionality to provide enhanced support for
corporate training and education markets.  CRITICAL
ACCOUNTING POLICIES (AND ESTIMATES)  Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States.  The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities.  On
an ongoing basis, we evaluate these estimates, including those related to
customer programs and incentives, bad debts, inventories, investments,
intangible assets, income taxes, warranty obligations, impairment or disposal of
long-lived assets, contingencies and litigation.  We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the    14   basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources.  Actual results may differ
from these estimates under different assumptions or conditions.  We have identified the policies below as
critical to our business operations and to the understanding of our financial
results. The impact and any associated risks related to these policies on our
business operations is discussed throughout managements discussion and analysis
of financial condition and results of operations where such policies affect our
reported and expected financial results:   Revenue
recognition;  Impairment
or disposal of long-lived assets;  Deferred
taxes;  Accounting
for stock-based compensation; and  Commitments
and contingencies.   REVENUE RECOGNITION.  Revenue is recognized for
digital water marking based on a contracted usage schedule on a monthly billing
cycle.  Software revenue and other services are recognized in accordance
with the terms of the specific agreement, which is generally upon delivery and
when accepted by customer.  Maintenance, support and service revenue are
recognized ratably over the term of the related agreement.  In order to
recognize revenue, we must not have any continuing obligations and it must also
be probable that we will collect the accounts receivable.  IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS.
 Long-lived assets are reviewed in accordance with Statement of Financial
Accounting Standard (SFAS) 144.  Impairment or disposal of
long-lived assets losses are recognized in the period the impairment or disposal
occurs.  DEFERRED TAXES.  We record a valuation allowance to
reduce deferred tax assets when it is more likely than not that some portion of
the amount may not be realized.  ACCOUNTING FOR STOCK-BASED
COMPENSATION.In
December 2004, the Financial Accounting Standards Board FASB issued SFAS No. 123 (revised 2004),
Share Based
Payment (SFAS 123(R)). SFAS 123(R) requires all share-based
payments to employees, including grants of employee stock options, to be
recognized in the financial statements based on their fair values. We adopted
SFAS 123(R) on January 1, 2006. SFAS 123(R) permits public companies
to adopt its requirements using either the modified prospective or modified
retrospective transition method. We use the modified prospective transition
method, which requires that compensation cost is recognized for all awards
granted, modified or settled after the effective date as well as for all awards
granted to employees prior to the effective date that remain unvested as of the
effective date.  COMMITMENTS AND CONTINGENCIES.    We account for commitments and contingencies in
accordance with financial accounting standards board Statement No. 5, Accounting
for Contingencies. We record a liability for commitments and contingencies when
the amount is both probable and reasonably estimable.     15   RESULTS OF OPERATIONS  Sales  Sales
for the three-month period ended March 31, 2009 and March 31, 2008 were $6,000
for each year.  Revenues were generated from Software License Agreement
from our SmartmarkSoftware.  Cost
of Sales  The
cost of sales for the three months ended March 31, 2009 and March 31, 2008 were
$-0- and $ 750, respectively.  Costs are the royalties on our video
watermarking license agreement with Digimarc Corporation.  Selling, General and Administrative Expenses  Selling, general and administrative expenses, consisting of
product marketing expenses, consulting fees, office, professional fees and other
expenses to execute our business plan and for our day-to-day operations,
decreased in the three months ending March 31, 2009.  We have a contract
for our Smartmark Software and delivered acceptable release to start billing.
 Product marketing costs decreased due to managements decision to direct
our efforts toward the current customer.   Administrative expenses
have decreased as a result.  Selling, general and administrative expenses for the three months
ended March 31, 2009 decreased $117,684 to $113,941 from $228,625 for the three
months ended March 31, 2008.  The overall decrease was the result of
professional fees.  Professional expenses for the three months ended March 31, 2009,
decreased to $2,500 from $59,714 for the comparable period of 2008.  The
decreased costs in the first quarter of 2009 were due to the no activity with
patent infringement lawsuit.  Product
marketing expenses for the three months ended March 31, 2009, decreased to
$18,587 from $26,241 for the comparable period in 2008.  The decrease was
due to managements decision to direct our efforts towards our current
customer.  We have
arranged for additional staff and consultants to engage in marketing activities
in an effort to identify and assess appropriate market segments, develop
business arrangements with prospective partners, create awareness of new
products and services, and communicate to the industry and potential customers.
