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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549



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FORM 10-Q



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|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2002

OR



|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|----- | ----------------------------------------------------------------------------------------

Commission File Numbers:

|                                                     |  |                    
|---------------------------------------------------- |  | -------------------
|ACME Intermediate Holdings, LLC
ACME Television, LLC |  | 333-40277
333-40281

ACME INTERMEDIATE HOLDINGS, LLC
AND
ACME TELEVISION, LLC(Exact name of registrants as specified in their charters)

|                                                                                 |  |                                                      |  |                                                            
|-------------------------------------------------------------------------------- |  | ---------------------------------------------------- |  | -----------------------------------------------------------
|Delaware
Delaware
(State or other jurisdiction of
incorporation or organization) |  | ACME INTERMEDIATE HOLDINGS, LLC
ACME TELEVISION, LLC |  | 52-2050589
52-2050588
(I.R.S. employer
identifications no.)

2101 E. Fourth Street, Suite 202A
Santa Ana, California, 92705
(714) 245-9499
(Address and telephone number of principal executive offices)



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Indicate by check mark whether the registrants (1) have 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, and (2) have been subject to such filing
requirements for the past 90 days.
Yes [X] No [   ]

100% of the membership units of ACME Intermediate Holdings, LLC are owned
directly or indirectly by ACME Communications, Inc. 100% of the membership
units of ACME Television, LLC are owned directly or indirectly by ACME
Intermediate Holdings, LLC. Such membership units are not publicly traded and,
therefore, have no separate, quantifiable market value.

As of May 15, 2002, ACME Intermediate Holdings, LLC and ACME Television, LLC
had 910,986 and 200, respectively, common membership units outstanding; all
such units are owned, directly or indirectly, by ACME Communications, Inc.



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TABLE OF CONTENTS



|                            |                                                                                               |                                                            |  |  |  |  |  | 
|--------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                                               | Consolidated Balance Sheets                               
|                            |                                                                                               | Consolidated Statements of Operations and Members Capital
|                            |                                                                                               | Consolidated Statements of Cash Flows                     
|                            |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)    
|                            | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                            | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II  OTHER INFORMATION
|                            | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                            | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|SIGNATURES                 
|EXHIBIT INDEX              
|EXHIBIT 3.1                
|EXHIBIT 10.1               
|EXHIBIT 10.2               
|EXHIBIT 10.3               



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##### Table of Contents



ACME INTERMEDIATE HOLDINGS, LLC
AND
ACME TELEVISION, LLC

FORM 10-Q

TABLE OF CONTENTS

|                               |  |                                                                                                                         |  |     
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------- |  | ----
|ITEM                           |  |                                                                                                                         |  |     
|NUMBER                         |  |                                                                                                                         |  | PAGE
|                               |  |                                                                                                                         |  |     
|PART I  FINANCIAL INFORMATION
|                              
|Item 1.                        |  | Financial Statements                                                                                                    |  |     
|                              
|                               |  | Consolidated Balance Sheets as of December 31, 2001 and March 31, 2002                                                  |  | 3   
|                              
|                               |  | Consolidated Statements of Operations and Members Capital for the Three Months Ended
March 31, 2001 and March 31, 2002 |  | 4   
|                              
|                               |  | Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2001 and March 31, 2002                      |  | 5   
|                              
|                               |  | Notes to Consolidated Financial Statements                                                                              |  | 6   
|                              
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results Of Operations                                   |  | 9   
|                              
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                              |  | 13  
|                              
|PART II  OTHER INFORMATION   
|                              
|Item 1.                        |  | Legal Proceedings                                                                                                       |  | 14  
|                              
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                                                        |  | 14  





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##### Table of Contents






ACME Intermediate Holdings, LLC and Subsidiaries
ACME Television, LLC and Subsidiaries
Consolidated Balance Sheets

