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  June  30,  2002


                         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)


      70  Essex  Street,  Mystic,  Connecticut                06355
     (Address  of  principal  executive  offices)            (ZIP  code)


                                 (860)  572-1560
              (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  |_|

At  August  13,  2002,  there were 101,745,089 shares of the registrant's common
stock  outstanding.



PART  I.  FINANCIAL  INFORMATION

Item  1.    Financial  Statements





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

CAUTIONARY  STATEMENT

Certain  statements  contained in this Quarterly Report on Form 10-Q ("Report"),
including,  without  limitation,  statements  containing  the  words "believes,"
"anticipates,"  "estimates,"  "expects," and words of similar import, constitute
"forward-looking  statements."  Readers should not place undue reliance on these
forward-looking  statements.  USA Video's actual results could differ materially
from  those  anticipated  in  these forward-looking statements for many reasons,
including  risks  and  uncertainties  set forth in USA Video Interactive Corp.'s
Annual  Report  on  Form  10-K, the most important of which are summarized below
under Factors Which May Affect Future Results of Operations, as well as in other
documents  USA  Video files 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
financial  statements  included  in  this  report.

OVERVIEW  OF  THE  COMPANY

USA  Video  Interactive Corp. ("USA Video" or the "Company") designs and markets
to  business customers 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. The Company's systems, services
and delivery solutions include 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.

USVO  holds 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.  It has been cited by at least 145 subsequent patents.  USVO holds similar
patents  in England, France, Spain, Italy, Germany, and Canada, and has a patent
pending  in Japan.  USVO anticipates actively engaging in licensing this patent.

MARKETS  AND  PRODUCTS:
As  an  outgrowth  of  its  video  streaming  systems  business  and specialized
engineering  services,  USVO  has  identified  emerging markets for global media
streaming  services  and has developed a unique solution to provide a wide range
of  business  customers  with  value-added streaming media solutions.  With this
approach,  called  StreamHQ  ,  customers can leverage USVO's infrastructure and
technical  expertise,  while  focusing  on their own core business competencies.

StreamHQ  facilitates  the transmission of digitized and compressed video to the
user's desktop via multiple streaming modes that take advantage of the available
connectivity.  While  competitive  services take a "one-size-fits-all" streaming
approach,  StreamHQ  brings  unique  value  propositions  to individual vertical
markets  with  functionality  designed  specifically  for those markets.  Beyond
quality streaming, USVO's overriding goal has been to give customers media asset
management  tools  and  information  that  provide a basis for them to achieve a
return  on  investment  in  streaming  media  expenditures.

StreamHQ  encompasses  an  end-to-end  process from source to viewing, including
content production, content encoding, asset management and protection, media and
application  hosting,  multi-mode  content  distribution,  and  transaction data
capture  and  reporting.

USVO  tailored  an  initial  deployment  product, Zmail, which uses StreamHQ  to
deliver  rich media emails.  Zmail leverages the diverse functional capabilities
of this architecture to provide a value-added service to advertisers, as well as
other business applications, such as corporate communications, consumer notices,
product  recalls,  and  customer  support.

Clicking  on  a  link  within  a  Zmail  accesses  a customized web page with an
embedded,  non-proprietary  streaming  player  (e.g., Windows Media, QuickTime).
The  user  can customize his or her viewing experience and access any of the web
page  links  for  additional  information,  guidance,  or  e-commerce.  Zmail
functionality  monitors  all  media  player  transactions,  as  well  as  web
click-throughs,  and  aggregates  the  data  across  multiple  users  to provide
web-based  campaign  reports  to  the  customer.

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TECHNOLOGY  APPROACH:
USVO  is  approaching  the  global media streaming services market with a Tier 1
media-streaming  infrastructure  that the Company has attempted to differentiate
from  competitive  products  and services in terms of architectural, functional,
and  business  features.  Leveraging  some  of  the  industry's  most  prominent
providers  for  data storage, networking, and data management, StreamHQ  strives
to  compete  based  on  service  availability,  an  efficient streaming process,
redundancy and fail-over features, and continuity in the event of power outages.

USVO has created a modular system that can be scaled to meet the requirements of
a  growing  clientele.  StreamHQ  can  also  be  rapidly replicated to provide a
streaming  utility  in  multiple  Internet  Data  Centers  around  the  world.

StreamHQ  functionality  is  software  driven,  allowing  USVO  to create future
system  enhancements  based on the needs of the marketplace.  Additionally, USVO
can  customize the baseline features of StreamHQ  and plans to expand the system
features  to  support  the  specialized  needs of additional types of customers.

RESEARCH  AND  DEVELOPMENT:
USVO  has  ongoing  research  and  development  (R&D)  efforts that are aimed at
improving the efficiency and security of media delivery to clients.  Among these
R&D  efforts is the ongoing development of technology that will help protect the
intellectual  property  of  content  owners.  USVO  also  has  a  proprietary
still-image  wavelet  compression  technology.

