UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549  FORM
10-K/A (Amendment No. 2)  XANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.  For the fiscal year ended December 31,
2008 OR TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.  For the transition period from _______ to
___________.  Commission file number 0-29651  USA VIDEO INTERACTIVE CORP. (Exact name of registrant as specified in
its charter) WYOMING 06-1576391 (State or
Other Jurisidiction of (I.R.S. Employer Identification
No.) Incorporation of
Organization) 8
West Main Street  Suite 3-13, Niantic, Connecticut 06357 (Address
of principal executive offices) (ZIP Code) Registrants telephone number,
including area code: (860)
739-8030 Securities registered pursuant
to Section 12(b) of the Act None Securities registered pursuant to
Section 12(g) of the Act: Common
Shares (Title of Class)  Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
  Yes [    ]  No  [ X ]  Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
 Yes [    ]  No   [ X ]  Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
shorter period that the registrant as required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes  [ X ]   No
  [    ].  Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [    ].  Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer.  See definition of accelerated filer and large
accelerated filer in  Rule 12b-2 of the Exchange Act. Large Accelerated
filer [    ] Accelerated Filer [    ] Non-accelerated filer [ X ]  Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  [    ]
  No   [ X ].   2   State the aggregate market value of the
voting and non-voting equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrants
most recently completed fiscal quarter:   $21,400,434  Indicate the number of shares outstanding
of each of the registrants classes of common stock, as of the latest
practicable date:  178,526,363  Documents Incorporated by Reference:
NONE    3     Explanatory
Note  USA
Video Interactive Corp. (the Company) filed its annual report on Form
10-K for the year ended December 31, 2008 on March 31, 2009 (the Original
Filing).  The purpose of this Amendment No. 1 on Form 10-K/A (this Amendment) is:  (i) under Item 1A. Risk Factors, to revise a risk factor to state that
management has concluded that internal controls over financial reporting are
ineffective; and  (ii) under Item 9A. Controls and Procedures, to include managements
conclusion about the disclosure controls and procedures.  No
revisions have been made to the Companys financial statements or any other
disclosure contained in the Original Filing.  In
connection with the filing of this Amendment No. 2, and as required by Rule
12b-15 of the Securities Exchange Act of 1934, the Company is also filing
as exhibits to this Amendment No.2 the certifications pursuant to Rule
13a-14(a).  Because no financial statements are contained within this Amendment No.1, the Company is not including those parts of the
Rule 13a-14(a) certifications pertaining to financial statements and is not
including certifications pursuant to Rule 13a-14(b) (18 U.S.C. §1350).  This
Amendment continues to speak as of the date of the Original Filing, and the
Company has not updated the disclosure contained herein to reflect events that
have occurred since the filing of the Original Filing.  Accordingly,
this Amendment should be read in conjunction with the Companys other filings,
if any, made with the Securities and Exchange Commission subsequent to the
filing of the Original Filing, including the amendments to those filings, if
any.   4   Item 1A. Risk Factors  Our business and operations are subject
to a number of risks and uncertainties as described below. However, the risks
and uncertainties described below are not the only ones we face. Additional
risks and uncertainties that we are unaware of, or that we may currently deem
immaterial, may become important factors that harm our business, financial
condition or results of operations. If any of the following risks actually
occur, our business, financial condition or results of operations could
suffer.  OUR LIMITED OPERATING HISTORY MAKES IT
DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS.  We have a very limited operating history
and have made very limited sales of our products and services and we were in the
development stage through December 31, 1999. Our business and prospects must be
considered in light of the risks encountered by companies in their early stages
of development, particularly companies in new and rapidly evolving markets such
as streaming media.  Some of these risks relate to our ability to:  · maintain or develop
relationships with suppliers and marketing partners;  · establish a
 customer base;  · continue to develop and
upgrade our technology, products and services;  · provide superior
customer service;  · respond to competitive
developments; and  · retain and motivate