|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |        |         |         | 
|-------------------------------------------------- | --------------------------------------------- | -------------------- | -------------------------------------- | ------ | ----------------------- | ------- | -------------------- | ------ | -------------- | ------- | --------------- | ------ | ----------- | ------- | -------- | ------ | ------- | ------- | 
|                                                   |                                               |                      |                                        |        | As of December 31, 2001 |         | As of March 31, 2002
|                                                   |                                               |                      |                                        |        |                         |         |                     
|                                                   |                                               |                      |                                        |        | ACME                    |         |                      |        |                |         | ACME            |        |             |         |         
|                                                   |                                               |                      |                                        |        | Intermediate            |         | ACME                 |        | Intermediate   |         | ACME           
|                                                   |                                               |                      |                                        |        | Holdings, LLC           |         | Television, LLC      |        | Holdings, LLC  |         | Television, LLC
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        | (Unaudited)
|                                                   |                                               |                      |                                        |        |                         |         |                      |        | (In thousands) |         |                 |        |            
|ASSETS                                             |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|Current assets:                                    |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   | Cash and cash equivalents                     |                      | $                                      | 4,280  |                         |         | $                    | 4,280  |                |         | $               | 11,901 |             |         | $        | 11,901 |        
|                                                   | Restricted cash                               |                      |                                        | 1,741  |                         |         |                      | 1,741  |                |         | $               | 2,875  |             |         | $        | 2,875  |        
|                                                   | Accounts receivable, net                      |                      |                                        | 13,563 |                         |         |                      | 13,563 |                |         |                 | 12,537 |             |         |          | 12,537 |        
|                                                   | Current portion of programming rights         |                      |                                        | 14,539 |                         |         |                      | 14,539 |                |         |                 | 12,952 |             |         |          | 12,952 |        
|                                                   | Prepaid expenses and other current assets     |                      |                                        | 1,286  |                         |         |                      | 1,286  |                |         |                 | 1,527  |             |         |          | 1,527  |        
|                                                   | Deferred income taxes                         |                      |                                        | 746    |                         |         |                      | 746    |                |         |                 |       |             |         |          |       |        
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               | Total current assets |                                        |        | 36,155                  |         |                      |        | 36,155         |         |                 |        | 41,792      |         |          |        | 41,792  |        
|                                                   |                                               |                      |                                        |        |                         |         |                      |       
|Property and equipment, net                        |                                               |                      | 36,493                                 |        |                         |         | 36,493               |        |                |         | 39,116          |        |             |         | 39,116   |       
|Programming rights, net of current portion         |                                               |                      | 20,490                                 |        |                         |         | 20,490               |        |                |         | 25,578          |        |             |         | 25,578   |       
|Intangible assets, net                             |                                               |                      | 252,595                                |        |                         |         | 252,595              |        |                |         | 252,595         |        |             |         | 252,595  |       
|Other assets                                       |                                               |                      | 8,369                                  |        |                         |         | 7,113                |        |                |         | 8,643           |        |             |         | 7,438    |       
|Deposits                                           |                                               |                      | 848                                    |        |                         |         | 848                  |        |                |         | 931             |        |             |         | 931      |       
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               | Total assets         |                                        | $      | 354,950                 |         |                      | $      | 353,694        |         |                 | $      | 368,655     |         |          | $      | 367,450 |        
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|LIABILITIES AND MEMBERS CAPITAL                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|Current liabilities:                               |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   | Accounts payable                              |                      |                                        | 8,620  |                         |         |                      | 8,620  |                |         | $               | 9,299  |             |         | $        | 9,299  |        
|                                                   | Accrued liabilities                           |                      |                                        | 13,269 |                         |         |                      | 13,269 |                |         |                 | 14,858 |             |         |          | 14,858 |        
|                                                   | Due to affiliates                             |                      |                                        | 1,161  |                         |         |                      | 1,033  |                |         |                 | 1,160  |             |         |          | 1,032  |        
|                                                   | Current portion of programming rights
payable |                      |                                        | 14,121 |                         |         |                      | 14,121 |                |         |                 | 12,952 |             |         |          | 12,952 |        
|                                                   | Current portion of obligations under
lease    |                      |                                        | 3,290  |                         |         |                      | 3,290  |                |         |                 | 3,998  |             |         |          | 3,998  |        
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               |                      | Total current liabilities              |        |                         | 40,461  |                      |        |                | 40,333  |                 |        |             | 42,267  |          |        |         | 42,139  | 
|                                                   |                                               |                      |                                        |        |                         |         |                      |       
|Programming rights payable, net of
current portion |                                               |                      | 19,931                                 |        |                         |         | 19,931               |        |                |         | 24,559          |        |             |         | 24,559   |       
|Obligations under lease, net of
current portion    |                                               |                      | 9,436                                  |        |                         |         | 9,436                |        |                |         | 11,119          |        |             |         | 11,119   |       
|Other liabilities                                  |                                               |                      | 328                                    |        |                         |         | 328                  |        |                |         | 251             |        |             |         | 251      |       
|Deferred income taxes                              |                                               |                      | 1,635                                  |        |                         |         | 7,878                |        |                |         | 30,780          |        |             |         | 30,280   |       
|10 7/8% senior discount notes                      |                                               |                      | 175,000                                |        |                         |         | 175,000              |        |                |         | 175,000         |        |             |         | 175,000  |       
|12% senior secured notes                           |                                               |                      | 62,424                                 |        |                         |         |                     |        |                |         | 64,478          |        |             |         |         |       
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               |                      | Total liabilities                      |        |                         | 309,215 |                      |        |                | 252,906 |                 |        |             | 348,454 |          |        |         | 283,348 | 
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|Members capital                                   |                                               |                      | 191,386                                |        |                         |         | 225,547              |        |                |         | 203,487         |        |             |         | 237,648  |       
|Accumulated deficit                                |                                               |                      | (145,651                               | )      |                         |         | (124,759             | )      |                |         | (183,286        | )      |             |         | (153,546 | )     
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               |                      | Total members capital                 |        |                         | 45,735  |                      |        |                | 100,788 |                 |        |             | 20,201  |          |        |         | 84,102  | 
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       
|                                                   |                                               |                      | Total liabilities and members capital |        | $                       | 354,950 |                      |        | $              | 353,694 |                 |        | $           | 368,655 |          |        | $       | 367,450 | 
|                                                   |                                               |                      |                                        |        |                         |         |                      |        |                |         |                 |        |             |         |          |       

See the notes to the consolidated financial statements

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ACME Intermediate Holdings, LLC and Subsidiaries
ACME Television, LLC and Subsidiaries
Consolidated Statements of Operations and Members Capital
(Unaudited)

|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |        |         |  
|----------------------------------------------- | ----------------------------- | ----------------------- | ------- | ------------------------------------ | ------ | --------------- | ------- | -------------- | ------ | --------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | -
|                                                |                               |                         |         | For the Three Months Ended March 31,
|                                                |                               |                         |         |                                     
|                                                |                               |                         |         | 2001                                 |        | 2002           
|                                                |                               |                         |         |                                      |        |                
|                                                |                               |                         |         | ACME                                 |        |                 |         |                |        | ACME            |         |        |         |  
|                                                |                               |                         |         | Intermediate                         |        | ACME            |         | Intermediate   |        | ACME           
|                                                |                               |                         |         | Holdings, LLC                        |        | Television, LLC |         | Holdings, LLC  |        | Television, LLC
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                
|                                                |                               |                         |         |                                      |        |                 |         | (In thousands) |        |                 |         |       
|Net revenues                                    |                               | $                       | 16,481  |                                      |        | $               | 16,481  |                |        | $               | 16,847  |        |         | $ | 16,847  |       
|Operating expenses:                             |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|                                                | Station operating expenses    |                         |         | 13,585                               |        |                 |         | 13,585         |        |                 |         | 14,660 |         |   |         | 14,660 |        
|                                                | Depreciation and amortization |                         |         | 4,959                                |        |                 |         | 4,959          |        |                 |         | 1,171  |         |   |         | 1,171  |        
|                                                | Corporate expenses            |                         |         | 914                                  |        |                 |         | 914            |        |                 |         | 817    |         |   |         | 817    |        
|                                                | Equity-based compensation     |                         |         | 132                                  |        |                 |         | 132            |        |                 |         | 115    |         |   |         | 115    |        
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|                                                |                               | Operating income (loss) |         |                                      | (3,109 | )               |         |                | (3,109 | )               |         |        | 84      |   |         |        | 84      |  
|                                                |                               |                         |         |                                      |        |                 |         |               
|Other income (expenses):                        |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|                                                | Interest income               |                         |         | 133                                  |        |                 |         | 133            |        |                 |         | 13     |         |   |         | 13     |        
|                                                | Interest expense              |                         |         | (7,144                               | )      |                 |         | (5,309         | )      |                 |         | (7,748 | )       |   |         | (5,643 | )      
|                                                | Other expense                 |                         |         | (45                                  | )      |                 |         | (45            | )      |                 |         | (49    | )       |   |         | (49    | )      
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|Net loss before income taxes                    |                               |                         | (10,165 | )                                    |        |                 | (8,330  | )              |        |                 | (7,700  | )      |         |   | (5,595  | )     
|Income tax benefit                              |                               |                         | 3,388   |                                      |        |                 | 2,691   |                |        |                 | (29,935 | )      |         |   | (23,192 | )     
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|                                                |                               | Net loss                |         | $                                    | (6,777 | )               |         | $              | (5,639 | )               |         | $      | (37,635 | ) |         | $      | (28,787 | )
|                                                |                               |                         |         |                                      |        |                 |         |               
|Parents contributions                          |                               |                         | 132     |                                      |        |                 | 132     |                |        |                 | 12,101  |        |         |   | 12,101  |       
|Members Capital at the
beginning of the period |                               |                         | 64,529  |                                      |        |                 | 114,718 |                |        |                 | 45,735  |        |         |   | 100,788 |       
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       
|Members Capital at the
end of the period       |                               | $                       | 57,884  |                                      |        | $               | 109,211 |                |        | $               | 20,201  |        |         | $ | 84,102  |       
|                                                |                               |                         |         |                                      |        |                 |         |                |        |                 |         |        |         |   |         |       

See the notes to the consolidated financial statements.