BUSINESS  OBJECTIVES:
USVO  has  established  the  following  near-term  business  objectives:
1.   Establish StreamHQ as the industry standard in the streaming video and rich
     media  marketplace;
2.   Generate  services-  and  systems-based  revenues  in  accordance  with the
     corporate  business  plan;
3.   Attain industry recognition for the superior architectural, functional, and
     business  differentiators  of  the  StreamHQ  architecture;
4.   Leverage USVO's digital video patent for licensing fees and partnerships in
     the  United  States  and  internationally;
5.   Develop  at  least  one  client  per  year  for a complete StreamHQ system,
     including  intellectual  property  licensing  and  operational  support;
6.   Expand  StreamHQ  functionality  to  provide enhanced support for corporate
     training  and  education  markets;  and
7.   Patent  and  license  new  technology  developed  within  the corporate R&D
     program.

MARKET  PERSPECTIVE:
With  its  StreamHQ  service  offering,  USVO's  goals  are:  1)  to  become  a
market-leading  streaming  media  service  provider; 2) to establish itself as a
leader  in  streaming  technology  innovation;  3) to capture revenue and market
share  from  services  and  products  in  advertising, corporate communications,
education,  entertainment,  and  other  markets.  Numerous  published  reports
estimate  the current value of these markets as in excess of 20 billion dollars.
As  a  secondary  objective,  USVO intends to leverage its broad video-on-demand
patent  by  licensing  it  to  other  companies.

The  Company  was  incorporated on April 18, 1986, as First Commercial Financial
Group  Inc. in the Province of Alberta, Canada.  In 1989,its 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, the Company changed its name to USA Video Interactive Corp.
and  continued  its corporate existence to the State of Wyoming. The Company has
five  wholly-owned subsidiaries:  USA Video (California) Corp., USA Video Corp.,
USA  Video  Productions  Inc.,  USA Video Technologies, Inc., and USVO, Inc. USA
Video's  executive and corporate offices are located in Mystic, Connecticut, and
its  Canadian  offices  are  located  in  Vancouver,  British  Columbia.

CRITICAL  ACCOUNTING  POLICIES

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
on-going basis, we evaluate these estimates, including those related to customer
programs and incentives, bad debts, inventories, investments, intangible assets,

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income  taxes,  warranty obligations, 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
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 consider the following accounting policies to be both those most important to
the  portrayal  of  our  financial condition and the require the most subjective
judgment:

          -  Revenue  recognition;
          -  Accounting  for  marketable  securities;  and
          -  Inventory  valuation  and  related  reserves.

Revenue  recognition.  Software  revenue  and  other  services are recognized in
accordance  with  the  terms  of the specific agreement, which is generally upon
delivery.  Maintenance,  support and service revenue are recognized ratably over
the  term  of  the  related  agreement.

Accounting for marketable securities.  We classify our investments in marketable
securities  as  "available for sale."  We carry these investments at fair value,
based  on  quoted market prices, and unrealized gains and losses are included in
accumulated  other comprehensive income (loss), which is reflected upon the sale
of  our  marketable  securities  in  our  statements  of  operations.

Inventory  valuation  and related reserves.  Inventories are valued at the lower
of cost or market on a first-in, first-out basis.  We use a standard cost system
for  purposes  of  determining  cost; the standards are adjusted as necessary to
ensure  they  approximate  actual costs.  We write down or reserve for estimated
obsolete  or  excess  inventory  based  upon assumptions about future demand and
market  conditions.  We  compare  current inventory levels on a product basis to
our  current  sales  forecast  in order to assess our inventory reserve balance.
Our  sales  forecasts  are based on economic conditions and trends (both current
and  projected),  anticipated  customer  demand  and acceptance of our products,
current  products,  expected  future products and various other assumptions.  If
actual  market conditions are less favorable than those projected by management,
additional  write-downs  may  be  required.


RESULTS  OF  OPERATIONS

Sales

Sales  for  the  six-month  period ended June 30, 2002 were $89,576, compared to
revenue  of $34,235 for the six-month period ended June 30, 2001.  Sales for the
three-month  period  ended  June  30,  2002  were  $63,323  compared  to $33,175
three-month  period  ended  June 30, 2001. The increase in revenue for the three
month  ended  June  30,  2002  is attributable to the proceeds from a government
program  based  on product and services provided on a December 31, 2000 project.

Starting in the fourth quarter of 2000 and continuing during the next 24 months,
the  Company  concentrated its managerial and technical efforts on the remaining
critical  stages  of  developing  and  refining its new web and content delivery
infrastructure  (StreamHQ).

