<SUBMISSION>
<ACCESSION-NUMBER>0001125282-02-003526
<TYPE>10-Q/A
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20020331
<FILING-DATE>20021115
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACTV INC /DE/
<CIK>0000854152
<ASSIGNED-SIC>3663
<IRS-NUMBER>942907258
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q/A
<ACT>34
<FILE-NUMBER>001-10377
<FILM-NUMBER>02830553
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1270 AVE OF THE AMERICAS
<CITY>NEW YORK
<STATE>NY
<ZIP>10020
<PHONE>2122622571
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>12270 AVE OF THE AMERICAS #2401
<STREET2>12270 AVE OF THE AMERICAS #2401
<CITY>NEW YORK
<STATE>NY
<ZIP>10020
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q/A
<SEQUENCE>1
<FILENAME>b321448.htm
<DESCRIPTION>FORM 10-Q/A
<TEXT>
<html>
<head>
    <title>Prepared and filed by St Ives Burrups</title>
</head>
<body>
<a name="cover"></a>
<hr size="3" noshade color="#000000" style="margin-top: -15px">
<hr size="1" noshade color="#000000" style="margin-top: -22px">
<p align="center"><font face="serif" size="2"><b><font size="4">UNITED STATES<br>
  SECURITIES AND EXCHANGE COMMISSION</font></b></font><b><br>
  <font face="serif" size="3">WASHINGTON, D.C. 20549</font></b></p>
<hr width="250" size="2" noshade>
<p align=center><font face="serif" size="4"><b>FORM 10-Q/A</b></font></p>
<hr width="250" size="2" noshade>
<p align="center"><font face="serif" size="2"><b><img src="tickedbox.gif" width="12" height="12">
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AMENDMENT NO. 1 TO QUARTERLY REPORT
  PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934</b></font></p>
<p align=center><font face="serif" size="2"><b>FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002</b></font></p>
<hr width="250" size="2" noshade>
<p align=center><font face="serif" size="4"><b>ACTV, INC</b>.</font><br>
<font face="serif" size="2">(Exact name of registrant as specified in its charter)</font></p>
<hr width="250" size="2" noshade>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td align="center"><font face="serif" size="2"><b><u>DELAWARE</u></b><br>
        (State or other jurisdiction of<br>
        incorporation or organization)</font></td>
    <td align=center valign=bottom width="50%"><font face="serif" size="2"><b><u>94-2907258</u></b><br>
      (I.R.S. Employer<br>
      Identification No.)</font></td>
  </tr>
  <tr valign=bottom>
    <td align="center" bgcolor="#ffffff">&nbsp;</td>
    <td align="center" bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td align="center"><font face="serif" size="2"><b>233
        PARK AVENUE SOUTH<br>
        <u>NEW YORK, NEW YORK</u></b><br>
        (Address of principal executive offices)</font></td>
    <td align=center valign=bottom><font face="serif" size="2"><b><u>10003</u></b><br>
      (Zip Code)</font></td>
  </tr>
</table>
<p align=center><font face="serif" size="2"><b>(212) 497-7000</b><br>  (Registrant&#146;s telephone number, including area code)</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check
  mark whether the registrant (1) has filed all reports required to be filed by
  Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
  12 months (or for such shorter period that the registrant was required to file
  such reports), and (2) has been subject to such filing requirements for the
  past 90 days. Yes <img src="tickedbox.gif"> No <img src="emptybox.gif"></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 8, 2002, there were 55,949,958 shares of the registrant&#146;s common stock outstanding.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amendment No. 1 to Form 10-Q is being filed to give effect to the restatement of the Company&#146;s consolidated  financial statements as discussed in Note 14 to the consolidated financial statements.</font></p>
<p></p>
<p></p>
<hr size="1" noshade color="#000000" style="margin-top: -15px">
<hr size="3" noshade color="#000000" style="margin-top: -24px">
<page>
<a name="p1"></a>
<p><font face="serif" size="2"><b>ITEM 1. FINANCIAL STATEMENTS</b></font></p>
<p align=center><font face="serif" size="2"><b>ACTV, INC. AND SUBSIDIARIES<br>  CONSOLIDATED BALANCE SHEETS (AS RESTATED &#150; SEE NOTE 14)</b></font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>MARCH
      31,<br>
      2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>DECEMBER
      31,<br>
      2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>(Unaudited)</b></font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px">
        <div align="center"><font face="serif" size="2"><b>ASSETS</b></font></div>
      </div></td>
    <td width="2%" bgcolor="#ffffff">&nbsp;</td>
    <td width="8%" bgcolor="#ffffff">&nbsp;</td>
    <td width="2%" bgcolor="#ffffff">&nbsp;</td>
    <td width="2%" bgcolor="#ffffff">&nbsp;</td>
    <td width="8%" bgcolor="#ffffff">&nbsp;</td>
    <td width="2%" bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Current
        assets:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Cash
        and cash equivalents</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">54,082,513</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">69,035,707</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Short-term
        investments</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">17,414,676</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">8,951,695</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Accounts
        receivable-net</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,695,099</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,319,805</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Other</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">1,327,195</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">1,696,617</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Total
        current assets</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">74,519,483</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">81,003,824</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Property
        and equipment-net</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,701,763</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">6,344,631</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Other
        assets:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Restricted
        cash</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">484,913</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">484,913</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Investment
        in warrant</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">13,795,482</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">16,255,355</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Investments&#151;other</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">7,397,776</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">7,397,776</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Patents
        and patents pending</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">8,335,063</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">8,425,889</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Software
        development costs</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,637,524</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,310,100</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Goodwill</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">12,935,701</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">12,935,701</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Other</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,359,156</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,429,132</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Total
        other assets</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">49,945,615</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">52,238,866</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:30px;"><font face="serif" size="2">Total
        assets</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">130,166,861</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">139,587,321</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px">
        <div align="center"><font face="serif" size="2"><b>LIABILITIES AND STOCKHOLDERS&#146;
          EQUITY</b></font></div>
      </div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Current
        liabilities:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"><div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Accounts
        payable and accrued expenses</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">3,650,704</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,664,088</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"><div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Deferred
        revenue</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">3,886,755</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">4,068,450</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:30px"><font face="serif" size="2">Total
        current liabilities</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">7,537,459</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">9,732,538</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Deferred
        revenue</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">66,061,685</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">66,966,638</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Minority
        interest</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">2,426,836</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">3,215,652</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Stockholders&#146;
        equity:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Common
        stock, $0.10 par value, 200,000,000 shares authorized: issued and outstanding
        55,886,982 at March 31, 2002, and 55,881,938 at December 31, 2001</font></div></td>
    <td bgcolor="eeeeee">&nbsp;</td>
    <td bgcolor="eeeeee"><div align="right"><font face="serif" size="2">5,588,698</font></div></td>
    <td bgcolor="eeeeee"><div align="right"></div></td>
    <td bgcolor="eeeeee"><div align="right"></div></td>
    <td bgcolor="eeeeee"><div align="right"><font face="serif" size="2">5,588,194</font></div></td>
    <td bgcolor="eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Additional
        paid-in capital</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">311,479,972</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">317,496,700</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Stockholder
        loans</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(305,281</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(339,035</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Accumulated
        deficit</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(262,622,508</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(263,073,366</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Total