qualified personnel.  WE HAVE INCURRED SUBSTANTIAL LOSSES; WE
EXPECT TO INCUR LOSSES IN THE FUTURE, AND MAY NEVER ACHIEVE PROFITABILITY.  To date, we have not been
profitable, have not generated significant revenue from operations, and have
incurred substantial losses.  For the year ended December 31, 2008, we had
a net loss of $915,918.  As of December 31, 2008, we had an accumulated
deficit of $38,185,097 and a working capital deficit of $421,078.  We
intend to continue to expend significant financial and management resources on
the development of our proposed products and services, and other aspects of our
business.  As a result, we expect operating losses and negative cash flows
to increase for the foreseeable future.  Consequently, we will need to
generate significant revenues to achieve and maintain profitability.  We
may be unable to do so. If our revenues grow more slowly than anticipated or if
operating expenses increase more than expected, or are not reduced sufficiently,
we may never achieve profitability.  Because of factors discussed in this
paragraph, our auditors, in their report on our financial statements, have
expressed substantial doubt concerning our ability to continue as a going
concern.  IF WE ARE UNABLE TO OBTAIN SUBSTANTIAL
ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO REMAIN IN BUSINESS.  We require substantial working capital to
fund our business.  We have had significant operating losses and negative
cash flow from operations since inception of our current business and expect to
continue to do so for the foreseeable future.  Our capital requirements
will depend on several factors, including the rate of market acceptance of our
products and services, the ability to establish and expand a client base and the
growth and effectiveness of our sales and marketing efforts.  We estimate
we will require approximately $1.25 Million to $1.75 Million in financing to
meet our working capital needs over the remainder of 2009 and substantial
additional financing thereafter.  Further, if capital requirements vary
materially from those currently planned, we may require additional financing.
 We have no arrangements or commitments for any financing.  Financing
may not be available when needed on terms favorable to us, or at all.  If
adequate funds are not available or are not available on acceptable terms, we
may be unable to further develop or enhance our products and services, take
advantage of future opportunities or respond to competitive pressures, or
ultimately, to continue in business.  5    OUR OPERATING RESULTS IN FUTURE PERIODS
ARE EXPECTED TO BE SUBJECT TO SIGNIFICANT FLUCTUATIONS, WHICH WOULD LIKELY
AFFECT THE TRADING PRICE OF OUR COMMON SHARES.  Our quarterly and annual operating results
are likely to fluctuate significantly in the future due to a variety of factors,
many of which are outside of our control. Some of these factors include:  · our ability to attract
and retain customers;  · the introduction of new
video transmission services or products by others;  · price competition;  · the continued
development of and changes in the streaming media market;  · our ability to remain
competitive in our product and service offerings;  · our ability to attract
new personnel; and  · U.S. and foreign
regulations relating to the Internet.  As a result of the factors listed above,
and others, period-to-period comparisons of our operating results may not be
meaningful in predicting our future performance.  It is possible that our
operating results will not meet market expectations in some future quarter or
quarters, which would likely result in a significant decline in our stock price.  THE DIGITAL WATERMARKING BUSINESS IS
HIGHLY COMPETITIVE, AND OUR FAILURE TO COMPETE SUCCESSFULLY WOULD LIMIT OUR
ABILITY TO RETAIN AND INCREASE OUR MARKET SHARE.  The digital watermarking market is new,
rapidly evolving and extremely competitive.  We expect competition to
intensify in the future.  We compete with companies that provide all or
certain aspects of our services, including other streaming media providers,
content encoders, video production companies, Internet data management
companies, and others, and expect that additional competition in the future will
be provided by those types of providers and others.  Our current market
share is insignificant.  The digital watermarking market is
currently dominated by a small number of larger companies, including Phillips,
Sarnoff, Verance, KDDI, NextAmp, and other companies large and small, some of
which offer digital watermarking products.  Most of our current and
potential competitors have longer operating histories, larger customer bases,
greater name recognition and significantly greater financial, marketing and
other resources than us.  In addition, larger, well-established and
well-financed entities may acquire, invest in or form joint ventures with online
competitors as the use of the Internet and other online services increases.
