---

#### UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

---

FORM 10-QSB

---

#### [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

#### [  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-26809

SMARTVIDEO TECHNOLOGIES, INC.

(Name of small business issuer in its charter)

|Delaware                                         |  | 91-1962104                       
|------------------------------------------------ |  | ---------------------------------
|(State or other jurisdiction of incorporation)   |  | (IRS Employer Identification No.)
|                                                
|1650 Oakbrook Drive, Suite 405, Norcross Georgia |  | 30093                            
|(Address of principal executive offices)         |  | (Zip Code)                       

(770) 729-8777
Issuer's telephone number, including area code

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

Transitional Small Business Disclosure Format:
Yes  [ ]     No  [X]

The total number of shares of the issuers common stock, $.001 par value,
outstanding on August 11, 2003 was 7,636,658.

---

#### SMARTVIDEO TECHNOLOGIES INC.

#### Index to Form 10-QSB

`PART I - FINANCIAL INFORMATION

  Item   1.  Financial Statements
    Historical Financial Statements
       Consolidated Balance Sheets...........................................3
       Consolidated Statements of Operations.................................4
       Consolidated Statements of Cash Flows.................................5
       Notes to Consolidated Financial Statements............................7
  Item   2.  Management's Discussion and Analysis or Plan of Operation......13
  Item   3.  Controls and Procedures........................................16


PART II - OTHER INFORMATION

  Item   1.  Legal Proceedings..............................................17
  Item   2.  Changes in Securities and Use of Proceeds......................17
  Item   3.  Defaults Upon Senior Securities................................17
  Item   4.  Submission of Matters to a Vote of Security Holders............17
  Item   5.  Other Information..............................................17
  Item   6.  Exhibits and Reports on Form 8-K...............................17
  Signatures................................................................18`

-2-

---

### PART I  FINANCIAL INFORMATION

#### Item 1. Financial Information

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Balance Sheets

`June 30,      December 31,
                                                         2003            2002
                                                    -------------   -------------

                                     ASSETS

CURRENT ASSETS
    Cash                                            $     23,605    $      5,742
    Accounts receivable                                   28,746               -
                                                    -------------   -------------
     Total current assets                                 52,351           5,742

EQUIPMENT, net of accumulated depreciation
    of $11,429 and $7,163, respectively                   28,788           3,250

PREPAID EXPENSES (Note 3)                                965,250       1,316,250

OTHER ASSETS                                              10,000          10,000
                                                    -------------   -------------

      TOTAL ASSETS                                  $  1,056,389    $  1,335,242
                                                    =============   =============


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
    Accounts payable and accrued expenses           $    506,589    $    138,560
    Convertible promissory notes (Note 4)                230,000          60,000
    Due to related parties (Note 6)                      554,160         521,273
    Accrued interest                                      42,878          23,915
                                                    -------------   -------------
     Total current liabilities                         1,333,627         743,748

DUE TO RELATED PARTIES - LONG-TERM PORTION                     -          50,000
                                                    -------------   -------------

     Total liabilities                                 1,333,627         793,748
                                                    -------------   -------------

SHAREHOLDERS' EQUITY (DEFICIT)
    Preferred stock, $.001 par value, 12,000,000
      shares authorized, 12,000,000 issued and
      outstanding as of June 30, 2003 and
      December 31, 2002, respectively                     12,000          12,000
    Common stock, $.001 par value, 50,000,000
      shares authorized, 7,293,325 and 6,949,396
      shares issued and outstanding as of June
      30, 2003 and December 31, 2002, respectively         7,293           6,949
    Additional paid in capital                         2,679,557       2,083,956
    Accumulated deficit                               (2,976,088)     (1,561,411)
                                                    -------------   -------------

     Total shareholders' equity (deficit)               (277,238)        541,494
                                                    -------------   -------------

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $  1,056,389    $  1,335,242
                                                    =============   =============`

-3-
        The accompanying notes are an integral part of these statements.

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Operations

`Period from
                                                                                                  Inception
                                      For the Quarterly Period     For the Six Months        (August 31, 2000)
                                            Ended June 30,           Ended June 30,             to June 30,
                                   ---------------------------  ---------------------------
                                      2003          2002          2003             2002             2003
                                   ------------  ------------  -------------   ------------    --------------

REVENUE                             $   10,409    $       -     $    30,246     $       -       $    32,996
                                   ------------  ------------  -------------   ------------    --------------