        stockholders&#146; equity</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">54,140,881</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">59,672,493</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:30px"><font face="serif" size="2">Total
        liabilities and stockholders&#146; equity</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">130,166,861</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">139,587,321</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
</table>
<p align=center><font face="serif" size="2"><b>SEE NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS.</b></font></p>
<p></p>
<p align=center><font face="serif" size="2">1</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p2"></a>
<p align=center><font face="serif" size="2"><b>ACTV, INC. AND SUBSIDIARIES<br>  CONSOLIDATED STATEMENTS OF OPERATIONS<br>  (UNAUDITED)</b></font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>THREE
      MONTHS<br>
      ENDED MARCH 31,</b></font><br>
      <hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Revenue</font></div></td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">3,186,421</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">3,273,442</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Costs
        and expenses:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Selling,
        general and administrative expenses</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">6,050,416</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">14,089,135</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Stock-based
        compensation (income)/expense</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(6,002,831</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">1,302,494</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Depreciation
        and amortization</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,305,461</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,419,522</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Amortization
        of goodwill</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">418,498</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Total
        costs and expenses</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,353,046</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">17,229,649</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Income/(loss)
        from operations</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">1,833,375</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(13,956,207</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Interest
        income</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">288,540</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,620,408</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Other
        expense</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">2,459,873</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">8,735,412</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Loss
        before minority interest and cumulative effect of accounting change</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(337,958</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(21,071,211</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Minority
        interest-subsidiaries</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">788,816</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">694,615</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Income/(loss)
        before cumulative effect of accounting change</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">450,858</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(20,376,596</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Cumulative
        transition effect of adopting SFAS No. 133</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(58,732,197</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net
        income/(loss)</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">450,858</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(79,108,793</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net
        income/(loss) per share</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Basic</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Before
        cumulative effect of accounting change</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">0.01</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(0.39</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px"><font face="serif" size="2">Cumulative
        transition effect of adopting SFAS No. 133</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(1.12</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Basic
        net income/(loss) per share</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">0.01</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(1.51</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-10px"><font face="serif" size="2">Diluted</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Before
        cumulative effect of accounting change</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">0.01</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(0.39</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px"><font face="serif" size="2">Cumulative
        transition effect of adopting SFAS No. 133</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(1.12</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px"><font face="serif" size="2">Diluted
        net income/(loss) per share</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">0.01</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(1.51</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Shares
        used in basic calculations</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">55,883,934</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">52,358,579</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Shares
        used in diluted calculations</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">56,862,945</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">52,358,579</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
</table>
<p align=center><b><font face="serif" size="2">SEE NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS.</font></b></p>
<p></p>
<p align=center><font face="serif" size="2">2</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p3"></a>
<p align=center><font face="serif" size="2"><b>ACTV, INC. AND SUBSIDIARIES<br>  CONSOLIDATED STATEMENTS OF CASH FLOWS<br>  (UNAUDITED)</b></font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>THREE MONTHS<br> ENDED MARCH 31,</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Cash flows from operating activities:</font></div></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Net income/(loss)</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">450,858</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(79,108,793</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Adjustments to reconcile net income/(loss) to net cash used in operations:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cumulative transition effect of adopting SFAS No. 133</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">58,732,197</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Change in fair value of warrant</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,459,873</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">8,735,412</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Depreciation and amortization</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,305,461</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,838,019</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Amortization of deferred revenue</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(904,953</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(904,953</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Deferred revenue</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(181,695</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(147,334</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Stock-based compensation</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(6,002,831</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,302,494</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Common stock issued in lieu of cash payment</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,767,275</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Minority interest</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(788,816</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(694,615</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Changes in assets and liabilities:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Accounts receivable</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(375,294</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1,152,241</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Other assets</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">386,543</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(995,571</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Accounts payable and accrued expenses</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(2,013,383</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(4,914,100</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Net cash used in operating activities</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(5,664,237</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(15,542,210</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Cash flows from investing activities:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Investment in short-term investments</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(8,462,981</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Investment in patents</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(71,689</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(182,357</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Investment in property and equipment</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(265,099</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(3,804,775</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Investment in software development costs</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(509,549</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(747,446</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Strategic investments</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(118,460</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Net cash used in investing activities</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(9,309,318</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(4,853,038</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Cash flows from financing activities:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Transfer to restricted cash</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1,157,030</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Net proceeds from equity financings</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,611</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">74,972</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Repayment of stockholder loans</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">18,750</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">35,910</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Net cash provided by/(used) financing activities</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">20,361</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1,046,148</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Net decrease in cash and cash equivalents</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(14,953,194</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(21,441,396</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cash and cash equivalents, beginning of period</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">69,035,707</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">122,488,041</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cash and cash equivalents, end of period</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">54,082,513</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">101,046,645</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"><font face="serif" size="2"><b>SUPPLEMENTAL DISCLOSURE TO THE
