<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                (Amendment No. 1)

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934.
    For the fiscal year ended December 31, 2002.

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934.
    For the transition period from __________ to _________________.

                        Commission File Number 000-23415

                           Princeton Video Image, Inc.
                           ---------------------------
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                                             22-3062052
            --------                                             ----------
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

                15 Princess Road, Lawrenceville, New Jersey 08648
                -------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                  609-912-9400
                                  ------------
              (Registrant's Telephone Number, Including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of Each Exchange
      Title of Each Class                          on Which Registered
      -------------------                          -------------------
             None                                         None

           Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, $.001 par value
                         -----------------------------
                               Title of Each Class

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X]   No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

<PAGE>

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter: $11,006,379 based on the last sales price on June 28, 2002.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 18,418,865 shares of Common
Stock, $.001 par value per share were outstanding on April 15, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

         There are no documents incorporated by reference in this Form.

                                EXPLANATORY NOTE

         Princeton Video Image, Inc. hereby amends its Annual Report on Form
10-K for the fiscal year ended December 31, 2002, as filed with the Securities
and Exchange Commission on April 1, 2003, for the sole purpose of adding Items
10-13 of Part III.

                                       2

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

INFORMATION REGARDING DIRECTORS

         Our directors are elected at each annual meeting of stockholders to
serve until their successors are elected and qualify. Our current Board of
Directors is comprised of the following persons:

<TABLE>
<CAPTION>
     NAME                                      AGE
     ----                                      ---
<S>                                            <C>
Lawrence J. Burian...........................   33
Joseph Decosimo..............................   77
Donald P. Garber.............................   44
Wilt Hildenbrand.............................   55
Lawrence Lucchino............................   56
Jerome J. Pomerance..........................   62
Eduardo Sitt.................................   71
Brown F. Williams............................   62
</TABLE>

         The principal occupations and business experience, for at least the
past five years, of each current director are as follows:

         Lawrence J. Burian was elected to our Board of Directors in November
2001. Mr. Burian joined Cablevision Systems Corporation ("Cablevision") in
February 2000 as Assistant General Counsel. He was promoted to Vice President,
Associate General Counsel in February 2002. Prior to joining Cablevision, Mr.
Burian was associated with the law firm of Davis Polk & Wardell, which he joined
following graduation from Yale Law School in May 1994. While at Davis Polk &
Wardell, Mr. Burian practiced in both their New York and London offices and
specialized in corporate Mergers and Acquisitions. In January 1995, Mr. Burian
enjoyed a six-month leave of absence to serve as a Law Clerk to Justice Aharon
Barak, President of the Supreme Court of Israel.

         Joseph F. Decosimo was elected to our Board of Directors in December
2002. Mr. Decosimo has been Senior Partner of Joseph Decosimo and Company, a
certified public accounting firm, since it's founding in 1971. He received his
undergraduate degree from the University of Georgia in 1949, and an M.B.A. from
Northwestern University in 1950. Mr. Decosimo is a member of the American
Institute of Certified Public Accountants, and has served as a director of
several charitable and professional organizations. Mr. Decosimo is one of the
individuals designated to serve on our Board of Directors by Presencia en
Medios, S.A. de C.V. ("Presencia").

         Donald P. Garber was elected to our Board of Directors in December
1999. Mr. Garber has been Commissioner, President and Chief Executive Officer of
Major League Soccer since August 1999. Prior to such appointment, Mr. Garber
served in various positions with the National Football League over the past
fifteen years. Most recently he served as Senior Vice President of NFL
International, the NFL's international division, where he was responsible for
managing the NFL Europe league from October 1996 to July 1999. Prior to working
with NFL International, Mr. Garber was Vice President of Business Development
and Special Events for NFL Properties from 1990 to 1996.

         Wilt Hildenbrand was elected to our Board of Directors in February
2001. Mr. Hildenbrand has been employed by Cablevision since 1976, and currently
serves as its executive vice president of engineering and technology. Prior to
assuming his current post, Mr. Hildenbrand held the positions of senior vice
president of technology and vice president of engineering support and customer
relations. From 1979 to 1986, he served as director of engineering for Rainbow
Media Holdings, Cablevision's programming subsidiary. He began his tenure at
Cablevision as chief engineer of the company's Long Island system. Mr.
Hildenbrand is the individual designated to serve on our Board of Directors by
PVI Holding, LLC ("PVI Holding"), an indirect wholly owned subsidiary of
Cablevision.

                                       3

<PAGE>

         Lawrence Lucchino was elected to our Board of Directors in October
1994. Mr. Lucchino enjoys a wide variety of connections with the professional
sports industry. Since February 2002, Mr. Lucchino has served as President and
CEO of the Boston Red Sox Baseball Club. In addition, Mr. Lucchino served as a
member of the Board of Directors of the Washington Redskins from 1979 to 1985,
and served as President and CEO of the Baltimore Orioles from May 1988 until
October 1993. He has been a member of the MLB Operations Committee and currently
serves on the Commissioner's Blue Ribbon Task Force on Baseball Economics. Mr.
Lucchino served as President and Chief Executive Officer of the San Diego Padres
from December 1994 to October 2001, and was a partner in the Washington, DC law
firm of Williams & Connolly from 1978 to 1999.

         Jerome J. Pomerance was elected to our Board of Directors in 1992. He
has served as the President of J.J. Pomerance & Co., Inc., a firm providing
strategic international business advice for product development and
applications, since December 1991. Prior to his founding of that firm, Mr.
Pomerance was Chief Operating Officer and Vice-Chairman of Kroll Associates,
Inc., a leading corporate investigation, due diligence and crisis management
firm. Before joining Kroll in 1983, he was Treasurer, and later President and
Chief Executive Officer, of a group of privately held international ophthalmic
companies and a director of the Optical Manufacturers Association over a period
of 20 years.

         Eduardo Sitt was elected to our Board of Directors in October 1993.
From 1964 until 1993, he was the principal stockholder and Chief Executive
Officer of Hilaturas de Michoacon, S.A., a Mexican textile manufacturer. Mr.
Sitt is a stockholder and, during the past five years, has served as a director
of Grupo Financiero BBVA-Bancomer, a publicly held financial corporation and
parent company of Mexico's fifth largest bank, a full service stock brokerage
house and several other financial firms. Mr. Sitt is the President and principal
stockholder of, and one of the individuals designated to serve on our Board of
Directors by, Presencia. Mr. Sitt is also the President of Publicidad Virtual,
S.A. de C.V. ("Publicidad"), a subsidiary of PVI. He also serves as a director
of Albatros Textil, a textile manufacturer.