 In addition, new technologies and the expansion of existing technologies
are expected to result in additional competition.  We may not be able to compete successfully
against current and future competitors, and any inability to do so could
decrease our revenues, contribute to our not achieving profitability and
adversely affect our ability to establish, maintain and increase our market
share.  THE MARKET FOR OUR PRODUCTS AND SERVICES
IS RELATIVELY NEW AND IS EVOLVING, AND OUR SUCCESS WILL DEPEND ON OUR ABILITY TO
ADAPT TO CHANGING MARKET CONDITIONS.  Our future financial performance will
depend in large part on the growth in demand for our digital watermarking
services and products.  This market is emerging and rapidly evolving, is
characterized by an increasing number of market entrants and will be subject to
frequent and continuing changes in customer preferences and technology.  As
is typical in new and evolving markets, demand and market acceptance for our
products and services is subject to a high level of uncertainty.  Because
the market for our products is evolving, it is difficult to assess or predict  6   with any assurance the size or growth rate,
if any, of this market.  There can be no assurance that a significant
market for our products will develop, or that it will develop at an acceptable
rate or that new competitors will not enter the market.  In addition, even
if a significant market develops for such products, there can be no assurance
that our products will be successful in such a market.  If a significant
market fails to develop, develops more slowly than expected or attracts new
competitors, or if our products do not achieve market acceptance, our business
prospects, financial condition and results of operations will be materially
adversely affected.  WE ARE SUBJECT TO RAPID TECHNOLOGICAL
CHANGE, WHICH COULD RENDER OUR PRODUCTS AND SERVICES OBSOLETE.  Our future success will depend in part on
our ability to offer products and services that incorporate leading technology
and address the increasingly sophisticated and varied needs of our current and
prospective customers.  Our market is characterized by rapidly changing and
unproven technology, evolving industry standards, changes in customer needs,
emerging competition and frequent new service introductions. Future advances in
technology may not be beneficial to or compatible with our business.  In
addition, we may not be able to incorporate technological advances into our
products and services in a cost-effective and timely basis.  Keeping pace
with the technological advances may require substantial expenditures and lead
time, particularly with respect to acquiring updated hardware and infrastructure
components of our systems.  We may require additional financing to fund
such acquisitions.  Any such financing may not be available on commercially
reasonably terms, if at all, when needed.  WE ARE DEPENDENT UPON VENDORS AND OTHER
THIRD PARTY SERVICE PROVIDERS, AND WILL BE COMPETING WITH SOME OF THESE
COMPANIES.  We are, and will continue to be dependent
on vendors and other providers to supply the hardware, software and co-location
resources that comprise our products and services.  We have no long-term or
exclusive contracts or arrangements with any of these vendors or providers.
 We cannot be certain that our current and proposed vendors and service
providers will continue to do business with us or that we will be able to
establish relationships with new vendors and service providers, if necessary.
 If we are unable to establish and maintain satisfactory relationships and
arrangements with these third parties, our business could be harmed.  In
addition, we will be dependent upon our third party vendors and other suppliers
to adequately test their products before release, and to provide support for the
products after delivery.  The failure of any of these third party providers
to do so could have a material adverse effect on our business.  Further, we currently compete with, and
expect to compete with in the future, providers of some of our technology or
system components.  Our inability to, at the same time, effectively
cooperate and compete with these companies could harm our business.  IF WE DO NOT CONTINUOUSLY IMPROVE OUR
TECHNOLOGY IN A TIMELY MANNER, OUR PRODUCTS COULD BE RENDERED OBSOLETE.  The markets for our products and services
are characterized by:  · rapidly changing
technology;  · evolving industry
standards;  · frequent new product
and service introductions; and  · changing customer
demands.  These changes and developments may render
our products and technologies obsolete in the future.  As a result, our
success depends on our ability to adapt to these changes, particularly to
develop or adapt products and services or to acquire new products and services
that can compete successfully.  There can be no assurance that we will be
successful in these efforts.   7   OUR SERVICES ARE COMPLEX AND WE MAY NOT
BE ABLE TO PREVENT DEFECTS THAT COULD DECREASE THEIR MARKET ACCEPTANCE, RESULT
IN PRODUCT LIABILITY OR HARM OUR REPUTATION.  Our digital water marketing and streaming
media products and services are complex, and the steps we take to ensure that
they are free of errors or defects, particularly when first introduced or when
new versions or enhancements are released, may not be successful.  We
cannot guarantee that current versions or enhanced versions or our products will
be free of significant software defects or bugs. Despite our testing, and
testing by our third-party vendors and providers, current or future products may
contain serious defects.  Serious defects or errors could result in lost
revenue or a delay in market acceptance of our products and could seriously harm
our business and operating results.  Errors in our products may be caused
by defects in third-party hardware or software incorporated into our products.