  CONSOLIDATED STATEMENTS OF CASH FLOWS</b></font></p>
<p><div style="text-indent: 3%"><font face="serif" size="2">The following schedule provides additional information concerning acquisitions:</font></div><p></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>FOR
      THE THREE MONTHS ENDED MARCH 31,</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Retirement of common stock</font></div></td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">15,004</font></td>
    <td width="2%">&nbsp;</td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">&#151;</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Purchase acquisitions:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Assets acquired (excluding cash)</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,948,392</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Liabilities assumed</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,744,148</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Market value of shares issued</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">27,475,090</font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="center"><b><font face="serif" size="2">SEE NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS.</font></b></p>
<p></p>
<p align=center><font size="2" face="serif">3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p4"></a>
<p align=center><font face="serif" size="2"><b>ACTV, INC. AND SUBSIDIARIES<br>  CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY<br>  (UNAUDITED)<br>  (AS RESTATED &#150; SEE NOTE 14)</b></font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>COMMON
      STOCK</b></font><br>
      <hr noshade size="1"></td>
    <td rowspan="2">&nbsp;</td>
    <td colspan=2 rowspan="2" align=center valign=bottom><font face="serif" size="1"><b>STOCKHOLDER</b></font><br>
<font face="serif" size="1"><b>LOAN</b></font></td>
    <td rowspan="2">&nbsp;</td>
    <td colspan=2 rowspan="2" align=center valign=bottom><font face="serif" size="1"><b>ADDITIONAL<br>
      PAID IN</b></font><br>
<font face="serif" size="1"><b>CAPITAL</b></font></td>
    <td rowspan="2">&nbsp;</td>
    <td colspan=2 rowspan="2" align=center valign=bottom><font face="serif" size="1"><b>ACCUMULATED</b></font><br>
      <font face="serif" size="1"><b>DEFICIT</b></font></td>
    <td rowspan="2">&nbsp;</td>
    <td colspan="2">&nbsp;</td>
    <td rowspan="2">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>SHARES</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>AMOUNT</b></font></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>TOTAL</b></font></td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">December
        31, 2001</font></div></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">55,881,938</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,588,194</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(339,035</font></td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">317,496,700</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(263,073,366</font></td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td width="2%" valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width="8%" align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">59,672,493</font></td>
    <td width="2%" bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Issuance
        of shares in connection with exercise of stock options &amp; warrants</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">6,711</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">671</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">940</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">1,611</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Adjustment
        in deferred stock compensation</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(6,002,831</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(6,002,831</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Rescission/repayment
        of shareholder loans</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">33,754</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">33,754</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Retirement
        of stock</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(1,667</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(167</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(14,837</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(15,004</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Net
        income</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">&#151;</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">450,858</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">450,858</font></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:10px; text-indent:-10px"><font face="serif" size="2">Balance
        at March 31, 2002</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">55,886,982</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">5,588,698</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(305,281</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">311,479,972</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(262,622,508</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">54,140,881</font></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff"> <hr noshade size="2"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
</table>
<p align=center><b><font face="serif" size="2">SEE NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS.</font></b></p>
<p></p>
<p align=center><font face="serif" size="2">4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p5"></a>
<p align=center><font face="serif" size="2"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>  THREE MONTHS ENDED MARCH 31, 2002 AND 2001</b></font></p>
<p><font face="serif" size="2"><b>1.&nbsp;&nbsp;BASIS OF PRESENTATION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The results of operations
  for the three months ended March 31, 2002 and 2001 are not necessarily indicative
  of a full year&#146;s operations. In the opinion of management, the accompanying
  consolidated financial statements include all adjustments of a normal recurring
  nature, which are necessary to present fairly such financial statements.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All significant intercompany
  balances and transactions have been eliminated in consolidation. Certain information
  and footnote disclosures normally included in the financial statements prepared
  in accordance with generally accepted accounting principles have been condensed
  or omitted.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These unaudited consolidated
  financial statements should be read in conjunction with the audited financial
  statements and notes thereto included in our annual report on Form 10-K/A for
  the year ended December 31, 2001.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We consider all highly
  liquid debt instruments purchased with an original maturity of three months
  or less to be cash equivalents.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain reclassifications
  have been made to the prior years&#146; financial statements to conform to the
  2002 presentation.</font></p>
<p><font face="serif" size="2"><b>2.&nbsp;&nbsp;RECENT ACCOUNTING PRONOUNCEMENTS</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July 2001, the
  Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 142 (&#147;SFAS 142&#148;), &#147;Goodwill and Other Intangible
  Assets&#148;, effective for fiscal years beginning after December 15, 2001.
  Under SFAS 142, goodwill and intangible assets deemed to have indefinite lives
  will no longer be amortized but will be subject to annual impairment tests.
  Other intangible assets will continue to be amortized over their useful lives.
  We adopted SFAS 142 beginning on January 1, 2002. We will perform the first
  of the required impairment tests of goodwill using the methodology prescribed
  by SFAS 142 by June 30, 2002. We have not yet determined the final expected
  effect the adoption of SFAS 142 will have on our statement of financial condition,
  but do not believe it will be material.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following pro
  forma information for the three months ended March 31, 2001 presents net loss
  and loss per common share adjusted to exclude goodwill amortization expense
  of $418,498 recognized during the period.</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net loss:</font></div></td>
    <td width="2%">&nbsp;</td>
    <td align=right valign=bottom width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">As reported</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(79,108,793</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Pro
        forma</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(78,690,295</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Loss
        per common share&#151;Basic and Diluted:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">As reported</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1.51</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Pro
        forma</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1.50</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
</table>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2001,
  the FASB issued Statement of Financial Accounting Standards No. 144, Accounting
  for the Impairment or Disposal of Long-Lived Assets, (&#147;SFAS 144&#148;),
  which is effective for financial statements issued for fiscal years beginning
  after December 15, 2001. The objectives of SFAS 144 are to address significant
  issues relating to the implementation of Statement of Financial Accounting Standard
  No. 121, (&#147;SFAS 121&#148;), Accounting for the Impairment of Long-Lived
  Assets and for Long-Lived Assets to Be Disposed Of, and to develop a single
