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  September  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)


                                 1-800-321-8564
              (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  October  14,  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  applications  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  encoding,  asset  management  and  protection,  media  and  application
hosting,  multi-mode  content  distribution,  and  transaction  data capture and
reporting.

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.

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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  or  within  corporate
Intranets  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 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  offering,  USVO's goals are:  1) to become a market-leading
streaming  media  solutions  provider;  2)  to  establish  itself as a leader in
streaming  technology  innovation;  3)  to capture revenue and market share from
services  and  products  in  web and content delivery systems 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  and  other intellectual properties by licensing them 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,
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 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:

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-     Revenue  recognition;
-     Accounting  for  marketable  securities;
-     Impairment  or  disposal  of  long-lived  assets;  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.

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.  Long-lived  assets  are reduced to their
estimated  fair  value.

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 nine-month period ended September 30, 2002 were $146,701, compared
to  revenue  of  $101,861  for  the  nine-month period ended September 30, 2001.
Sales  for the three-month period ended September 30, 2002 were $57,125 compared
to  $67,626 three-month period ended September 30, 2001. The increase in revenue
for  the  nine month period ended September 30, 2002 is attributable to software
engineering  services  and  service  maintenance contracts on previous installed
systems.

Starting in the fourth quarter of 2000 and continuing during the next 30 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  21  to  24  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.

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.

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Cost  of  Sales

The  cost  of sales for the nine months ended September 30, 2002 was $96,205, as
compared  to  $56,602  for  the  comparable period of 2001.  For the three-month
period  ended  September  30, 2002, the cost of sales was $38,663 as compared to
$36,036  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
September  30,  2002  decreased $315,869 to $124,385 from $440,254 for the three
months  ended  September  30, 2001. For the nine months ended September 30, 2002
these costs decreased by $725,934 to $775,316 from $1,501,250 for the comparable
period.  The  reduction  was  due  to  consolidation  efforts  of  management.

Professional expense for the three months ended September 30, 2002, decreased to
$8,414 from $38,161 for the comparable period of 2001. For the nine months ended
September  30,  2002  these  costs  decreased  to  $80,218 from $213,295 for the
comparable  period.  The  Company utilized its staff to perform tasks previously
outsourced.

Product  marketing  expenses  for  the  three  months  ended September 30, 2002,
decreased  to  $6,199  from  $175,366 for the comparable period of 2001. For the
nine  months  ended  September  30,  2002  these costs decreased to $99,336 from
$489,458  for  the  comparable  period.  The  reduction was due to consolidation
efforts  of  management.

Administrative/Office  expenses  for  the three months ended September 30, 2002,
decreased  to  $34,499  from $162,027 for the comparable period of 2001. For the
nine  months  ended  September  30,  2002 these costs decreased to $219,918 from
$351,405  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 59% to
$273,839  for  the  nine  months ended September 30, 2002, from $672,304 for the
comparable  period  in  2001  and  by  84% to $38,258 for the three months ended
September  30,  2002  from  $232,695  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 nine months ended September 30, 2002
     reflected  charges  in  the  first  quarter  of 2002 of $12,718, the second
     quarter of 2002 of $19,077 and the third quarter of 2002 of $19,077 was due
     to  the  amortization of a portion of the options issued to consultants. In
     July  2002,  $38,154 was vested. Non-cash compensation charges for the nine
     months  ended  September  30, 2001 reflected charges in the third and first
     quarter  of  2001  of  $575,347.  Of  this  amount,  $9,750  and  $462,097,
     respectively,  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 TSX 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 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

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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.
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 nine months
ended  September  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.

Impairment  Loss  on  Long-Lived  Assets

As  the  result  of the Company's inability to raise revenues in accordance with
the  corporate  business plan, the company continued operating at a loss for the
nine  month  period ended September 30, 2002. As a result, the Company commenced
an  impairment  review  of its long-lived assets in accordance with Statement of
Financial  Accounting  Standard  ("SFAS")144  "Accounting  of  the Impairment or
Disposal  of  Long-Lived  Assets".  As  an result of this impairment review, the
Company  recorded  an impairment loss of approximately $350,000 during the three
month  period  ended  September  30, 2002, to reduce the carrying value of these
assets  to  its  estimated  fair  value.