EXPENSES
    Compensation and benefits           36,136        26,432        159,454         65,121          625,892
    Consulting fees                    201,693         7,867        248,387         35,934          309,236
    Data center                         69,958            -          88,059             -            99,045
    Rents                               25,717            -          50,782             -            50,782
    Professional fees                   23,671            -          44,886             -            92,679
    General & administrative            39,102         1,624        152,851          7,903          232,086
    Service fees                       175,500            -         351,000             -         1,150,125
    Depreciation & amortization          2,900           870          4,266          1,740           11,429
                                   ------------  ------------  -------------   ------------    --------------
                                       574,677        36,793      1,099,685        110,698        2,571,274
       Total operating expenses
                                   ------------  ------------  -------------   ------------    --------------

          Loss from operations        (564,268)      (36,793)    (1,069,439)      (110,698)      (2,538,278)
                                   ------------  ------------  -------------   ------------    --------------

OTHER EXPENSES
    Interest expense                   (18,509)       (2,954)      (345,238)        (5,937)        (435,314)
    Other                                   -             -              -              -            (2,496)
                                   ------------  ------------  -------------   ------------    --------------
                                       (18,509)       (2,954)      (345,238)        (5,937)        (437,810)
       Total other expenses
                                   ------------  ------------  -------------   ------------    --------------
                                    $ (582,777)   $  (39,747)   $(1,414,677)    $ (116,635)     $(2,976,088)
NET LOSS
                                   ============  ============  =============   ============    ==============

LOSS PER SHARE
    Basic and diluted net loss
     per share                      $   (0.08)    $  (0.01)     $   (0.20)      $   (0.03)
                                   ============  ============  =============   ============

    Weighted average common
       shares used to compute
       basic and diluted net
       loss per share                7,127,391     3,500,000      7,038,886       3,500,000
                                   ============  ============  ==============   ===========`

-4-
        The accompanying notes are an integral part of these statements.

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows

`Period from
                                                                                               Inception
                                                          For the Quarterly Period Ended    (August 31, 2000)
                                                                      June 30,                to June 30,
                                                         --------------------------------
                                                              2003              2002              2003
                                                         --------------    --------------   ----------------

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                               $  (1,414,677)    $    (116,635)   $  (2,976,088)
  Adjustments to reconcile net loss to net cash used in
   operating activities:
    Issuance of common stock for services                            -                 -          720,000
    Beneficial conversion feature of convertible debt          308,000                 -          368,000
    Depreciation and amortization                                4,266             1,740           11,429
    Increase in accounts receivable                            (28,746)                -          (28,746)
    Decrease in prepaid expenses                               351,000                 -          424,125
    Increase in accrued interest on notes payable               34,220             4,113           58,135
    Decrease (increase) in other assets                              -                 -          (10,000)
    Increase in accounts payable and accrued expenses          368,029           (12,434)         490,119
                                                         --------------    --------------   ----------------
       Net cash used in operating activities                  (377,908)         (123,216)        (943,026)
                                                         --------------    --------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Investments in equity funds                                      -                 -         (100,000)
    Liquidation of investments in equity funds                       -                 -          100,000
    Purchase of equipment                                      (29,804)                -          (40,217)
                                                         --------------    --------------   ----------------
       Net cash used in investing activities                   (29,804)                -          (40,217)
                                                         --------------    --------------   ----------------


CASH FLOWS FROM FINANCING ACTIVITIES
    Issuance of common stock                                   120,000                 -          270,000
    Increase (decrease) in due to related parties              (27,425)          110,586          343,848
    Issuance of convertible promissory notes                   333,000                 -          393,000
                                                         --------------    --------------   ----------------
       Net cash provided by financing activities               425,575           110,586        1,006,848
                                                         --------------    --------------   ----------------

NET INCREASE (DECREASE) IN CASH                                 17,863           (12,630)          23,605

CASH, beginning of period (inception)                            5,742            12,754                -
                                                         --------------    --------------   ----------------

CASH, end of period                                      $      23,605     $         124    $      23,605
                                                         ==============    ==============   ================`

-5-
        The accompanying notes are an integral part of these statements.

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)

`Period from
                                                                                                       Inception
                                                                   For the Quarterly Period Ended   (August 31, 2002)
                                                                              June 30,                 to June 30,
                                                                   ------------------------------
                                                                       2003            2002               2003
                                                                   --------------  --------------   ---------------

SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
    Issuance of common stock on conversion of convertible
     promissory notes including accrued interest through the
     date of conversion in April 2003                              $     167,945   $           -    $    167,945
                                                                   ==============  ==============   ===============
    Repurchase of common stock through the issuance of a note
     payable                                                       $           -   $           -    $    150,000
                                                                   ==============  ==============   ===============

    In a reverse acquisition, the Company acquired all of the
     outstanding capital stock of the Armagh Group, Inc. as
     of November 26, 2002. In connection with the reverse
     acquisition, liabilities were assumed as follows:

        Fair value                                                 $           -   $           -    $  1,449,375
        Cash paid, net of cash acquired                                        -               -               -
        Common stock issued                                                    -               -      (1,385,905)
                                                                   --------------  --------------   ---------------

           Net liabilities assumed on acquisition                  $           -   $           -    $     66,470
                                                                   ==============  ==============   ===============`

-6-
        The accompanying notes are an integral part of these statements.