Services  and/or systems based on this infrastructure are intended to become the
Company's core business in place of its custom-built systems for video encoding,
decoding and streaming, the market for which has diminished significantly in the
last  18  to  21  months.  The Company believes the market declined for a number
reasons,  the  most important of which is that customers no longer can afford to
invest  in  single-purpose  hardware  systems  of this type. As a result, profit
margins  on  the  Company's  media  systems  have  continued to decline, and the
Company  has  lowered  prices in the face of declining demand. A change in focus
was  necessary  to  capture  the  market  for  a  more  diverse  multi-purpose
infrastructure.

This  change  in focus required shifting technical and managerial resources from
sales of the old line of products to systems/services offerings based on the new
infrastructure.  Additionally,  the  Company  was required to make a significant
investment  in  the  computer  hardware  and  development  of  the  software
functionality  that  are  at  the  core  of  this  infrastructure.

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Recently,  due  to  the change in capital markets, funding for an internal sales
and  marketing  team  was  unable  to be maintained.  Therefore, the Company has
focused  on  partnering  relationships  with  other  companies  to  complete the
execution  of  it  StreamHQ  -based  business  plan.

Cost  of  Sales

The  cost  of  sales  for  the  six  months  ended June 30, 2002 was $57,542, as
compared  to  $20,566  for  the  comparable period of 2001.  For the three-month
period ended June 30, 2002, the cost of sales was $45,470 as compared to $19,843
for  the  comparable  period  2001.  The  increase  in cost of sales is directly
attributable  to  the  increase  in  sales.

Selling,  General  and  Administrative  Expenses

Selling,  General  and  Administrative  expenses  consisted of product marketing
expenses,  consulting  fees,  office,  professional  fees  and other expenses to
execute  the business plan and for day-to-day operations of the Company.  Due to
market conditions, Management has implemented consolidation procedures to reduce
the  daily  cost  of  Selling,  General  and  Administrative  expenses.

Selling, General and Administrative expenses for the three months ended June 30,
2002  decreased  $341,971  to  $296,519 from $638,490 for the three months ended
June  30,  2001.  The  six  months  ended  June 30, 2002 these cost decreased by
$413,249  to  $647,747 from $1,060,996 for the comparable period.  The reduction
was  due  to  consolidation  efforts  of  management.

Professional  expense  for  the  three  months ended June 30, 2002, decreased to
$30,856  from  $104,892 for the comparable period of 2001.  The six months ended
June  30,  2002 these cost decreased to $71,804 from $175,133 for the comparable
period.  The  Company utilized its staff to perform tasks previously outsourced.

Product  marketing  expenses for the three months ended June 30, 2002, decreased
to  $29,634  from  $200,170  for  the comparable period of 2001.  The six months
ended  June  30,  2002  these  cost  decreased  to $93,137 from $314,092 for the
comparable  period.  The  reduction  was  due  to  consolidation  efforts  of
management.

Administrative/Office  expenses  for  the  three  months  ended  June  30, 2002,
decreased  to $100,890 from $189,378 for the comparable period of 2001.  The six
months  ended  June  30, 2002 these cost decreased to $185,419 from $274,559 for
the  comparable  period.  The  reduction  was  due  to  consolidation efforts of
management.

The  Company  has  arranged  for  additional  staff/consultants  to  engaged  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 compensation, hardware,
software,  licensing  fees,  and  new  product  applications  for  the Company's
proprietary  StreamHQ  .  Research  and development expenses decreased by 46% to
$235,581  for  the  six  months  ended  June  30,  2002,  from  $439,609 for the
comparable  period in 2001 and by 91% to $17,436 for the three months ended June
30, 2002 from $204,375 for the comparable period in 2001.  The reduction was due
to  consolidation  efforts  of  management.

As  the  Company  consolidates  its  business,  its product development, product
marketing,  and  other  general  and  administrative  expenses  will continue to
decrease.

Non-Cash  Compensation  Charges

Non-cash  compensation  charges for the six months ended June 30, 2002 reflected
charges  in  the first quarter of 2002 of $12,718 and the second quarter of 2002
of  $19,077  was  due  to the amortization of a portion of the options issued to
consultants.  Non-cash  compensation  charges  for the six months ended June 30,
2001 reflected charges in the first quarter of 2001 of $565,597. Of this amount,
$462,097  was  due to the issuance of common shares and common share warrants to
the  Company's  officers,  directors  and employees at a price or exercise price
below the market price of the common shares at the time of issuance. Because the
rules  of  the  Toronto Venture Exchange  require that the offering price for
privately  placed  securities  of  listed  companies be set when the offering is
first  announced,  rather  than upon closing, and the market price of the common

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shares  increased  between  announcement  of  the offering and closing, the sale
price of the common shares and the exercise price of the warrants were below the
market  price  of  the  common  shares on the date of issuance. In addition, the
Company  issued  options  to  purchase  150,000  common  shares  to consultants,
resulting  in  a  $97,500  charge during the six months ended June 30, 2001. The
Company  also  incurred  a  charge  of $6,000 for the issuance of employee stock
options.