         Brown F Williams is our co-founder, Chairman of the Board and President
of our Interactive Television Division. Prior to his election as Chairman of the
Board in January 1997, and his appointment as President, Interactive
Technologies in November 2001, Mr. Williams served as our President (from July
1990 to January 1997) and Chief Executive Officer (from September 1996 to
January 1997). Mr. Williams has been one of our directors since our organization
in July 1990. Mr. Williams also served as our Treasurer until February 1998. Mr.
Williams is a senior executive with more than 25 years experience in the
development of high technology products, primarily during his 20 years with RCA
Laboratories, Inc. Until 1987, Mr. Williams was Vice President of David Sarnoff
Research Center, Inc. with responsibility for both hardware and software
contract research business. Between 1987 and 1991, Mr. Williams was active in a
number of start-up companies, either as a consultant on behalf of the funding
groups or as an executive employee on behalf of the managements of such
companies. Mr. Williams has had significant experience in product development,
product introduction and licensing in Europe and Japan, as well as in the United
States. Mr. Williams serves as a director of Evergreen Solar, Inc.

         Mr. Eduardo Sitt and Mr. David Sitt are father and son, respectively.
There are no other familial relationships among the directors and the executive
officers.

                                       4

<PAGE>

INFORMATION REGARDING OFFICERS

         The following table identifies our current executive officers.

<TABLE>
<CAPTION>
                                                                                                       IN CURRENT
            EXECUTIVE OFFICERS                 AGE        CAPACITIES IN WHICH SERVED               POSITIONS SINCE (1)
            ------------------                 ---        --------------------------               -------------------
<S>                                            <C>    <C>                                          <C>
Brown F Williams...........................    62     Chairman of the Board and                      1997 (Chairman)
                                                      President, Interactive Technologies          2001 (Pres., I.T.)

David Sitt (2).............................    37     Co-Chief Executive Officer                          2001

Roberto Sonabend (3).......................    50     Co-Chief Executive Officer                          2001

Samuel A. McCleery (4).....................    51     Vice President of Business Development              1991
                                                      and Assistant Secretary

Gene Dwyer (5).............................    55     Vice President and Chief Technology                 2000
                                                      Officer

Howard J. Kennedy (6)......................    53     Vice President of Convergence                       2000

James Green (7)............................    40     President and Chief Operating Officer               2002

Carol Bendig (8)...........................    39     Vice President of Finance                           2002

Lionel White (9)...........................    39     Vice President of Broadcast Operations              2002

Mervyn Trappler (10).......................    46     Executive     Vice     President    for             2002
                                                      International and Special Projects

Lon Rosen (11).............................    44     President, PVI Entertainment                        2002
</TABLE>

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

         (1)      All officers are elected annually at the annual meeting of the
Board of Directors, and serve at the pleasure of the Board.

         (2)      David Sitt was appointed to serve as one of our interim
co-Chief Executive Officers in November 2001. Mr. Sitt was appointed to serve as
Corporate Vice President of Publicidad in September 2001. Prior to that time,
Mr. Sitt had served as Executive Vice President of Publicidad since 1997.

         (3)      Roberto Sonabend was appointed to serve as one of our interim
co-Chief Executive Officers in November 2001. Mr. Sonabend was appointed to
serve as Corporate Vice President of Publicidad in September 2001. Prior to that
time, Mr. Sonabend had served as President of the International Division of
Publicidad since 1997.

         (4)      Samuel A. McCleery was elected to serve as our Vice President
of Business Development (formerly Vice President of Sales and Marketing) in
November 1991. Mr. McCleery has been our Assistant Secretary since 1991. Prior
to November 1991, Mr. McCleery was President of his own sports marketing and
events company with clients that included "The Ronald Reagan Foundation" . From
1981 to 1989, Mr. McCleery served as the director of sports marketing for Prince
Manufacturing, the world's largest marketer of tennis racquets. Prior to 1981,
Mr. McCleery was a Director of New Business for Le Coq Sportif, a division of
Adidas (France).

         (5)      Gene Dwyer has been our Vice President and Chief Technology
Officer since January 2000. Dr. Dwyer also served as our Director of Research,
responsible for the algorithm architecture of the L-VIS(R) System, from

                                       5

<PAGE>

April 1999 through December 1999, and as a Project Manager for PVI from November
1997 to April 1999. Prior to joining PVI, Dr. Dwyer was the co-owner of
Silhoutte Technology from 1986, which provided image processing and enhancement
software for the U.S. Department of Defense.

         (6)      Howard J. Kennedy has been our Vice President of Convergence
since January 2000. From March 1995 through December 1999, Mr. Kennedy was our
Director-Principal Scientist, responsible for the technical development,
evaluation and direction of new software and Internet products. Prior to joining
PVI, Mr. Kennedy worked at Intel Corporation, where he was Architect and
Principal Engineer in the Multimedia Systems Technology Group from October 1988.

         (7)      James Green was elected to serve as our President and Chief
Operating Officer in June 2002. Also, since November 2002, Mr. Green has been
our acting Chief Financial Officer. Mr. Green began his career in children's
television production at Lancit Media in New York. From there, he moved to the
Walt Disney Company where he worked in international film distribution (Buena
Vista International). Mr. Green's eight-year tenure with Disney culminated in
his appointment as the General Manager of the Japanese market. From Disney, Mr.
Green moved to Pixar Animation Studies where he worked as the Vice President of
Marketing and New Business Development. In 1998, Mr. Green resigned to become a
founding partner and CEO of Sabela Media, an Internet ad serving company, which
was later sold in January 2000 to 24/7 Real Media. Mr. Green remained with 24/7
Real Media for nine months as President of the Technology Solutions Division.
From 24/7 Real Media, Mr. Green was recruited by LiveWire to run GiantBear, a
wireless data company. Mr. Green was CEO of GiantBear from October 2000 to
December 2001. Mr. Green holds an MBA from UCLA's Anderson School of Business
and a Music Degree from McGill University.

         (8)      Carol Bendig has served as our Vice President of Finance since
November 2002. Mrs. Bendig served as our Director, Planning and Financial
Analysis from January 2001 to October 2002, and our Manager, Financial Planning
and Analysis from October 1998 to January 2001. She has an MBA from the
Philadelphia University Graduate School of Business. She has over 15 years in
the accounting and financing area. Prior to joining PVI, Mrs. Bendig was
Director of Business Operations for Primestar Inc., then the nation's second
largest Direct Broadcast Satellite provider, where she was responsible for the
Northeast regional office financial management as well as strategic and long
range planning. Prior to joining Primestar in January 1995, Mrs. Bendig worked
at Comcast Cable Corporation were she had several financial positions from 1990
to 1995.

         (9)      Lionel White was elected to serve as our Vice President of
Operations in October 2002. Prior to joining PVI, Mr. White served as Vice
President, Giantbear Operations of InfoSpace, Inc. from April 2002 to October
2002. From January 2001 to March 2002, Mr. White served as Vice President,
Operations of Giantbear, Inc. Prior to joining Giantbear, Mr. White served as
Vice President, Global Operations of 24/7 Media, Inc. (formerly Sabela Media)
from August 1999 to December 2002, and Senior Consultant at Milcom
Communications from December 1998 to July 1999. Prior to joining Milcom
Communications, Mr. White entered the Management Information Services division
of an Australian department store retailer where he worked to enhance executive
reporting and systems availability. In 1995 he entered IBM. Maximizing his
extensive industry contacts and reputation he founded a consulting organization
that provided services to a diverse group of clients including Sony Australia,
Komatsu, College of Technical and Advanced Education and The Electrical Industry
Council.