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002

#### NOTE 1 - Organization, Risks and Going Concern

Organization

OVT, Inc., d/b/a SmartVideo was incorporated in the state of Georgia on August
31, 2000. The Company has developed a proprietary video compression and
processing technology that enables the delivery of full motion video content to
a web browser using an internet connection at speeds as low as 23K.

On January 3, 2003, by a written consent of a majority of the shareholders,
Armagh approved an amendment to effect a one for three reverse stock split with
effect to the outstanding common stock, the creation of the 2002 Stock Incentive
Plan and to change the name of the corporation to SmartVideo Technologies, Inc.
This reverse split did not affect the issued and outstanding preferred shares.

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. All significant intercompany transactions and
balances have been eliminated.

Risks

The Company is subject to a number of risks similar to other companies in a
comparable stage of development including reliance on key personnel, successful
marketing of its services in an emerging market, competition from other
companies with greater technical, financial, management and marketing resources,
successful development of new services, the enhancement of existing services,
and the ability to secure adequate financing to support future operations.

Going Concern

The Company has incurred recurring losses and negative cash flows since
inception. As of June 30, 2003, it had an accumulated deficit of $2,976,088 and
a working capital deficit of $1,281,276. These matters raise substantial doubt
about its ability to continue as a going concern. The ability of the Company to
continue operations is contingent upon attaining profitable operations and
obtaining additional debt and/or equity capital to fund its operations.

OVT, Inc. is a development stage company that has only recently started to
market its various products. The Company has generated only minimal revenues
from operations since its inception and has no assurance of any future revenues.
All losses accumulated since inception have been considered as part of the
Company's development stage activities. The Company will require substantial
additional financing for continuing research and development of its products and
for the commercialization of its products. There can be no assurances that the
Company's operations will be profitable or that it will be able to obtain
sufficient additional financings when they are needed, or that such financings
will be obtainable on terms satisfactory to the Company.

#### NOTE 2 - Summary of Significant Accounting Policies

Unaudited Interim Financial Data

The interim consolidated financial statements are unaudited and have been
prepared by SmartVideo Technologies, Inc. in accordance with the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted in accordance with such rules and regulations. These consolidated
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Annual Report on Form
10-KSB, as filed with the Securities and Exchange Commission on May 15, 2003.
The

-7-

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

#### NOTE 2 - Summary of Significant Accounting Policies - (Continued)

Unaudited Interim Financial Data - (Continued)

financial information included herein reflects all adjustments (consisting only
of normal recurring adjustments) that are, in the opinion of management,
necessary for a fair presentation of the results for interim periods. The
results of operations for the quarterly periods ended June 30, 2003 and 2002 are
not necessarily indicative of the results to be expected for the full years.

Cash Equivalents

All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents.

Property and Equipment

The Company provides for depreciation of equipment using the straight-line
method based on estimated useful lives of three years.

Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. For purposes of evaluating the recoverability of long-lived assets,
the recoverability test is performed using undiscounted net cash flows estimated
to be generated by the asset.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.

Fair Value of Financial Instruments

Substantially all of the Company's assets and liabilities are carried at fair
value or contracted amounts that approximate fair value. Estimates of fair value
are made at a specific point in time, based on relative market information and
information about the financial instrument, specifically, the value of the
underlying financial instrument. Assets that are recorded at fair value consist
largely of other assets, which are carried at contracted amounts that
approximate fair value. Similarly, the Company's liabilities consist of
liabilities recorded at contracted amounts that approximate fair value.

Stock Splits

On January 3, 2003, the Company effected a 1 for 3 reverse split of the
Company's common stock.

All references to shares and share amounts have been adjusted to reflect the
stock splits on a retroactive basis.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the
current presentation.

-8-

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

#### NOTE 2 - Summary of Significant Accounting Policies - (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Management believes that the estimates utilized in the
preparation of the consolidated financial statements are prudent and reasonable.
Actual results could differ from these estimates.

Recent Accounting Pronouncements

On January 1, 2002, the Company adopted SFAS 142, "Goodwill and Other Intangible
Assets", which requires the discontinuance of goodwill amortization and that it
be assessed for impairment on an annual basis or more frequently if impairment
indicators exist. The adoption of SFAS 142 did not have any effect on the
Company's financial position, results of operations or cash flows as the Company
has no recorded goodwill.