 If so, we may be unable to fix these defects without the co-operation of
these third-party providers.  Because these defects may not be as
significant to these providers as they are to us, we may not receive the rapid
co-operation that we may require.  Errors, defects or other performance
problems with our products could also harm our customers' businesses or result
in potential product liability claims.  Even if unsuccessful, a product
liability claim brought against us would likely be time-consuming, costly and
harmful to our reputation.  Nor can there be any assurance that our product
liability insurance coverage will be sufficient to satisfy any successful claim.  ANY LOSS OF OUR PERSONNEL OR INABILITY
TO ADD NEW PERSONNEL COULD HARM OUR BUSINESS.  Our future success depends significantly on
the continued services and performance of our senior management.  Our
performance also depends on our ability to retain and motivate our other key
personnel.  The loss of the services of any member of our senior management
team or other key employees could cause significant disruption in our business.
 We have no long-term employment agreements with senior management and do
not currently maintain any "key person" life insurance. Our future
success also depends on our ability to identify, attract, hire, train, retain
and motivate other highly skilled technical, managerial, operations, sales and
marketing and customer service personnel.  Competition for such personnel
is intense, and we may not successfully attract, assimilate or retain
sufficiently qualified personnel.  The failure to retain and attract the
necessary personnel could impede our future success.  IF WE FAIL TO
MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO
ACCURATELY REPORT OUR FINANCIAL RESULTS. AS A RESULT, CURRENT AND POTENTIAL
STOCKHOLDERS COULD LOSE CONFIDENCE IN OUR FINANCIAL REPORTING, WHICH COULD HAVE
A NEGATIVE IMPACT ON OUR STOCK PRICE.  Pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, we are required to include in our Annual Report on
Form 10-K our assessment of the effectiveness of our internal controls over
financial reporting. Our Chief Executive Officer and Chief Financial Officer
have determined that our internal controls are ineffective.  The material
weaknesses in our internal controls related to a lack of segregation of duties
due to inadequate staffing within our accounting department and upper
management, the assignment of authority and responsibility, lack of consistent
policies and procedures, inadequate monitoring controls and inadequate
disclosure controls.  If we cannot adequately maintain the effectiveness of
our internal controls over financial reporting, we may be subject to liability
and/or sanctions or investigation by regulatory authorities, such as the
Securities and Exchange Commission. Any such action could adversely affect our
financial results and the market price of our common stock.  WE DO NOT CURRENTLY HAVE ANY PAYING
CUSTOMERS.  Our sales were $24,000 in 2008 and $Nil in
2007.  One customer accounted for 100% of our revenue for the year ended
December 31, 2008.  We expect a small number of customers will continue to
account for a substantial portion of our revenue for the foreseeable future.
 Our inability to increase the number of our customers could limit our
ability to maintain or increase our market share, or could cause revenue to drop
quickly and unexpectedly.  OUR BUSINESS MAY SUFFER IF WE CANNOT
PROTECT OUR INTELLECTUAL PROPERTY.  We seek to protect our proprietary rights
through a combination of patents, trade secrets and trademark laws,  8   confidentiality procedures and contractual
provisions with employees and third parties.  Despite our efforts to
protect our proprietary rights, unauthorized parties may attempt to copy aspects
of our products or obtain and use information that we consider as proprietary.