Other  Expense

The  Company sold the stock of related registered companies for the three months
ended June 30, 2002 for a loss of $93,319.  As of December 31, 2001, the Company
reported  change  in  unrealized  loss  on  investments  for  $86,487.

Net  Losses

To  date,  the  Company  has not achieved profitability and, in fact, expects to
incur  substantial  net losses for at least the remainder of 2002. The Company's
net  loss for the six months ended June 30, 2001 was $1,241,537 as compared with
a  net  loss  of  $2,217,876  for the six months ended June 30, 2001 and for the
three  months  ended  June 30, 2002 was $564,757 as compared to $919,808 for the
comparable  period.

LIQUIDITY  AND  CAPITAL  RESOURCES

At  June  30,  2002,  the Company's had a cash position of $125,212, compared to
$104,238  at  December  31, 2001. The Company's principal sources of cash during
the  three  months  ended  June  30,  2002,  were  proceeds of $700,000 from the
issuance  of  stock  in  a  private placement.  This was substantially offset by
$714,810  of  cash  used  in  operating  activities.

The Company will require additional financing to fund current operations through
the  remained  of 2002. The Company has historically satisfied its capital needs
primarily  by  issuing equity securities. The Company will require an additional
$1.5  million  to $2.0 million to finance operations for the rest of fiscal 2002
and  intends  to  seek  such  financing  through sales of its equity securities.

Assuming  the  aforementioned  $1.5  million  to  $2.0  million  in financing is
obtained,  the  Company  believes that continuing operations for the longer term
will  be supported through anticipated growth in revenues and through additional
sales  of  the Company's securities. Although longer-term financing requirements
may vary depending upon the Company's sales performance, management expects that
the  Company  will  require additional financing of $1.5 million to $2.0 million
for  fiscal  2002.  The  Company  has no binding commitments or arrangements for
additional  financing, and there is no assurance that management will be able to
obtain  any  additional financing on terms acceptable to the Company, if at all.

FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS  OF  OPERATIONS

Certain  risks and uncertainties could cause actual results to differ materially
from  the  results  contemplated  by the forward-looking statements contained in
this Report. Risks and uncertainties have been set forth in the Company's Annual
Report  on  Form  10-K, as well as in other documents the Company files with the
SEC.  These  risk  factors  include  the  following:

THE  COMPANY'S  LIMITED  OPERATING  HISTORY  MAKES  IT DIFFICULT TO EVALUATE ITS
BUSINESS  AND  PROSPECTS.

The  Company's  business  and prospects must be considered in light of the risks
encountered  by  companies  in  their  early stages of development, particularly
companies  in  new  and  rapidly  evolving  markets  such  as  streaming  media.

IF  THE COMPANY IS UNABLE TO OBTAIN SUBSTANTIAL ADDITIONAL FINANCING IN THE NEXT
FEW  MONTHS  IT  MAY  NOT  BE  ABLE  TO  MAINTAIN  OPERATIONS AT CURRENT LEVELS.

The  Company requires substantial additional financing to maintain operations at
current levels beyond the second quarter of 2002. Financing may not be available
when  needed on terms favorable to the Company, or at all. If adequate funds are
not  available  or  are  not  available  on acceptable terms, the Company may be
unable  to  further develop or enhance its products and services, take advantage
of  future  opportunities or respond to competitive pressures, or ultimately, to
continue  in  business.

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CONTINUATION OF THE CURRENT SLUMP IN THE TECHNOLOGY SECTOR WILL ADVERSELY AFFECT
DEMAND  FOR  THE  COMPANY'S  PRODUCTS  AND  SERVICES.

The  Company's  sales  have  been adversely affected by the ongoing slump in the
technology  industry segment and the continuation of these market conditions can
be  expected  to  result  in  depressed  demand  for  the Company's products and
services.

THE  COMPANY'S OPERATING RESULTS IN FUTURE PERIODS ARE EXPECTED TO BE SUBJECT TO
SIGNIFICANT  FLUCTUATIONS,  WHICH  WOULD  LIKELY AFFECT THE TRADING PRICE OF ITS
COMMON  SHARES.

Factors  that  could  cause  such  fluctuations include the Company's ability to
attract  and  retain  customers;  the  introduction  of  new  video transmission
services  or products by others; price competition; the continued development of
and  changes in the streaming media market; its ability to remain competitive in
its  product  and  service  offerings; its ability to attract new personnel; and
potential  U.S.  and  foreign  regulation  of  the  Internet.

THE  COMPANY  IS  SUBJECT  TO RAPID TECHNOLOGICAL CHANGE, WHICH COULD RENDER THE
COMPANY'S  PRODUCTS  AND  SERVICES  OBSOLETE.