On January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," ("SFAS 144"). SFAS 144 supercedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of," and
elements of APB 30, "Reporting the Results of Operations--Reporting the Effects
on Disposal of a Segment of a Business and Extraordinary, Unusual or
Infrequently Occurring Events and Transactions." SFAS 144 establishes a
single-accounting model for long-lived assets to be disposed of while
maintaining many of the provisions relating to impairment testing and valuation.
The Company adopted SFAS 144 on January 1, 2002, and the adoption did not have a
material effect on the financial position or results of operations.

In April 2002, Statement of Financial Accounting Standards No. 145, "Rescission
of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections," was issued. This statement provides guidance on the
classification of gains and losses from the extinguishment of debt and on the
accounting for certain specified lease transactions. The adoption of this
statement did not have a material impact on the Company's financial position,
results of operations or cash flows.

In June 2002, Statement of Financial Accounting Standards No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities," ("SFAS 146") was issued.
This statement provides guidance on the recognition and measurement of
liabilities associated with disposal activities and is effective on January 1,
2003. Under SFAS 146, companies will record the fair value of exit or disposal
costs when they are incurred rather than at the date of a commitment to an exit
or disposal plan. The adoption of SFAS 146 could result in the Company
recognizing the cost of future restructuring activities, if any, over a period
of time rather than in one reporting period.

In November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Guarantees of Indebtedness of Others," ("FIN 45"). FIN 45 requires the
Company to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in the issuance of the guarantee. FIN 45 is
effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements effective for the year ending December 31, 2002 expand
the disclosures required by a guarantor about its obligations under a guarantee.
The adoption of the disclosure requirements of this statement did not impact the
Company's financial position, results of operations or cash flows.

-9-

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

#### NOTE 2 - Summary of Significant Accounting Policies - (Continued)

Recent Accounting Pronouncements - (Continued)

In December 2002, Statement of Financial Accounting Standards No. 148,
"Accounting for Stock-Based Compensation -Transition and Disclosure," ("SFAS
148") was issued. SFAS 148 amends Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") to provide
alternative methods of transition for a voluntary change to the fair value
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on the reported results. The provisions of SFAS 148 are effective for
financial statements for fiscal years ending after December 15, 2002 and interim
periods beginning after December 15, 2002. The adoption of the disclosure
requirements of this statement did not impact the Company's financial position,
results of operations or cash flows.

In December 2002, the Emerging Issues Task Force issued a consensus on Issue No.
00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21). EITF
00-21 mandates how to identify whether goods or services or both that are to be
delivered separately in a bundled sales arrangement should be accounted for as
separate units of accounting. The consensus is effective prospectively for
SmartVideo's third quarter of 2003, and SmartVideo is currently evaluating the
effects of adoption of EITF 00-21 on its service arrangements.

In January 2003, the Financial Accounting Standards Board issued Interpretation
No. 46, "Consolidation of Variable Interest Entities," ("FIN 46"). The
interpretation provides guidance for determining when a primary beneficiary
should consolidate a variable interest entity, or equivalent structure, that
functions to support the activities of the primary beneficiary. The
interpretation is effective as of the beginning of the first interim or annual
reporting period beginning after June 15, 2003 for variable interest entities
created before February 1, 2003. The adoption of this statement is not expected
to impact the Company's financial position, results of operations or cash flows.

#### NOTE 3 - Prepaid Expenses

On November 14, 2002, Armagh entered into an advisory agreement with an outside
advisor to advise the senior management regarding corporate development
strategy, the development of a short and long-term strategic plan, and to assist
in the identification and development of potential acquisition candidates and
strategic partners. Under the provisions of the agreement, the term is for a 24
month period beginning with the acceptance of the agreement and the Advisor was
to receive 1,200,000 shares of the Company's common stock in compensation for
his services. As of June 30, 2003, the unamortized portion related to this
agreement was $965,250.

#### NOTE 4 - Convertible Promissory Notes

In December 2002, the Company issued two 10 percent convertible promissory notes
in the amount of $30,000 each. These convertible promissory notes have a due
date of December 20, 2003 but may be converted by the holders at any time prior
to payment. The conversion price under the terms of these notes is $0.75 per
share (beneficial conversion feature). In April 2003, the holders of these
convertible promissory notes exercised their conversion rights at the conversion
price of $0.75 per share of common stock including accrued interest through the
date of conversion.

-10-

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

#### NOTE 4 -  Convertible Promissory Notes - (Continued)

Under the terms of these notes, the intrinsic value of the beneficial conversion
feature was calculated assuming that the conversion date was the same as the
issue date. As of the issue date, the beneficial conversion feature for these 2
notes was $60,000. This beneficial conversion feature has been reflected in the
financial statements as additional paid-in capital and interest expense.

In January 2003, the Company issued four 10 percent convertible promissory notes
totaling $233,000. These convertible promissory notes have due dates one year
from the date of issuance but may be converted by the holders at any time prior
to payment. The conversion price under the terms of these notes is $0.75 per
share of common stock (beneficial conversion feature). In April 2003, the
holders of $103,000 of these convertible promissory notes exercised their
conversion rights at the conversion price of $0.75 per share of common stock
including accrued interest through the date of conversion.