         (10)     Mervyn Trappler was elected to serve as our Executive Vice
President for International and Special Projects in January 2002. Mr. Trappler
sits on the Board of Directors for PSP, Inc. and has served on a number of
boards of non-profit organizations in the USA and the Caribbean. Prior to
joining PVI, Mr. Trappler was Vice President, Television and New Business
Development for ISL from March 1997 to May 2001.

         (11)     Lon Rosen was elected to serve as our President, PVI
Entertainment in May 2002. Prior to joining PVI, Mr. Rosen served as Senior
Agent for Endeavor from March 1998 to April 2002. From February 1997 to March
1998, Mr. Rosen was Vice President, Development of 20th Century Fox.


                                       6

<PAGE>
             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act requires that our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission ("SEC") and Nasdaq.
Officers, directors and greater than ten percent stockholders are required by
SEC regulation to furnish PVI with copies of all Forms 3, 4 and 5 they file.

         Based solely on our review of the copies of forms we have received and
written representations from certain reporting persons, we believe that all of
our officers, directors, and greater than ten percent beneficial owners complied
with all filing requirements applicable to them with respect to transactions
during the six-month period ended December 31, 2002.

ITEM 11. EXECUTIVE COMPENSATION

EXECUTIVE OFFICERS' COMPENSATION

         The following table sets forth certain information concerning the
annual and long-term compensation for the fiscal years ended December 31, 2002,
June 30, 2001 and 2000 and the six-month period ended December 31, 2001 of our
co-chief executive officers and certain other highly compensated executive
officers of PVI who were serving as executive officers at December 31, 2002
(collectively, the "Named Officers").

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                     LONG TERM
                                                                                    COMPENSATION
                                                                                    -------------
     NAME AND PRINCIPAL                               ANNUAL COMPENSATION            SECURITIES
     -------------------                              -------------------            UNDERLYING            ALL OTHER
         POSITION                      YEAR(1)      SALARY ($)     BONUS ($)         OPTIONS (#)        COMPENSATION ($)
          -------                      -------      ----------     ---------         -----------        ----------------
<S>                                  <C>           <C>             <C>              <C>                 <C>
Brown F Williams...............            2002    $ 247,917           ---               10,000           $    4,542(2)
Chairman of the Board and            Transition      136,406           ---              470,000                3,007(2)
President, Interactive                     2001      250,000           ---              260,000(3)               ---
Technologies                               2000      250,000           ---              120,000                  ---

David Sitt(4)..................            2002    $ 245,000       $16,667(6)           180,000                  ---
Co-Chief Executive Officer           Transition       57,366(5)     14,583(6)               ---                  ---

Robert Sonabend(4).............            2002    $ 245,000       $16,667(6)           180,000                  ---
Co-Chief Executive Officer           Transition       57,366(5)     14,583(6)               ---                  ---

Howard J. Kennedy..............            2002    $ 170,000           ---                  ---           $    4,250(2)
Vice President of                    Transition       91,201           ---               50,000                2,031
Convergence                                2001      168,701           ---                  ---                3,969
                                           2000      155,000           ---              115,000                5,438
                                                                                            ---                  ---

Gene Dwyer.....................            2002    $ 180,000           ---               50,000                  ---
Vice President and Chief             Transition       97,212           ---                  ---                  ---
Technology Officer                         2001      177,836           ---              115,000                  ---
                                           2000      155,000           ---

Samuel A. McCleery.............            2002    $ 175,000           ---               25,000           $   39,474(7)
Vice President of Business           Transition      116,539           ---              100,000                6,934(8)
Development                                2001      160,000           ---               85,000(9)            31,838(10)
                                           2000      154,167       $15,000                  ---                  ---
</TABLE>

                                       7

<PAGE>

----------

(1)      Effective December 21, 2001, PVI changed its fiscal year end from June
         30 to December 31. "Transition" refers to the six-month transition
         period that began July 1, 2001 and ended December 31, 2001. Years 2002,
         2001 and 2000 refer to the fiscal years ended December 31, 2002 and
         June 30, 2001 and 2000, respectively.

(2)      Represents the amount we contributed to the 401(k) Plan.

(3)      Includes 250,000 shares underlying outstanding options that were
         repriced on February 2, 2001.

(4)      Individual was appointed to serve as one of our interim co-Chief
         Executive Officers in November 2001.

(5)      Represents amount paid for services rendered as Corporate Vice
         President of Publicidad from September 2001 to December 2001, and
         amount earned for services rendered as one of PVI's interim co-Chief
         Executive Officers from November 2001 to December 2001.

(6)      Represents bonus equal to 30 days' pay, of which 15 days' pay was
         required to be paid in accordance with Mexican law.

(7)      Includes $35,328 in sales commissions paid to him, and $4,146 that we
         contributed to the 401(k) Plan on his behalf.

(8)      Includes $2,750 in sales commission paid to him, and $4,184 that we
         contributed to the 401(k) Plan on his behalf.

(9)      Includes 50,000 shares underlying outstanding options that were
         repriced on February 2, 2001.

(10)     Includes $23,963 in sales commissions paid to him, and $7,875 that we
         contributed to the 401(k) Plan on his behalf.


         The following table sets forth certain information concerning grants of
stock options during the fiscal year ended December 31, 2002 to the Named
Officers.

<TABLE>
<CAPTION>
                                               OPTION GRANTS IN LAST FISCAL YEAR

                                                   PERCENTAGE OF TOTAL
                             NUMBER OF             OPTIONS GRANTED TO
                             SECURITIES             EMPLOYEES DURING              EXERCISE OR
                             UNDERLYING              THE LAST FISCAL              BASE PRICE      EXPIRATION       GRANT DATE
       NAME               OPTIONS GRANTED                  YEAR                    PER SHARE         DATE        PRESENT VALUE(1)
       ----               ---------------              -----------                 ---------         ----        ----------------
<S>                       <C>                      <C>                            <C>             <C>            <C>
Brown F Williams.....          10,000                     .53%                     $   1.07         7/1/2012         $  9,906

David Sitt...........          10,000                     .53%                     $   2.22        1/10/2012         $ 20,966
                               10,000                     .53%                     $   1.51        2/10/2012           13,682
                               10,000                     .53%                     $   1.77        3/10/2012           17,134
                               10,000                     .53%                     $   1.53        4/10/2012           14,469
                               10,000                     .53%                     $  1.127        5/10/2012           10,580
                               10,000                     .53%                     $   1.12        6/10/2012            9,905
                                7,667                     .40%                     $  2.201       12/10/2011            3,879
                               10,000                     .53%                     $   .961        7/10/2012            8,965
                               10,000                     .53%                     $    .63        8/10/2012            6,328
                               10,000                     .53%                     $    .62        9/10/2012            5,837
                               10,000                     .53%                     $    .61       10/10/2012            5,546
                               72,333                    3.81%                     $    .51       10/30/2012           37,541