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 nine months ended September 30, 2002 was $1,882,873 as compared
with  a  net loss of $2,971,875 for the nine months ended September 30, 2001 and
for  the  three  months  ended  September  30,  2002 was $641,336 as compared to
$753,999  for  the  comparable  period.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At September 30, 2002, the Company had a cash position of $53,652, compared
     to  $104,238  at  December  31,  2001.

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 through fiscal 2003 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
through  fiscal 2003. 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

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of  future  opportunities or respond to competitive pressures, or ultimately, to
continue  in  business.

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.

Item  4.  Controls  and  Procedures

Based  on  their  evaluation  of  the  effectiveness of the Company's disclosure
controls  and procedures as of a date within 90 days prior to the filing date of
this  quarterly  report,  the undersigned officers of the Company have concluded
that  such  disclosure  controls  and  procedures  are  adequate.  There were no
significant  changes  in  internal  controls  or  in  other  factors  that could
significantly  affect  internal  controls, including any corrective actions with
regard  to  significant  deficiencies and material weaknesses, subsequent to the

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date of the most recent evaluation by the undersigned officers of the Company of
the  design  and operation of internal controls which could adversely affect the
Company's  ability  to  record,  process,  summarize  and report financial data.


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

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)

               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  September  27,  2002, the Registrant announced that four
                    employees  of  its  wholly  owned  subsidiary USVO Inc. have
                    filed  a  complaint with the Connecticut Department of Labor
                    with  respect  to outstanding wages. The Registrant has been
                    in  contact  with  the  Connecticut Department of Labor. The
                    Registrant  intends  to  satisfy  this obligation forthwith.

               (ii) Amendment  - On September 27, 2002, the Registrant announced
                    that four employees of its wholly owned subsidiary USVO Inc.
                    have  filed  a  complaint with the Connecticut Department of
                    Labor  with respect to outstanding wages. The Registrant has
                    been in contact with the Connecticut Department of Labor and
                    intends  to  satisfy  this  obligation  forthwith.

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:  November  14,  2002          By:  /s/  Anton  J.  Drescher
                                     --------------------------------
                                     Name:  Anton  J.  Drescher
                                     Title:  Chief  Financial  Officer

                                        9
<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

SECTION  906  CERTIFICATION  BY  EDWIN  MOLINA

Pursuant  to the requirements of Section 906 of the Sarbanes-Oxley Act of  2002,
Edwin  Molina,  hereby  certifies  that:

1.   this report fully complies with the requirements of Sections 13(a) or 15(d)
     of  the  1934  Act,  and

2.   the  information  contained in this report fairly presents, in all material
     respects, the registrant's financial condition and results of operations of
     the  registrant.

                                By:  /s/  Edwin  Molina
                                   -----------------------------------
                                   Name:  Edwin  Molina
                                   Title:  President  and  Chief  Executive
                                          Officer
                                   Date:  November  14,  2002


SECTION  906  CERTIFICATION  BY  ANTON  J.  DRESCHER

Pursuant  to the requirements of Section 906 of the Sarbanes-Oxley Act of  2002,
Anton  J.  Drescher,  hereby  certifies  that:

1.   this report fully complies with the requirements of Sections 13(a) or 15(d)
     of  the  1934  Act,  and

2.   the  information  contained in this report fairly presents, in all material
     respects, the registrant's financial condition and results of operations of
     the  registrant.