 Other components of selling, general and administrative expense did not
change significantly.  Research and Development Expenses  Research and development expenses consisted primarily of
contractors, compensation, hardware, software, licensing fees, and new product
applications for our proprietary MediaSentinel.  Research and development
expenses decreased to $9,000 for the three months ended March 31, 2009, from
$29,350 for the comparable period in 2008. The decrease was the result of a
concentration in one application of research and development efforts for
MediaSentinel.     16   Non-Cash Compensation Charges  Non-cash compensation charges for the three months ended March 31,
2009 were $-0-, compared to $37,650 for the comparable period in 2008.  The
amount for the three months ended March 31, 2008 was due to the issuance of
stock options to an employee.  Net
Losses  To
date, we have not achieved profitability and, we expect to incur substantial net
losses for at least the remainder of 2009.  Our net loss for the three
months ended March 31, 2009 was $113,941, compared with a net loss of $253,305
for the three months ended March 31, 2008.  The decrease in losses is
directly related to the decrease in professional fees.  LIQUIDITY AND CAPITAL RESOURCES  At
March 31, 2009, we had a cash position of $3,182, compared to $65 at December
31, 2008.  We anticipate capital requirements of $500,000 for the continued
development of our MediaSentinel products $750,000 for commercialization of our
MediaSentinel products and $500,000 for costs associated with the
administration of our company.  We will
require additional financing to fund current operations through fiscal 2009.
 We have historically satisfied our capital needs primarily by issuing
equity securities.  We will require an additional $1.25 million to $1.75
million to finance operations through fiscal 2009 and we intend to seek such
financing through sales of our equity securities.  We have not raised any
capital in the three months ended March 31, 2009.  Assuming the aforementioned $1.25 million to $1.75 million in
financing is obtained, we believe that continuing operations for the longer term
will be supported through anticipated licensing revenues and through additional
sales of our securities.  We have no binding commitments or arrangements
for additional financing, and there is no assurance that we will be able to
obtain any additional financing on terms acceptable to us, if at all.  OFF-BALANCE SHEET ARRANGEMENTS  We do
not maintain any off-balance sheet transactions, arrangements, or obligations
that are reasonably likely to have a material effect on our financial condition,
results of operations, liquidity, or capital resources.  Item 3. Quantitative and Qualitative Disclosures About Market
Risk  We
believe our exposure to overall foreign currency risk is not material.  We
do not manage or maintain market risk sensitive instruments for trading or other
purposes and are not exposed to the effects of interest rate fluctuations as we
do not carry any long-term debt.  We
report our operations in US dollars and our currency exposure, although
considered by us as immaterial, is primarily between US and Canadian dollars.