In March 2003, the Company issued one 10 percent convertible promissory notes
totaling $100,000. This convertible promissory note has a due date one year from
the date of issuance but may be converted by the holder at any time prior to
that date. The conversion price under the terms of this note is $0.75 per share
of common stock (beneficial conversion feature).

Under the terms of these convertible promissory notes, the intrinsic value of
the beneficial conversion feature was calculated assuming that the conversion
date was the same as the issue date. In certain instances, the amount of the
intrinsic value of the beneficial conversion feature of the convertible
promissory notes issued in January and March exceeded the principal amount of
the debt. Accordingly, the beneficial conversion feature of these convertible
promissory notes has been limited to $308,000. This beneficial conversion
feature has been reflected in the financial statements as additional paid-in
capital and interest expense.

#### NOTE 5 - Shareholders' Equity

In April 2003, three holders of the Company's 10% Convertible Promissory
Notes exercised their conversion rights at a conversion price of $0.75 per share
of common stock. The Company had originally received gross proceeds of $163,000
upon the issuance of these 10% Convertible Promissory Notes. A total of 223,929
shares of common stock were issued under these conversions including accrued
interest through the date of conversion. These shares of common stock were
issued as restricted shares exempt from registration under the Securities Act of
1933 in reliance on exemptions provided in Regulation D.

In May and June 2003, the Company completed a group of private financing
transactions. The Company received $120,000 of gross proceeds from these
transactions. In these transactions, SmartVideo sold 120,000 units consisting of
one share of common stock and one five year common stock purchase warrant at a
purchase price of $1.00 per unit. These securities have been issued to four
accredited investors in a private placement exempt from registration under the
Securities Act of 1933 in reliance on exemptions provided in Section 4(2) and
Regulation D promulgated thereunder. The common stock purchase warrants are
exercisable at $2.50 per share.

The Company granted the purchasers of these units piggy-back registration
rights covering the shares issued and the shares issuable upon the exercise of
the common stock purchase warrants.

-11-

#### SMARTVIDEO TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

#### NOTE 6 - Related Party Transactions

Amounts due to related parties at June 30, 2003 and 2002 consist of the
following:

`June 30,
                                                                            --------------------------
                                                                                2003         2002
                                                                            ------------  ------------

   Note payable due to former shareholder in connection with stock
   repurchase; bearing interest at 5.18%; principal payments of $50,000
   plus accrued interest due on March 2, 2002, 2003, and 2004.              $  150,000    $  150,000

   Note payable due to entity related to a shareholder; bearing interest
   at 8% with principal and interest payments due as follows: $75,000
   within 30 days of funding of the Company, followed by monthly
   principal payments of $50,000 plus accrued interest beginning 30 days
   after the initial payment of $75,000 (This note was originally
   advances from an entity related to a shareholder until September 2002
   when it was converted to a note payable.)                                   310,312       317,748

   Note payable due to shareholder on demand bearing interest at 5%             50,000             -

   Advances from officers and shareholders                                      43,848        15,000
                                                                            ------------  ------------

        Total related party loans and advances                                 554,160       482,748

        Less: current portion                                                 (554,160)     (432,748)
                                                                            ------------  ------------

        Long-term portion                                                   $        -    $   50,000
                                                                            ============  ============`

The Company is in default on its note payable due to a former shareholder of
OVT, Inc. This note payable is collateralized by 2,500,000 shares of OVT, Inc.'s
common stock.

Until October 2002, the Company was provided the use of office facilities from a
related entity at no cost. In October 2002, an agreement was reached with this
related entity to begin charging the Company rent for its share of the office
facilities and common expenses. There were no expenses accrued or charged under
the terms of this agreement prior to December 31, 2002.

#### NOTE 7 - Subsequent Events

From July 1, 2003 through August 11, 2003, the Company completed a group of
private financing transactions. From these transactions, the Company received
$343,333 in gross proceeds. In these transactions, SmartVideo sold 343,333 units
consisting of one share of common stock and one five year common stock purchase
warrant at a purchase price of $1.00 per unit. These securities have been issued
to six accredited investors in a private placement exempt from registration
under the Securities Act of 1933 in reliance on exemptions provided in Section
4(2) and Regulation D promulgated thereunder. The common stock purchase warrants
are exercisable at $2.50 per share.

The Company granted the purchasers of these units piggy-back registration
rights covering the shares issued and the shares issuable upon the exercise of
the common stock purchase warrants.