                                By:  /s/  Anton  J.  Drescher
                                   ------------------------------------
                                   Name:  Anton  J.  Drescher
                                   Title:  Secretary  and  Chief  Financial
                                          Officer
                                   Date:  November  14,  2002



CERTIFICATIONS

I,  Edwin  Molina,  certify  that:

1.   I have reviewed this quarterly report on Form 10-Q of USA Video Interactive
     Corp;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entitles,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

                                       10
<PAGE>

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b)   any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report whether or not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                By:  /s/  Edwin  Molina
                                   -----------------------------------
                                   Name:  Edwin  Molina
                                   Title:  President  and  Chief  Executive
                                          Officer
                                   Date:  November  14,  2002





I,  Anton  J.  Drescher,  certify  that:

1.   I have reviewed this quarterly report on Form 10-Q of USA Video Interactive
     Corp;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officers  and  I  are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entitles,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other certifying officers and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and

     b)   any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report whether or not there were significant changes in internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                By:  /s/  Anton  J.  Drescher
                                   ------------------------------------
                                   Name:  Anton  J.  Drescher
                                   Title:  Secretary  and  Chief  Financial
                                          Officer
                                   Date:  November  14,  2002

                                       F1
<PAGE>









                           USA VIDEO INTERACTIVE CORP.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                SEPTEMBER 30, 2002

                                   (UNAUDITED)

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

                                       F2
<PAGE>
                  USA VIDEO INTERACTIVE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (STATED IN US DOLLARS)
<TABLE>
<CAPTION>


                                                                               SEPTEMBER 30,    DECEMBER 31,
                                                                                   2002             2001
                                                                              ---------------  --------------

                                                                                (UNAUDITED)
<S>                                                                           <C>              <C>
ASSETS

Current Assets:
    Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . .  $       53,652   $     104,238
    Marketable securities - related parties. . . . . . . . . . . . . . . . .               -          42,616
    Accounts receivable, net of allowance for doubtful accounts $-0- . . . .           1,400          30,900
    Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -          12,000
    Prepaid expenses and other current assets. . . . . . . . . . . . . . . .          10,805          21,613
                                                                              ---------------  --------------

TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . .          65,857         211,367

Property and Equipment - at cost, net of accumulated
  depreciation of $505,529 and $573,015, respectively. . . . . . . . . . . .         354,957       1,100,339

Other Assets, net of accumulated amortization of $10,508
 and $8,016, respectively. . . . . . . . . . . . . . . . . . . . . . . . . .          67,980          70,472

Deferred Tax Assets, net of valuation allowance
  of $7,749,000 and $7,215,000, respectively . . . . . . . . . . . . . . . .               -               -
                                                                              ---------------  --------------

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      488,794   $   1,382,178
                                                                              ===============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
    Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . .  $    1,149,739   $     948,417
    Due to related parties . . . . . . . . . . . . . . . . . . . . . . . . .          55,006          91,480
                                                                              ---------------  --------------

TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . .       1,204,745       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.      30,230,225      29,492,071
    Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . .               -         (86,487)
    Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . .     (30,946,176)    (29,063,303)
                                                                              ---------------  --------------

        STOCKHOLDERS' EQUITY (DEFICIENCY). . . . . . . . . . . . . . . . . .        (715,951)        342,281
                                                                              ---------------  --------------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY). . . . . . .  $      488,794   $   1,382,178
                                                                              ===============  ==============

</TABLE>




                             SEE ACCOMPANYING NOTES

                                       F3
<PAGE>

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

<TABLE>
<CAPTION>


                                                  FOR THE THREE MONTHS ENDED        FOR THE NINE MONTHS ENDED
                                                SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                                    2002             2001             2002             2001
                                               ---------------  ---------------  ---------------  ---------------
<S>                                            <C>              <C>              <C>              <C>
Revenue . . . . . . . . . . . . . . . . . . .  $       57,125   $       67,626   $      146,701   $      101,861
                                               ---------------  ---------------  ---------------  ---------------

Expenses:
        Cost of sales . . . . . . . . . . . .          38,663           36,036           96,205           56,602
        Research and development. . . . . . .          38,258          232,695          273,839          672,304
        Selling, general and administrative .         124,385          440,254          775,316        1,501,250
        Depreciation and amortization . . . .         132,624          104,645          397,874          276,622
        Impairment loss on long-lived assets.         350,000                -          350,000                -
        Noncash compensation charges. . . . .          19,077            9,750           50,872          575,347
                                               ---------------  ---------------  ---------------  ---------------

