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**UNITED  STATES****SECURITIES AND  EXCHANGE COMMISSION****Washington, D.C. 20549**

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**FORM 10-Q/A**

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|  | **AMENDMENT NO. 1 TO QUARTERLY REPORT PURSUANT      TO SECTION 13      OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|--|---------------------------------------------------------------------------------------------------------------------------|

**For  the quarterly period ended June 30, 2002**

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**ACTV, Inc.**(Exact name of registrant as specified in its charter)

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| **Delaware**                                                            | **94-2907258**                                |
|-------------------------------------------------------------------------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) | (I.R.S.      EmployerIdentification      No.) |
|                                                                    |                                          |
| **233      Park Avenue South****New      York, New York**               | **10003**                                     |
| (Address      of principal executive offices)                           | (Zip      Code)                               |
|                                                                    |                                          |
| **(212)      497-7000**                                            |
| (Registrant’s      telephone number, including area code)          |

Indicate by    check mark whether the registrant (1) has filed all reports required to be    filed by Sections 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     No 

As    of August 12, 2002, there were 55,931,181 shares of the registrant’s    common stock outstanding.

The amendment    No. 1 for Form 10-Q is being filed to give effect to the restatement of the    Company’s consolidated financial statements as discussed in Note 14 to    the financial statements.

 

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|  |
|  |

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**Item 1. Financial Statements**

**ACTV, INC. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                               | **June 30, 2002** |            | **December 31, 2001** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|-----------------|---------------------------------|--------|
|                                                                                                                                                               |                             |                 |                            |        |  |   |
| **ASSETS**                                                                                                                                                         |                        | **(Unaudited)** |                            |   |   |
| Current assets:                                                                                                                                                    |                        |            |                            |   |   |   |
| Cash        and cash equivalents                                                                                                                                   | $                           | 46,623,473      |                                 | $      | 69,035,707 |   |
| Short-term        investments                                                                                                                                      |                        | 17,632,019      |                            |   | 8,951,695 |   |
| Accounts        receivable-net                                                                                                                                     |                        | 1,208,149       |                            |   | 1,319,805 |   |
| Other                                                                                                                                                              |                        | 1,818,373       |                            |   | 1,696,617 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |   |
| Total        current assets                                                                                                                                        |                        | 67,282,014      |                            |   | 81,003,824 |   |
|                                                                                                                                                               |                        |            |                            |   |   |   |
| Property and equipment-net                                                                                                                                         |                        | 5,272,041       |                            |   | 6,344,631 |   |
| Other assets:                                                                                                                                                      |                        |            |                            |   |   |   |
| Restricted        cash                                                                                                                                             |                        | 484,913         |                            |   | 484,913 |   |
| Investment        in warrant                                                                                                                                       |                        | 6,975,148       |                            |   | 16,255,355 |   |
| Investments-other                                                                                                                                                  |                        | 7,426,414       |                            |   | 7,397,776 |   |
| Patents        and patents pending                                                                                                                                 |                        | 8,496,520       |                            |   | 8,425,889 |   |
| Software        development costs                                                                                                                                  |                        | 5,652,852       |                            |   | 5,310,100 |   |
| Goodwill                                                                                                                                                           |                        | 12,935,701      |                            |   | 12,935,701 |   |
| Other                                                                                                                                                              |                        | 1,308,343       |                            |   | 1,429,132 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |   |
|                                                                                                                                                               |                        |            |                            |   |   |   |
| Total        other assets                                                                                                                                          |                        | 43,279,891      |                            |   | 52,238,866 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |   |
| Total        assets                                                                                                                                                | $                           | 115,833,946     |                            | $      | 139,587,321 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |   |
| **LIABILITIES AND STOCKHOLDERS’      EQUITY**                                                                                                                 | ****                        |            |                            |   |   |   |
| Current liabilities:                                                                                                                                               |                        |            |                            |   |   |
| Accounts        payable and accrued expenses                                                                                                                       | $                           | 3,489,051       |                            | $      | 5,664,088 |   |
| Deferred        revenue                                                                                                                                            |                        | 3,653,444       |                            |   | 4,068,450 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |  |
| Total        current liabilities                                                                                                                                   |                        | 7,142,495       |                            |   | 9,732,538 |   |
| Deferred revenue                                                                                                                                                   |                        | 65,156,732      |                            |   | 66,966,638 |   |
| Minority interest                                                                                                                                                  |                        | 1,509,252       |                            |   | 3,215,652 |   |
| Stockholders’ equity:                                                                                                                                         |                        |            |                            |   |   |   |
| Common        stock, $0.10 par value, 200,000,000 shares authorized: issued and outstanding        55,929,560 at June 30, 2002 and 55,881,938 at December 31, 2001 |                        | 5,592,956       |                            |   | 5,588,194 |   |
| Additional        paid-in capital                                                                                                                                  |                        | 311,468,567     |                            |   | 317,496,700 |   |
| Stockholder        loans                                                                                                                                           |                        | (204,499        | )                               |   | (339,035 | ) |
| Accumulated        deficit                                                                                                                                         |                        | (274,831,557    | )                               |   | (263,073,366 | ) |
|                                                                                                                                                               |                             |                 |                            |        |  |   |
| Total        stockholders’ equity                                                                                                                             |                        | 42,025,467      |                            |   | 59,672,493 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |
| Total        liabilities and stockholders’ equity                                                                                                             | $                           | 115,833,946     |                            | $      | 139,587,321 |   |
|                                                                                                                                                               |                             |                 |                            |        |  |   |

*See notes to consolidated financial  statements.*

2

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**ACTV, INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)**

|                                                                                     | **For the Three Months      Ended June 30,** |        | **For the Six Months Ended June 30,** |   |
|------------------------------------------------------------------------------------------|----------------------------------------------|-------------|--------------------------------------------|--------|
|                                                                                     |                                              |             |                                            |        |  |   |  |  |  |  |  |   |
|                                                                                     | **2002**                                     |        | **2001**                                   |   | **2002** |   | **2001** |   |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
| Revenue                                                                                  | $                                            | 3,233,518   |                                       | $      | 4,226,452 |   | $ | 6,419,939 |   | $ | 7,499,894 |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                                      |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Selling, general        and administrative                                               |                                         | 8,553,363   |                                       |   | 12,657,243 |   |   | 14,603,779 |   |   | 26,746,378 |   |
| Depreciation        and amortization                                                     |                                         | 1,399,491   |                                       |   | 1,466,813 |   |   | 2,704,952 |   |   | 2,886,335 |   |
| Amortization        of goodwill                                                          |                                         | —      |                                       |   | 1,042,308 |   |   | — |   |   | 1,460,806 |   |
| Stock-based        compensation reduction                                                |                                         | —      |                                       |   | (4,121,649 | ) |   | (6,002,831 | ) |   | (2,819,155 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
| Total costs        and expenses                                                          |                                         | 9,952,854   |                                       |   | 11,044,715 |   |   | 11,305,900 |   |   | 28,274,364 |   |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Loss from operations                                                                     |                                         | (6,719,336  | )                                          |   | (6,818,263 | ) |   | (4,885,961 | ) |   | (20,774,470 | ) |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Interest income                                                                          |                                         | 413,037     |                                       |   | 1,171,229 |   |   | 701,577 |   |   | 2,791,638 |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Other (expense)/income                                                                   |                                         | (6,820,334  | )                                          |   | 12,955,697 |   |   | (9,280,207 | ) |   | 4,220,285 |   |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| (Loss)/income        before minority interest and cumulative effect of accounting change |                                         | (13,126,633 | )                                          |   | 7,308,663 |   |   | (13,464,591 | ) |   | (13,762,547 | ) |
| Minority interest - subsidiaries                                                         |                                         | 917,584     |                                       |   | 819,157 |   |   | 1,706,400 |   |   | 1,513,771 |   |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
| (Loss)/income        before cumulative effect of accounting change                       | $                                            | (12,209,049 | )                                          | $      | 8,127,820 |   | $ | (11,758,191 | ) | $ | (12,248,776 | ) |
| Cumulative        transition effect of adopting SFAS No. 133                             |                                         | —      |                                       |   | — |   |   | — |   |   | (58,732,197 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Net (loss)/income                                                                        | $                                            | (12,209,049 | )                                          | $      | 8,127,820 |   | $ | (11,758,191 | ) | $ | (70,980,973 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Net (loss)/income per share:                                                             |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Basic                                                                                    |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Before cumulative        effect of accounting change                                     | $                                            | (0.22       | )                                          | $      | 0.15 |   | $ | (0.21 | ) | $ | (0.23 | ) |
| Cumulative        transition effect of adopting SFAS No. 133                             |                                         | —      |                                       |   | — |   |   | — |   |   | (1.08 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
| Basic net        (loss)/income per share                                                 | $                                            | (0.22       | )                                          | $      | 0.15 |   | $ | (0.21 | ) | $ | (1.31 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                  |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Before cumulative        effect of accounting change                                     | $                                            | (0.22       | )                                          | $      | 0.14 |   | $ | (0.21 | ) | $ | (0.23 | ) |
| Cumulative        transition effect of adopting SFAS No. 133                             |                                         | —      |                                       |   | — |   |   | — |   |   | (1.08 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |  |   |  |  |   |
| Diluted net        (loss)/income per share                                               | $                                            | (0.22       | )                                          | $      | 0.14 |   | $ | (0.21 | ) | $ | (1.31 | ) |
|                                                                                     |                                              |             |                                       |        |  |   |  |   |  |  |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Shares used in basic calculations                                                        |                                         | 55,936,341  |                                       |   | 55,916,619 |   |   | 55,910,282 |   |   | 54,147,428 |   |
|                                                                                     |                                         |        |                                       |   |   |   |   |   |   |   |   |   |
| Shares used in diluted calculations                                                      |                                         | 55,936,341  |                                       |   | 60,107,307 |   |   | 55,910,282 |   |   | 54,147,428 |   |