-12-

#### Item 2.  Management's Discussion and Analysis or Plan of Operation

Overview

The acquisition of SmartVideo was treated as a reverse acquisition for financial
reporting purposes. As such, our financial statements have been prepared as if
SmartVideo had acquired us. Although from a technical standpoint SmartVideo is a
wholly-owned subsidiary of us, the results of operations prior to November 26,
2002, included in our consolidated financial statements, are limited to the
operating results of SmartVideo. The results of operations subsequent to
November 26, 2002 are the consolidated operating results of SmartVideo and us.
The equity section of the balance sheet and our net loss per share has been
retroactively restated to reflect the reverse acquisition.

Plan of Operation

Over the course of the next twelve months, we intend to raise additional
operating capital, execute our business plan and focus our business development
efforts in the following three key areas:

- By enabling our customers to communicate more effectively with their employees,
customers, vendors, and investors through the use of rich, live and on-demand
multimedia programs;
- By developing strategic relationships with premium, rich media, content
providers, who will utilize our products and services to create customized
value-added technologies and services that increase their sales and revenue
base; and,
- By developing partnering relationships with wide-ranging sales and distribution
channel leaders already serving our vertical market space in a way that assists
them in developing new revenue streams and opportunities for additional sales
and that also reduces their dependency on low margin products that may already
be in the final stages of their product lifecycle.

In March 2003, we announced an increase in our capacity to support expected
demand for our services. With this increase in capacity, we can support more
than 50 million unique viewers each month. As demand warrants, we will expand
our total capacity.

As the demand for our products and services increases, we intend to add
additional personnel who focus will primarily be in the following areas:
customer service, order fulfillment, technical support, and quality of service
monitoring.

Once we raise sufficient capital, we also intend to invest in core technology
research and product development. We anticipate bringing new solutions to the
marketplace that not only meet our customer's needs but also present a clear
value statement to them.

Results of Operations

Six Months Ended June 30, 2003 compared to 2002

Our revenues totaled $30,246 and $0 for the six months ended June 30, 2003 and
2002, respectively. We are a development stage company and have only recently
started to market our products and services.

Our compensation and benefits expenses increased from $65,121 for the six months
ended June 30, 2002 to $159,454 for the same period in 2003. We are now actively
engaged in bringing our products to market and have begun to add additional
staff to relieve some of the burden on our executive team. During the six months
ended June 30, 2003, we have also been working on several demonstration projects
for potential customers. At our present stage of development, our compensation
and benefits expense will fluctuate based on the requirements of existing
projects and contracts.

-13-

Our consulting fees expenses increased from $35,934 for the six months ended
June 30, 2002 to $248,387 for the same period in 2003. We are now actively
engaged in bringing our products to market and have begun to work with some
additional consultants on short-term projects to relieve some of the burden on
our executive team as well as speed the process of delivering product requests
to customers. During the six months ended June 30, 2003, we have also been
working on several demonstration projects for potential customers as well. At
our present stage of development, our consulting fees will fluctuate based on
the requirements of existing projects and contracts.

During the six months ended June 30, 2003, we brought our data center online in
response to projected customer demand. The data center was not operational
during the six months ended June 30, 2002.

In January 2003, we began paying rent for the use of the office facilities we
are occupying and the proportionate share of common expenses. Prior to that
time, we had been provided the use of those facilities from a related entity at
no cost. For the six months ended June 30, 2003, we incurred expenses under this
arrangement of $50,782.

Our professional fees increased to $44,886 for the six months ended June 30,
2003 as compared to $-0- for the same period in 2002. Our professional fees
during the six months ended June 30, 2003 are primarily related to costs and
expenses associated with our acquisition of OVT, Inc. and audit and attorneys
fees and expenses incurred as a result of our now being a publicly traded
company.

General & administrative expenses increased to $152,851 during the six months
ended June 30, 2003 from $7,903 for the same period in 2002. This increase was
due primarily to additional costs and expenses associated with our expanded
marketing efforts, travel and the development of several models for customers
during the first six months of 2003.

Service fees increased to $351,000 during the six months ended June 30, 2003
from $-0- during the same quarter in 2002. The entire amount of this increase
represents the amortization of prepaid expenses associated with the advisor
agreement entered into in November 2002.

Interest expense increased to $345,238 for the six months ended June 30, 2003 up
from $5,937 in 2002. This increase is attributable to the conversion of an
advance from a related entity into an interest-bearing note payable which
contributed an additional $12,756, interest expense attributable to the issuance
of the convertible promissory notes in the amount of $14,420, and $308,000 in
additional interest expense charged related to the beneficial conversion feature
upon the issuance of the convertible promissory notes in January and March 2003.

Six Months Ended June 30, 2002 compared to 2001

Our revenues totaled $-0- and $-0- for the six months ended June 30, 2002 and
2001, respectively. We are a development stage company and had been in the
development stages of our products and services during that time period.