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##### Table of Contents






ACME Intermediate Holdings, LLC and Subsidiaries
ACME Television, LLC and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |   |         |        | 
|------------------------------------------------------------------------------- | ---------------------- | ------------------------------------------------------------ | ----------------------------------------------------- | - | -------------------------- | ----- | -------------- | - | ------------- | ----- | ----------- | - | ------- | ------ |  | - | ------- | ------ | 
|                                                                                |                        |                                                              |                                                       |   | For the Three Months Ended
|                                                                                |                        |                                                              |                                                       |   |                           
|                                                                                |                        |                                                              |                                                       |   | March 31, 2001             |       | March 31, 2002
|                                                                                |                        |                                                              |                                                       |   |                            |       |               
|                                                                                |                        |                                                              |                                                       |   | ACME                       |       | ACME           |   | ACME          |       | ACME       
|                                                                                |                        |                                                              |                                                       |   | Intermediate               |       | Television,    |   | Intermediate  |       | Television,
|                                                                                |                        |                                                              |                                                       |   | Holdings, LLC              |       | LLC            |   | Holdings, LLC |       | LLC        
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |            
|Cash flows from operating activities:                                           |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Net loss                                                     |                                                       | $ | (6,777                     | )     |                | $ | (5,639        | )     |             | $ | (37,635 | )      |  | $ | (28,787 | )     
|Adjustments to reconcile net loss to net cash
provided by operating activities: |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Depreciation and amortization                                |                                                       |   | 4,959                      |       |                |   | 4,959         |       |             |   | 1,171   |        |  |   | 1,171   |       
|                                                                                |                        | Amortization of program rights                               |                                                       |   | 3,515                      |       |                |   | 3,515         |       |             |   | 4,064   |        |  |   | 4,064   |       
|                                                                                |                        | Amortization of debt issuance costs                          |                                                       |   | 387                        |       |                |   | 164           |       |             |   | 683     |        |  |   | 632     |       
|                                                                                |                        | Amortization of discount on 12% senior secured notes         |                                                       |   | 1,801                      |       |                |   |              |       |             |   | 2,054   |        |  |   |        |       
|                                                                                |                        | Equity-based compensation                                    |                                                       |   | 132                        |       |                |   | 132           |       |             |   | 115     |        |  |   | 115     |       
|                                                                                |                        | Deferred taxes                                               |                                                       |   | (3,408                     | )     |                |   | (2,711        | )     |             |   | 29,935  |        |  |   | 23,192  |       
|Changes in assets and liabilities:                                              |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Decrease in accounts receivables, net                        |                                                       |   | 2,638                      |       |                |   | 2,638         |       |             |   | 1,025   |        |  |   | 1,025   |       
|                                                                                |                        | Increase in prepaid expenses                                 |                                                       |   | (267                       | )     |                |   | (301          | )     |             |   | (241    | )      |  |   | (241    | )     
|                                                                                |                        | (Increase) decrease in other assets                          |                                                       |   | (172                       | )     |                |   | 51            |       |             |   | (260    | )      |  |   | (260    | )     
|                                                                                |                        | Increase (decrease) in accounts payable                      |                                                       |   | (1,042                     | )     |                |   | (1,042        | )     |             |   | 3,546   |        |  |   | 3,546   |       
|                                                                                |                        | Increase in accrued liabilities                              |                                                       |   | 5,136                      |       |                |   | 5,136         |       |             |   | 1,596   |        |  |   | 1,596   |       
|                                                                                |                        | Payments on programming rights payable                       |                                                       |   | (3,531                     | )     |                |   | (3,531        | )     |             |   | (4,132  | )      |  |   | (4,132  | )     
|                                                                                |                        | Increase in due to affiliates                                |                                                       |   | 110                        |       |                |   | 110           |       |             |   |        |        |  |   |        |       
|                                                                                |                        | Decrease in other liabilities                                |                                                       |   |                           |       |                |   |              |       |             |   | (18     | )      |  |   | (18     | )     
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        |                                                              | Net cash provided by operating activities             |   |                            | 3,481 |                |   |               | 3,481 |             |   |         | 1,903  |  |   |         | 1,903  | 
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|Cash flows from investing activities:                                           |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Purchase of property and equipment                           |                                                       |   | (914                       | )     |                |   | (914          | )     |             |   | (6,661  | )      |  |   | (6,661  | )     
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|Cash flows from financing activities:                                           |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Payment of financing costs on credit facility                |                                                       |   |                           |       |                |   |              |       |             |   | (780    | )      |  |   | (780    | )     
|                                                                                |                        | Cash restricted as collateral under capital lease facilities |                                                       |   |                           |       |                |   |              |       |             |   | (1,134  | )      |  |   | (1,134  | )     
|                                                                                |                        | Capital lease obligations                                    |                                                       |   |                           |       |                |   |              |       |             |   | 3,274   |        |  |   | 3,274   |       
|                                                                                |                        | Payments of capital lease obligations                        |                                                       |   | (554                       | )     |                |   | (554          | )     |             |   | (967    | )      |  |   | (967    | )     
|                                                                                |                        | Capital contribution from parent                             |                                                       |   |                           |       |                |   |              |       |             |   | 11,986  |        |  |   | 11,986  |       
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        |                                                              | Net cash provided by (used in) financing activities   |   |                            | (554  | )              |   |               | (554  | )           |   |         | 12,379 |  |   |         | 12,379 | 
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Net increase in cash                                         |                                                       |   | 2,013                      |       |                |   | 2,013         |       |             |   | 7,621   |        |  |   | 7,621   |       
|                                                                                |                        | Cash at beginning of period                                  |                                                       |   | 10,347                     |       |                |   | 10,347        |       |             |   | 4,280   |        |  |   | 4,280   |       
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        | Cash at end of period                                        |                                                       | $ | 12,360                     |       |                | $ | 12,360        |       |             | $ | 11,901  |        |  | $ | 11,901  |       
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|Cash payments for:                                                              |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                |                        |                                                              | Interest                                              |   | $                          | 258   |                |   | $             | 258   |             |   | $       | 288    |  |   | $       | 288    | 
|                                                                                |                        |                                                              | Taxes                                                 |   | $                          | 20    |                |   | $             | 20    |             |   | $       | 58     |  |   | $       | 58     | 
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  
|                                                                                | Non-cash transactions: |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |   |        
|                                                                                |                        |                                                              | Program rights in exchange for program rights payable |   | $                          | 53    |                |   | $             | 53    |             |   | $       | 7,565  |  |   | $       | 7,565  | 
|                                                                                |                        |                                                              |                                                       |   |                            |       |                |   |               |       |             |   |         |        |  |  

See the notes to the consolidated financial statements.