Roberto Sonabend.....          10,000                     .53%                     $   2.22        1/10/2012         $ 20,966
                               10,000                     .53%                     $   1.51        2/10/2012           13,682
                               10,000                     .53%                     $   1.77        3/10/2012           17,134
                               10,000                     .53%                     $   1.53        4/10/2012           14,469
                               10,000                     .53%                     $  1.127        5/10/2012           10,580
                               10,000                     .53%                     $   1.12        6/10/2012            9,905
</TABLE>

                                       8

<PAGE>

<TABLE>
<S>                            <C>                       <C>                       <C>            <C>                 <C>
                                7,667                     .40%                     $  2.201       12/10/2011           3,879
                               10,000                     .53%                     $   .961        7/10/2012           8,965
                               10,000                     .53%                     $    .63        8/10/2012           6,328
                               10,000                     .53%                     $    .62        9/10/2012           5,837
                               10,000                     .53%                     $    .61       10/10/2012           5,546
                               72,333                    3.81%                     $    .51       10/30/2012          37,541

Howard J. Kennedy....              --                      --                            --               --              --
Gene Dwyer...........              --                      --                            --               --              --
Samuel A. McCleery...          25,000                    1.32%                     $   1.00        7/26/2012          17,518
</TABLE>

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

(1)      The calculation of the grant date valuation is based on the
         Black-Scholes method.

   AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
                                     VALUES

         The following table sets forth certain information with respect to the
exercise of options to purchase common stock during the fiscal year ended
December 31, 2002 by the Named Officers and unexercised options to purchase
common stock held by the Named Officers at December 31, 2002.

<TABLE>
<CAPTION>
                                                                        NUMBER OF                            VALUE OF
                                                                  SECURITIES UNDERLYING                 UNEXERCISED IN-THE-
                                   SHARES                          UNEXERCISED OPTIONS                  MONEY OPTIONS HELD
                                  ACQUIRED     VALUE             HELD AT DECEMBER 31,2002             AT DECEMBER 31, 2002(1)
                                     ON       REALIZED           ------------------------             -----------------------
       NAME                     EXERCISE (#)    ($)           EXERCISABLE       UNEXERCISABLE      EXERCISABLE     UNEXERCISABLE
       ----                     ------------    ---           -----------       -------------      -----------     -------------
<S>                             <C>           <C>             <C>               <C>                <C>             <C>
Brown F Williams .........           --          --              556,666          193,334               --               --
David Sitt................           --          --              127,667           52,333               --               --
Roberto Sonabend .........           --          --              127,667           52,333               --               --
Howard J. Kennedy                    --          --               98,021           71,979               --               --
Gene Dwyer                           --          --               97,220           72,780               --               --
Samuel A. McCleery........           --          --              183,610           46,390               --               --
</TABLE>

-----------

(1) Based on the closing price on the Nasdaq National Market on December 31,
2002: $.33 per share.

COMPENSATION OF DIRECTORS

         Directors do not receive cash compensation for serving on the Board of
Directors or any Board committee. On July 1 of each year, each director receives
an automatic grant of an option to purchase 10,000 shares of our common stock at
an exercise price equal to the fair market value of our common stock on the date
of the grant. The option vests in monthly installments so long as the director
continues to serve as a director. On July 1, 2002, PVI granted, subject to
certain conditions (including, without limitation, conditions relating to
vesting), options to purchase 10,000 shares of common stock to each of the
directors who were serving as such on such date. All directors are reimbursed
for expenses incurred in connection with attendance at Board of Directors and
committee meetings.

         By letter agreement dated January 1, 2002, PVI retained ERM &
Associates, Inc. ("ERM") to provide consulting services to PVI. As compensation
for its services, ERM received a cash fee of $10,000 per month (subject to
pro-ration for any shorter period), as well as an option to purchase 5,000
shares of PVI common stock for each full month of consulting services (up to a
maximum of 30,000 shares unless otherwise approved by the Compensation
Committee). The term of the consulting arrangement with ERM was extended by
letter agreement dated February 15, 2002, and

                                       9

<PAGE>

expired on May 15, 2002. Our director, Emilio Romano, who was a director of PVI
during 2002, is the President and owner of ERM.

EMPLOYMENT AGREEMENTS WITH NAMED OFFICERS

         In January 1997, PVI and Mr. Williams entered into an employment
agreement that provides for automatic annual renewal and permits us to terminate
the agreement upon 90 days' prior notice to Mr. Williams. In November 2001, Mr.
Williams' employment agreement was amended concurrent with his appointment to
the office of President, Interactive Technologies. Pursuant to the terms of his
amended agreement, Mr. Williams' base salary is $325,000 per year, subject to
increases at the discretion of the Board of Directors, and Mr. Williams' term of
employment will be automatically extended for a period of two years following a
change in control of PVI. From July 2002 to November 2002, Mr. Williams' salary
was temporarily reduced to $100,000 per year in an effort to conserve capital.
In exchange for accepting a reduction in salary, Mr. Williams received a stock
option to purchase 56,250 shares of our common stock. Mr. Williams is eligible
for an annual bonus based on performance measures determined by the Compensation
Committee. In the event Mr. Williams' employment is terminated by PVI without
cause, or in the event Mr. Williams terminates his employment due to a
detrimental change in the nature or scope of his employment or duties, he is
entitled to receive his then current salary for a period equal to the greater of
two years or the remainder of his then current term of employment, and, upon his
request, all of his stock options that are vested on the date of his termination
shall be exercisable until the expiration date set forth in the applicable stock
agreement.

         On February 18, 2003, Mr. Sitt signed an offer letter from PVI
specifying basic terms and conditions of his employment. Pursuant to such offer
letter, Mr. Sitt's base salary for service as Corporate Vice President of
Publicidad is $200,000 per year subject to increases at the discretion of the
Board of Directors, and in connection with such services he received an option
to purchase 275,000 shares of our common stock, which was granted in 2003. In
addition, Mr. Sitt is entitled to an annual bonus equal to thirty days salary.
In the event Mr. Sitt's employment as Corporate Vice President of Publicidad is
terminated by PVI without cause, or Mr. Sitt terminates such employment for good
reason, e.g. detrimental change in the nature or scope of his employment or
duties, he is entitled to receive his then current salary for a period of six
months. Further, in the event that Mr. Sitt's employment as Corporate Vice
President of Publicidad is terminated due to death or disability, Mr. Sitt's
estate or personal representative will receive severance equal to three or six
months salary, as applicable. As consideration for Mr. Sitt's service as
co-Chief Executive Officer of PVI, he has been granted options to purchase
235,000 shares of PVI common stock, 180,000 of which were granted in 2002 with
the remainder granted in 2003.