Our compensation and benefits expenses decreased to $65,121 for the six months
ended June 30, 2002 as compared to $144,986 for the same period in 2001. This is
indicative of a development stage company and staffing our ongoing projects on
an ad hoc basis. At our present stage of development, our compensation and
benefits expense will fluctuate based on the requirements of existing projects
and other developmental activities.

Our consulting fees increased to $35,934 for the six months period ended June
30, 2002 as compared to $-0- for the same period in 2001. This is indicative of
a company in our stage of development and staffing our ongoing projects on an ad
hoc basis. At our present stage of development, our consulting fees expense will
fluctuate based on the requirements of existing projects and other developmental
activities.

Our general & administrative expenses for the six months ended June 30 decreased
to $7,903 in 2002 from $8,206 in 2001. This is indicative of a development stage
company and our various costs fluctuating from project to project. At our
present stage of development, our general & administrative expense will
fluctuate based on the requirements of existing projects and other developmental
activities.

-14-

Interest expense for the six months ended June 30 increased to $5,937 in 2002
from $3,243 in 2001. This increase reflects fluctuations associated with
financing portions of our business with short-term financing activities on a
project by project basis.

Liquidity and Capital Resources

To date, we have generated only minimal revenues. As a result, our operations
are not an adequate source of cash to fund future operations. To fund our cash
requirements, we have relied on private placements and loans from shareholders
and other related entities.

It is anticipated that we will need to raise at least $840,000 over the course
of the next twelve months to fund our current level of operations. There can be
no assurance, however, that such financing will be available to us or, if it is
available, that we will be able to structure such financing on terms acceptable
to us and that it will be sufficient to fund our cash requirements until we can
reach a level of profitable operations and positive cashflows. If we are unable
to obtain the financing necessary to support our operations, we may be unable to
continue as a going concern. We currently have no commitments for any additional
capital.

Going Concern

We have incurred recurring losses and negative cash flows since our inception.
As of June 30, 2003, we had an accumulated deficit of $2,976,088 and a working
capital deficit of $1,281,276. These matters raise substantial doubt about our
ability to continue as a going concern. Our ability to continue operations is
contingent upon attaining profitable operations and obtaining additional debt
and/or equity capital to fund our operations.

We are a development stage company and have only recently started to market our
various products. We have generated only minimal revenues from operations since
our inception and have no assurance of any future revenues. All losses
accumulated since inception have been considered as part of our development
stage activities. We will require substantial additional financing for
continuing research and development of our products and for the
commercialization of our products. There can be no assurances that our
operations will become profitable or that we will be able to obtain sufficient
additional financings when they are needed, or that such financings will be
obtainable on terms satisfactory to us.

Subsequent Events

-15-

#### Recent Accounting Pronouncements

On January 1, 2002, we adopted SFAS 142, "Goodwill and Other Intangible Assets",
which requires the discontinuance of goodwill amortization and that it be
assessed for impairment on an annual basis or more frequently if impairment
indicators exist. The adoption of SFAS 142 did not have any effect on our
financial position or results of operations or cash flows as we have no recorded
goodwill.

On January 1, 2002, we adopted Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets," ("SFAS
144"). SFAS 144 supercedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of," and elements of APB
30, "Reporting the Results of Operations--Reporting the Effects on Disposal of a
Segment of a Business and Extraordinary, Unusual or Infrequently Occurring
Events and Transactions." SFAS 144 establishes a single-accounting model for
long-lived assets to be disposed of while maintaining many of the provisions
relating to impairment testing and valuation. The adoption of SFAS 144 on
January 1, 2002 did not have a material effect on our financial position or
results of operations.

In April 2002, Statement of Financial Accounting Standards No. 145, "Rescission
of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections," was issued. This statement provides guidance on the
classification of gains and losses from the extinguishment of debt and on the
accounting for certain specified lease transactions. The adoption of this
statement did not have a material impact on our financial position, results of
operations or cash flows.

In June 2002, Statement of Financial Accounting Standards No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities," ("SFAS 146") was issued.
This statement provides guidance on the recognition and measurement of
liabilities associated with disposal activities and is effective on January 1,
2003. Under SFAS 146, companies will record the fair value of exit or disposal
costs when they are incurred rather than at the date of a commitment to an exit
or disposal plan. The adoption of SFAS 146 could result in our recognizing the
cost of future restructuring activities, if any, over a period of time rather
than in one reporting period.

In November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Guarantees of Indebtedness of Others," ("FIN 45"). FIN 45 requires the
Company to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in the issuance of the guarantee. FIN 45 is
effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements effective for the year ending December 31, 2002 expand
the disclosures required by a guarantor about its obligations under a guarantee.
The adoption of the disclosure requirements of this statement did not impact our
financial position, results of operations or cash flows.