  accounting model, based on the framework established in SFAS 121, for long-lived
  assets to be disposed of by sale, whether previously held and used or newly
  acquired. The Company adopted SFAS 144 as of January 1, 2002. The adoption of
  SFAS 144 had no impact on the Company&#146;s financial statements.</font></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p6"></a>
<p><font face="serif" size="2"><b>3.&nbsp;&nbsp;INTANGIBLE ASSETS AND GOODWILL</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill totaled
  $12.9 million at March 31, 2002 and December 31, 2001. Our other intangible
  assets consist of patents, which as of March 31, 2002 and December 31, 2001
  were as follows:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>Gross<br> Intangible<br> Assets</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>Accumulated<br> Amortization</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>Net Intangible<br> Assets</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">March 31, 2002</font></div></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Patents</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">10,104,845</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1,769,782</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">8,335,063</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">December 31, 2001</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Patents</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">10,033,157</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1,607,268</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">8,425,889</font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization expense
  related to patents totaled $162,515 and $149,240 million during the three months
  ended March 31, 2002 and 2001, respectively. The estimated aggregate future
  amortization expense for intangible assets remaining as of March 31, 2002 is
  as follows:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Remainder of 2002</font></div></td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">502,442</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">2003</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">667,378</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">2004</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">667,378</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">2005</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">667,378</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">2006</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">667,378</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Thereafter</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">5,163,109</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">8,335,063</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font face="serif" size="2"><b>4.&nbsp;&nbsp;FINANCIAL INSTRUMENTS</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January
  1, 2001, we adopted Statement of Financial Accounting Standards (&#147;SFAS&#148;)
  No. 133, &#147;Accounting for Derivative Instruments and Hedging Activities&#148;
  (&#147;SFAS 133&#148;), as amended by SFAS 137 and 138. SFAS 133 requires that
  all derivative financial instruments be recorded on the balance sheet at fair
  value. The provisions of SFAS 133 affected accounting for 2.5 million restricted
  warrants of Liberty Livewire Corporation held by us. Prior to the adoption of
  SFAS 133, we carried the warrants at cost. With the adoption of SFAS 133, we
  now record the warrants at fair value. The adoption of SFAS 133 resulted in
  our recording a cumulative effect transition adjustment loss of $58.7 million
  at January 1, 2001. Beginning in the first quarter of 2001, we have recorded
  subsequent changes in the fair value of the warrants in our statements of operations,
  which resulted in a charge of $2.5 million and $8.7 million for the three months
  ended March 31, 2002 and 2001, respectively.</font></p>
<p><font face="serif" size="2">There may be periods with significant non-cash increases or decreases to our net income/loss related to the  changes in the fair value of the Livewire investment. The carrying value of our derivative instrument approximates fair  value. We determine the fair value of the Livewire warrants by reference to underlying market values of Liberty  Livewire&#146;s common stock as reported by Nasdaq, and on estimates using the Black-Scholes valuation model.</font></p>
<p><font face="serif" size="2"><b>5.&nbsp;&nbsp;MERGER AND ACQUISITION ACTIVITY</b></font></p>
<p><font face="serif" size="2"><b>ACQUISITION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2001, we
  acquired all of the assets and business of Intellocity, Inc., a technology and
  engineering solutions provider focusing on the interactive television market.
  The aggregate purchase price of $27.5 million consisted of 4,007,890 shares
  of our common stock, aggregating $23.2 million, and options to purchase 762,665
  shares of our common stock, valued at $4.3 million. The purchase agreement provided
  for a future payment by us of up to 1.5 million shares and options that was
  contingent upon Intellocity&#146;s achieving certain performance targets for
  the year ended December 31, 2001. Intellocity failed to meet those targets,
  thereby releasing us from this additional payment obligation. Intellocity shareholders
  are subject to provisions restricting the sale of the ACTV stock; these restrictions
  range over 4 years. The acquisition was accounted for in the first quarter of
  2001 under the purchase method of accounting.</font></p>
<p></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p7"></a>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fair value of
  assets acquired and liabilities assumed in the acquisition of Intellocity amounted
  to approximately $1.5 million. We calculated goodwill, representing the excess
  cost over the fair value of net assets acquired, to be $26.4 million. Through
  December 31, 2001, we were amortizing this amount over a seven-year period.
  In connection with our year-end review of 2001 results, we conducted a study
  of the realizability of the goodwill value attributed to Intellocity at December
  31, 2001. As a result of this study, we recorded an impairment charge to goodwill
  of $11.2 million during the fourth quarter of 2001, adjusting the asset value
  of such goodwill from $23.2 million to $12.0 million.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We adopted SFAS 142
  as of January 1, 2002 and accordingly recorded no amortization of goodwill for
  the quarter ended March 31, 2002 (See Note 2). The results of Intellocity&#146;s
  operations are included in our consolidated results from the date of acquisition.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table
  presents the pro forma results of operations had the acquisition of Intellocity
  been completed as of January 1, 2001. The pro forma results are shown for illustrative
  purposes only and do not purport to be indicative of the results that would
  have been reported if the business combination had occurred on the date indicated
  or that may occur in the future. These pro forma amounts include estimates and
  assumptions that we believe are reasonable.</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>For
      the Three Months<br>
      Ended<br>
      March 31, 2001</b></font></td>
    <td align=center valign=bottom>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Revenues</font></div></td>
    <td width=2% valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td width=10% align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">4,489,730</font></td>
    <td width=2% bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Loss
        before minority interest and cumulative effect of accounting change</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(21,918,915</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Loss
        before cumulative effect of accounting change</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(21,224,300</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net
        loss</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(79,956,497</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Basic
        and diluted loss per share:</font></div></td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Before
        cumulative effect of accounting change</font></div></td>
    <td bgcolor="#eeeeee">&nbsp;</td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(0.25</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Cumulative
        effect of accounting change</font></div></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#ffffff"><font face="serif" size="2">(1.11</font></td>
    <td valign=bottom bgcolor="#ffffff"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#eeeeee"> <div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Basic
        and diluted loss per share</font></div></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">(1.36</font></td>
    <td valign=bottom bgcolor="#eeeeee"><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom>
    <td bgcolor="#ffffff"></td>
    <td colspan=2 valign=bottom bgcolor="#ffffff"> <hr noshade size="1"></td>
    <td bgcolor="#ffffff">&nbsp;</td>
  </tr>
</table>
<p><font face="serif" size="2"><b>6.&nbsp;&nbsp;MINORITY INTEREST</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record a minority
  interest benefit resulting from Digital ADCO, in which third parties hold a
  minority equity position. Digital ADCO was formed in November 1999 by co-founders
  ACTV, Inc. and Motorola Broadband. Digital ADCO develops applications for the
  delivery of addressable advertising. Under the terms of our agreement with Motorola
  Broadband, we licensed five of our patents to Digital ADCO and Motorola Broadband
  licensed six of its patents and made a capital commitment to Digital ADCO. During
  August 2000, OpenTV made a capital contribution and contributed patents on a
  non-exclusive basis to Digital ADCO. Additionally, we formed Digital ADCO International
  to license and distribute products and services outside of North America and
  other western hemisphere countries. Digital ADCO, Inc.&#146;s issued and outstanding
  shares of capital stock presently consist of Class A common stock, having one
  vote per share, and Class B common stock, having 25 votes per share. Open TV
  currently owns all of the issued and outstanding Class A common shares. Motorola
  Broadband and we together own all of the issued and outstanding Class B common
  shares. We currently own 45.9% of Digital ADCO. We consolidate the results of
  our Digital ADCO subsidiary, despite our ownership position of 45.9%, due to
  our exercise of voting control with respect to such subsidiary.</font></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p8"></a>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months
  ended March 31, 2002 and 2001, we allocated losses in the amount of $685,559
  and $694,615, respectively, from Digital ADCO to its minority shareholders.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also record a