 

*See notes to consolidated financial  statements.*

3

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**ACTV, INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF CASH FLOWS****(Unaudited)**

|                                                                     | **For the Six Months****Ended June 30,** |        |
|--------------------------------------------------------------------------|------------------------------------------|-------------|
|                                                                     |                                          |        |  |   |
|                                                                     | **2002**                                 |        | **2001** |   |
|                                                                     |                                          |        |  |   |
| Cash flows from operating activities:                                    |                                     |        |   |   |   |   |
| Net loss                                                                 | $                                        | (11,758,191 | ) | $ | (70,980,973 | ) |
| Adjustments        to reconcile net loss to net cash used in operations: |                                     |        |   |   |   |   |
| Cumulative        transition effect of adopting SFAS No. 133             |                                     | —      |   |   | 58,732,197 |   |
| Change        in fair value of warrant                                   |                                     | 9,280,207   |   |   | (4,220,285 | ) |
| Depreciation        and amortization                                     |                                     | 2,704,952   |   |   | 4,347,141 |   |
| Deferred        compensation - other                                     |                                     | —      |   |   | 75,000 |   |
| Stock-based        compensation                                          |                                     | (6,002,831  | ) |   | (2,819,155 | ) |
| Amortization        of deferred revenue                                  |                                     | (1,809,906  | ) |   | (1,809,906 | ) |
| Common        stock issued in lieu of cash payment                       |                                     | 89,156      |   |   | 1,767,275 |   |
| Deferred        revenue                                                  |                                     | (415,006    | ) |   | 138,304 |   |
| Minority        interest                                                 |                                     | (1,706,400  | ) |   | (1,513,771 | ) |
|                                                                     |                                     |        |   |   |   |   |
| Changes in assets and liabilities:                                       |                                     |        |   |   |   |   |
| Accounts        receivable                                               |                                     | 111,656     |   |   | (1,528,965 | ) |
| Other        assets                                                      |                                     | (106,676    | ) |   | (2,097,101 | ) |
| Accounts        payable and accrued expenses                             |                                     | (2,175,037  | ) |   | (957,675 | ) |
|                                                                     |                                          |             |   |  |  |   |
| Net        cash used in operating activities                             |                                     | (11,788,076 | ) |   | (20,867,914 | ) |
|                                                                     |                                          |             |   |  |  |   |
|                                                                     |                                     |        |   |   |   |   |
| Cash flows from investing activities:                                    |                                     |        |   |   |   |   |
| Investment        in short-term investments                              |                                     | (8,680,324  | ) |   | — |   |
| Investment        in patents                                             |                                     | (399,687    | ) |   | (567,499 | ) |
| Investment        in property and equipment                              |                                     | (831,599    | ) |   | (5,892,035 | ) |
| Investment        in software development costs                          |                                     | (708,750    | ) |   | (2,192,252 | ) |
| Strategic        investments                                             |                                     | (28,638     | ) |   | (5,217,349 | ) |
|                                                                     |                                          |             |   |  |  |   |
| Net        cash used in investing activities                             |                                     | (10,648,998 | ) |   | (13,869,135 | ) |
|                                                                     |                                          |             |   |  |  |   |
|                                                                     |                                     |        |   |   |   |   |
| Cash flows from financing activities:                                    |                                     |        |   |   |   |   |
| Transfer        to restricted cash                                       |                                     | —      |   |   | (1,066,278 | ) |
| Net        proceeds from equity financings                               |                                     | 6,089       |   |   | 106,320 |   |
| Repayment        of stockholders loans                                   |                                     | 18,751      |   |   | 35,910 |   |
|                                                                     |                                          |             |   |  |  |   |
| Net        cash provided by/(used in) financing activities               |                                     | 24,840      |   |   | (924,048 | ) |
|                                                                     |                                          |             |   |  |  |   |
|                                                                     |                                     |        |   |   |   |   |
| Net decrease in cash and cash equivalents                                |                                     | (22,412,234 | ) |   | (35,661,097 | ) |
| Cash        and cash equivalents, beginning of period                    |                                     | 69,035,707  |   |   | 122,488,041 |   |
|                                                                     |                                          |             |   |  |  |   |
| Cash        and cash equivalents, end of period                          | $                                        | 46,623,473  |   | $ | 86,826,944 |   |
|                                                                     |                                          |             |   |  |  |   |

**Supplemental Disclosure  to the Consolidated Statements of Cash Flows**

The following schedule provides additional information  concerning retirement of common stock and acquisitions:

|                                    | **For the Six Months      Ended June 30,** |    |
|-----------------------------------------|--------------------------------------------|---------|
|                                    |                                            |    |
|                                    | **2002**                                   |    | **2001** |   |
|                                    |                                            |    |  |   |
| Retirement of Common Stock:             | $                                          | 115,786 |   | $ | 1,520,000 |   |
| Purchase Acquisitions:                  |                                       |    |   |   |   |   |
| Assets        acquired (excluding cash) |                                       | —  |   |   | 2,089,071 |   |
| Liabilities        assumed              |                                       | —  |   |   | 2,695,524 |   |
| Market        value of shares issued    |                                       | —  |   |   | 27,475,090 |   |