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ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND MARCH 31, 2002

(1) FORMATION AND DESCRIPTION OF THE BUSINESS

Reorganization of Parent

ACME Communications, Inc. was formed on July 23, 1999, in preparation for
and in conjunction with an initial public offering of its stock.

On September 27, 1999, the Board of Advisors of ACME Television Holdings,
LLC the parent company of ACME Intermediate Holdings, LLC (ACME Intermediate)
and its wholly-owned subsidiary ACME Television, LLC (ACME Television) and
its members and the Board of Directors of ACME Communications, Inc. and its
stockholder approved a merger and reorganization (the Reorganization),
whereby ACME Communications, Inc., became the direct parent of ACME Television
Holdings, LLC. As a result of the Reorganization, ACME Communications, Inc. is
the ultimate parent of ACME Intermediate and its wholly owned subsidiary ACME
Television. All transactions contemplated as part of the Reorganization closed
on October 5, 1999. References to ACME Parent herein refer to ACME
Communications, Inc.

Formation

ACME Intermediate was formed on August 8, 1997. Upon formation, ACME
Intermediate received a contribution from ACME Parent, of ACME Parents
wholly-owned subsidiaries  ACME Television of Oregon, LLC (ACME Oregon) and
ACME Television of Tennessee, LLC (ACME Tennessee) and certain other net
assets. This Contribution of $25,455,000 (including cash of $2,380,000) was
made in exchange for membership units in ACME Intermediate and was treated as a
transaction between entities under common control, similar to a pooling of
interests. Accordingly, the transaction was recorded at historical cost and
ACME Intermediate has reflected the results of operations of the contributed
entities for the year ended December 31, 1997. In addition, on September 30,
1997, ACME Parent made an additional contribution of $21,746,000 in exchange
for membership units in ACME Intermediate.

ACME Television was formed on August 8, 1997. Upon formation, ACME
Television received a contribution from ACME Parent through ACME Intermediate
of ACME Parents wholly owned subsidiaries  ACME Oregon and ACME Tennessee and
certain other net assets. This Contribution of $25,455,000 (including cash of
$2,380,000) was made in exchange for membership units in the Company and was
treated as a transaction between entities under common control, similar to a
pooling of interests. Accordingly, the transaction was recorded at historical
cost and ACME Television has reflected the results of operations of the
contributed entities for the year ended December 31, 1997. In addition, on
September 30, 1997, ACME Intermediate made an additional contribution of
$60,061,000 in exchange for membership units in ACME Television.

ACME Parent owns directly or indirectly, 100% of the outstanding member
units of ACME Intermediate. ACME Intermediate owns, directly or indirectly,
100% of the outstanding member units of ACME Television.

Description of the Business

ACME Intermediate is a holding company with no independent operations
other than its wholly owned subsidiary, ACME Television. ACME
Television, through its wholly-owned subsidiaries, owns and operates the
following ten commercially licensed broadcast television stations located
throughout the United States:

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|        |  |         |    |        |  |                                   |  |             |    |         |  |    
|------- |  | ------- | -- | ------ |  | --------------------------------- |  | ----------- | -- | ------- |  | ---
|        |  |         |    |        |  |                                   |  | U.S.        |    |        
|        |  |         |    |        |  |                                   |  | Market      |    | Network
|Station |  | Channel |    | Market |  | Rank*                             |  | Affiliation
|        |  |         |    |        |  |                                   |  |            
|KPLR    |  |         | 11 |        |  | St. Louis, MO                     |  |             | 22 |         |  | WB 
|KWBP    |  |         | 32 |        |  | Portland, OR                      |  |             | 23 |         |  | WB 
|KUWB    |  |         | 30 |        |  | Salt Lake City, UT                |  |             | 35 |         |  | WB 
|KWBQ    |  |         | 19 |        |  | Albuquerque-Santa Fe, NM          |  |             | 48 |         |  | WB 
|KASY    |  |         | 50 |        |  | Albuquerque-Santa Fe, NM          |  |             | 48 |         |  | UPN
|WBDT    |  |         | 26 |        |  | Dayton, OH                        |  |             | 60 |         |  | WB 
|WBXX    |  |         | 20 |        |  | Knoxville, TN                     |  |             | 62 |         |  | WB 
|WIWB    |  |         | 14 |        |  | Green Bay-Appleton, WI            |  |             | 69 |         |  | WB 
|WTVK    |  |         | 46 |        |  | Ft. Myers-Naples, FL              |  |             | 76 |         |  | WB 
|WBUI    |  |         | 23 |        |  | Champaign-Springfield-Decatur, IL |  |             | 82 |         |  | WB 



| |  | * Based on television households
| |  | --------------------------------

In March 2002, ACME
Parent entered into, and subsequently assigned to ACME Television, a court-approved asset purchase agreement
to buy substantially all of the broadcast assets of station WHPN serving the
Madison, Wisconsin marketplace, for a cash purchase price of $5.6 million.
This agreement is subject to regulatory approvals and the satisfaction of other
pre-closing conditions. We began operating the station under an interim LMA on
April 1, 2002 and expect the transaction to close by mid-summer 2002.

We also own the rights to acquire construction permits to build four other
stations  three to be new WB Network affiliates in Lexington, KY, Richmond, VA
and Flint-Saginaw-Bay Cities, MI and the fourth to be a second station,
operated as an independent, in Portland, OR. The acquisition of these
construction permits is dependent on the Federal Communications Commission
approving the underlying applications. The aggregate purchase price for these
four construction permits is approximately $18.4 million.

(2) PRESENTATION OF INTERIM FINANCIAL STATEMENTS

Financial statements are presented for each of ACME Intermediate Holdings,
LLC and its wholly owned subsidiary, ACME Television, LLC. Unless the context
requires otherwise, references to the Company refers to both ACME
Intermediate and ACME Television. Segment information is not presented since
all of the Companys revenue is attributed to a single reportable segment -
television broadcasting.