  minority interest benefit from one other subsidiary, Advision LLC, in which
  we currently hold 51% equity ownership. For the three months ended March 31,
  2002, we allocated losses in the amount of $103,257 to the minority shareholders
  of this subsidiary.</font></p>
<p><font face="serif" size="2"><b>7.&nbsp;&nbsp;SEGMENT INFORMATION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have two principal
  business segments, the Digital Television segment and the Enhanced Media segment.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information concerning
  our business segments for the three months ending March 31, 2002 and 2001 are
  as follows:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>For the Three Months<br> Ended March 31,</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Revenues</font></div></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">856,109</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">723,316</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,330,312</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,550,126</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">3,186,421</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">3,273,442</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Depreciation &amp; Amortization</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">744,497</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">689,001</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">306,530</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">418,715</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated Corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">254,434</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">730,304</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">1,305,461</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">1,838,020</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Interest Income</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">11,652</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">114,158</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">9,119</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,807</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated Corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">267,769</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">1,503,443</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">288,540</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">1,620,408</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net Income/(Loss)</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1,538,746</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1,832,434</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1,920,274</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(2,736,374</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated Corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">3,909,878</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(74,539,985</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">450,858</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(79,108,793</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Capital Expenditures</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">182,498</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">1,541,673</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">54,176</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated Corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">82,601</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">2,208,926</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">265,099</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">3,804,775</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p9"></a>
<p><font face="serif" size="2"><b>Balance Sheet Accounts as of</b></font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>March 31,<br> 2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>December 31,<br> 2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Current Assets</font></div></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">4,407,139</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">4,061,843</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">5,431,673</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">4,735,475</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">64,680,671</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">72,206,506</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">74,519,483</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">81,003,824</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total Assets</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Digital Television</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">12,148,495</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">12,022,462</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Enhanced Media</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">22,424,077</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">24,471,782</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Unallocated corporate</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">95,594,289</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">103,093,077</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">130,166,861</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">139,587,321</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font face="serif" size="2"><b>8.&nbsp;&nbsp;EXECUTIVE INCENTIVE COMPENSATION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incurred executive incentive compensation expense related to an executive bonus of $2,300,000 for the three  months ended March 31, 2001. This expense, which related to an executive incentive compensation provision that  subsequently was cancelled in the second quarter of 2001, was based on changes in the market value of our common  stock and paid in unregistered securities.</font></p>
<p><font face="serif" size="2"><b>9.&nbsp;&nbsp;INVESTMENT IN WARRANT</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ACTV and Liberty
  Livewire LLC, a unit of Livewire (formerly known as Todd AO Corporation), entered
  into a joint marketing agreement to market &#147;HyperTV(R) with Livewire&#148;
  in April 2000. Livewire has the right to use our patented HyperTV convergence
  technology in providing to advertisers, TV programmers, studios and networks
  such services as application hosting, web authoring, data management, and e-commerce.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with
  our entering into the joint marketing agreement, we received warrants to acquire
  2,500,000 shares of Livewire at $30 per share. The warrants, which become exercisable
  at the rate of 500,000 shares per year, beginning April 13, 2001, include certain
  registration rights and may be exercised until March 31, 2015. With certain
  exceptions, the warrants are not transferable. We previously recorded an investment
  and corresponding deferred revenue in the amount of $76,016,175, the estimated
  value of the warrants as of April 2000. We amortize the deferred revenue into
  income over a period of 21 years, the contractual term of the joint marketing
  agreement.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The estimated fair
  value of the warrants at March 31, 2002 and December 31, 2001 was $13.8 million
  and $16.3 million, respectively. We perform fair value estimates of the warrants
  using Black-Scholes pricing model. Currently, we account for the warrants under
  SFAS No. 133 (See Note 4).</font></p>
<p align=center><font face="serif" size="2"> </font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p10"></a>
<p><font face="serif" size="2"><b>10.&nbsp;&nbsp;NET INCOME/(LOSS) PER
  SHARE</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table
  sets forth the computation of basic and diluted loss per share:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>Three Months Ended March 31,</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2002</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>2001</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Numerator:</font></div></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Income/(loss) before cumulative effect of accounting change</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">450,858</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(20,376,596</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cumulative transition effect of adopting SFAS No. 133</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(58,732,197</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Net income/(loss)</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">450,858</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(79,108,793</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Denominator:</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Basic weighted-average shares outstanding</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">55,883,934</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">52,358,579</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Weighted-average options outstanding</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">979,011</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Diluted weighted-average shares outstanding</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">56,862,945</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">52,358,579</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Net income/(loss) per share</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Basic</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Before cumulative effect of accounting change</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">0.01</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(0.39</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cumulative transition effect of adopting SFAS No. 133</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1.12</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Basic net income/(loss) per share</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">0.01</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1.51</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Diluted</font></div></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Before cumulative effect of accounting change</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">0.01</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(0.39</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:10px; text-indent:10px"><font face="serif" size="2">Cumulative transition effect of adopting SFAS No. 133</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">&#151;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">(1.12</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td></td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:20px"><font face="serif" size="2">Diluted net income/(loss) per share</font></div></td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">0.01</font></td>
    <td>&nbsp;</td>