*See notes to consolidated financial  statements.*

4 

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**ACTV, INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY****(Unaudited)**

|                                                                                | **Common Stock** |       | **Stockholder****Loans** |      | **Additional Paid in****Capital** |   | **Accumulated****Deficit** |   | **Total** |        |
|-------------------------------------------------------------------------------------|------------------|------------|--------------------------|-----------|---------------------------------------------|--------|----------------------------|--------|-----------|-------------|
|                                                                                     |
| **Shares**                                                                          |             | **Amount** |
|                                                                                |                  |       |                          |      |                                             |   |                            |   |           |        |  |   |
| Balance        at December 31, 2001                                                 | 55,881,938       |       | $                        | 5,588,194 |                                        | $      | (339,035                   | )      | $         | 317,496,700 |   | $ | (263,073,366 | ) | $ | 59,672,493 |   |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Issuance        of shares in connection with exercise of stock options and warrants | 25,374           |       |                     | 2,537     |                                        |   | —                     |   |      | 3,552       |   |   | — |   |   | 6,089 |   |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Adjustment        to deferred stock compensation                                    | —           |       |                     | —    |                                        |   | —                     |   |      | (6,002,831  | ) |   | — |   |   | (6,002,831 | ) |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Issuance        of common stock for 401k plan                                       | 67,141           |       |                     | 6,714     |                                        |   | —                     |   |      | 82,442      |   |   | — |   |   | 89,156 |   |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Retirement        of common stock                                                   | (44,893          | )          |                     | (4,489    | )                                           |   | —                     |   |      | (111,296    | ) |   | — |   |   | (115,785 | ) |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Rescission/repayment        of shareholder loans                                    | —           |       |                     | —    |                                        |   | 134,536                    |   |      | —      |   |   | — |   |   | 134,536 |   |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Net loss                                                                            | —           |       |                     | —    |                                        |   | —                     |   |      | —      |   |   | (11,758,191 | ) |   | (11,758,191 | ) |
|                                                                                |                  |       |                          |           |                                        |        |                            |   |           |             |   |  |  |   |  |  |   |
|                                                                                |             |       |                     |      |                                        |   |                       |   |      |        |   |   |   |   |   |   |   |
| Balance at June 30, 2002                                                            | 55,929,560       |       | $                        | 5,592,956 |                                        | $      | (204,499                   | )      | $         | 311,468,567 |   | $ | (274,831,557 | ) | $ | 42,025,467 |   |

*See notes to consolidated financial  statements.*

5

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**NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001**

**1.   Basis of Presentation**

The results of operations for the three and six    months ended June 30, 2002 and 2001 are not necessarily indicative of a full    year’s operations. In the opinion of management, the accompanying consolidated    financial statements include all adjustments of a normal recurring nature,    which are necessary to present fairly such financial statements.

All significant intercompany balances and transactions    have been eliminated in consolidation. Certain information and footnote disclosures    normally included in the financial statements prepared in accordance with    generally accepted accounting principles have been condensed or omitted.

These unaudited consolidated financial statements    should be read in conjunction with the audited financial statements and notes    thereto included in our annual report on Form 10-K/A for the year ended December    31, 2001.

We consider all highly liquid debt instruments    purchased with an original maturity of three months or less to be cash equivalents.

Certain reclassifications have been made to the    prior years’ financial statements to conform to the 2002 presentation.

**2.   Recent Accounting Pronouncements**

In July 2001, the Financial Accounting Standards    Board issued Statement of Financial Accounting Standards No. 142 (“SFAS    142”), Goodwill and Other Intangible Assets, effective for fiscal years    beginning after December 15, 2001. Under SFAS 142, goodwill and intangible    assets deemed to have indefinite lives will no longer be amortized but will    be subject to annual impairment tests. Other intangible assets will continue    to be amortized over their useful lives. We adopted SFAS 142 beginning on    January 1, 2002. We completed the transitional goodwill impairment test as    required by SFAS 142 using a measurement date of January 1, 2002. Based on    the results of the transitional impairment test, we were not required to recognize    an impairment of goodwill. We will continue to perform future impairment tests    as required by SFAS 142. There can be no assurance that future impairment    tests will not result in a charge to earnings.

The following pro forma information for the three    and six months ended June 30, 2001 presents net income/loss and income/loss    per common share adjusted to exclude goodwill amortization expense of $1,042,308    and $1,460,806 recognized respectively during the periods.

|                                         | **Three Months Ended****June 30, 2001** |      | **Six Months Ended****June 30, 2001** |   |
|----------------------------------------------|-----------------------------------------|-----------|---------------------------------------|--------|
|                                         |                                         |      |                                       |   |
| Net income/(loss):                           |                                    |      |                                  |   |   |   |
| As reported                                  | $                                       | 8,127,820 |                                  | $      | (70,980,973 | ) |
| Pro forma                                    | $                                       | 9,170,128 |                                  | $      | (69,520,167 | ) |
| Income/(loss) per common share—Basic:   |                                    |      |                                  |   |   |   |
| As reported                                  | $                                       | 0.15      |                                  | $      | (1.31 | ) |
| Pro forma                                    | $                                       | 0.16      |                                  | $      | (1.28 | ) |
|                                         |                                    |      |                                  |   |   |   |
| Income/(loss) per common share—Diluted: |                                    |      |                                  |   |   |   |
| As reported                                  | $                                       | 0.14      |                                  | $      | (1.31 | ) |
| Pro forma                                    | $                                       | 0.15      |                                  | $      | (1.28 | ) |

In October 2001, the FASB issued Statement of Financial    Accounting Standards No. 144, Accounting for the Impairment or Disposal of    Long-Lived Assets, (“SFAS 144”), which is effective for financial    statements issued for fiscal

6

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years beginning after December 15, 2001. The objectives  of SFAS 144 are to address significant issues relating to the implementation  of Statement of Financial Accounting Standard No. 121, (“SFAS 121”),  Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets  to Be Disposed Of, and to develop a single accounting model, based on the framework  established in SFAS 121, for long-lived assets to be disposed of by sale, whether  previously held and used or newly acquired. The Company adopted SFAS 144 as  of January 1, 2002. The adoption of SFAS 144 had no impact on the Company’s  financial statements.

**3.   Intangible Assets and Goodwill**

Goodwill totaled $12.9 million at June 30, 2002    and December 31, 2001. Our other intangible assets consist of patents, which    as of June 30, 2002 and December 31, 2001 were as follows:

|              | **Gross      Intangible      Assets** |       | **Accumulated      Amortization** |   | **Net Intangible      Assets** |   |
|-------------------|---------------------------------------|------------|-----------------------------------|--------|--------------------------------|--------|
|              |                                       |       |                                   |   |                                |   |
| June 30, 2002     |                                  |       |                              |   |                           |   |   |   |   |
| Patents           | $                                     | 10,432,846 |                              | $      | (1,936,326                     | )      | $ | 8,496,520 |   |
|              |                                  |       |                              |   |                           |   |   |   |   |
| December 31, 2001 |                                  |       |                              |   |                           |   |   |   |   |
| Patents           | $                                     | 10,033,157 |                              | $      | (1,607,268                     | )      | $ | 8,425,889 |   |

Amortization expense related to patents totaled $329,057  and $302,819 during the six months ended June 30, 2002 and 2001, respectively.  The estimated aggregate future amortization expense for intangible assets remaining  as of June 30, 2002 is as follows:

| Remainder of 2002 | $      | 341,184   |   |
|-------------------|--------|-----------|--------|
| 2003              |   | 682,368   |   |
| 2004              |   | 682,368   |   |
| 2005              |   | 682,368   |   |
| 2006              |   | 682,368   |   |
| Thereafter        |   | 5,425,864 |   |
|              |        |           |   |
| Total             | $      | 8,496,520 |   |
|              |        |           |   |

**4.   Financial Instruments**

Effective January 1, 2001, we adopted Statement of  Financial Accounting Standards (“SFAS”) No. 133,“Accounting  for Derivative Instruments and Hedging Activities” (“SFAS 133”),  as amended by SFAS 137 and 138. SFAS 133 requires that all derivative financial  instruments be recorded on the balance sheet at fair value. The provisions of  SFAS 133 affected accounting for 2.5 million restricted warrants of Liberty  Livewire Corporation held by us. Prior to the adoption of SFAS 133, we carried  the warrants at cost. With the adoption of SFAS 133, we now record the warrants  at fair value. The adoption of SFAS 133 resulted in our recording a cumulative  effect transition adjustment loss of $58.7 million at January 1, 2001. Beginning  in the first quarter of 2001, we have recorded subsequent changes in the fair  value of the warrants in our statements of operations, which resulted in a charge  of $6.8 million and a credit of $13.0 million for the three months ended June  30, 2002 and 2001, respectively, and a charge of $9.3 million and a credit of  $4.2 million for the six months ended June 30, 2002 and 2001, respectively.