 Exposure to other currency risks is also not material as international
transactions are settled in US dollars.  Any future financing undertaken by
us will be denominated in US dollars.  As we increase our marketing
efforts, the related expenses will be primarily in US dollars.  In
addition, 90% of our bank deposits are in US dollars.     17   Item 4. Controls and Procedures  Our management, with the participation of our
Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures, as defined in Exchange
Act Rule 13a-15(e) and 15d-15(e), as of the end of the period covered by this
report.  In designing and evaluating our disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives.  While we believe our disclosure controls and
procedures and our internal control over financial reporting have improved, no
system of controls can prevent errors and fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control systems objectives will be met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within our company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur. Controls can also be circumvented by individual acts of
some people, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions or deterioration in the degree of compliance with its policies or
procedures. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.  Subject to the limitations above, management
believes that the consolidated financial statements and other financial
information contained in this report, fairly present in all material respects
our financial condition, results of operations, and cash flows for the periods
presented.  Based on the evaluation of the effectiveness
of our disclosure controls and procedures, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective at a
reasonable assurance level. There were no changes in our internal control over
financial reporting that occurred during our most recent fiscal quarter that
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.  PART II. OTHER INFORMATION  Item 1. Legal Proceedings  Our
patent infringement litigation against Movielink LLC came to a substantive
conclusion on September 8, 2006, when the U.S. Court of Appeals for the Federal
Circuit affirmed certain rulings of the U.S. District Court for the District of
Delaware granting Movielink summary judgment of non-infringement. A further
procedural determination was entered on September 26, 2007, taxing litigation
costs against us  On
September 13, 2006, USA Video Technology Corp., our wholly-owned subsidiary,
filed suit in the U.S. District Court for the Eastern District of Texas,
alleging that its U.S. Patent No. 5,130,792 is infringed by cable technology
interests including Time Warner, Inc., Charter Communications, Inc., and Comcast
Cable Communications LLC, and seeking statutory compensation and a court
injunction against further infringement.  In December 2007, the court
issued rulings adverse to our interests: a claim    18   construction ruling interpreting certain terms in the patent's
claims, and a related summary judgment of non-infringement.  Defendants
then filed motions for costs and attorney fees.  The court denied
defendants' motions for attorney fees and granted the motions for costs, so that
we now have a remaining liability from this litigation in the amount of
approximately $30,000, not counting our own remaining attorney fees and
litigation expenses.  Our subsidiary filed notice of appeal from the
district court's adverse substantive decisions, but was unable to prosecute the
appeal and so it was dismissed.  We are party to a default judgment entered against one of our
subsidiaries.  During the year ended December 31, 1995, a claim was made
against us for the total amount payable under the terms of a lease with one of
our subsidiaries for office space in Dallas, Texas through 2002.  Our
management is of the opinion that the amount payable under the terms of this
judgment is not estimable or determinable at this time and may be substantially
mitigated by the landlords renting the property to another party.  The
range of possible loss is from $-0- to approximately $500,000.  Any
settlement resulting from the resolution of this contingency will be accounted
for in the period of settlement when such amounts are estimable or
determinable.  We lease our United States office space under a non-cancelable
operating lease, expiring in July 2010.  The minimum rental commitment of
this lease is approximately $13,560 annually.  We lease our Canadian office
space on a month to month basis.  Rent expense United States and Canada
amounted to $10,001 and $11,004 for the three months ended March 31, 2009 and
2008, respectively.  Item 1A. Risk Factors  A description of the risks associated with our
business, financial condition, and results of operations is set forth in Part I,
Item 1A, of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008. These factors continue to be meaningful for your
evaluation of our company and we urge you to review and consider the risk
factors presented in the Form 10-K. There have been no material changes to these
risks presented in the Form 10-K.  Item 2. Unregistered Sales of Equity 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) Exhibit(s)     19   31.1 Certification of the Chief Executive Officer Pursuant To Rule
13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  31.2 Certification of the Chief Financial Officer Pursuant To Rule
13a-14 Or 15d-14 of the Securities Exchange Act of 1934,as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
 Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002  32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
 Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002  (b) Reports on Form 8-K  (i) On March 31st, 2009 we announced that we had terminated GLO CPAs,
LLP (GLO) as our auditors.  We engaged John A. Braden &
Company, P.C. ("Braden") as our independent certified public accountants
commencing with the audit of our financial statements for the fiscal year ended
December 31, 2008.  The decision to engage Braden was approved by the audit
committee of our board of directors.       20   SIGNATURE  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.   USA
VIDEO INTERACTIVE CORP.   Dated:
 May 11, 2009 By:
 /s/  Anton J. Drescher -------------------------------- Name:
Anton J. Drescher Title:
 Chief Financial Officer