Keeping  pace  with  the  technological  advances  may  require  substantial
expenditures  and  lead  time,  particularly  with  respect to acquiring updated
hardware  and  infrastructure components of its systems. The Company may require
additional  financing  to  fund such acquisitions. Any such financing may not be
available  on  commercially  reasonably  terms,  if  at  all,  when  needed.

IF  THE COMPANY DOES NOT CONTINUOUSLY IMPROVE ITS TECHNOLOGY IN A TIMELY MANNER,
ITS  PRODUCTS  COULD  BE  RENDERED  OBSOLETE.

These  changes  and  developments  may  render  the  Company's  products  and
technologies  obsolete in the future. As a result, the Company's success depends
on  its  ability  to  develop  or  adapt products and services or to acquire new
products  and  services that can compete successfully. There can be no assurance
that  the  Company  will  be  successful  in  these  efforts.

THE  COMPANY INTENDS TO ISSUE ADDITIONAL EQUITY SECURITIES, WHICH MAY DILUTE THE
INTERESTS  OF  CURRENT SHAREHOLDERS OR CARRY RIGHTS OR PREFERENCES SENIOR TO THE
COMMON  SHARES.

Accordingly,  existing  shareholders may experience additional dilution of their
percentage  ownership  interest  in  the  Company.  In  addition, the new equity
securities  may  have  rights,  preferences  or  privileges  senior  to those of
existing  holders  of  the  Company's  common  shares.


Item  3.  Quantitative  and  Qualitative  Disclosures  About  Market  Risk

The  Company  believes  its  exposure  to  overall  foreign currency risk is not
material.  The  Company  does  not  manage  or  maintain  market  risk sensitive
instruments  for  trading or other purposes and is not exposed to the effects of
interest  rate  fluctuations  as  it  does  not  carry  any  long-term  debt.

The  Company  reports  its  operations  in US dollars and its currency exposure,
although  considered  by  the Company as immaterial, is primarily between the 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  the  Company  will  be denominated in US dollars. As the Company
increases  its  marketing  efforts, the related expenses will be primarily in US
dollars.  In  addition,  90%  of  the Company's bank deposits are in US dollars.

PART  II.  OTHER  INFORMATION

Item  1.   Legal  Proceedings

The  Company  is  not  a  party to any other material pending legal proceedings.

Item  2.   Changes  in  Securities  and  Use  of  Proceeds

During the quarter ended June 30, 2002, the Company completed an offering, which
it  commenced in May 2002, of units.  Each unit consisted of one share of common

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stock  and one warrant to acquire an additional share at $0.085 per share ($0.13
CN)  by  June  2004.  On completion of the offering, a total of 10,000,000 units
were  issued  at  $0.07  per  unit  ($0.11  CN)  for total proceeds of  $700,000
(adjusted  for  exchange  rate  conversions  for  sales to Canadian purchasers).

The  offer and sale of the units were exempt from registration under Rule 506 of
Regulation  D  of  the  Securities  Act.  The  Company limited the manner of the
offering  and  provided disclosure regarding the offering and the Company to the
investors.  Three  officers  and  directors  of the Company, one employee of the
Company,  six  (6)  additional  unaffiliated nonaccredited investors, and eleven
(11)  additional  unaffiliated  accredited  investors  purchased the securities.
The  Company  believes  that  a  portion  of  these sales were also exempt under
Regulation  S  under  the  Securities  Act,  as  the sales were made in offshore
transactions  to  non-U.S.  persons.


Item  3.   Defaults  Upon  Senior  Securities.

None.

Item  4.   Submission  of  Matters  to  a  Vote  of  Security  Holders.

The  Company held an annual meeting of shareholders on June 28, 2002, at Groton,
Connecticut.  At  the  meeting  the shareholders voted to retain Anton Drescher,
Edwin  Molina  and  Robert  Smith  as  Directors  of  the  Company.

Also  at  the  meeting,  the  shareholders approved the appointment of Goldstein
Golub  Kessler  LLP  as  auditors  for  the  year  ending  December  31,  2002.


<TABLE>
<CAPTION>



Matter Voted Upon                No. of Votes For           No. of Votes Against        No. of Votes Withheld
-----------------                ----------------           --------------------        ---------------------
<S>                                <C>                              <C>                      <C>

1. Election of Directors           51,486,814                       nil                      543,723


2. Appoint Goldstein Golub
     Kessler LLP as auditors
     of the Company for the
     year ending
     December 31, 2002             51,629,330                     336,556                     64,908

1. Any other matters               50,820,355                   1,004,913                    205,519
</TABLE>



Item  5.   Other  Information.

None.

Item  6.   Exhibits  and  Reports  on  Form  8-K

          (a)  Exhibit(s)

               Exhibit  1  -  Certification of Chief Executive Officer and 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 April 15, 2002, the registrant filed a report on Form 8-K
                    wherein  the registrant reported that it had placed eight of
                    its  twenty  employees  in  the  Connecticut  office  on  a
                    temporary  furlough.