There may be periods with significant non-cash increases  or decreases to our net income/loss related to the changes in the fair value  of the Livewire investment. The carrying value of our derivative instrument  approximates fair value. We determine the fair value of the Livewire warrants  by reference to underlying market values of Liberty Livewire’s common stock  as reported by Nasdaq, and on estimates using the Black-Scholes valuation model.

**5.   Acquisition of Intellocity**

In March 2001, we acquired all of the assets and  business of Intellocity, Inc., a technology and engineering solutions provider  focusing on the interactive television market. The aggregate purchase price  of $27.5 million consisted of 4,007,890 shares of our common stock, aggregating  $23.2 million, and options to purchase 762,665 shares of our common stock, valued  at $4.3 million. Intellocity shareholders are subject to provisions restricting  the sale of the ACTV stock; these restrictions range over 4 years. The acquisition  was accounted for in the first quarter of 2001 under the purchase method of  accounting.

The fair value of assets acquired and liabilities  assumed in the acquisition of Intellocity amounted to approximately $1.5 million.  We calculated goodwill, representing the excess cost over the fair value of  net assets acquired, to be $26.4 million. Through December 31, 2001, we were  amortizing this amount over a seven-year period. In connection with our year-end  review of 2001 results, we assessed the realizability of the goodwill value  attributed to Intellocity at December 31, 2001. As a result of this assessment,  we recorded an impairment charge to goodwill of $11.2 million during the fourth  quarter of 2001, adjusting the asset value of such goodwill from $23.2 million  to $12.0 million.

7

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We adopted SFAS 142 as of January 1, 2002 and accordingly    recorded no amortization of goodwill for the six months ended June 30,    2002 (See Note 2). The results of Intellocity's operations are included in    our consolidated results from the date of acquisition.

The following table presents the pro forma results  of operations had the acquisition of Intellocity been completed as of January  1, 2001. The pro forma results are shown for illustrative purposes only and  do not purport to be indicative of the results that would have been reported  if the business combination had occurred on the date indicated or that may occur  in the future. These pro forma amounts include estimates and assumptions that  we believe are reasonable.

|                                                                            | **For the Six      Months      Ended      June 30, 2001** |        |
|---------------------------------------------------------------------------------|---------------------------------------------------------------------|-------------|
|                                                                            |                                                                     |        |
|                                                                            |                                                                |        |
|                                                                            |                                                                |        |
| Revenues                                                                        | $                                                                   | 8,698,313   |   |
|                                                                            |                                                                     |             |   |
| Loss        before minority interest and cumulative effect of accounting change | $                                                                   | (14,610,251 | ) |
|                                                                            |                                                                     |             |   |
| Loss        before cumulative effect of accounting change                       | $                                                                   | (13,096,480 | ) |
|                                                                            |                                                                     |             |   |
|                                                                            |                                                                |        |   |
| Net loss                                                                        | $                                                                   | (71,828,677 | ) |
|                                                                            |                                                                     |             |   |
|                                                                            |                                                                |        |   |
| Basic and diluted loss per share:                                               |                                                                |        |   |
| Before cumulative effect of accounting change                                   |                                                                | (0.24       | ) |
| Cumulative effect of accounting change                                          | $                                                                   | (1.04       | ) |
|                                                                            |                                                                     |             |   |
| Basic and diluted loss per share                                                | $                                                                   | (1.28       | ) |
|                                                                            |                                                                     |             |   |

**6.   Minority Interest**

We record a minority interest benefit resulting    from Digital ADCO, in which third parties hold a minority equity position.    Digital ADCO was formed in November 1999 by co-founders ACTV, Inc. and Motorola    Broadband. Digital ADCO develops applications for the delivery of addressable    advertising. Under the terms of our agreement with Motorola Broadband, we    licensed five of our patents to Digital ADCO and Motorola Broadband licensed    six of its patents and made a capital commitment to Digital ADCO. During August    2000, OpenTV made a capital contribution and contributed patents on a non-exclusive    basis to Digital ADCO. Additionally, we formed Digital ADCO International    to license and distribute products and services outside of North America and    other western hemisphere countries. Digital ADCO, Inc.’s issued and outstanding    shares of capital stock presently consist of Class A common stock, having    one vote per share, and Class B common stock, having 25 votes per share.    OpenTV currently owns all of the issued and outstanding Class A common shares.    Motorola Broadband and we together own all of the issued and outstanding Class    B common shares. We currently own 45.9% of Digital ADCO. We consolidate the    results of our Digital ADCO subsidiary, despite our ownership position of    45.9%, due to our exercise of voting control with respect to such subsidiary.

For the three months  ended June 30, 2002 and 2001, we allocated losses in the amount of $794,172  and $685,905, respectively, and for the six months ended June 30, 2002 and 2001,  we allocated losses in the amount of $1,479,731 and $1,380,520, respectively,  from Digital ADCO to its minority shareholders.

We also record a minority interest benefit from one    other subsidiary, Advision LLC, in which we currently hold 51% equity ownership.    For the three months ended June 30, 2002 and 2001, we allocated losses in    the amount of $123,412 and $133,251, respectively, and for the six months    ended June 30, 2002 and 2001, we allocated losses in the amount of $226,669    and $133,251, respectively, to the minority shareholders of this subsidiary.

The minority interest on our balance sheet at December    31, 2001, reflects a decrease of $6.9 million as compared to that recorded    in previously reported financial statements (see Note 14). This decrease is    the result of a correction in the calculation of our minority interest liability    and does not affect the minority interest benefit reported on our previously    reported statements of operations.

8

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**7.   Segment Information**

We have two principal business segments, which    are delineated by their respective markets: Digital Television and Enhanced    Media. Information concerning these business segments for the three and six    months ending June 30, 2002 and 2001 is as follows:

|                                | **For the Three MonthsEnded June 30,** |        | **For the Six Months            Ended June 30,** |   |
|-------------------------------------|-----------------------------------------------------------------|-------------|--------------------------------------------------|--------|
|                                |                                                                 |        |                                                  |   |
|                                | **2002**                                                        |        | **2001**                                         |   | **2002** |   | **2001** |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| **Revenues**                        |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| Digital Television                  | $                                                               | 849,385     |                                             | $      | 1,820,097 |   | $ | 1,705,494 |   | $ | 2,549,413 |   |
| Enhanced Media                      |                                                            | 2,384,133   |                                             |   | 2,406,355 |   |   | 4,714,445 |   |   | 4,950,481 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| Total                               | $                                                               | 3,233,518   |                                             | $      | 4,226,452 |   | $ | 6,419,939 |   | $ | 7,499,894 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
|                                |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| **Depreciation & Amortization** |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| Digital Television                  | $                                                               | 813,131     |                                             | $      | 688,244 |   | $ | 1,557,628 |   | $ | 1,377,245 |   |
| Enhanced Media                      |                                                            | 321,107     |                                             |   | 405,597 |   |   | 627,637 |   |   | 824,312 |   |
| Unallocated Corporate               |                                                            | 265,253     |                                             |   | 1,415,280 |   |   | 519,687 |   |   | 2,145,584 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| Total                               | $                                                               | 1,399,491   |                                             | $      | 2,509,121 |   | $ | 2,704,952 |   | $ | 4,347,141 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| **Interest Income**                 |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| Digital Television                  | $                                                               | 12,231      |                                             | $      | 73,787 |   | $ | 23,883 |   | $ | 187,945 |   |
| Enhanced Media                      |                                                            | 12,276      |                                             |   | 490 |   |   | 21,395 |   |   | 3,298 |   |
| Unallocated Corporate               |                                                            | 388,530     |                                             |   | 1,096,952 |   |   | 656,299 |   |   | 2,600,395 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| Total                               | $                                                               | 413,037     |                                             | $      | 1,171,229 |   | $ | 701,577 |   | $ | 2,791,638 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
|                                |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| **Net (Loss)/Income**               |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| Digital Television                  | $                                                               | (3,312,790  | )                                                | $      | (1,667,007 | ) | $ | (4,851,444 | ) | $ | (3,499,440 | ) |
| Enhanced Media                      |                                                            | (6,331,000  | )                                                |   | (2,212,320 | ) |   | (8,251,366 | ) |   | (4,948,693 | ) |
| Unallocated Corporate               |                                                            | (2,565,259  | )                                                |   | 12,007,147 |   |   | 1,344,619 |   |   | (62,532,840 | ) |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| Total                               | $                                                               | (12,209,049 | )                                                | $      | 8,127,820 |   | $ | (11,758,191 | ) | $ | (70,980,973 | ) |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
|                                |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| **Capital Expenditures**            |                                                            |        |                                             |   |   |   |   |   |   |   |   |   |
| Digital Television                  | $                                                               | 551,989     |                                             | $      | 320,095 |   | $ | 734,487 |   | $ | 4,517,605 |   |
| Enhanced Media                      |                                                            | 1,847       |                                             |   | 692,798 |   |   | 1,847 |   |   | 85,274 |   |
| Unallocated Corporate               |                                                            | 12,664      |                                             |   | 2,209,195 |   |   | 95,265 |   |   | 1,289,156 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |
| Total                               | $                                                               | 566,500     |                                             | $      | 3,222,088 |   | $ | 831,599 |   | $ | 5,892,035 |   |
|                                |                                                                 |             |                                             |        |  |   |  |  |   |  |  |   |