 Litigation may be necessary to enforce our intellectual property rights,
to protect our trade secrets and to determine the validity and scope of the
proprietary rights of others.  Any litigation could result in substantial
costs and diversion of management and other resources with no assurance of
success and could seriously harm our business and operating results.  THERE IS NO ASSURANCE THAT OUR PATENTS
WONT BE CHALLENGED, INVALIDATED OR CIRCUMVENTED  There can be no assurance that our current
or future patents, if any, will not be challenged, invalidated, or circumvented,
or that any rights granted thereunder will provide competitive advantages to us.
 In addition, there can be no assurance that patents will be issued from
pending applications, or that claims allowed on any future patents will be
sufficiently broad to protect our technology.  In addition, the laws of
some foreign countries may not permit the protection of our proprietary rights
to the same extent as do the laws of the United States.  We intend to
enforce our proprietary rights through the use of licensing agreements and, when
necessary, litigation.  Although we believe the protection afforded by our
patents, patent applications, and trademarks have value, the rapidly changing
technology in the video transmission industry makes our future success dependent
primarily on the innovative skills, technological expertise, and management
abilities of our employees rather than on patent and trademark protection.  OUR PRODUCTS MAY INFRINGE THE
INTELLECTUAL PROPERTY RIGHTS OF OTHERS, CAUSING US TO INCUR SIGNIFICANT COSTS OR
PREVENT US FROM LICENSING OUR PRODUCTS.  Other companies, including our competitors,
may have or obtain patents or other proprietary rights that would prevent, limit
or interfere with our ability to make, use or license our products.  We
cannot be certain that our products do not and will not infringe patents or
other proprietary rights of others.  We may be subject to legal
proceedings, including claims of alleged infringement by others of the
intellectual property rights of third parties.  If a successful claim of
infringement is brought against us and we fail to or are unable to license the
infringed technology on commercially reasonable terms, our business and
operating results could be significantly harmed.  Companies in the
technology market are increasingly bringing suits alleging infringement of their
proprietary rights, particularly patent rights.  Although we are not
currently subject to any litigation or claims, any future claims, whether or not
valid, could result in substantial costs and diversion of resources with no
assurance of success.  Intellectual property litigation or claims could
force us to do one or more of the following:  · cease selling,
incorporating or using products or services that incorporate the challenged
intellectual property;  · obtain a license from
the holder of the infringed intellectual property right, which license may not
be available on commercially reasonable terms, or at all; or  · redesign our products
or services.  If we are forced to take any of these
actions, our business could be substantially harmed.  OUR SUCCESS DEPENDS ON THE CONTINUED
GROWTH IN DEMAND FOR E-BUSINESS APPLICATIONS.  Our primary business strategy involves the
development of products and services that enable users to transmit video over
the Internet.  As a result, our future sales and any future profits will be
substantially dependent upon the widespread acceptance and use of the Internet
as an effective medium of business by consumers and businesses.  To be
successful, consumers and businesses that historically have used traditional
means of commerce to transact business must continue to accept and utilize the
Internet as a medium for conducting business and exchanging information.
 Consumers and businesses may reject the Internet as a viable commercial
medium for a number of reasons, including potentially inadequate network
infrastructure, slow development of enabling technologies, insufficient
commercial support and privacy concerns.  In addition, delays in the
development or adoption of new standards and protocols required to handle
increased levels of Internet activity or increased government regulation could
cause the Internet to lose its viability as a commercial medium.  If the
demand for e-business applications does not grow or grows more slowly than
expected, demand for our products  9   and services would be reduced and our
revenue would suffer.  GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES COULD ADD ADDITIONAL COSTS AND RISKS TO DOING BUSINESS ON THE
INTERNET.  We are not currently subject to direct
regulation by any governmental agency, other than regulations applicable to
businesses generally, export control laws and laws or regulations directly
applicable to electronic commerce.  However, due to the increasing
popularity and use of the Internet, it is possible that a number of laws and
regulations may be adopted with respect to the Internet covering issues such as:
user privacy, pricing, content, copyrights, distribution, and characteristics
and quality of products and services.  Furthermore, the growth and development of
the market for electronic commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies conducting