    <td valign=bottom><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom><font face="serif" size="2">(1.51</font></td>
    <td valign=bottom><font face="serif" size="2">)</font></td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="2"></td>
    <td><hr noshade size="2"></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font face="serif" size="2"><b>11.&nbsp;&nbsp;CORPORATE RESTRUCTURING</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the third
  and fourth quarter 2001, we completed certain restructuring initiatives. The
  restructuring charges totaled $6.6 million and related to the surrender of real
  estate leases and employee severance expenses. During the three months ended
  March 31, 2002, approximately $0.7 million of the accrued restructuring charges
  were paid. At March 31, 2002, we had $0.1 million remaining in accrued restructuring
  charges to be paid out during the second quarter of 2002.</font></p>
<p></p>
<p align=center><font face="serif" size="2"> </font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p11"></a>
<p><font face="serif" size="2"><b>12.&nbsp;&nbsp;SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH ACTIVITIES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded a reduction
  in stock-based compensation expense in the amount of $6,002,831 for the three
  months ended March 31, 2002, and recorded non-cash, stock-based compensation
  expense in connection with vested variable options of $1,302,494 for the three
  months ended March 31, 2001. In the first quarter of 2002, we rescinded the
  applicable option exercise provisions that resulted in the variable option accounting
  treatment for such options in our financial statements.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During both the quarter
  ended March 31, 2002 and the quarter ended March 31, 2001, we recorded revenue
  of $904,954 from amortization of the deferred revenue recognized in connection
  with the Liberty Livewire warrants (See Note 9).</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2002,
  we canceled outstanding options totaling 2,093,334 shares at exercise prices
  of $6.50 to $13.50 and, in their place, granted new options totaling 1,046,667
  shares at an exercise price of $2.00 per share, which was above the market value
  of such shares at the time of grant. The grantees are all present or former
  employees of ours.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The newly granted
  options will be subject to variable option accounting treatment. That is, if
  the closing market price of our common stock is greater than $2.00 per share
  at any reporting date, we will recognize a non-cash compensation expense equal
  to the difference between such market price and $2.00 times the number of outstanding
  option shares subject to variable accounting treatment. To the extent that we
  are carrying an accrued expense of this type at any given reporting date and
  there is a decline in the market price of our stock at the end of the subsequent
  reporting period, we will recognize a reduction in expense for the subsequent
  period.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our March 31, 2002
  consolidated financial statements reflect no expense related to the 1,046,667
  variable options, since the closing market price of our common stock at March
  31, 2002 was less than the option exercise price of $2.00 per share.</font></p>
<p><font face="serif" size="2"><b>13.&nbsp;&nbsp;SUBSEQUENT EVENT</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of May 3, 2002,
  we signed a letter agreement with Liberty Media Corporation regarding a possible
  acquisition of all outstanding shares of ACTV common stock. Under the terms
  of the letter agreement, Liberty, which currently owns approximately 16% of
  our outstanding shares, would purchase all remaining shares at a price of $2.00
  per share. Such purchase price would be payable in either cash, shares of Liberty
  Series A common stock, or the publicly traded common stock of a Liberty subsidiary
  or affiliate. We have entered into a 65-day exclusive negotiating period with
  Liberty with respect to the possible transaction, during which Liberty will
  conduct due diligence and negotiate definitive terms with us. Should the exclusive
  period end without either a signed definitive agreement between the parties,
  or a decision by either party not to proceed with the possible transaction,
  Liberty may elect, for a period of one day following the end of the exclusive
  period, to acquire the remaining outstanding shares of our common stock at a
  price of $2.00 per share. Neither Liberty nor we can provide any assurances
  that a definitive agreement will be reached, or that a transaction ultimately
  will be consummated. Any potential transaction calling for the acquisition of
  all outstanding shares of our common stock would require the board approval
  of Liberty Media and ACTV as well as our shareholder approval.</font></p>
<p><font face="serif" size="2"><b>14.&nbsp;&nbsp;RESTATEMENT</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent to the
  issuance of the Company&#146;s interim financial statements for the three months
  ended March 31, 2002, management noted an error in the calculations of the minority
  interest of Digital ADCO, Inc. and SpotOn International, Ltd. This resulted
  in an adjustment of approximately $6.9 million between minority interest and
  additional paid-in capital as of March 31, 2002 and December 31, 2001. This
  change has no impact on the Company&#146;s previously reported cash flows or
  results from operations.</font></p>

<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A summary of the
  significant effects of the restatement is as follows:</font></p>
<table width="80%" border="0" align="center" cellpadding="0" cellspacing="0">
  <tr valign=bottom>
    <td></td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>March 31, 2002,</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td colspan=5 align=center valign=bottom><font face="serif" size="1"><b>December 31, 2001</b></font><br>
<hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="1"><b>Balance
        Sheet</b></font></div></td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>As Previously<br> Reported</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>As Restated</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>As Previously<br> Reported</b></font></td>
    <td>&nbsp;</td>
    <td colspan=2 align=center valign=bottom><font face="serif" size="1"><b>As Restated</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
    <td><hr noshade size="1"></td>
    <td><hr noshade size="1"></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Minority Interest</font></div></td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">9,311,838</font></td>
    <td width="2%">&nbsp;</td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">2,426,836</font></td>
    <td width="2%">&nbsp;</td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">10,100,654</font></td>
    <td width="2%">&nbsp;</td>
    <td valign=bottom width="2%"><font face="serif" size="2">$</font></td>
    <td align=right valign=bottom width="8%"><font face="serif" size="2">3,215,652</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#ffffff">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Additional Paid-In Capital</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">304,594,970</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">311,479,972</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">310,611,698</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">317,496,700</font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=bottom bgcolor="#eeeeee">
    <td><div style="margin-left:20px; text-indent:-20px"><font face="serif" size="2">Total Stockholders&#146; Equity</font></div></td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">47,255,879</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">54,140,881</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">52,787,491</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align=right valign=bottom><font face="serif" size="2">59,672,493</font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<p></p>
<p align=center><font face="serif" size="2"> </font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p12"></a>
<p><font face="serif" size="2"><b>ITEM 2.&nbsp;&nbsp;MANAGEMENT&#146;S DISCUSSION
  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></font></p>
<p><font face="serif" size="2"><b>OVERVIEW</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should read the
  following discussion together with our consolidated financial statements and
  related notes included elsewhere. The results discussed below are not necessarily
  indicative of the results to be expected in any future periods. To the extent
  that the information presented in this discussion addresses financial projections,
  information or expectations about our products or markets or otherwise makes
  statements about future events, such statements are forward-looking and are
  subject to a number of risks and uncertainties that could cause actual results
  to differ materially from the statements made. For further information about
  forward-looking statements, see &#147;Special Note Regarding Forward-Looking
  Statements&#148; in our annual report on Form 10-K/A for the year ended December
  31, 2001.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a digital
  media company that provides proprietary technologies, tools, and technical and
  creative services for interactive TV advertising, programming, and enhanced
  media applications. We have two operating business segments, which we call Digital
  TV and Enhanced Media.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our
  Digital TV technologies are unique in providing targeting, interactivity and
  accountability for television commercials, and in giving viewers the ability
  to instantly customize their viewing experiences for a wide variety of programming
  applications. Our Enhanced Media technologies allow both for the enhancement
  of video and audio content, including standard TV programming, with Web-based
  information and interactivity.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe the expansion
  of digital TV transmission systems and the emergence of platforms providing
  the simultaneous delivery of video and Internet content (convergence programming),
  will allow television distributors, advertisers and programmers to bring interactivity
  to a mass audience. We believe that our proprietary technologies, tools, and
  expertise in providing technical and creative services position us to capitalize
  on this growth.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have received
  strategic investments from Liberty Media Corporation, our largest shareholder,
  and Motorola Broadband Communications Sector.</font></p>
<p><font face="serif" size="2"><b>RESULTS OF OPERATIONS</b></font></p>
<p><font face="serif" size="2"><b>COMPARISON OF THREE-MONTH PERIODS ENDED MARCH 31, 2002 AND MARCH 31, 2001</b></font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues</i>.