|                       |                        |        |                            |        |        |   |
|----------------------------|-----------------------------|-------------|---------------------------------|-------------|-------------|--------|
| **Balance Sheet Accounts** |                        |        |                            |        |        |   |
|                       | **June 30, 2002** |        | **December 31, 2001** |        |
|                       |                             |             |                            |             |             |   |
| **Current Assets**         |                        |        |                            |        |        |   |
| Digital Television         | $                           | 3,567,639   |                            | $           | 4,061,843   |   |
| Enhanced Media             |                        | 6,283,656   |                            |        | 4,735,475   |   |
| Unallocated Corporate      |                        | 57,430,719  |                            |        | 72,206,506  |   |
|                       |                             |             |                            |             |             |   |
| Total                      | $                           | 67,282,014  |                            | $           | 81,003,824  |   |
|                       |                             |             |                            |             |             |   |
|                       |                        |        |                            |        |        |   |
| **Total Assets**           |                        |        |                            |        |        |   |
| Digital Television         | $                           | 11,076,491  |                            | $           | 12,022,462  |   |
| Enhanced Media             |                        | 16,339,066  |                            |        | 24,471,782  |   |
| Unallocated Corporate      |                        | 88,418,389  |                            | 103,093,077 |        |
|                       |                             |             |                            |             |             |   |
| Total                      | $                           | 115,833,946 |                            | $           | 139,587,321 |   |
|                       |                             |             |                            |             |             |   |

9

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**8.   Executive Incentive Compensation**

We incurred executive  incentive compensation expense related to an executive bonus of $2,300,000 for  the six months ended June 30, 2001. This expense related to incentive compensation  awarded in the 2000 fiscal year but paid in a series of quarterly installments,  which were subject to forfeiture under certain conditions. The contractual provision  that gave rise to this bonus, which was based on changes in the market value  of our common stock and paid in unregistered securities, was cancelled during  the second quarter of 2001.

**9.   Investment in Warrant**

ACTV and Liberty Livewire LLC, a unit of Livewire    (formerly known as Todd AO Corporation), entered into a joint marketing agreement    to market “HyperTV(R) with Livewire” in April 2000. Livewire has    the right to use our patented HyperTV convergence technology in providing    to advertisers, TV programmers, studios and networks such services as application    hosting, web authoring, data management, and e-commerce.

In connection with  our entering into the joint marketing agreement, we received warrants to acquire  2,500,000 shares of Livewire at $30 per share. The warrants, which become exercisable  at the rate of 500,000 shares per year, beginning April 13, 2001, include certain  registration rights and may be exercised until March 31, 2015. With certain  exceptions, the warrants are not transferable. We previously recorded an investment  and corresponding deferred revenue in the amount of $76,016,175, the estimated  value of the warrants as of April 2000. We are amortizing the deferred revenue  into income over a period of 21 years, the contractual term of the joint marketing  agreement.

The estimated fair  value of the warrants at June 30, 2002 and December 31, 2001 was approximately  $7.0 million and $16.3 million, respectively. We perform fair value estimates  of the warrants using Black-Scholes pricing model. Currently, we account for  the warrants under SFAS No. 133 (See Note 4).

**10.   Net (Loss)/Income Per Share**

The following table sets forth the computation of  basic and diluted (loss)/income per share:

|                                                               | **Three Months Ended** |        | **Three Months Ended** |   |
|--------------------------------------------------------------------|------------------------|-------------|------------------------|--------|
|                                                               |                        |        |                        |   |
|                                                               | **June 30, 2002**      |        | **June 30, 2001**      |   | **June 30, 2002** |   | **June 30, 2001** |   |
|                                                               |                        |        |                        |   |  |   |  |   |
| Numerator                                                          |                   |        |                   |   |   |   |   |   |   |   |   |   |
| (Loss)/income        before cumulative effect of accounting change | $                      | (12,209,049 | )                      | $      | 8,127,820 |   | $ | (11,758,191 | ) | $ | (12,248,776 | ) |
| Cumulative        transition effect of adopting SFAS No. 133       |                   | —      |                   |   | — |   |   | — |   |   | (58,732,197 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
|    Net (loss)/income                                | $                      | (12,209,049 | )                      | $      | 8,127,820 |   | $ | (11,758,191 | ) | $ | (70,980,973 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
|                                                               |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Denominator                                                        |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Basic        weighted-average shares outstanding                   |                   | 55,936,341  |                   |   | 55,916,619 |   |   | 55,910,282 |   |   | 54,147,428 |   |
| Weighted-average        options outstanding                        |                   | —      |                   |   | 4,190,688 |   |   | — |   |   | — |   |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
| Diluted        weighted average shares outstanding                 |                   | 55,936,341  |                   |   | 60,107,307 |   |   | 55,910,282 |   |   | 54,147,428 |   |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
|                                                               |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Net (loss)/income per share                                        |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Basic                                                              |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Before        cumulative effect of accounting change               | $                      | (0.22       | )                      | $      | 0.15 |   | $ | (0.21 | ) | $ | (0.23 | ) |
| Cumulative        transition effect of adopting SFAS No. 133       |                   | —      |                   |   | — |   |   | — |   |   | (1.08 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
| Basic        net (loss)/income per share                           | $                      | (0.22       | )                      | $      | 0.15 |   | $ | (0.21 | ) | $ | (1.31 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
|                                                               |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Diluted                                                            |                   |        |                   |   |   |   |   |   |   |   |   |   |
| Before        cumulative effect of accounting change               | $                      | (0.22       | )                      | $      | 0.14 |   | $ | (0.21 | ) | $ | (0.23 | ) |
| Cumulative        transition effect of adopting SFAS No. 133       |                   | —      |                   |   | — |   |   | — |   |   | (1.08 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |
| Diluted        net (loss)/income per share                         | $                      | (0.22       | )                      | $      | 0.14 |   | $ | (0.21 | ) | $ | (1.31 | ) |
|                                                               |                        |             |                   |        |  |   |  |  |   |  |  |   |

**11.   Corporate Restructuring**

During the third and fourth quarter of 2001, we    completed certain restructuring initiatives. The restructuring charges totaled    $6.6 million and related to the surrender of real estate leases and employee    severance expenses. We had paid out the remaining accrued restructuring charges    of $0.8 million in the six months ended June 30, 2002.

10

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**12.   Agreement with iN DEMAND**

In April 2002, we signed  a multi-year agreement with iN DEMAND, pursuant to which iN DEMAND will use  our digital video technology to offer digital cable customers Nascar In-Car  on iN DEMAND. Nascar In-Car is a multi-channel television package that uses  a mix of digital compression technology, real-time telemetry data and superior  graphics to give subscribers an enhanced, interactive viewing experience. iN  DEMAND, is distributing the package on a pay-per-view basis through certain  digital cable systems in the US. Our agreement with iN DEMAND, which covers  a total of approximately 90 races through 2004, obligates us to incur certain  production costs, which we estimate will average $170,000 per race. In turn,  we receive a percentage of gross receipts from the sale of pay-per-view subscriptions.