business online.  The adoption of additional laws or regulations may
decrease the growth of the Internet or other online services, which could, in
turn, decrease the demand for our products and services and increase our cost of
doing business.  The applicability to the Internet of
existing laws governing issues such as property ownership, copyrights,
encryption and other intellectual property issues, taxation, libel, export or
import matters, obscenity and personal privacy is uncertain.  The vast
majority of such laws were adopted prior to the advent of the Internet and
related technologies.  As a result, they do not contemplate or address the
unique issues of the Internet and related technologies.  Changes to such
laws intended to address these issues, including some recently proposed changes,
could create uncertainty in the Internet marketplace.  Such uncertainty
could reduce demand for our products and services or increase the cost of doing
business due to increased costs of litigation or increased service delivery
costs.  OUR SHARE PRICE HAS BEEN AND COULD BE
HIGHLY VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES TO INVESTORS.  The trading price of our common shares has
been and is likely to continue to be highly volatile and could be subject to
wide fluctuations in response to a number of factors including: variations in
quarterly operating results; new products or services offered by us or our
competitors; conditions or trends in the Internet and online commerce
industries; changes in the economic performance and/or market valuations of
other Internet and online service companies; and other events or factors, many
of which are beyond our control.  In addition, the stock market in general,
and the market for Internet-related and technology companies in particular, has
experienced extreme price and volume fluctuations, including large price drops
in 2008, 2003, 2002 and 2001, that have often been unrelated or disproportionate
to the operating performance of such companies.  These broad market and
industry factors may materially adversely affect the market price of our common
shares, regardless of our actual operating performance.  In the past,
following periods of volatility in the market price of a company's securities,
securities class-action litigation has often been instituted against such
companies.  Such litigation, if instituted, could result in substantial
costs and a diversion of management's attention and resources.  ANTI-TAKEOVER PROVISIONS IN OUR CHARTER
DOCUMENTS COULD PREVENT OR DELAY A CHANGE IN CONTROL OF THE COMPANY.  Our Articles of Continuance and bylaws
contain anti-takeover provisions that could discourage, delay or even prevent an
acquisition of our company at a premium price or at all.  Any of these
provisions might prevent the market price of our common shares from increasing
in response to takeover attempts, and could prevent our shareholders from
realizing a premium over the then-prevailing market price for the common shares.  WE INTEND TO ISSUE ADDITIONAL EQUITY
SECURITIES, WHICH MAY DILUTE THE INTERESTS OF CURRENT SHAREHOLDERS OR CARRY
RIGHTS OR PREFERENCES SENIOR TO THE COMMON SHARES.  We intend to issue additional equity
securities in order to raise working capital.  Accordingly, existing
shareholders may experience additional dilution of their percentage ownership
interest in our company.  In addition, the new equity securities may have
rights, preferences or privileges senior to those of existing holders of our
common shares.   10   LIMITED LIABILITY OF EXECUTIVE OFFICERS
AND DIRECTORS MAY DISCOURAGE SHAREHOLDERS FROM BRINGING A LAWSUIT AGAINST THEM.  Our bylaws contain provisions that limit
the liability of directors for monetary damages and provide for indemnification
of officers and directors.  These provisions may discourage shareholders
from bringing a lawsuit against officers and directors for breaches of fiduciary
duty and may also reduce the likelihood of derivative litigation against
officers and directors even though such action, if successful, might otherwise
have benefited the shareholders.  In addition, a shareholder's investment
in USA Video may be adversely affected to the extent that costs of settlement
and damage awards against officers or directors are paid by USA Video pursuant
to the indemnification provisions of the bylaws.  REQUIREMENTS OF THE SEC WITH REGARD TO
LOW-PRICED "PENNY STOCKS" MAY ADVERSELY AFFECT THE ABILITY OF
SHAREHOLDERS TO SELL THEIR SHARES IN THE SECONDARY MARKET.  "Penny stocks" are low-priced, and
usually highly speculative, stock selling at less than $5.00 per share.
 Our securities are subject to Rule 15g-9 under the Securities Exchange
Act of 1934, which imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and "accredited investors" (generally, an individual with a net
worth in excess of $1,000,000 or an annual income exceeding $200,000, or
$300,000 together with his or her spouse).  For transactions covered by
this rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale.  The rule also requires the delivery, prior to the
transaction, of a risk disclosure document mandated by the SEC relating to the
penny stock market.  The broker-dealer must also disclose the commissions
payable for the transaction, current quotations for the stock, and, if
applicable, the fact that it is the sole market maker in the stock.