               (ii) On  May  14, 2002, the registrant filed a report on Form 8-K
                    wherein  the  registrant  reported  that  the  prominent
                    intellectual  property  and  technology  law  firm  Fish  &
                    Richardson P.C. (www.fr.com) will commence protection of the
                    registrant's  store-and-forward  video-on-demand U.S. patent
                    (number  5,130,792),  beginning with an aggressive licensing
                    program.

              (iii) On  May  17,  2002,  the  Registrant announced that Daniel
                    Kinnaman  and  the Company have mutually agreed to terminate
                    Mr.  Kinnaman's  employment  as  Vice President of Sales and
                    Marketing,  effective  immediately.

                                        9
<PAGE>


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:  August  13,  2002                  By:  /s/  Anton  J.  Drescher
                                     --------------------------------
                                     Name:  Anton  J.  Drescher
                                     Title:  Chief  Financial  Officer

                                       10
<PAGE>
                                                                       Exhibit 1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


I,  Edwin  Molina,  certify,  pursuant  to  18  U.S.C.  Section 1350, as adopted
pursuant  to  Section  906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of USA Video Interactive Corp on Form 10-Q for the quarterly period ended
June  30, 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the  Securities Exchange Act of 1934 and that information contained in such Form
10-Q  fairly  presents  in  all  material  respects  the financial condition and
results  of  operations  of  USA  Video  Interactive  Corp.


                                By:  /s/  Edwin  Molina
                                   -----------------------------------
                                   Name:  Edwin  Molina
                                   Title:  President  and  Chief  Executive
                                          Officer
                                   Date:  August  13,  2002



I,  Anton  J.  Drescher, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant  to  Section  906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of USA Video Interactive Corp on Form 10-Q for the quarterly period ended
June  30, 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the  Securities Exchange Act of 1934 and that information contained in such Form
10-Q  fairly  presents  in  all  material  respects  the financial condition and
results  of  operations  of  USA  Video  Interactive  Corp.


                                By:  /s/  Anton  J.  Drescher
                                   ------------------------------------
                                   Name:  Anton  J.  Drescher
                                   Title:  Secretary  and  Chief  Financial
                                          Officer
                                   Date:  August  13,  2002

                                       F1
<PAGE>









                           USA VIDEO INTERACTIVE CORP.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 2002

                                   (UNAUDITED)

                             (STATED IN US DOLLARS)
                              --------------------





                                       F2
<PAGE>

<TABLE>
<CAPTION>

                               USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                                        CONSOLIDATED BALANCE SHEETS
                                          (STATED IN US DOLLARS)


                                                                               JUNE 30,      DECEMBER 31,
                                                                                 2002            2001
                                                                             -------------  --------------
                                                                              (UNAUDITED)
<S>                                                                          <C>            <C>
ASSETS

Current Assets:
  Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .  $    125,212   $     104,238
  Marketable securities - related parties . . . . . . . . . . . . . . . . .             -          42,616
  Accounts receivable, net of allowance for doubtful accounts $-0-. . . . .        22,671          30,900
  Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        36,322          12,000
  Prepaid expenses and other current assets . . . . . . . . . . . . . . . .        13,122          21,613
                                                                             -------------  --------------


     TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . .       197,327         211,367

Property and Equipment - at cost, net of accumulated
  depreciation of $836,603 and $573,015, respectively . . . . . . . . . . .       836,751       1,100,339

Other Assets, net of accumulated amortization of $9,677
 and $8,016, respectively . . . . . . . . . . . . . . . . . . . . . . . . .        68,811          70,472

Deferred Tax Assets, net of valuation allowance
  of $7,667,000 and $7,215,000, respectively. . . . . . . . . . . . . . . .             -               -
                                                                             -------------  --------------


     TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  1,102,889   $   1,382,178
                                                                             =============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
  Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . .  $  1,140,446   $     948,417
  Due to related parties. . . . . . . . . . . . . . . . . . . . . . . . . .        75,212          91,480
                                                                             -------------  --------------


     TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . . . . . . . . . .     1,215,658       1,039,897
                                                                             -------------  --------------



Commitments and Contingencies

Stockholders' Equity (Deficiency):
  Preferred stock - no par value; authorized 250,000,000 shares,
    none issued
  Common stock - no par value; authorized 250,000,000 shares,
    issued and outstanding 101,745,088 and 91,745,088 shares, respectively.    30,192,071      29,492,071
  Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . .             -         (86,487)
  Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . .   (30,304,840)    (29,063,303)
                                                                             -------------  --------------


     STOCKHOLDERS' EQUITY (DEFICIENCY). . . . . . . . . . . . . . . . . . .      (112,769)        342,281
                                                                             -------------  --------------


     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY). . . . . . . .  $  1,102,889   $   1,382,178
                                                                             =============  ==============