We cannot be certain  that subscription sales will produce more than negligible revenues for us, given  that Nascar In-Car is the first such programming ever sold in the U.S. Because  commercialization of the subscription package began in late June 2002, we do  not yet have comprehensive data from the cable operators responsible for sales,  billing and collection of the Nascar In-Car package fees. Accordingly, our reported  revenues for the three and six months ended June 30, 2002 reflect no revenue  from Nascar In-Car.

**13.   Supplemental Disclosure of  Cash and Non-Cash Activities**

We recorded no reduction  in non-cash stock-based compensation expense for the three months ended June  30, 2002 and a reduction in non-cash stock-based compensation expense in the  amount of $6,002,831 for the six months ended June 30, 2002. We recorded a reduction  of non-cash, stock-based compensation expense in connection with vested variable  options of $4,121,649 and $2,819,155 for the three and six months ended June  30, 2001, respectively. In the first quarter of 2002, we rescinded the applicable  option exercise provisions that resulted in the variable option accounting treatment  for such options in our financial statements.

During both the three  months and six months ended June 30, 2002 and June 30, 2001, we recorded revenue  of $904,953 and $1,809,906, respectively from amortization of the deferred revenue  recognized in connection with the Liberty Livewire warrants (See Note 9).

In January 2002, we  canceled outstanding options totaling 2,093,334 shares at exercise prices of  $6.50 to $13.50 and, in their place, granted new options totaling 1,046,667  shares at an exercise price of $2.00 per share, which was above the market value  of such shares at the time of grant. All the grantees were employees whose salary  compensation had been reduced in conjunction with the Company's restructuring  efforts in the second half of 2001. However, the executive officers whose salary  compensation was reduced were not eligible to participate.

The newly granted options  will be subject to variable option accounting treatment. That is, if the closing  market price of our common stock is greater than $2.00 per share at any reporting  date, we will recognize a non-cash compensation expense equal to the difference  between such market price and $2.00 multiplied by the number of outstanding  option shares subject to variable accounting treatment. To the extent that we  are carrying an accrued expense of this type at any given reporting date and  there is a decline in the market price of our stock at the end of the subsequent  reporting period, we will recognize a reduction in expense for the subsequent  period.

Our consolidated financial  statements for the three and six months ended June 30, 2002, reflect no expense  related to the 1,046,667 variable options, since the closing market price of  our common stock at June 30, 2002 was less than the option exercise price of  $2.00 per share.

**14.   Restatement**

The Company’s consolidated financial statements    included in our 2001 Annual Report on Form 10-K were amended to account for    a correction in the calculation of our minority interest liability. The change    does not affect the minority interest benefit reported on our ppreviously    reported statements of operations. All references to the Annual report on    Form 10-K/A in this Quarterly Report on Form 10-Q/A have been changed to reflect    the restatement.

**15.   Agreement with Liberty Media  Corporation Regarding Possible Acquisition of ACTV, Inc.**

In May 2002, we signed  a letter agreement with Liberty Media Corporation regarding a possible acquisition  of all outstanding shares of ACTV common stock. Under the terms of the letter  agreement, Liberty, which currently owns approximately 16% of our outstanding  shares, would purchase all remaining shares at a price of $2.00 per share. We  entered into a 65-day exclusive negotiating period with Liberty with respect  to the possible transaction, during which Liberty conducted due diligence. In  July 2002, we executed an amended agreement with Liberty that extended the exclusive  negotiating period to August 15, 2002 and reduced the consideration to be paid  for ACTV shares to $1.65 per share. Such purchase price would be payable in  either cash, shares of Liberty Series A common stock, or the publicly traded  common stock of a Liberty subsidiary or affiliate. On August 14, 2002, we agreed  with Liberty to an extension of the amended agreement through September 15,  2002. The proposed acquisition terms remained unchanged. Neither Liberty nor  we can provide any assurances that a definitive agreement will be reached, or  that a transaction ultimately will be consummated. Any potential transaction  calling for the acquisition of all outstanding shares of our common stock would  require the board approval of Liberty Media and ACTV as well as our shareholder  approval.

11

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| **ITEM 2. ** | **MANAGEMENT’S DISCUSSION AND ANALYSIS****OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**  |
|-------------------|---------------------------------------------------------------------------------------------------------|

**Overview**

You should read the following discussion together  with our consolidated financial statements and related notes included elsewhere.  The results discussed below are not necessarily indicative of the results to  be expected in any future periods. To the extent that the information presented  in this discussion addresses financial projections, information or expectations  about our products or markets or otherwise makes statements about future events,  such statements are forward-looking and are subject to a number of risks and  uncertainties that could cause actual results to differ materially from the  statements made. For further information about forward-looking statements, see  “Special Note Regarding Forward-Looking Statements” in our annual  report on Form 10-K/A for the year ended December 31, 2001.

We are a digital media company that provides proprietary  technologies, tools, and technical and creative services for interactive TV  advertising, programming, and enhanced media applications. We have two operating  business segments, which we call Digital TV and Enhanced Media.

We believe that our Digital TV technologies are unique  in providing targeting, interactivity and accountability for television commercials,  and in giving viewers the ability to instantly customize their viewing experiences  for a wide variety of programming applications. Our Enhanced Media technologies  allow both for the enhancement of video and audio content, including standard  TV programming, with Web-based information and interactivity.

We believe the expansion of digital TV transmission  systems and the emergence of platforms providing the simultaneous delivery of  video and Internet content (convergence programming), will allow television  distributors, advertisers and programmers to bring interactivity to a mass audience.  We believe that our proprietary technologies, tools, and expertise in providing  technical and creative services position us to  capitalize on this growth.

We have received strategic investments from Liberty  Media Corporation, our largest shareholder, and Motorola Broadband Communications  Sector.

**Results of Operations**

**Comparison of Three-Month Periods Ended June  30, 2002 and June 30, 2001**

*Revenues.*  During the three-month period ended June 30, 2002, our revenues decreased 24%,  to $3.2 million, compared with $4.2 million in the three-month period ended  June 30, 2001. The decrease was principally the result of a decline in technical  and professional service revenue from our Digital Television segment. Revenue  recognized from the Livewire joint marketing arrangement was $904,953 for both  periods. Such revenue represents 28% and 21% of our total revenues for the three  months ended June 30, 2002 and 2001, respectively.

*Total Selling,  General and Administrative Expenses.* Total  selling, general and administrative expenses decreased approximately 32% in  the second quarter of 2002, to $8.6 million, from $12.7 million in the second  quarter of 2001. The decrease reflects significantly reduced personnel, occupancy  and related expenses in the more recent quarter, which more than compensated  for increased costs related to our Nascar In-Car project, launched in the second  quarter of 2002.

*Stock-Based Compensation*.  We recorded no increase or decrease in stock-based compensation expense for  the three months ended June 30, 2002, as compared to a credit of stock-based  compensation expense of $4.1 million for the three months ended June 30, 2001.  We had recorded a charge or credit to stock-based compensation expense based  on increases in the market value of our common stock in excess of the exercise  price of certain employee options, which were subject to variable option accounting  treatment. In the first quarter of 2002, we rescinded the applicable option  exercise provisions that resulted in the variable option accounting treatment  of the options in question. Although we have other currently outstanding options  subject to variable option accounting treatment, the exercise price of these  options was greater than the market price on each reporting date since their  issuance in January 2002. Accordingly, we recognized no stock-based compensation  expense related to such options.

12

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*Depreciation and Amortization*.    Depreciation and amortization expense decreased 44%, to $1.4 million in the    three months ended June 30, 2002, versus $2.5 million during the same period    in 2001. The decrease is due principally to our adoption of SFAS 142 as of    January 1, 2002, resulting in no amortization expense for goodwill in the    three months ended June 30, 2002. Depreciation expense for our Digital Television    segment showed a marginal increase, from $0.7 million in the second quarter    of 2001 to $0.8 million in the more recent quarter, as the result of capital    equipment purchases in 2002 related to the Nascar In-Car project.