  During the three-month period ended March 31, 2002, our revenues decreased 3%,
  to $3,186,421, compared with $3,273,442 in the three-month period ended March
  31, 2001. The decrease was the result of a decline in revenues of our Enhanced
  Media business. Revenue recognized from the Livewire joint marketing arrangement
  was $904,953 for both periods. Such revenue represents 28% of our total revenues
  for each of the three months ended March 31, 2002 and 2001.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Selling,
  General, and Administrative Expenses</i>. Total selling, general and administrative
  expenses decreased approximately 57% in the first quarter of 2002, to $6,050,416,
  from $14,089,135 in the first quarter of 2001. The decrease reflects significantly
  reduced personnel, occupancy and related expenses in the more recent quarter
  as a result of our corporate restructuring implemented in the second half of
  2001.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-Based Compensation</i>.
  We realized a reduction of stock-based compensation expense of $6.0 million
  for the three months ended March 31, 2002, compared with a stock-based compensation
  expense of $1.3 million for the three months ended March 31, 2001. We had been
  recording a charge to or reduction of stock-based compensation expense in relation
  to increases and decreases in the market value of the our common stock above
  the exercise price of certain employee options. These options were subject to
  variable option accounting treatment. In the first quarter of 2002, we rescinded
  the applicable option exercise provisions that resulted in the variable option
  accounting treatment of such options and, as a consequence, reversed the accrued
  stock-based compensation expense at December 31, 2001, of approximately $6.0
  million.</font></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p13"></a>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
  Amortization. </i>Depreciation and amortization expense decreased 29% in the
  first quarter of 2002, to $1,305,461, from $1,838,020 in the first quarter of
  2001. The decrease is due principally to our adoption of SFAS 142 as of January
  1, 2002, resulting in no amortization expense for goodwill in the three months
  ended March 31, 2002.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Expense.</i>
  Other expense comprises the change in fair value of warrants held by us, which
  we currently account for as a derivative instrument, pursuant to the requirements
  of SFAS No. 133. For the three months ended March 31, 2002, we recorded a decrease
  in the value of the warrants of $2.5 million, compared with a decrease of $8.7
  million for the three months ended March 31, 2001.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest Income.
  </i>Interest income in first quarter of 2002 was $288,540, compared with $1,620,408
  in the first quarter of 2001. The decrease was the result of significantly reduced
  prevailing interest rates and lower average cash balances during the more recent
  quarter. We incurred no interest expense in the first quarter of 2002 or 2001.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative Transition
  Effect of Change in Accounting Principle. </i>January 1, 2001, we adopted Statement
  of Financial Accounting Standards (&#147;SFAS&#148;) No. 133, &#147;Accounting
  for Derivative Instruments and Hedging Activities&#148; (&#147;SFAS 133&#148;),
  as amended by SFAS 137 and 138. SFAS 133 requires that all derivative financial
  instruments be recorded on the balance sheet at fair value. The provisions of
  SFAS 133 affected accounting for 2.5 million restricted warrants of Liberty
  Livewire Corporation held by us. Prior to the adoption of SFAS 133, we carried
  the warrants at cost. With the adoption of SFAS 133, we now record the warrants
  at fair value. The adoption of SFAS 133 resulted in our recording a cumulative
  effect transition adjustment loss of $58.7 million at January 1, 2001. Beginning
  in the first quarter of 2001, we have recorded subsequent changes in the fair
  value of the warrants in our statements of operations.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Income/(Loss).
  </i>For the three months ended March 31, 2002, our net income was $450,858 or
  $0.01 per basic and diluted share, compared to a net loss of $79,108,793 or
  $1.51 per basic and diluted share for the three months ended March 31, 2001.</font></p>
<p><font face="serif" size="2"><b>LIQUIDITY AND CAPITAL RESOURCES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since our inception,
  we have not generated revenues sufficient to fund our operations and have incurred
  operating losses. Through March 31, 2002, we had an accumulated deficit of $262.6
  million. Our cash position on March 31, 2002 (including short-term investments)
  was $71.4 million, compared with $77.9 million on December 31, 2001.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used
  In Operating Activities. </i>During the three month period March 31, 2002, we
  used cash of $5.7 million for operations, compared with $15.5 million for the
  three months ended March 31, 2001. The decrease in net cash used by operating
  activities principally relates to lower operating losses and decreased working
  capital uses.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used
  In Investing Activities. </i>For the three month period ended March 31, 2002,
  we used cash for investing activities of $9.3 million, compared with $4.9 million
  for the three months ended March 31, 2001. The increase in cash used in investing
  activities is due to an increase in our short-term investments.</font></p>
<p><font face="serif" size="2"><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided
  By (Used In) Financing Activities. </i>We had no significant cash used or provided
  by financing activities for either the first three months of 2002 or 2001. We
  have and continue to fund our cash requirements from the net proceeds of a public,
  follow-on offering completed in February 2000. Through a group of underwriters,
  we sold a total of 4.6 million common shares, resulting in net proceeds of $129.4
  million. In addition, in the year ended December 31, 2000, Liberty Digital,
  Inc. invested an additional $20 million in us by exercising a warrant granted
  in March 1999, and OpenTV and Motorola invested a total of $13.0 million in
  our Digital ADCO subsidiary.</font></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p14"></a>
<p><font face="serif" size="2"><b>CRITICAL ACCOUNTING POLICIES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of patents
  which represent patent acquisition costs and legal costs relating to patents
  pending, is being amortized on a straight-line basis over the estimated economic
  lives of the respective patents (averaging 15 years), which is less than the
  statutory life of each patent.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We capitalize costs
  incurred for the development of software products when economic and technological
  feasibility of such products has been established. Capitalized software costs
  are amortized on a straight-line basis over the estimated useful lives of the
  respective products</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded a charge
  or a credit to stock-based compensation expense for increases or decreases,
  in the market value of the our common stock in excess of the exercise price
  of certain employee options, which were subject to variable option accounting
  treatment. We recorded a credit in stock-based compensation for the quarter
  ended March 31, 2002 as the market price of our common stock declined in the
  first quarter 2002 as compared to its value as of December 31, 2001. We recorded
  an increase in stock-based compensation expense for the quarter ended March
  31, 2001 as the market price of our common stock declined in first quarter 2001
  as compared to its value as of December 31, 2000.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of
  financial statements in conformity with generally accepted accounting principles
  requires us to make estimates and assumptions that affect the reported amount
  of assets and liabilities and disclosures of contingent assets and liabilities
  at the date of the financial statements and the reported amounts of revenues
  and expenses during the reporting period. Our actual results could differ from
  these estimates.</font></p>
<p><font face="serif" size="2"><b>IMPACT OF INFLATION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation has not
  had any significant effect on the Company&#146;s operating costs.</font></p>
<p><font face="serif" size="2"><b>ITEM 3.</b>&nbsp;&nbsp;<b>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our interest income
  is affected by changes in the general level of U.S. interest rates. Changes
  in U.S. interest rates could affect the interest earned on our cash equivalents
  and investments. Currently, changes in U.S. interest rates would not have a
  material effect on the interest earned on our cash equivalents and investments.