In December 2002, Statement of Financial Accounting Standards No. 148,
"Accounting for Stock-Based Compensation--Transition and Disclosure," ("SFAS
148") was issued. SFAS 148 amends Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") to provide
alternative methods of transition for a voluntary change to the fair value
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock- based employee compensation and the effect of the method
used on the reported results. The provisions of SFAS 148 are effective for
financial statements for fiscal years ending after December 15, 2002 and interim
periods beginning after December 15, 2002. The adoption of the disclosure
requirements of this statement did not impact our financial position, results of
operations or cash flows.

In December 2002, the Emerging Issues Task Force issued a consensus on
Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21).
EITF 00-21 mandates how to identify whether goods or services or both that are
to be delivered separately in a bundled sales arrangement should be accounted
for as separate units of accounting. The consensus is effective prospectively
for our third quarter of 2003, and we are currently evaluating the effects of
adoption of EITF 00-21 on our service arrangements.

-16-

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities," ("FIN
46"). The interpretation provides guidance for determining when a primary
beneficiary should consolidate a variable interest entity, or equivalent
structure, that functions to support the activities of the primary beneficiary.
The interpretation is effective as of the beginning of the first interim or
annual reporting period beginning after June 15, 2003 for variable interest
entities created before February 1, 2003. The adoption of this statement is not
expected to impact our financial position, results of operations or cash flows.

#### Item 3.  Controls and Procedures

Within 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic
SEC reports. It should be noted that 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, regardless of how remote.

In addition, we reviewed our internal controls, and there have been no
significant changes in our internal controls or in other factors that could
significantly affect those controls subsequent to the date of their last
evaluation.

-17-

#### PART II - OTHER INFORMATION

#### Item 1.  Legal Proceedings

None

#### Item 2.  Changes in Securities and Use of Proceeds

In April 2003, three holders of our 10% Convertible Promissory Notes
exercised their conversion rights at a conversion price of $0.75 per share of
common stock. We had originally received gross proceeds of $163,000 upon the
issuance of these 10% Convertible Promissory Notes. A total of 223,929 shares of
common stock were issued under these conversions including accrued interest
through the date of conversion. These shares of common stock were exempt from
registration pursuant to Section 3(a)(9) of the Securities Act of 1933.

In May and June 2003, we completed a group of private financing
transactions. We received $120,000 of gross proceeds from these transactions. In
these transactions, we sold units consisting of one share of common stock and
one five year common stock purchase warrant at a purchase price of $1.00 per
unit. These securities have been issued to four accredited investors in a
private placement exempt from registration under the Securities Act of 1933 in
reliance on exemptions provided in Section 4(2) and Regulation D promulgated
thereunder. The common stock purchase warrants are exercisable at $2.50 per
share.

We granted the purchasers of these units piggy-back registration rights
covering the shares issued and the shares issuable upon the exercise of the
common stock purchase warrants.

#### Item 3.  Defaults on Senior Securities

None

#### Item 4.  Submission of Matters to a Vote of Security Holders

None

#### Item 5.  Other Information

None

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

a.  Exhibits

None

b.  The Company filed one report on Form 8-K during the
         quarter ended June 30, 2003. amending the Form 8-K dated
         November 26, 2002 to include the pro forma financial information
         relating to the acquisition of OVT, Inc.

-18-

### SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

### SMARTVIDEO TECHNOLOGIES, INC.

|By: | /s/ Richard E. Bennett, Jr.                   |  | August 14, 2003
|--- | --------------------------------------------- |  | ---------------
|    | Richard E. Bennett, Jr.                       |  | Date           
|    | President, Chief Executive Officer & Director
|    | (Principal Executive Officer)                
|    | (Principal Financial and Accounting Officer) 
|    |                                               | 
|   
|   

`CERTIFICATION

     In connection with the Quarterly Report of SmartVideo Technologies, Inc.
(the "Company") on Form 10-QSB for the period ending June 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Richard E. Bennett, Jr., the Chief Executive Officer (Principal Financial and
Accounting Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to
the best of my knowledge:

     (1) The Report fully complies with the requirements of section 13(a) or
     15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
     material respects the financial condition and results of the Company.

Date:  August 14, 2003

                                           /s/  Richard E. Bennett, Jr.
                                                Richard E. Bennett
                                             Chief Executive Officer
                                   (Principal Financial and Accounting Officer)`

-19-

`CERTIFICATION


I, Richard E. Bennett, Jr., certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of SmartVideo
Technologies, Inc.;

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

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

4.   I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

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

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

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

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

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

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

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



Date: August 14, 2003                        /s/  Richard E. Bennett, Jr.
                                                Richard E. Bennett, Jr.
                                          President & Chief Executive Officer
                                            (Principal Executive Officer)
                                    (Principal Financial and Accounting Officer)`

-20-