The accompanying consolidated financial statements for the three month
periods ended March 31, 2001 and 2002 are unaudited and have been prepared in
accordance with accounting principles generally accepted in the United States
of America, the instructions to this Form 10-Q and Article 10 of Regulation
S-X. In the opinion of management, such financial statements include all
adjustments (consisting of normal recurring accruals) considered necessary for
the fair presentation of the financial position and the results of operations,
and cash flows for these periods. As permitted under the applicable rules and
regulations of the Securities and Exchange Commission (SEC), these financials
statements do not include all disclosures and footnotes normally included with
annual consolidated financial statements, and accordingly, should be read in
conjunction with the consolidated financial statements and the notes thereto,
included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2001, filed with the SEC on April 1, 2002. The results of
operations presented in the accompanying consolidated financial statements are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2002.

(3)  Intangible Assets  Adoption of Statements 142 and 144

The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets effective
January 1, 2002. Under SFAS No. 142, the Company will no longer amortize
goodwill or intangible assets. As of December 31, 2001 and March 31, 2002, the
Company had $87.6 million is unamortized goodwill and $165 million in
unamortized broadcast licenses.

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Following is a reconciliation of the March 31, 2001 reported net loss to
the net loss as it would have been if SFAS No. 142 had been effective on
January 1, 2001:

|                  |                                 |                   |         |                        |         |                       |        |       |        |      |         |   |         |   |        |       |        |  
|----------------- | ------------------------------- | ----------------- | ------- | ---------------------- | ------- | --------------------- | ------ | ----- | ------ | ---- | ------- | - | ------- | - | ------ | ----- | ------ | -
|                  |                                 |                   |         | ACME Intermediate, LLC |         | ACME Television, LLC 
|                  |                                 |                   |         |                        |         |                      
|                  |                                 |                   |         | For the Quarter Ended  |         | For the Quarter Ended
|                  |                                 |                   |         | March 31,              |         | March 31,            
|                  |                                 |                   |         |                        |         |                      
|                  |                                 |                   |         | 2002                   |         | 2001                  |        | 2002  |        | 2001
|                  |                                 |                   |         |                        |         |                       |        |       |        |     
|                  |                                 |                   |         | (In thousands)         |         | (In thousands)       
|Reported net loss |                                 | $                 | (37,635 | )                      |         | $                     | (6,777 | )     |        | $    | (28,787 | ) |         | $ | (5,639 | )    
|Add back:         |                                 |                   |         |                        |         |                       |        |       |        |      |         |   |         |   |        |      
|                  | Goodwill amortization           |                   |         |                       |         |                       |        | 1,334 |        |      |         |  |         |   |        | 1,334 |       
|                  | Broadcast licenses amortization |                   |         |                       |         |                       |        | 2,504 |        |      |         |  |         |   |        | 2,504 |       
|                  |                                 |                   |         |                        |         |                       |        |       |        |      |         |   |         |   |        |      
|                  |                                 | Adjusted net loss |         | $                      | (37,635 | )                     |        | $     | (2,939 | )    |         | $ | (28,787 | ) |        | $     | (1,801 | )
|                  |                                 |                   |         |                        |         |                       |        |       |        |      |         |   |         |   |        |      

Prior to January 1, 2002, the Company recorded deferred tax liabilities
relating to the difference in the book basis and tax basis of goodwill and
intangibles. The reversals of those deferred tax liabilities were utilized to
support the realization of deferred tax assets (primarily consisting of net
operating loss carryforwards) and the corresponding deferred tax benefits
recorded by the Company. As a result of the adoption of SFAS No. 142, those
deferred tax liabilities will no longer reverse on a scheduled basis and can no
longer be utilized to support the realization of deferred tax assets.
Accordingly, the Company recorded a one-time, non-cash charge
totaling $29.2 million and $22.3 million for ACME
Intermediate and ACME Television, respectively, to deferred income tax expense in the quarter ended March 31, 2002 to
establish a valuation allowance against its deferred tax assets.

The Company also adopted the provisions of SFAS No. 144 Accounting for
the Impairment or Disposal of Long-Lived Assets effective January 1, 2002.
There was no write-down for impairment of these assets required as a result of
the adoption of SFAS No. 144.

(4) Revolving Credit Facility

In February 2002, the Company replaced its revolving credit facility. The
new facility is with Foothill Capital Corporation, as both agent and lender.
Like its predecessor, the new facility is secured by all of the Companys
television station assets. It allows for borrowings up to $30 million,
contains less restrictive financial covenants than the previous facility and
expires May 31, 2004. The agent is obligated to use its best efforts to
increase the facility to $40 million via the placement of additional
syndication, but there is no assurance such a placement will be completed.
Under this agreement, the Company has the option to borrow at an interest rate
determined by either a base rate (Wells Fargo Banks prime rate) plus 3
percentage points, or at the LIBOR rate plus 4.25 percentage points. The
financial covenants, which are quarterly tests beginning March 31, 2002,
included in the new facility are (a) minimum EBITDA, (b) maximum total
leverage, (c) minimum net tangible worth and (d) maximum capital expenditures
(annual basis only). In addition to the financial covenants, the facility
contains negative covenants, which, among other restrictions, require the
lenders approval for certain station acquisitions and dispositions. At March
31, 2002 there were no borrowings under the facility and the Company was in
compliance with all covenants.

Costs associated with the procuring of bank credit facilities, including
loan fees and related professional fees, are included in long-term other assets
and are amortized over the term of the facilities. Approximately $292,000 in
capitalized costs that related to the prior facility were expensed in the first
quarter of 2002.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward -Looking Statements:

This Quarterly Report on Form 10-Q includes forward-looking statements. We
have based these forward-looking statements on our current expectations and
projections about future events. In some cases, you can identify
forward-looking statements by terminology such as may, will, could,
expect, believe, potential, or might or the negative of such terms or
other comparable terminology. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our and the
television broadcast industrys actual results, levels of activity,
performance, achievements and prospects to be materially different from those
expressed or implied by such forward-looking statements. These risks,
uncertainties and other factors include those identified in our Annual Report
on Form 10-K filed with the Securities and Exchange Commission on April 1,
2002.

We are under no duty to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
after the date of this Quarterly Report on Form 10-Q. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
Quarterly Report on Form 10-Q might not occur.

The following discussion should be read in conjunction with the Companys
unaudited consolidated financial statements and related notes included
elsewhere in this report on Form 10-Q and with the audited financial statements and Managements Discussion and Analysis contained in
the Companys Form 10-K for the year ended December 31, 2001.

OVERVIEW

Our ten television stations are regionally diverse and range in size
(based on television households) from the 22nd through the 82nd largest markets
in the nation. All but one of our stations are affiliates of The WB Television
Network. Our second station in the Albuquerque  Santa Fe marketplace is a UPN
affiliate. KPLR  St. Louis, our only VHF station, has been broadcasting in
that market for over 40 years and is considered a mature television station.
Our other nine stations (our Developing Stations) have only been on the air,
or achieving measurable ratings, for 2-5 years.