*Interest Income*.  Interest income in second quarter of 2002 was $0.4 million, compared with $1.2  million in the second quarter of 2001. The decrease was the result of significantly  reduced prevailing interest rates and lower average cash balances during the  more recent quarter. We incurred no interest expense in the second quarter of  2002 or 2001.

*Other (Expense)/Income.*Other  (expense)income comprises the change in fair value of warrants held by us, which  we currently account for as a derivative instrument, pursuant to the requirements  of SFAS No. 133. For the three months ended June 30, 2002, we recorded a decrease  in the value of the warrants of $6.8 million, compared with an increase of $13.0  million for the three months ended June 30, 2001.

*Net (Loss)/Income*.  For the three months ended June 30, 2002, our net loss was $12.2 million, or  $0.22 per basic and diluted share, compared to net income of $8.1 million, or  $0.15 per basic share and $0.14 per diluted share, for the three months ended  June 30, 2001.

**Comparison of Six-Month Periods Ended June  30, 2002 and June 30, 2001**

*Revenues.*  During the six-month period ended June 30, 2002, our revenues decreased 15%,  to $6.4 million, compared with $7.5 million in the six-month period ended June  30, 2001. The decrease was principally due to a decline in technical and professional  service revenue from our Digital Television segment. The revenue decline was  even greater on a fully comparable basis, given that the 2001 six-month period  included only four months of results of Intellocity, which we acquired in March  of that year. Revenue recognized from the Livewire joint marketing arrangement  was $1,809,906 for both periods. Such revenue represents 28% and 24% of our  total revenues for the six months  ended June 30, 2002 and 2001, respectively.

*Total Selling,  General and Administrative Expenses.*Total  selling, general and administrative expenses decreased approximately 45% in  the first half of 2002, to $14.6 million, from $26.7 million in the first half  of 2001. The decrease reflects significantly reduced personnel, occupancy and  related expenses in the more recent quarter as a result of our corporate restructuring  implemented in the second half of 2001.

*Stock-Based Compensation.*    Stock-based compensation expense was credited $6.0 million for the six months    ended June 30, 2002, and credited $2.8 million for the six months ended June    30, 2001. We had recorded a charge or credit to stock-based compensation expense    based on increases in the market value of our common stock in excess of the    exercise price of certain employee options, which were subject to variable    option accounting treatment. In the first quarter of 2002, we rescinded the    applicable option exercise provisions that resulted in the variable option    accounting treatment of the options in question. Although we have other currently    outstanding options subject to variable options accounting treatment, the    exercise price of these options was greater than the market price on each    reporting date since their issuance in January 2002. Accordingly, we recognized    no stock-based compensation expense related to such options.

*Depreciation and  Amortization*. Depreciation and amortization  expense decreased 37%, to $2.7 million in the six-month period ended June 30,  2002, from $4.3 million in the six-month period ended June 30, 2001. The decrease  is due principally to our adoption of SFAS 142 as of January 1, 2002, resulting  in no amortization expense for goodwill in the  six months ended June 30, 2002.

*Interest Income*.  Interest income in first half of 2002 was $0.7 million, compared with $2.8 million  in the first half of 2001. The decrease was the result of lower average cash  balances during the six months ended June 30, 2001. The decrease was the result  of significantly reduced prevailing interest rates and lower average cash balances  during the more period. We incurred no interest expense in the first half of  2002 or 2001.

13

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*Other (Expense)/Income.*Other  (expense)income comprises the change in fair value of warrants held by us, which  we currently account for as a derivative instrument, pursuant to the requirements  of SFAS No. 133. For the six months ended June 30, 2002, we recorded a decrease  in the value of the warrants of $9.3 million, compared with an increase of $4.2  million for the six months ended June 30, 2001.

*Cumulative Transition  Effect of Change in Accounting Principle.*  Effective January 1, 2001, ACTV adopted FASB Statement No. 133, “Accounting  for Derivative Instruments and Hedging Activities”, as amended by SFAS  137 and 138 (“SFAS 133”). SFAS 133 requires that all derivative financial  instruments be recorded in the balance sheet at fair value. The provisions of  SFAS 133 affected the accounting for our investment of 2.5 million restricted  warrants for Liberty Livewire Corporation(“Livewire”). Prior to the  adoption of SFAS 133, these warrants were carried at cost. With the adoption  of SFAS 133, the Livewire investment is recorded at fair value. This resulted  in recording a cumulative effect transition adjustment loss of $58.7 million  at January 1, 2001. There may be periods with significant non-cash increases  or decreases to our net income/loss pertaining to  the Livewire investment.

*Net Loss*.  For the six months ended June 30, 2002, our net loss was $11.8 million, or $0.21  per basic and diluted share, compared to the net loss of $71.0 million, or $1.31  per basic and diluted share, for the  six months ended June 30, 2001.

**Liquidity and Capital Resources**

Since our inception, we have not generated revenues  sufficient to fund our operations and have incurred operating losses. Through  June 30, 2002, we had an accumulated deficit of $274.8 million. Our cash position  on June 30, 2002 (including short-term investments) was $64.3 million, compared  with $78.0 million on December 31, 2001.

*Net Cash Used  In Operating Activities.* During the six  month period ended June 30, 2002, we used cash of $11.8 million for operations,  compared with $20.9 million for the six months ended June 30, 2001. The decrease  in net cash used by operating activities principally relates to lower operating  losses and decreased working capital uses.

*Net Cash Used  In Investing Activities.* With regard to  investing activities, in the six months ended June 30, 2002, we used cash of  $10.6 million, compared to $13.9 million in the six months ended June 30, 2001.

Approximately $8.7 million of the more recent period’s  total related to investments in short-term financial instruments, compared to  $0 of such investments in the 2001 quarter. The large decrease in cash used  in other investing activities is due principally to a significant reduction  in capital expenditures and strategic investments.

In April 2001, we provided $5 million in financing  to Playboy.com, Inc. in the form of an 8% convertible promissory note. The note  was automatically converted on August 13, 2001 into shares of Series A Convertible  Preferred Stock of Playboy.com. The Series A Convertible Preferred Stock is  convertible into common stock of Playboy.com on a one-to-one basis, and may  be redeemed at the holder’s option, after five years, and has customary  anti-dilution provisions. Holders of the Series A Convertible Preferred Stock  will receive a non-cumulative 8% per annum dividend. If Playboy.com is unable  to pay the redemption price for the Series A Convertible Preferred Stock, a  holder can require payment by Playboy Enterprises, Inc. In this event, Playboy  Enterprises, Inc. has the option of making such payment in cash or in shares  of its common stock.

*Net Cash Provided By (Used In) Financing Activities.*  We had no significant cash provided by or used in financing activities for either  the six-month periods ended June 30, 2002 or June 30, 2001. We have and continue  to fund our cash requirements from the net proceeds of a public, follow-on offering  completed in February 2000. Through a group of underwriters, we sold a total  of 4.6 million common shares, resulting in net proceeds of $129.4 million. In  addition, in the year ended December 31, 2000, Liberty Digital, Inc. invested  an additional $20 million in us by exercising a warrant granted in March 1999,  and OpenTV and Motorola invested a total of $13.0 million in our Digital ADCO  subsidiary.

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**Critical Accounting Policies**

The cost of patents, which represents patent acquisition  costs and legal costs relating to patents pending, is being amortized on a straight-line  basis over the estimated economic lives of the respective patents (averaging  15 years), which is less than the statutory life of each patent.

We capitalize costs incurred for the development  of software products when economic and technological feasibility of such products  has been established. Capitalized software costs are amortized on a straight-line  basis over the estimated useful lives of the respective products.

We record a charge or a credit to stock-based compensation  expense for increases or decreases in the market value of our common stock in  excess of the exercise price of certain employee options that are subject to  variable option accounting treatment. Our financial results for the three-month  period in 2001 and the six-month periods in both 2002 and 2001 reflect credits  in stock-based compensation pursuant to certain employee options. These credits  are the result of market price declines of our common stock during these periods.  In the first quarter of 2002, we rescinded the applicable option exercise provisions  that resulted in the variable option accounting treatment of such options, and  therefore no charges were recorded in the second quarter of 2002.