 Consequently, the rule may adversely affect the ability of broker-dealers
to sell our securities and may adversely affect the ability of shareholders to
sell their shares in the secondary market.  WE DO NOT ANTICIPATE PAYING DIVIDENDS TO
SHAREHOLDERS IN THE FORESEEABLE FUTURE.  We have not paid dividends on our common
shares and we intend, for the foreseeable future, to invest any earnings in the
further development of our business. Accordingly, shareholders should not expect
to receive any dividends on their shares.  Our failure to manage or adequately
address any one or more of these rights could result in our business suffering a
material adverse effect.     11   Item 9A. Controls and
Procedures  Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls
and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of
the end of the period covered by this report.  In
designing and evaluating our disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives.  No system of controls can prevent errors and
fraud. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the control systems objectives
will be met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within our company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur. Controls can also
be circumvented by individual acts of some people, by collusion of two or more
people, or by management override of the controls. The design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Over time,
controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with its policies or procedures. Because of the
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detected.  Subject to the limitations above, management
believes that the consolidated financial statements and other financial
information contained in this report, fairly present in all material respects
our financial condition, results of operations, and cash flows for the periods
presented.  Based on the evaluation of the effectiveness
of our disclosure controls and procedures, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective at a
reasonable assurance level.  Based upon their evaluation of our internal
controls over financial reporting, our Chief Executive Officer and Chief
Financial Officer have concluded that our internal controls over financial
reporting are ineffective.  The material weaknesses in our internal
controls related to a lack of segregation of duties due to inadequate staffing
within our accounting department and upper management, the assignment of
authority and responsibility, lack of consistent policies and procedures,
inadequate monitoring controls and inadequate disclosure controls.  There were no changes in our internal
controls that occurred during the period covered by this report that have
materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.  We are committed to
improving our financial organization.  As part of this commitment, we will
create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within
the accounting function when funds are available to our company.  In addition, management
believes that preparing and implementing sufficient written policies and
checklists will remedy the following material weaknesses (i) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of US GAAP and SEC disclosure
requirements; and (ii) ineffective controls over period end financial close and
reporting processes.  Further, management believes that the hiring of
additional personnel who have the technical expertise and knowledge will result
in proper segregation of duties and provide more checks and balances within the
department.  Additional personnel will also provide the cross training
needed to support our company if personnel turn over issues within the
department occur.  We will continue to
monitor and evaluate the effectiveness of our internal controls and procedures
and our internal controls over financial reporting on an ongoing basis and are
committed to taking further action and implementing additional enhancements or
improvements, as necessary and as funds allow.  12    This annual report does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting.  Management's report was not subject to
attestation by our registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit our company to provide
only management's report in this annual report.      13   PART IV   Item 15. Exhibits, Financial
Statements to Shareholders and Reports on Form 8-K.  (c) Exhibits  31.1 Certification of the
Chief Executive Officer Pursuant To Rule 13a-14 Or 15d-14 of the Securities
Exchange Act Of 1934,as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002  31.2 Certification of the
Chief Financial Officer Pursuant To Rule 13a-14 Or 15d-14 of the Securities
Exchange Act of 1934,as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002    14


SIGNATURES  Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.  USA VIDEO INTERACTIVE CORP.   By:  /s/Edwin
Molina Date:   July 14,
2009 Edwin Molina Chief Executive Officer   Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.   Signature Title Date   /s/ Edwin Molina Chief
Executive Officer, Director July 14, 2009 ----------------------- Edwin Molina   /s/ Anton J.
Drescher Chief
Financial Officer, (principal July 14, 2009 ----------------------- financial officer and principal Anton J. Drescher accounting officer), Director   /s/ Maurice Loverso Director July 14, 2009 ----------------------- Maurice Loverso   /s/ Rowland Perkins Director July 14, 2009 ----------------------- Rowland Perkins