We derive revenues primarily from the sale of advertising time to local,
regional and national advertisers. Our revenues depend on popular programming
that attracts audiences in the demographic groups targeted by advertisers,
allowing us to sell advertising time at satisfactory rates. Our revenues also
depend significantly on factors such as the national and local economy and the
level of local competition.

Our revenues are generally highest during the fourth quarter of each year,
primarily due to increased expenditures by advertisers in anticipation of
holiday season consumer spending and an increase in viewership during this
period. We generally pay commissions to advertising agencies on local, regional
and national advertising and to national sales representatives on national
advertising. Our revenues reflect deductions from gross revenues for
commissions payable to advertising agencies and national sales representatives.

Our primary ongoing operating expenses are programming costs, employee
compensation, advertising and promotion expenditures and depreciation.
Programming expense consists primarily of amortization of broadcast rights
relating to syndicated programs as well as news production and sports rights
fees. Changes in employee compensation expense result primarily from increases
in total staffing levels, from adjustments to fixed salaries based on
individual performance and inflation and from changes in sales commissions paid
to our sales staff based on levels of advertising revenues. Advertising and
promotion expenses consist primarily of media and related production costs
resulting from the promotion of our stations and programs. This amount is net
of any reimbursement received or due to us for such advertisement and promotion
from The WB Network, UPN or from other program suppliers.

RESULTS OF OPERATIONS

The following table sets forth our calculation of broadcast cash flow and
adjusted EBITDA along with a summary of our statement of cash flow data for the
periods indicated:

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|                                            |                         |                      |                                |                     |       |                              |       |    |        |        |       | 
|------------------------------------------- | ----------------------- | -------------------- | ------------------------------ | ------------------- | ----- | ---------------------------- | ----- | -- | ------ | ------ | ----- | 
|Other Operating Data:                       |                         |                      |                                |                     |       |                              |       |   
|                                            |                         |                      |                                |                     |       | Three Months ended March 31,
|                                            |                         |                      |                                |                     |       |                             
|Broadcast cash flow and adjusted EBITDA(1): |                         | 2001                 |                                | 2002               
|                                            |                         |                      |                                |                     |       |                              |       |   
|                                            |                         |                      |                                |                     |       | (Unaudited)                 
|                                            | Operating Income (loss) |                      | $                              | (3,109              | )     |                              | $     | 84 |       
|                                            | Add back:               |                      |                                |                     |       |                              |       |    |       
|                                            |                         |                      | Equity-based compensation      |                     |       | 132                          |       |    |        | 115    |      
|                                            |                         |                      | Depreciation and amortization  |                     |       | 4,959                        |       |    |        | 1,171  |      
|                                            |                         |                      | Amortization of program rights |                     |       | 3,515                        |       |    |        | 4,064  |      
|                                            |                         |                      | Corporate expenses             |                     |       | 914                          |       |    |        | 817    |      
|                                            |                         |                      | Adjusted program payments(1)   |                     |       | (3,522                       | )     |    |        | (4,132 | )    
|                                            |                         |                      |                                |                     |       |                              |       |   
|                                            |                         |                      |                                | Broadcast cash flow |       |                              | 2,889 |    |        |        | 2,119 | 
|                                            | Less:                   |                      |                                |                     |       |                              |       |    |       
|                                            |                         |                      | Corporate expenses             |                     |       | 914                          |       |    |        | 817    |      
|                                            |                         |                      |                                |                     |       |                              |       |   
|                                            |                         |                      |                                | Adjusted EBITDA     |       | $                            | 1,975 |    |        | $      | 1,302 | 
|Broadcast cash flow margin(1)               |                         |                      | 17.5                           | %                   |       |                              | 12.6  | % 
|Adjusted EBITDA margin(1)                   |                         |                      | 12.0                           | %                   |       |                              | 7.7   | % 
|                                           
|Cash flows provided by (used in):           |                         |                      |                                |                     |       |                              |       |   
|                                            |                         | Operating activities |                                | $                   | 3,481 |                              |       | $  | 1,903  |       
|                                            |                         | Investing activities |                                | $                   | (914  | )                            |       | $  | (6,661 | )     
|                                            |                         | Financing activities |                                | $                   | (554  | )                            |       | $  | 12,379 |       



---

|(1) |  | We define:
|--- |  | ----------



| |  |  | broadcast cash flow as operating income, plus equity-based
compensation, depreciation and amortization, time brokerage fees,
amortization of program rights, and corporate expenses, less program
payments  the latter as adjusted to reflect reductions for liabilities
relating to expired rights or rights which have been written-off in
connection with acquisitions and adjusted to allocate evenly over the
payment term any advance deposits;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | adjusted EBITDA as broadcast cash flow less corporate expenses;                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  |  | broadcast cash flow margin as broadcast cash flow as a percentage of net revenues; and                                                                                                                                                                                                                                                                                                                                                                
|
| |  |  | adjusted EBITDA margin as adjusted EBITDA as a percentage of net revenues.                                                                                                                                                                                                                                                                                                                                                                            



| |  | We have included broadcast cash flow, broadcast cash flow margin, adjusted
EBITDA and adjusted EBITDA margin data because management believes that these
measures are useful to an investor to evaluate our ability to service debt
and to assess the earning ability of our stations operations. However, you
should not consider these items in isolation or as substitutes for net
income, cash flows from operating activities and other statement of
operations or cash flows data prepared in accordance with accounting
principles generally accepted in the United States of America. These measures
are not necessarily comparable to similarly titled measures employed by other
companies.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quarter ended March 31, 2002 vs March 31, 2001

Net revenues increased 2% to $16.8 million for the first quarter of 2002
compared to $16.5 million for the same period a year ago. When compared to the
year-over-year quarterly declines experienced over the last three quarters, the
growth of the first quarter 2002 reflects stabilized advertiser demand and
increased ratings and revenue shares at our nine Developing Stations net of a
modest decline in revenues at KPLR.

Station operating expenses increased 8% to $14.7 million for first three
months of 2002 compared to $13.6 million for the same period a year ago,
reflecting our continued investment in programming, staffing and sales related
costs at our Developing Stations.

Depreciation and amortization decreased 76% to $1.2 million in the first
quarter of 2002 compared to $5.0 million in the same period a year ago due to
our adoption of SFAS No. 142. Under SFAS No. 142, our goodwill and other
intangible assets are no longer amortized, and therefore, the $1.2 million in
the first quarter of 2002 consists only of depreciation expense. This
represents a 4% increase compared to our first quarter 2001

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depreciation expense because of our capital expenditures to convert to
digital broadcasting and to upgrade existing equipment.

Corporate expenses decreased 11% to $817,000 for the first quarter of 2002
as compared to $914,000 for the same period a year ago due primarily to a
reduction in professional fees and incentive compensation provisions.