</TABLE>


                             SEE ACCOMPANYING NOTES


                                       F3
<PAGE>

<TABLE>
<CAPTION>

                                USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                           (STATED IN US DOLLARS)
                                                 (UNAUDITED)



                                             FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                                                JUNE 30    JUNE 30                  JUNE 30    JUNE 30
                                                 2002       2001                      2002       2001
                                          ---------------  ---------------  ---------------  ---------------
<S>                                       <C>              <C>              <C>              <C>
Revenue. . . . . . . . . . . . . . . . .  $       63,323   $       33,175   $       89,576   $       34,235
                                          ---------------  ---------------  ---------------  ---------------

Expenses:
  Cost of sales. . . . . . . . . . . . .          45,470           19,843           57,542           20,566
  Research and development . . . . . . .          17,436          204,375          235,581          439,609
  Selling, general and administrative. .         296,519          638,490          647,747        1,060,996
  Depreciation and amortization. . . . .         156,313           91,429          265,250          171,977
  Noncash compensation charges . . . . .          19,077                -           31,795          565,597
                                          ---------------  ---------------  ---------------  ---------------


Total expenses . . . . . . . . . . . . .         534,815          954,137        1,237,915        2,258,745
                                          ---------------  ---------------  ---------------  ---------------
Loss from operations . . . . . . . . . .        (471,492)        (920,962)      (1,148,339)      (2,224,510)
                                          ---------------  ---------------  ---------------  ---------------

Other income (expense)
  Interest income. . . . . . . . . . . .              54            1,443              121            5,034
  Other. . . . . . . . . . . . . . . . .         (93,319)            (289)         (93,319)           1,600
                                          ---------------  ---------------  ---------------  ---------------


                                                 (93,265)           1,154          (93,198)           6,634
                                          ---------------  ---------------  ---------------  ---------------

Net loss . . . . . . . . . . . . . . . .  $     (564,757)  $     (919,808)  $   (1,241,537)  $   (2,217,876)
                                          ===============  ===============  ===============  ===============

Net loss per share - basic and diluted .  $         (.01)  $         (.01)  $         (.01)  $         (.03)
                                          ===============  ===============  ===============  ===============
Weighted-average number of common
 shares outstanding - basic and diluted.      92,074,758       84,373,990       91,910,834       83,331,719
                                          ===============  ===============  ===============  ===============
</TABLE>



                             SEE ACCOMPANYING NOTES


                                       F4
<PAGE>



<TABLE>
<CAPTION>

                                       USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
                                                  (STATED IN US DOLLARS)
                                                        (UNAUDITED)



                                                      FOR THE THREE MONTHS ENDED           FOR THE SIX MONTHS ENDED
                                                       JUNE 30              JUNE 30           JUNE 30         JUNE 30
                                                       2002                   2001             2002             2001
                                           ----------------------------  ---------------  ---------------  ---------------
<S>                                        <C>                           <C>              <C>              <C>
Net loss. . . . . . . . . . . . . . . . .  $                  (564,757)  $     (919,808)  $   (1,241,537)  $   (2,217,876)

Other comprehensive income:
  Change in unrealized loss on marketable
      securities. . . . . . . . . . . . .                       81,811          (64,684)          86,487          (97,796)
                                           ----------------------------  ---------------  ---------------  ---------------


Comprehensive loss. . . . . . . . . . . .  $                  (482,946)  $     (984,492)  $   (1,155,050)  $   (2,315,672)
                                           ============================  ===============  ===============  ===============


</TABLE>



                             SEE ACCOMPANYING NOTES


                                       F5
<PAGE>

<TABLE>
<CAPTION>

                                      USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                                 (STATED IN US DOLLARS)

                                                       (UNAUDITED)

                                                COMMON  STOCK       ACCUMULATED
                                                                        OTHER
                                                                    COMPREHENSIVE    ACCUMULATED       STOCKHOLDERS'
                                           SHARES       AMOUNT          LOSS           DEFICIT     EQUITY  (DEFICIENCY)
                                         -----------  -----------  ---------------  -------------  ---------------------


<S>                                      <C>          <C>          <C>              <C>            <C>
Balance at December 31, 2001. . . . . .   91,745,088  $29,492,071  $      (86,487)  $(29,063,303)  $            342,281
Issuance of common stock and
 common stock warrants for cash . . . .   10,000,000      700,000               -              -                700,000
Change in unrealized loss on marketable
  securities. . . . . . . . . . . . . .            -            -          86,487              -                 86,487
Net loss. . . . . . . . . . . . . . . .            -            -               -     (1,241,537)            (1,241,537)




Balance at June 30, 2002. . . . . . . .  101,745,088  $30,192,071  $            -   $(30,304,840)  $           (112,769)
                                         ===========  ===========  ===============  =============  =====================