         On February 18, 2003, Mr. Sonabend signed an offer letter from PVI
specifying basic terms and conditions of his employment. Pursuant to such offer
letter, Mr. Sonabend's base salary for service as Corporate Vice President of
Publicidad is $200,000 per year subject to increases at the discretion of the
Board of Directors, and in connection with such services he received an option
to purchase 275,000 shares of our common stock which was granted in 2003. In
addition, Mr. Sonabend is entitled to an annual bonus equal to thirty days
salary. In the event Mr. Sonabend's employment as Corporate Vice President of
Publicidad is terminated by PVI without cause, or Mr. Sitt terminates such
employment for good reason, e.g. detrimental change in the nature or scope of
his employment or duties, he is entitled to receive his then current salary for
a period of six months. Further, in the event that Mr. Sonabend's employment as
Corporate Vice President of Publicidad is terminated due to death or disability,
Mr. Sonabend's estate or personal representative will receive severance equal to
three or six months salary, as applicable. As consideration for Mr. Sonabend's
service as co-Chief Executive Officer of PVI, he has been granted options to
purchase 235,000 shares of PVI common stock, 180,000 of which were granted in
2002 with the remainder granted in 2003.

         Effective February 2, 2001, PVI and Mr. McCleery entered into an
amended and restated employment agreement that provides for automatic annual
renewal and permits us to terminate the agreement upon 90 days' prior notice to
Mr. McCleery. Pursuant to such agreement, Mr. McCleery's base salary was
$200,000 per year, subject to increases at the discretion of the Board of
Directors. From August 2002 to November 2002, Mr. McCleery's salary was
temporarily reduced to $100,000 per year in an effort to conserve capital. In
exchange for accepting a reduction in salary, Mr. McCleery received a stock
option to purchase 25,000 shares of our common stock. On February 1, 2003, Mr.
McCleery agreed to another salary reduction to $160,000 for an undetermined
period of time. Mr. McCleery is eligible for an annual bonus based on
performance measures determined by the Compensation Committee of the Board of

                                       10

<PAGE>

Directors. In the event Mr. McCleery's employment is terminated by PVI without
cause, or Mr. McCleery terminates his employment for good cause, e.g.
detrimental change in the nature or scope of his employment or duties, he is
entitled to receive his then current salary for a period of two years.

         In addition to provisions in the above-described employment agreements
requiring each individual to maintain the confidentiality of our company's
information and assign inventions to PVI, such executive officers have agreed
that during the terms of their employment agreements and for two years
thereafter, they will not compete with us by engaging in any capacity in any
business which is competitive with the business of PVI.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The persons who served as members of the Compensation Committee of the
Board of Directors during the fiscal year ended December 31, 2002 were John B.
Torkelsen (who resigned effective January 21, 2003), Donald P. Garber, Lawrence
Lucchino and Wilt Hildenbrand. None of the members of the Compensation Committee
was an officer, former officer or employee of PVI.

401(K) PLAN

         We have adopted a tax-qualified employee savings and retirement plan
(the "401(k) Plan") covering our employees. Pursuant to the 401(k) Plan,
employees may elect to defer up to the lesser of: (i) 20% of their annual
compensation each year; or (ii) the statutorily prescribed annual limit ($12,000
in 2003), and have the deferred amount contributed to the 401(k) Plan. Pursuant
to the 401(k) Plan in effect during 2002, PVI matched 50% of an employee's
elective deferral contributions with an equal amount of our common stock, up to
a maximum annual match of 2.5% of the employee's compensation earned while his
or her deferral agreement is in effect. Contributions by both PVI and employees
to the Plan and income earned on such contributions are not taxable to employees
until withdrawn from the 401(k) Plan. The Trustees under the 401(k) Plan, at the
direction of each participant, invest the assets of the 401(k) Plan that are
attributable to participants' elective deferral contributions in designated
investment options. Effective January 1, 2003, the common stock match described
above was eliminated from the 401(k) Plan.

                                       11

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The following table sets forth certain information regarding the
beneficial ownership of our common stock as of April 15, 2003 except as
otherwise set forth below, (i) by each person who is known to PVI to
beneficially own more than 5% of our common stock, (ii) by each current director
and director nominee, (iii) by each Named Officer, and (iv) by all current
directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                                                                     COMMON STOCK BENEFICIALLY
                                                                                                     -------------------------
                                                                                                              OWNED(1)
                                                                                                              --------
    NAME OF BENEFICIAL OWNER                                                                         NUMBER            PERCENT
    ------------------------                                                                         ------            -------
<S>                                                                                                <C>                 <C>
PVI Holding, LLC(2) ......................................................................         23,460,874           61.94%
c/o Cablevision Systems Corporation
1111 Stewart Avenue
Bethpage, NY 11714

Presencia en Medios, S.A. de C.V.(3) .....................................................          8,967,627           44.90%
Paseo de las Palmas
No. 735, desp. 206
11000 Mexico, DF

Allen & Company Incorporated(4) ..........................................................          1,058,146            5.60%
Allen Holding Inc.
Herbert A. Allen
711 Fifth Avenue
New York, NY 10020

Brown F Williams(5) ......................................................................            776,931            4.10%
c/o Princeton Video Image, Inc.
15 Princess Road
Lawrenceville, NJ 08648

Lawrence J. Burian(6) ....................................................................             14,266               *
c/o Cablevision Systems Corporation
1111 Stewart Avenue
Bethpage, NY 11714

Joseph Decosimo(7) .......................................................................             88,500               *
c/o Joseph Decosimo and Company
Suite 1100 Tallan Building
Two Union Square
Chattanooga, Tennessee 37402

Donald P. Garber(8) ......................................................................             37,499               *
c/o Major League Soccer
110 East 42nd Street
10th Floor
</TABLE>

                                       12

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      COMMON STOCK BENEFICIALLY
                                                                                                      -------------------------
                                                                                                              OWNED(1)
                                                                                                              --------
         NAME OF BENEFICIAL OWNER                                                                      NUMBER          PERCENT
         ------------------------                                                                      ------          -------
<S>                                                                                                   <C>              <C>
New York, NY 10017

Wilt Hildenbrand(9) ......................................................................             20,832             *
c/o Cablevision Systems Corporation
1111 Stewart Avenue
Bethpage, NY 11714-3581

Lawrence Lucchino(10) ...................................................................             127,499           1.1%
7979 Ivanhoe Avenue
Suite 540
La Jolla, CA 92037

Jerome J. Pomerance(11) .................................................................             207,341             *
c/o J.J. Pomerance & Co.
730 Third Avenue
Suite 4602
New York, NY 10017

Eduardo Sitt(12) .........................................................................             47,499             *
c/o Presencia en Medios, S.A. de C.V.
Paseo de las Palmas
No. 735, desp. 206
Mexico, D.F. 11000

David Sitt(13) ...........................................................................            314,222           1.7%
c/o Publicidad Virtual, S.A. de C.V.
Paseo de los Laureles 458-301
Bosques de las Lomas
Mexico, D.F. 05120

Roberto Sonabend(14) .....................................................................            314,222           1.7%
c/o Publicidad Virtual, S.A. de C.V.
Paseo de los Laureles 458-301
Bosques de las Lomas
Mexico, D.F. 05120