Equity-based compensation of $115,000 in the first quarter of 2002 and
$132,000 in the first quarter of 2001 relates to stock options issued upon the
conversion of our long-term incentive plan awards during ACME Parents IPO in
September of 1999. These options were issued at a price below market value at
the date of grant and therefore generate compensation expense over the life of
the option. The decrease of $17,000 in 2002 is due to stock options that were
forfeited by former employees upon leaving the Company.

ACME Televisions interest expense for the first quarter of 2002 was $5.6
million and was $5.3 million in the first quarter of 2001. The increase
reflects increased interest expense relating to the accelerated amortization of
prepaid financing costs associated with our former credit facility that was
terminated in February 2002 (see Liquidity and Capital Resources below) and
higher capital lease obligations compared to a year ago.

ACME Intermediates interest expense for the first quarter of 2002 was
$7.7 million and was $7.1 million for the previous year. In addition to the
higher interest expense at ACME Television, interest expense also increased
relating to the higher accreted principal balance for ACME Intermediates 12%
senior secured notes compared to a year ago.

ACME Intermediate and ACME Televisions income tax expense for the first
quarter of 2002 were $29.9 million and $23.2 million, respectively, compared to
income tax benefits of $3.4 and $2.7 million, respectively, in the
corresponding quarter of 2001. These increases are due to the implementation of
SFAS No. 142 on January 1, 2002. Prior to January 1, 2002, the Company recorded
deferred tax liabilities relating to the difference in the book basis and tax
basis of goodwill and intangibles. The reversals of those deferred tax
liabilities were utilized to support the realization of deferred tax assets
(primarily consisting of net operating loss carryforwards) and the
corresponding deferred tax benefits recorded by the Company. As a result of
the adoption of SFAS 142, those deferred tax liabilities will no longer reverse
on a scheduled basis and can no longer be utilized to support the realization
of deferred tax assets. Accordingly, the Company recorded a one-time, non-cash
charge totaling $29.2 million and $22.3 million for ACME
Intermediate and ACME Television, respectively, to deferred income tax expense to establish a
valuation allowance against its deferred tax assets.

Broadcast cash flow (as defined) for the first quarter decreased 27% to
$2.1 million compared to $2.9 million in the same period a year ago. This
decrease was the result of our expense growth outstripping our revenue growth
for the quarter due to continued investment in programming, staffing and sales
related costs at our Developing Stations.

Adjusted EBITDA (as defined) decreased 34% to $1.3 million for the first
quarter of 2002 compared to $2.0 million adjusted EBITDA for the first quarter
of 2001. This decrease reflects our decreased broadcast cash flow net of our
decreased corporate expenses.

ACME Televisions net loss for the first quarter of 2002 was $28.8 million
compared to a net loss for the first quarter of 2001 of $5.6 million. This
$23.1 million increase in the Companys net loss is primarily attributable to
the one-time tax charge of $21.4 million incurred due to the adoption of SFAS
No. 142, lower adjusted EBITDA and increased interest expense, net of a
reduction in the amortization of intangibles of $3.8 million. ACME
Intermediates higher net loss for the three month period ended March 31, 2002,
compared to ACME Televisions, reflects the interest and income tax expense
related to ACME Intermediates 12% senior secured notes.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow provided by operating activities was $1.9 million for the three
months ended March 31, 2002 compared to cash flow provided by operating
activities of $3.5 million for the first three months of 2001. This decrease
in cash flow relates primarily to decreased cash collections our increased
investment in programming and to increased interest expense on capital lease
facilities.

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Cash flow used in investing activities during the first three months of
2002 was $6.7 million compared to $914,000 used during the first three months
of 2001. The $5.8 million increase is attributable to the purchases of
broadcast and other equipment while we continue to improve technical facilities
at our stations.

Cash flow provided by financing activities of $12.4 million for the first
three months of 2002 constitutes an increase of $12.9 million over the $554,000
cash used in financing activities in the same period of 2001. This increase is
primarily attributable to the $12 million contribution from ACME Parent. The
remainder is the net of our capital lease borrowings, repayments and collateral
and the financing costs associated with our new credit facility.

In February 2002, we completed our new revolving credit facility with
Foothill Capital Corporation, as both agent and lender. The new revolving
facility, which like its predecessor is secured by all of our television
station assets, allows for borrowings up to $30 million, contains less
restrictive financial covenants and expires May 31, 2004. The agent is
obligated to use its best efforts to increase the facility to $40 million via
the placement of additional syndication, but there is no assurance such a
placement will be completed. Under this agreement, we have the option to
borrow at an interest rate determined by either a base rate (Wells Fargo Banks
prime rate) plus 3 percentage points, or at the LIBOR rate plus 4.25 percentage
points. The financial covenants, which are quarterly tests beginning March 31,
2002, included in the new facility are (a) minimum EBITDA, (b) maximum total
leverage, (c) minimum net tangible worth and (d) maximum capital expenditures
(annual basis only). In addition to the financial covenants, the facility
contains negative covenants, which, among other restrictions, require the
lenders approval for certain, station acquisitions and dispositions. At March
31, 2002 we had no borrowings outstanding under the facility and we were in
compliance with all covenants.

In March 2002, upon posting an additional $1.1 million of restricted cash
as collateral, we borrowed the final $3.3 million of our capital lease
facility. Borrowings under our various capital lease facilities are generally
paid over four to five years. At March 31, 2002, amounts due under all capital
lease facilities was $15.1 million bearing an implicit average interest rate of
8.4% per annum. We expect to incur approximately $9 million in additional
capital expenditures in 2002 as we conclude our transition to digital
broadcasting, as required by the FCC. After this transition is completed, we
expect that our capital expenditures, apart from those related to any pending
and future acquisitions, will approximate $3 million per year.

Effective October 1, 2000, the Companys $175.0 million 10 7/8% Senior
Discount Notes due September 30, 2004 began accruing cash interest. The
interest payment on these notes amounts to approximately $9.5 million every six
months and are due on March 31st and September 30th. Since the March 2002
payment date fell on a Sunday, the payment was made on Monday, April 1, 2002.
The Companys $71.6 million 12% Senior Secured Notes begin accruing cash
interest on October 1, 2002, with the first semi-annual payment due on March
31, 2003.

At March 31, 2002, the Company had $14.8 million of cash, $2.9 million of
which is restricted to collateralize capital lease obligations, and working
deficits of $475,000 and $347,000 for ACME Intermediate and ACME
Television, respectively.