Total expenses. . . . . . . . . . . . . . . .         703,007          823,380        1,944,106        3,082,125
                                               ---------------  ---------------  ---------------  ---------------
Loss from operations. . . . . . . . . . . . .        (645,882)        (755,754)      (1,797,405)      (2,980,264)
                                               ---------------  ---------------  ---------------  ---------------

Other income (expense)
           Interest income. . . . . . . . . .              22               98              143            5,132
           Other. . . . . . . . . . . . . . .           4,524            1,657          (85,611)           3,257
                                               ---------------  ---------------  ---------------  ---------------

                                                        4,546            1,755          (85,468)           8,389
                                               ---------------  ---------------  ---------------  ---------------

Net loss. . . . . . . . . . . . . . . . . . .  $     (641,336)  $     (753,999)  $   (1,882,873)  $   (2,971,875)
                                               ===============  ===============  ===============  ===============

Net loss per share - basic and diluted. . . .  $         (.01)  $         (.01)  $         (.02)  $         (.04)
                                               ===============  ===============  ===============  ===============
Weighted-average number of common
 shares outstanding - basic and diluted . . .     101,745,089       84,533,997       95,224,942       83,719,069
                                               ===============  ===============  ===============  ===============
</TABLE>






                             SEE ACCOMPANYING NOTES


                                       F4
<PAGE>

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

<TABLE>
<CAPTION>


                                                 FOR THE THREE MONTHS ENDED        FOR THE NINE MONTHS ENDED
                                               SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                                   2002             2001             2002             2001
                                              ---------------  ---------------  ---------------  ---------------
<S>                                           <C>              <C>              <C>              <C>
Net loss . . . . . . . . . . . . . . . . . .  $     (641,336)  $     (753,999)  $   (1,882,873)  $   (2,971,875)

Other comprehensive income:
     Change in unrealized loss on marketable
          securities                                        -         (20,535)          86,487         (118,331)
                                              ---------------  ---------------  ---------------  ---------------


Comprehensive loss . . . . . . . . . . . . .  $     (641,336)  $     (774,534)  $   (1,796,386)  $   (3,090,206)
                                           -  ===============  ===============  ===============  ===============


</TABLE>






                             SEE ACCOMPANYING NOTES


                                       F5
<PAGE>

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

                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                              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
Noncash compensation charges. . . . . .            -       38,154               -              -                 38,154
Change in unrealized loss on marketable
  securities. . . . . . . . . . . . . .            -            -          86,487              -                 86,487
Net loss. . . . . . . . . . . . . . . .            -            -               -     (1,882,873)            (1,882,873)
                                          ----------  -----------  --------------  --------------  ---------------------

Balance at September 30, 2002 . . . . .  101,745,088  $30,230,225  $            -   $(30,946,176)  $           (715,951)
                                         ===========  ===========  ===============  =============  =====================


</TABLE>






                             SEE ACCOMPANYING NOTES


                                       F6
<PAGE>

<TABLE>
<CAPTION>

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


                                                          FOR THE THREE MONTHS ENDED        FOR THE NINE MONTHS ENDED
                                                        SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,    SEPTEMBER 30,
                                                            2002             2001             2002             2001
                                                       ---------------  ---------------  ---------------  ---------------
<S>                                                    <C>              <C>              <C>              <C>
Cash flows from operating activities:
    Net loss. . . . . . . . . . . . . . . . . . . . .  $     (641,336)  $     (753,999)  $   (1,882,873)  $   (2,971,875)
    Adjustments to reconcile net loss to net cash
      used in operating activities:
      Bad debts . . . . . . . . . . . . . . . . . . .          17,753                -           17,753                -
      Depreciation and amortization . . . . . . . . .         132,625          104,645          397,874          276,622
      Impairment loss on long-lived assets. . . . . .         350,000                -          350,000                -
      Noncash compensation charge . . . . . . . . . .          19,077            9,750           50,872          575,347
     Realized loss on sale of marketable securities -
         related parties. . . . . . . . . . . . . . .               -                -           93,319                -
     Changes in operating assets and liabilities:
         Decrease in accounts receivable. . . . . . .           3,518           11,079           11,747          113,832
         Decrease in inventory. . . . . . . . . . . .          36,322                -           12,000                -
         (Increase) decrease in prepaid expenses and
          other current assets. . . . . . . . . . . .           2,317          (19,189)          10,808           63,148
         Increase (decrease) in accounts payable and
           accrued expenses . . . . . . . . . . . . .          28,370          (34,130)         188,604         (149,716)
     Decrease in accounts payable and accrued
         expenses - related parties . . . . . . . . .               -                -                -          (20,830)
     Increase (decrease) in due to related parties. .         (20,206)        (337,097)         (36,474)           5,167
                                                       ---------------  ---------------  ---------------  ---------------