James Green(15) ..........................................................................            136,666             *
c/o Princeton Video Image, Inc.
15 Princess Road
Lawrenceville, NJ 08648

Samuel A. McCleery(16) ...................................................................            243,565           1.3%
c/o Princeton Video Image, Inc.
</TABLE>

                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                                                     COMMON STOCK BENEFICIALLY
                                                                                                     -------------------------
                                                                                                              OWNED(1)
                                                                                                              --------
         NAME OF BENEFICIAL OWNER                                                                    NUMBER            PERCENT
         ------------------------                                                                    ------            -------
<S>                                                                                                 <C>                <C>
15 Princess Road
Lawrenceville, NJ 08648

All directors and executive officers as a ................................................          2,786,584            13.4%
group 16 persons)(17)
</TABLE>

----------
*        Less than one percent

(1)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Shares of common stock
         subject to stock options and warrants currently exercisable or
         exercisable within 60 days are deemed outstanding for computing the
         percentage ownership of the person holding such options and the
         percentage ownership of any group of which the holder is a member, but
         are not deemed outstanding for computing the percentage ownership of
         any other person. Except as indicated by footnote, and subject to
         community property laws where applicable, the persons named in the
         table have sole voting and investment power with respect to all shares
         of common stock shown as beneficially owned by them.

         Applicable percentage of ownership is based on 18,418,865 shares of
         common stock outstanding as of April 15, 2003.

(2)      Includes 4,000,000 shares of common stock held of record by PVI
         Holding, the indirect wholly-owned subsidiary of Cablevision, and
         Cablevision may be deemed the beneficial owner of the shares of our
         common stock owned by PVI Holding. Also includes warrants to purchase
         12,794,207 shares of common stock. Also includes 6,666,667 shares of
         our common stock underlying a $5,000,000 Convertible Note convertible
         at the option of PVI Holding.

(3)      Includes 1,336,711 shares of common stock and 585,843 shares of common
         stock underlying warrants that were exercisable within 60 days of April
         15, 2003. Includes 2,544,435 shares of common stock and warrants to
         purchase 967,306 shares of common stock that were exercisable within 60
         days of April 15, 2003, which are held by Presence in Media LLC, of
         which Presencia owns directly or indirectly 100% interest. Also
         includes an aggregate of 3,533,332 shares of our common stock
         underlying an aggregate of $2,650,000 Convertible Notes convertible at
         the option of Presencia. Does not include shares of common stock held
         directly by officers, directors or employees of Presencia.

(4)      The number of shares reported is based upon information disclosed by
         Allen & Company Incorporated ("ACI") on a Schedule 13G/A filed with the
         Securities and Exchange Commission on February 14, 2002. Includes
         179,920 shares of common stock and 878,226 shares of common stock
         underlying currently exercisable warrants. Allen Holding Inc. ("AHI"),
         by virtue of its status as the sole stockholder of ACI, may be deemed
         to share with ACI the power to vote or direct the vote and to dispose
         or direct the disposition of the shares of which is ACI is direct
         beneficial owner. Mr. Herbert A. Allen, by virtue of his status as a
         majority stockholder and the President and Chief Executive Officer of
         AHI and the President and Chief Executive Officer of ACI, may be deemed
         to share with AHI and ACI the power to vote or direct the vote and
         dispose or direct the disposition of shares of which each of AHI and
         ACI is the direct beneficial owner. Mr. Herbert A. Allen disclaims
         beneficial ownership of the securities reported to be held by AHI and
         ACI, except to the extent of his pecuniary interest therein. Does not
         include shares, which may be owned by other officers, directors or
         employees of AHI or ACI.

(5)      Includes 139,535 shares of common stock and 615,556 shares of common
         stock underlying options that were exercisable within 60 days of April
         15, 2003. Also includes 21,840 shares of common stock held by Mr.

                                       14

<PAGE>

         Williams as custodian for Bronwyn Williams, his minor daughter. Does
         not include shares of common stock owned by Mr. Williams' brother, Mr.
         Williams' adult daughter, and a trust of which Mr. Williams' mother is
         a beneficiary, respectively. Mr. Williams disclaims beneficial
         ownership of the shares of common stock that are held by him as
         custodian for his minor daughter.

(6)      Includes 100 shares of common stock and 14,166 shares of common stock
         underlying options granted to Mr. Burian that were exercisable within
         60 days of April 15, 2003.

(7)      Includes 88,500 shares of common stock.

(8)      Includes 37,499 shares of common stock underlying options granted to
         Mr. Garber that were exercisable within 60 days of April 15, 2003.

(9)      Includes 20,832 shares of common stock underlying options granted to
         Mr. Hildenbrand that were exercisable within 60 days of April 15, 2003.

(10)     Includes 80,000 and 47,499 shares of common stock underlying options
         owned by LL Sports Inc. and Lawrence Lucchino, respectively that were
         exercisable within 60 days of April 15, 2003. Mr. Lucchino controls LL
         Sports Inc.

(11)     Includes 20,000 shares of common stock owned by J.J. Pomerance & Co.,
         Inc. of which Mr. Pomerance is the President. Also includes 129,842
         shares of common stock and 57,499 shares of common stock underlying
         options that were exercisable within 60 days of April 15, 2003.

(12)     Includes 47,499 shares of common stock underlying options that were
         exercisable within 60 days of April 15, 2003. Mr. Sitt is the Chairman
         of the Board and President of Presencia. Mr. Sitt disclaims beneficial
         ownership of any securities of PVI held by Presencia.

(13)     Includes 314,222 shares of common stock underlying options that were
         exercisable within 60 days of April 15, 2003.

(14)     Includes 314,222 shares of common stock underlying options that were
         exercisable within 60 days of April 15, 2003.

(15)     Includes 136,666 shares of common stock underlying options granted to
         Mr. Green that were exercisable within 60 days of April 15, 2003.

(16)     Includes 1,228 shares of common stock, 47,200 shares of common stock
         underlying currently exercisable warrants and 195,137 shares of common
         stock underlying options granted to Mr. McCleery that were exercisable
         within 60 days of April 15, 2003.

(17)     Includes 439,145 shares of common stock, and 2,347,439 shares of common
         stock underlying options and warrants that were exercisable within 60
         days of April 15, 2003.

                      EQUITY COMPENSATION PLAN INFORMATION

         The following table sets forth information concerning the number of
outstanding options, the weighted average exercise price of those securities and
the number of securities remaining to be granted under existing equity plans,
whether approved or not approved by security holders, as of December 31, 2002.
The purpose of this table is to illustrate the potential dilution that could
occur from past and future equity grants.