The Company believes that existing unrestricted cash balances, funds
generated from operations and borrowings under its credit agreement will be
sufficient to satisfy the Companys cash requirements for its existing
operations for at least the next twelve months. The Company expects that any
future acquisitions of television stations, including the Madison, Wisconsin
acquisition and any of the four construction permits, would be financed through
these same sources and, if necessary, through additional debt and equity
financings. There is no guarantee that such other means of raising capital will
be at terms acceptable to the Company.

Critical Accounting Policies and Estimates

The Companys discussion and analysis of its financial condition and
results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to broadcast rights, bad debts, intangible
assets, income taxes, and contingencies and litigation. The Company bases its
estimates on historical experience and on various other assumptions that we

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believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions. The Company
believes the following critical accounting policies affect its more significant
judgements and estimates used in the preparation of its consolidated financial
statements.

Programming Rights

The Companys programming rights are stated, on a gross basis, at the
lower of amortized cost or estimated realizable value. The Company evaluates
estimated realizable value of programming rights based on current usage and
revenue performance and projected future revenue and usage of such programs.
Changes in the Companys programming schedule could impact the estimated
realizable value of programming. In addition, estimates of future revenue
performance relate to the number of advertising spots that will be sold by the
Company and the amount we can charge for each spot. A decrease in the number
of spots sold or the revenue generated per spot could also impact the
Companys estimated realizable value. For the quarter ended March 31, 2001
programming rights impairment charges totaled $14,000. There was no impairment
of programming rights during the quarter ended March 31, 2002.

Impairment of Asset Values/Accounting for Intangibles

The carrying values of our long-lived assets (tangible, identifiable
intangible and goodwill) are reviewed for impairment based upon estimated
future cash flows of the stations. As of March 31, 2002, the Company has not
recorded any impairment related to long-lived assets. Future adverse changes
in market conditions, changes in technology and other factors could reduce the
expected future cash flows and result in an impairment charge.

Revenue Recognition

The Company records revenue from the sale of airtime related to
advertising and contracted time at the time of broadcast. The Company
maintains allowances for doubtful accounts for estimated losses resulting from
the inability of its customers to make required payments. The Company utilizes
information available to the Company, including the timing of payments and the
financial condition of our customers, to estimate the allowance for doubtful
accounts. If the financial condition of our customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required. It should be noted that the Company does not have
a significant concentration of accounts receivable from any single customer or
industry segment.

Accounting for Income Taxes

Prior to January 1, 2002, the Company recorded deferred tax liabilities
relating to the difference in the book basis and tax basis of goodwill and
intangibles. The reversals of those deferred tax liabilities were utilized to
support the realization of deferred tax assets (primarily consisting of net
operating loss carryforwards) and the corresponding deferred tax benefits
recorded by the Company. As a result of the adoption of SFAS No. 142, those
deferred tax liabilities will no longer reverse on a scheduled basis and can no
longer be utilized to support the realization of deferred tax assets.
Accordingly, the Company recorded a one-time, non-cash charge totaling $28.4
million to deferred income tax expense in the quarter ended March 31, 2002 to
establish a valuation allowance against its deferred tax assets. In the event
we were to determine that we would be able to realize a deferred tax asset in
the future that is in excess of the net recorded amount, an adjustment to the
valuation allowance and a tax benefit would be recorded.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys credit facility has a variable interest rate. Accordingly,
the Companys interest expense could be materially affected by future
fluctuations in the applicable interest rate. At March 31, 2002, the Company
had no borrowings under the credit facility.

We are also exposed to risk from a change in interest rates to the extent
we are required to refinance existing fixed rate indebtedness at rates higher
than those prevailing at the time the existing indebtedness was incurred. We
have senior discount notes totaling $175.0 million and senior secured discount
notes totaling $71.6 million

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due in the years 2004 and 2005, respectively. Effective October 1, 2000,
the senior discount notes began accruing cash interest. The interest payment
on these notes amounts to approximately $9.5 million every six months.
Effective October 1, 2002, the senior secured notes will being accruing cash
interest and the first semi-annual interest payment of approximately $4.2
million will be due on March 31, 2003. Based upon the quoted market price, the
fair value of the senior discount notes and senior secured discount notes was
$177.6 and $61.6 million, respectively, as of March 31, 2002.




PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

The Company currently and from time to time is involved in litigation
incidental to the conduct of its business. The Company maintains comprehensive
general liability and other insurance, which it believes to be adequate for the
purpose. The Company is not currently a party to any lawsuit or proceeding that
management believes would have a material adverse affect on its financial
condition or results of operations.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS

|      |  |                                                                                                                                      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------
|3.1*  |  | ACME Intermediate Holdings, LLC Second Amended and Restated
Limited Liability Company Agreement                                      
|10.1* |  | Stock Option Cancellation and Amendment Agreement by and between
ACME Communications, Inc. and Jamie Kellner dated November 12, 2001.
|10.2* |  | Stock Option Cancellation and Amendment Agreement by and between
ACME Communications, Inc. and Douglas Gealy dated November 12, 2001.
|10.3* |  | Stock Option Cancellation and Amendment Agreement by and between
ACME Communications, Inc. and Thomas Allen dated November 12, 2001. 



---

|* |  | filed herewith
|- |  | --------------

REPORTS ON FORM 8-K



| |  | The Company has not filed a Current Report on Form 8-K within the
three-month period ended March 31, 2002.
| |  | ----------------------------------------------------------------------------------------------------------

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.

|                   |                                                                             |                    
|------------------ | --------------------------------------------------------------------------- | -------------------
|                   | ACME INTERMEDIATE HOLDINGS, LLC.                                           
|                  
|Date: May 15, 2002 | By:                                                                         | /s/ THOMAS D. ALLEN
|                   |                                                                            
|                   | Thomas D. Allen
Executive Vice President/CFO
(Principal accounting officer)



|                   |                                                                             |                    
|------------------ | --------------------------------------------------------------------------- | -------------------
|                   | ACME TELEVISION, LLC.                                                      
|                  
|Date: May 15, 2002 | By:                                                                         | /s/ THOMAS D. ALLEN
|                   |                                                                            
|                   | Thomas D. Allen
Executive Vice President/CFO
(Principal accounting officer)

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EXHIBIT INDEX

|        |  |                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                      
|Number  |  | Exhibit Description                                                                                                                  
|        |  |                                                                                                                                      
|3.1     |  | ACME Intermediate Holdings, LLC Second Amended and Restated Limited Liability
Company Agreement.                                     
|10.1    |  | Stock Option Cancellation and Amendment Agreement by and between ACME
Communications, Inc. and Jamie Kellner dated November 12, 2001.
|10.2    |  | Stock Option Cancellation and Amendment Agreement by and between ACME
Communications, Inc. and Doug Gealy dated November 12, 2001.   
|10.3    |  | Stock Option Cancellation and Amendment Agreement by and between ACME
Communications, Inc. and Tom Allen dated November 12, 2001.    

16