NET CASH USED IN OPERATING ACTIVITIES . . . . . . . .         (71,560)      (1,018,941)        (786,370)      (2,108,305)
                                                       ---------------  ---------------  ---------------  ---------------

Cash flows from investing activities:
   Purchases of property and equipment, net . . . . .               -          (63,628)               -         (486,120)
   Patent fees                                                                                                    (4,000)
   Proceed from sale of marketable securities -
      related parties . . . . . . . . . . . . . . . .               -                -           35,784                -
                                                       ---------------  ---------------  ---------------  ---------------


NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES .               -          (63,628)          35,784         (490,120)
                                                       ---------------  ---------------  ---------------  ---------------

Cash flows from financing activities:
   Proceeds from the issuance of common stock . . . .               -        1,074,131          700,000        2,407,391
   Proceeds from the issuance of common stock
      upon exercise of warrants . . . . . . . . . . .               -           12,053                -           72,912
                                                       ---------------  ---------------  ---------------  ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . .               -        1,086,184          700,000        2,480,303
                                                       ---------------  ---------------  ---------------  ---------------

Net increase (decrease) in cash and cash
  equivalents . . . . . . . . . . . . . . . . . . . .         (71,560)           3,615          (50,586)        (118,122)

Cash and cash equivalents at beginning of period. . .         125,212          109,460          104,238          231,197
                                                       ---------------  ---------------  ---------------  ---------------


Cash and cash equivalents at end of period. . . . . .  $       53,652   $      113,075   $       53,652   $      113,075
                                                       ===============  ===============  ===============  ===============
</TABLE>






                             SEE ACCOMPANYING NOTES

                                       F7
<PAGE>
                           USA VIDEO INTERACTIVE CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNADITED)
                             (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:

The  accompanying  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 $1,882,873 for the nine month
period  ended  September  30, 2002 and $3,684,340, $4,661,652 and $1,684,468 for
the  years  ended  December  31,  2001,  2000  and  1999,  respectively.  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 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
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 September 30, 2002
and  2001.

                                       F8
<PAGE>
                           USA VIDEO INTERACTIVE CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2002
                                   (UNADITED)
                             (STATED IN US DOLLARS)
                              --------------------

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
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 nine-month and three-month periods ended September 30, 2002,
respectively, approximately $51,000 and $19,000 which is based on the fair value
of  the stock options as services are provided. At September 30, 2002 since part
of such options have not yet vested, $13,000 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.

NOTE  F  -  IMPAIRMENT  OF  LONG-LIVED  ASSETS

As  the  result  of the Company's inability to raise revenues in accordance with
the  corporate  business plan, the company continued operating at a loss for the
nine  month  period ended September 30, 2002. As a result, the Company commenced
an  impairment  review  of its long-lived assets in accordance with Statement of
Financial  Accounting  Standard  ('SFAS")  144  "Accounting of the Impairment or
Disposal  of  Long-Lived  Assets".  As  a  result of this impairment review, the
Company  recorded  an impairment loss of approximately $350,000 during the three
month  period  ended  September  30, 2002, to reduce the carrying value of these
assets  to  its  estimated  fair  value.