                                       15

<PAGE>

<TABLE>
<CAPTION>
                                            NUMBER OF SECURITIES                                NUMBER OF SECURITIES
                                               TO BE ISSUED             WEIGHTED-AVERAGE      REMAINING AVAILABLE FOR
                                             UPON EXERCISE OF           EXERCISE PRICE OF      FUTURE ISSUANCE UNDER
                                            OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,       EXISTING EQUITY
    PLAN CATEGORY                           WARRANTS AND RIGHTS        WARRANTS AND RIGHTS       COMPENSATION PLANS
    -------------                           -------------------        -------------------       ------------------
<S>                                         <C> 21,113,508             <C>    $5.12              <C>   2,635,679
Equity compensation
   plans approved by
   security holders                               -------                    -------                    -------

Equity compensation
   plans not approved
   by security holders                              N/A                        N/A                        N/A
                                                  =======                    =======                    =======
         Total
</TABLE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT AND OTHERS

Cablevision

         Pursuant to the terms of a registration rights agreement, PVI Holding
was granted "piggyback" registration rights to participate in other
registrations of our securities, which we may undertake, and the right to demand
registration of its securities for resale under the Securities Act of 1933 on
six occasions. Such registration rights are subject to certain notice
requirements, timing restrictions and volume limitations that may be imposed by
the underwriter of an offering. In addition, PVI Holding has the option to
adopt, in lieu of these registration rights, the registration rights granted to
any other person in the future by PVI.

         PVI and Cablevision executed a license agreement in February 2001,
which grants Cablevision and its affiliates the right to use our L-VIS(R) System
and related proprietary rights in its businesses. Under the terms of the
agreement, we were to receive an advance payment of $7.5 million; of which $5
million was received during the six-month period ended December 31, 2001. The
license agreement provided that we would receive royalties based on
Cablevision's revenues from use of the L-VIS(R) System, an equipment fee equal
to our direct costs of manufacturing each L-VIS(R) System we provide under the
license, and enhancement fees for electronic insertions for which Cablevision
does not receive revenues based on our direct costs of providing such
insertions. The royalties and other payments due to PVI under the license
agreement were creditable against the advance payment. In June 2002, the parties
executed an Amended and Restated L-VIS(R) System License Agreement, pursuant to
which we (i) sold two L-VIS(R) units to Cablevision, (ii) reduced the charges
for certain services, and (iii) are obligated to refund any unused portion of
the Cablevision advance payment if Cablevision doesn't purchase products and
services or generate royalty payments in specified amounts by specified dates.

         We entered into a joint collaboration and license agreement with
Cablevision in September 2001, pursuant to which we agreed to work together to
develop technology to promote interactive use of and targeted advertising in
video delivery systems at various points in the distribution system. In
furtherance of the agreement, PVI and Cablevision agreed to cross-license to
each other, on a non-exclusive basis, our current technologies for use in the
development phase of the project. For products and technology developed under
the agreement, which relate to interactive and enhancement products specifically
for use with television distribution, Cablevision was to pay us a royalty based
on related revenues. We received a license to use, commercialize and sub-license
and Cablevision received a license to use any technology and products developed
under the joint collaboration and license agreement. In June 2002, the parties
executed an Amended and Restated Joint Collaboration Agreement, pursuant to
which the license for our iPoint(TM) Technology granted pursuant to the joint
collaboration and license agreement was converted to a fully paid up,
non-exclusive, perpetual, royalty free license.

         In June 2002, we entered into a Note Purchase and Security Agreement
(the "Note Purchase Agreement") with PVI Holding, pursuant to which we issued to
PVI Holding a $5,000,000 secured convertible note, which bore interest at 10%
per annum and matured on March 31, 2003. The note was convertible into shares of
our common stock at any time

                                       16

<PAGE>

prior to maturity at a price of $2.50 per share. If, prior to the maturity date,
we sell shares of our common stock resulting in aggregate cash proceeds of at
least 10,000,000, we could convert the note into shares of our common stock at a
price of $2.50 per share or, if such common stock is sold for an aggregate
weighted average price of less than $1.00 per share, at such weighted average
price. To secure payment of its obligations under the note, we granted PVI
Holding a security interest in all of our assets.

         Pursuant to the Note Purchase Agreement, PVI and Cablevision entered
into (a) a License Agreement for our iPoint(TM) Technology pursuant to which
Cablevision has, in consideration for crediting $3.5 million of prepaid license
fees relating to its use of the L-VIS(R) System, a non-exclusive license to use
the iPoint(TM) Technology solely for the benefit of Cablevision and its
affiliates, (b) a Proprietary Information Escrow Agreement pursuant to which we
placed certain of our proprietary information in escrow to be released to
Cablevision for use under its licenses in the event that PVI fails to meet
certain defined financial tests or defaults under the note held by PVI Holding,
and (c) an Option Agreement which provides that solely in the event PVI fails to
meet a specified financial test by March 31, 2003 (later extended to July 31,
2003 in connection with the Presencia Note Purchase Agreement) Cablevision will
have the option to purchase at appraised fair market value a sole, exclusive
license to all our technology for use in the United States, subject to
pre-existing rights granted to PVI customers and other third parties.

         On February 18, 2003, PVI entered into a Note Purchase and Security
Agreement and on March 20, 2003, the Note Purchase and Security Agreement was
amended (as so amended, the "Presencia Note Purchase Agreement") with Presencia
and PVI Holding. Pursuant to the Presencia Note Purchase Agreement, PVI issued
to PVI Holding, a $5,000,000 Amended and Restated secured convertible note,
which bears interest at 10% per annum and matures on July 31, 2003 (with the
holder having the right to extend the maturity date for up to two years), in
replacement of the $5,000,000 secured convertible note issued to PVI Holding on
June 25, 2002. The note is initially convertible by the holder into common stock
of PVI at $.75 per share. In the event that PVI sells any security (equity, debt
or otherwise) in a qualifying transaction (a "New Financing"), the holder of the
note would have the right to convert the note to PVI common stock at $.75 per
share or into the security being issued by PVI in the New Financing, on the same
terms as such security is being sold in the New Financing. Following the first
New Financing, the common stock conversion price of $.75 per share is increased
to $2.50 per share. In addition, the holder will have the right to convert the
note into any security issued in any New Financing that occurs while the note is
outstanding, subject to all of the terms of such New Financing. The holder of
the note is prohibited from converting the note under any circumstances at a
price below $.38 per share, the closing price of PVI's common stock on February
14, 2003.

         On April 7, 2003, in connection with the closing of the note purchase
by Presencia pursuant to the second amendment to the Presencia Note Purchase
Agreement, PVI issued to PVI Holding warrants to purchase 106,329 shares of
common stock at an exercise price of $6.53 per share and 2,658 shares of common
stock at an exercise price of $9.43 per share.