</TABLE>



                             SEE ACCOMPANYING NOTES


                                       F6
<PAGE>

<TABLE>
<CAPTION>

                             USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (STATED IN US DOLLARS)




SIX MONTHS ENDED JUNE 30,                                                   2002          2001

(UNAUDITED)
<S>                                                                        <C>           <C>
Cash flows from operating activities:
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(1,241,537)  $(2,217,876)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization . . . . . . . . . . . . . . . . . . . .      265,249       171,977
    Noncash compensation charge . . . . . . . . . . . . . . . . . . . . .       31,795       565,597
    Realized loss on sale of marketable securities - related parties. . .       93,319             -
    Changes in operating assets and liabilities:
      Decrease in accounts receivable . . . . . . . . . . . . . . . . . .        8,229       102,753
      Increase in inventory . . . . . . . . . . . . . . . . . . . . . . .      (24,322)            -
      Decrease in prepaid expenses and other current assets . . . . . . .        8,491        82,337
      Increase in other assets                                                                (4,000)
      Increase (decrease) in accounts payable and accrued expenses. . . .      160,234      (115,586)
      Decrease in accounts payable and accrued expenses -
         related parties. . . . . . . . . . . . . . . . . . . . . . . . .            -       (20,830)
      Increase (decrease) in due to related parties . . . . . . . . . . .      (16,268)       42,348
                                                                           ------------  ------------


       NET CASH USED IN OPERATING ACTIVITIES. . . . . . . . . . . . . . .     (714,810)   (1,393,280)
                                                                           ------------  ------------

Cash flows from investing activities:
    Purchases of property and equipment, net. . . . . . . . . . . . . . .            -      (422,492)
    Proceed from sale of marketable securities - related parties. . . . .       35,784             -
                                                                           ------------  ------------


       NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES. . . . . . . .       35,784      (422,492)
                                                                           ------------  ------------

Cash flows from financing activities:
    Proceeds from the issuance of common stock. . . . . . . . . . . . . .      700,000     1,333,260
    Proceeds from the issuance of common stock upon exercise of warrants
      warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -        60,859
    Loans from related parties. . . . . . . . . . . . . . . . . . . . . .            -       299,916
                                                                           ------------  ------------


       NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . . . . . . . .      700,000     1,694,035
                                                                           ------------  ------------

Net increase (decrease) in cash and cash equivalents. . . . . . . . . . .       20,974      (121,737)

Cash and cash equivalents at beginning of period. . . . . . . . . . . . .      104,238       231,197
                                                                           ------------  ------------


Cash and cash equivalents at end of period. . . . . . . . . . . . . . . .  $   125,212   $   109,460
                                                                           ============  ============
</TABLE>



                             SEE ACCOMPANYING NOTES


                                       F7
<PAGE>

                           USA VIDEO INTERACTIVE CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002
                                   (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,  2001.

NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

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
antidilutive.

Inventory,  which consists of computer equipment, is stated at the lower of cost
or  market  using  the  specific-identification  method.

 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 June 30, 2002 and
2001.

NOTE  C  -  COMMON  STOCK

On  June  28,  2002, the Company issued 7,085,000 units to investors at $.07 per
unit.  Each  unit  consisted  of  one  share  of common stock and one warrant to
purchase  an  additional  share  of  common  stock  at  $.085  per  share.

On  June  28,  2002, the Company issued 2,915,000 units to employees at $.07 per
unit.  Each  unit  consisted  of  one  share  of common stock and one warrant to
purchase  an  additional  share  of  common  stock  at  $.085  per  share.


NOTE  D  -  STOCKHOLDERS'  EQUITY  (DEFICIENCY)

During  January 2002 the Company issued 925,000 options to purchase common stock
to  certain  service  providers  of  the  Company under the 2001 Plan. The stock
options  are  exercisable at a price of $0.50 (U.S.) per share for a term of two

                                       F8
<PAGE>


                           USA VIDEO INTERACTIVE CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002
                                   (UNAUDITED)
                             (STATED IN US DOLLARS)
                              --------------------


years  from the date of grant. In accordance with the provisions of Statement of
Financial  Accounting  Standards  ("SFAS")  123,  the  Company  has  charged  to
operations  for  the  six-months  and  three-month  period  ended June 30, 2002,
respectively,  approximately $32,000 and 19,000 which is based on the fair value
of  the  stock  options  as  services  are provided. At June 30, 2002 since such
options  have  not  yet  vested, this amount is included in accounts payable and
accrued  expenses  in  the  accompanying  consolidated  balance  sheet.

NOTE  E  -  CONTINGENT  LIABILTIY

The Company is party to a default judgement entered against one of the Company's
subsidiaries.  During  the year ended December 31, 1995, a claim was made to the
Company  for  the  total  amount  payable  under the terms of the lease with 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  judgement  is  not  estimable  or determinable at this time and may be
substantially  mitigated  by the landlord 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.