In January 2002, we canceled outstanding options    totaling 2,093,334 shares at exercise prices of $6.50 to $13.50 and, in their    place, granted new options totaling 1,046,667 shares at an exercise price    of $2.00 per share. All the grantees were employees whose salary compensation    had been reduced in conjunction with the Company’s restructuring efforts    in the second half of 2001. However, the executive officers whose salary compensation    was reduced were not eligible to participate. The newly granted options will    be subject to variable option accounting treatment. That is, if the closing    market price of our common stock is greater than $2.00 per share at any reporting    date, we will recognize a non-cash compensation expense equal to the difference    between such market price and $2.00 times the number of outstanding option    shares subject to variable accounting treatment. To the extent that we are    carrying an accrued expense of this type at any given reporting date and there    is a decline in the market price of our stock at the end of the subsequent    reporting period, we will recognize a reduction in expense for the subsequent    period.

The preparation of financial statements in conformity  with generally accepted accounting principles requires us to make estimates  and assumptions that affect the reported amount of assets and liabilities and  disclosures of contingent assets and liabilities at the date of the financial  statements and the reported amounts of revenues and expenses during the reporting  period. Our actual results could differ from these estimates.

**Impact of Inflation**

Inflation has not had any significant effect on  our operating costs.

**Item 3. Quantitative and Qualitative Disclosures  About Market Risk**

Our interest income is affected by changes in the  general level of U.S. interest rates. Changes in U.S. interest rates could affect  the interest earned on our cash equivalents and investments. Currently, changes  in U.S. interest rates would not have a material effect on the interest earned  on our cash equivalents and investments. A majority of these cash equivalents  and investments earn a fixed rate of interest while the remaining portion earns  interest at a variable rate. We do not anticipate that exposure to interest  rate market risk will have a material impact on us due to the nature of our  investments.

During April 2000, we received a warrant to acquire  2,500,000 shares of Livewire, a publicly traded company. The warrant becomes  exercisable at the rate of 500,000 shares per year, commencing on April 13,  2001, includes certain registration rights and may be exercised until March  31, 2015. The warrant is not transferable, except in certain circumstances.  As of January 1, 2001, changes in fair value in the investment in warrant were  recorded to the statement of operations as we adopted SFAS No. 133. The estimated  value of the warrant at June 30, 2002 was $7.0 million. We expect the value  of the warrant to fluctuate based on the underlying stock price of Livewire.  We do not currently expect to exercise or register shares  in the coming year.

We record stock-based compensation expense based  on increases and decreases in the market price of our common stock above the  exercise price of employee options that are subject to variable option accounting  treatment.

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To the extent that we have a stock-based compensation  obligation at the beginning of a given reporting period, we recognize a reduction  in stock-based compensation expense related to unexercised variable options  for that period based on a reduction of the market price for our stock at the  end of the period. The obligation will increase as the market price for our  common stock increases at the end of a reporting period.

In January 2002, we canceled outstanding options  totaling 2,093,334 shares at exercise prices of $6.50 to $13.50 and, in their  place, granted new options totaling 1,046,667 shares at an exercise price of  $2.00 per share. All the grantees were employees whose salary compensation had  been reduced in conjunction with the Company’s restructuring efforts in  the second half of 2001. However, the executive officers whose salary compensation  was reduced were not eligible to participate. The newly granted options will  be subject to variable option accounting treatment. That is, if the closing  market price of our common stock is greater than $2.00 per share at any reporting  date, we will recognize a non-cash compensation expense equal to the difference  between such market price and $2.00 times the number of outstanding option shares  subject to variable accounting treatment. To the extent that we are carrying  an accrued expense of this type at any given reporting date and there is a decline  in the market price of our stock at the end of the subsequent reporting period,  we will recognize a reduction in expense for the subsequent period.

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

ACTV, Inc. and its wholly-owned subsidiary HyperTV  Networks, Inc. are co-plaintiffs in a civil action filed against The Walt Disney  Co., ABC, Inc., and ESPN, Inc. in December 2000, which action alleges that the  defendants’ “Enhanced TV” system synchronizing a web site application  to, amongst others, ESPN *Sunday  Night* and ABC *Monday Night Football*  telecasts has infringed and is continuing to infringe certain of the plaintiffs’  patents. In May 2002, the United States District Court for the Southern District  of New York granted summary judgment in favor of the defendants. Without addressing  the validity and enforceability of the three patents in suit, the Court reached  summary judgment on non-infringement alone. On July 3, 2002, the Company appealed  the District Court’s decision to the U.S. Court of Appeals for the Federal  Circuit in Washington, D.C.

**Item 2.   Changes in Securities**

Not applicable.

**Item 3.   Defaults Upon Senior  Securities**

Not applicable.

**Item 4.   Submission of Matters to a Vote of Stockholders**

None.

**Item 5.   Other Information**

None.

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**Item 6.   Exhibits and Reports  on Form 8-K**

|   | (a)   | Exhibits             |
|--------|-----------------|----------------------|
|   |            |                 |   |   |   |   |   |
|   |            | 11                   | Computation of net      (loss)/income per share — See Note 10. |
|   |            |                 |   |
|   |            | 99.1       | Certification by David      Reese, Chief Executive Officer |
|   |            |                 |   |
|   |            | 99.2       | Certification by Christopher      C. Cline, Chief Financial Officer |
|   |            |                 |
|   | (b)   | Reports on Form 8-K: |
|   |            |                 |   |   |
|   |            | **DateFiled**        | **ItemReported** | **Event** |
|   |            |                 |   |   |
|   |            | May 10, 2002    | Items 5 and 7. | Press Release dated May 8, 2002      announcing the execution of a Letter Agreement by and between ACTV, Inc.      and Liberty Media Corporation. |
|   |            |                 |   |   |
|   |            | May 30, 2002    | Items 5 and 7. | Press Release dated May 24, 2002      announcing summary judgment in favor of the      Walt Disney Co. and certain of its subsidiaries (collectively “Walt      Disney”) in connection with ACTV,      Inc.’s patent infringement suit against Walt Disney. |
|   |            |                 |   |   |
|   |            | July 16, 2002        | Items 5 and 7. | Press Release dated July 9, 2002      announcing the execution of an Amendment to the      Letter Agreement by and between ACTV, Inc. and Liberty Media Corporation. |
|   |            |                 |   |   |

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**SIGNATURES**

Pursuant to the requirements of the Securities    Exchange Act of 1934, the registrant has duly caused this report to be signed    on its behalf by the undersigned thereunto duly authorized.

|                    | **ACTV, Inc.**                                                           |
|-------------------------|--------------------------------------------------------------------------|
|                    |                                                                     |
|                    | Registrant                                                               |
|                    |                                                                     |
| Date: November 15, 2002 | /s/ David Reese                                                          |
|                    | David Reese                                                              |
|                    | Chairman, Chief Executive Officer and Director                           |
|                    |                                                                     |
| Date: November 15, 2002 | /s/ Christopher C. Cline                                                 |
|                    | Christopher C. Cline                                                     |
|                    | Chief Financial Officer(Principal      Financial and Accounting Officer) |

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**Form of Sarbanes-Oxley Section  302(a) Certification**

I, Christopher C. Cline, Chief Financial Officer  of ACTV, Inc., certify that:

| 1.     | I have reviewed this quarterly report on Form      10-Q/A of ACTV, Inc.;                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 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      entities, 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 functions):                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | 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.                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 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. |

Date: November 15, 2002

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**Form of Sarbanes-Oxley Section  302(a) Certification**

I, David Reese, Chief Executive Officer of ACTV,  Inc., certify that:

| 1.     | I have reviewed this quarterly report      on Form 10-Q/A of ACTV, Inc.;                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 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 entities, 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 functions):                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | 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.                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 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. |

Date: November 15, 2002

 

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