Presencia

         In December 2000, we entered into a reorganization agreement with
Presencia and certain of its affiliates, which agreement was later amended on
February 4, 2001. On September 20, 2001 we completed the transaction
contemplated by the reorganization agreement (the "Presencia Transaction"), in
accordance with which Presencia and its affiliates sold their shares of
Publicidad to us and our affiliate, Princeton Video Image Latin America, LLC,
and Publicidad became our wholly-owned, indirect subsidiary. In consideration
for the shares of Publicidad capital stock, we issued to Presencia and its
affiliate, Presence in Media LLC, an aggregate of 2,678,353 shares of our
common stock and warrants to purchase an aggregate of 1,036,825 shares of our
common stock. In addition, Presencia received warrants to purchase 500,000
shares of our common stock as partial consideration for waiving the
participation rights granted to it under the reorganization agreement with
respect to the issuance of securities in connection with the Cablevision
Transaction. Following the closing of the Presencia Transaction, Presencia and
its affiliates were the beneficial holders of 26.4% of our outstanding common
stock, which may deem to constitute a change in control.

         Pursuant to the terms of the reorganization agreement, Presencia has
the right to designate a maximum of three directors to our Board. In addition,
under the terms of an agreement entered into in connection with the
reorganization agreement, Presencia will receive additional compensation for
consulting services and incentives based on Publicidad's

                                       17

<PAGE>

future performance. Further, pursuant to the terms of a registration rights
agreement entered into in connection with the Presencia Transaction, Presencia
and certain of its affiliates were granted "piggyback" registration rights to
participate in other registrations of our securities which we may undertake, and
the right to demand registration of their securities for resale under the
Securities Act of 1933 on five occasions. Such registration rights are subject
to certain notice requirements, timing restrictions and volume limitations that
may be imposed by the underwriter of an offering.

         In June 2002, Publicidad and Presencia amended the consulting services
agreement to simplify the formula for calculation of the payments to Presencia,
and to give Publicidad the option, under certain specified circumstances, of
paying the contingent fee in PVI common stock

         Pursuant to the Presencia Note Purchase Agreement, PVI issued to
Presencia secured convertible notes in the amount of $1,500,000, $500,000 and
$650,000, on February 18, 2003, March 20, 2003 and April 7, 2003, respectively.
These notes bear interest at 10% per annum and mature on July 31, 2003 (with
the holder having the right to extend the maturity date for up to two years).
The notes are initially convertible by the holders into common stock of PVI at
$.75 per share. In the event that PVI sells any security (equity, debt or
otherwise) in a qualifying transaction (a "New Financing"), the holder of the
notes would have the right to convert the notes to PVI common stock at $.75 per
share or into the security being issued by PVI in the New Financing, on the same
terms as such security is being sold in the New Financing. Following the first
New Financing, the common stock conversion price of $.75 per share is increased
to $2.50 per share. In addition, the holder will have the right to convert the
notes into any security issued in any New Financing that occurs while the notes
are outstanding, subject to all of the terms of such New Financing. The holder
of the notes is prohibited from converting the notes under any circumstances at
a price below $.38 per share, the closing price of PVI's common stock on
February 14, 2003. To secure payment of its obligations under the notes, PVI has
granted Presencia a security interest in all of its assets, which security
interest Presencia now shares with PVI Holding on a pari passu basis. Presencia
and/or its designees have the right, exercisable upon written notice given to
PVI on or before May 7, 2003, to invest an additional $350,000 in PVI on the
same terms as described above.

         On April 7, 2003, in connection with the closing of the note purchase
by Presencia pursuant to the second amendment to the Presencia Note Purchase
Agreement, PVI (a) issued to Presencia warrants to purchase 34,932 shares of
common stock at an exercise price of $6.22 per share and (b) amended previously
outstanding warrants to purchase 1,536,825 shares of PVI common stock held by
Presencia to reduce the exercise price by 22.22% of the original exercise price
and extend the expiration date by four years.

         Pursuant to the Presencia Note Purchase Agreement, PVI paid $325,048 to
Presencia in payment of the contingent service fee for 2001 due under the
consultant services agreement between Publicidad Virtual and Presencia.

         Eduardo Sitt, a member of a Board of Directors, is a principal
stockholder and President of Presencia. David Sitt and Roberto Sonabend are also
stockholders of Presencia.

Allen & Co.

         Allen & Co, one of our principal stockholders, furnished financial
advisory services to us from time to time. On June 14, 2000, we entered into an
agreement with Allen & Co., which was amended as of December 20, 2000, pursuant
to which Allen & Co. would act as one of our financial advisors in connection
with certain stock purchase transactions, including the December 2000
transaction with Presencia (the "Presencia Transaction"). See "Certain
Relationships and Related Transactions - Presencia". In July 2001, we issued to
Allen & Co. a warrant to purchase 100,000 shares of our common stock at $2.3065
as consideration for its issuance of a fairness opinion in connection with the
Presencia Transaction. This warrant was issued with an expiration date of
December 20, 2005, or five years from the issuance date of their fairness
opinion. On September 20, 2001, Allen & Co. received a warrant to purchase an
additional 100,000 shares of our common stock at $3.91 in connection with the
completion of the Presencia Transaction. See "Certain Relationships and Related
Transactions - Presencia." We granted to Allen & Co. registration rights that,
subject to certain conditions and limitations, give Allen & Co. the one-time
right, commencing October 20, 2000 (200,000 shares), December 20, 2000 (100,000
shares) and September 20, 2001 (100,000 shares), to require us to register not
less than 50% of such shares.

                                       18

<PAGE>

Dasi

         Publicidad's personnel is provided by Consultares Asociados Dasi, S.C.,
a Mexican service company, of which David Sitt, one of our interim co-Chief
Executive Officers, is a principal stockholder. Publicidad reimburses Dasi the
amount that Dasi pays in salaries, taxes, and other costs associated with the
employment of the individuals working for Publicidad. No additional service
charge or commission is charged for Dasi's services.

                                       19

<PAGE>

                                    SIGNATURE

         Pursuant to the requirements of Section 13 or 15(d) 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.

                                         PRINCETON VIDEO IMAGE, INC.

                                         By: /s/ James Green
                                             ---------------
                                             James Green
                                             President & Chief Operating Officer
                                             Date: April 30, 2003

I, David Sitt, Co-Chief Executive Officer, certify that:

1.       I have reviewed this Amendment No. 1 to annual report on Form 10-K of
         Princeton Video Image, Inc.; and

2.       Based on my knowledge, this annual 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 annual report.

Dated: April 30, 2003               /s/ David Sitt
                                    --------------
                                    David Sitt
                                    Co-Chief Executive Officer

I, Roberto Sonabend, Co-Chief Executive Officer, certify that:

1.       I have reviewed this Amendment No. 1 to annual report on Form 10-K of
         Princeton Video Image, Inc.; and

2.       Based on my knowledge, this annual 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 annual report.

Dated: April 30, 2003               /s/ Roberto Sonabend
                                    --------------------
                                    Roberto Sonabend
                                    Co-Chief Executive Officer

I , James Green, Chief Operating Officer and principal financial officer,
certify that:

1.       I have reviewed this Amendment No. 1 to annual report on Form 10-K of
         Princeton Video Image, Inc.; and

2.       Based on my knowledge, this annual 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 annual report.

Dated: April 30, 2003               /s/ James Green
                                    ---------------
                                    James Green
                                    Chief Operating Officer
                                    (Principal Financial Officer)

                                       20