  A majority of these cash equivalents and investments earn a fixed rate of interest
  while the remaining portion earns interest at a variable rate. We do not anticipate
  that exposure to interest rate market risk will have a material impact on us
  due to the nature of our investments.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During April 2000,
  we received a warrant to acquire 2,500,000 shares of Livewire, a publicly traded
  company. The warrant becomes exercisable at the rate of 500,000 shares per year,
  commencing on April 13, 2001, includes certain registration rights and may be
  exercised until March 31, 2015. The warrant is not transferable, except in certain
  circumstances. We estimated the value of the warrant to be $76,016,175 at the
  date it was received, using the Black-Scholes pricing model, with a risk free
  rate of 6.5%, a volatility of 80% and assuming no cash dividends. The estimated
  value of the warrant at December 31, 2000 was $17.3 million, using the same
  assumptions. As of January 1, 2001, changes in fair value in the investment
  in warrant were recorded to the statement of operations as we adopted SFAS No.
  133. The estimated value of the warrant at March 31, 2002 was $13.8 million.
  We expect the value of the warrant to fluctuate based on the underlying stock
  price of Livewire. We do not currently expect to exercise or register shares
  in the coming year.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded stock-based
  compensation expense based on increases and decreases in the market price of
  our common stock above the exercise price of certain employee options, which
  were subject to variable option accounting treatment. To the extent that we
  had a stock-based compensation obligation at the beginning of a given reporting
  period, we recognized a reduction in stock-based compensation expense related
  to unexercised variable options for that period based on a reduction of the
  market price for our stock at the end of the period. The obligation would increase
  as the market price for our common stock increases at the end of a reporting
  period.</font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2002,
  we canceled outstanding options totaling 2,093,334 shares at exercise prices
  of $6.50 to $13.50 and, in their place, granted new options totaling 1,046,667
  shares at an exercise price of $2.00 per share. The grantees are all present
  or former employees of ours. The newly granted options will be subject to variable
  option accounting treatment. That is, if the closing market price of our common
  stock is greater than $2.00 per share at any reporting date, we will recognize
  a non-cash compensation expense equal to the difference between such market
  price and $2.00 times the number of outstanding option shares subject to variable
  accounting treatment. To the extent that we are carrying an accrued expense
  of this type at any given reporting date and there is a decline in the market
  price of our stock at the end of the subsequent reporting period, we will recognize
  a reduction in expense for the subsequent period.</font></p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p15"></a>
<p align=center><font face="serif" size="2"><b>PART II.</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>OTHER INFORMATION</b></font></p>
<p><font face="serif" size="2"><b>ITEM 1.&nbsp;&nbsp;LEGAL PROCEEDINGS</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ACTV, Inc. and its
  wholly-owned subsidiary HyperTV Networks, Inc. are co-plaintiffs in a civil
  action filed against The Walt Disney Co., ABC, Inc. and ESPN, Inc. in December,
  2000, which action alleges that the defendants&#146; &#147;Enhanced TV&#148;
  system synchronizing a web site application to, amongst others, ESPN Sunday
  Night and ABC Monday Night Football telecasts, has infringed and is continuing
  to infringe certain of the plaintiffs&#146; patents. That action is continuing
  in the U.S. District Court, Southern District of New York.</font></p>
<p><font face="serif" size="2"><b>ITEM 2.&nbsp;&nbsp;CHANGES IN SECURITIES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p><font face="serif" size="2"><b>ITEM 3.&nbsp;&nbsp;DEFAULTS UPON SENIOR SECURITIES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</font></p>
<p><font face="serif" size="2"><b>ITEM 4.&nbsp;&nbsp;SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></p>
<p><font face="serif" size="2"><b>ITEM 5.&nbsp;&nbsp;OTHER INFORMATION</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></p>
<p><font face="serif" size="2"><b>ITEM 6.&nbsp;&nbsp;EXHIBITS AND REPORTS ON FORM 8-K</b></font></p>
<p></p>
<table width="80%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">(a)</font></td>
    <td colspan="3"><font face="serif" size="2">Exhibits</font></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td width=5%>&nbsp;</td>
    <td width=4%>&nbsp;</td>
    <td width=3%><font face="serif" size="2">11</font></td>
    <td width=2%>&nbsp;</td>
    <td><font face="serif" size="2">Computation of Net (loss)/income per share
      &#150; See Note 11</font></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><a href="b321448_ex99-1.htm"><font face="serif" size="2">99.1</font></a></td>
    <td>&nbsp;</td>
    <td><a href="b321448_ex99-1.htm"><font face="serif" size="2">Certification
      by David Reese, Chief Executive Officer</font></a></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><a href="b321448_ex99-2.htm"><font face="serif" size="2">99.2</font></a></td>
    <td>&nbsp;</td>
    <td><a href="b321448_ex99-2.htm"><font face="serif" size="2">Certification
      by Christopher C. Cline, Chief Financial Officer</font></a></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">(b)</font> <p></p></td>
    <td colspan="3"><font face="serif" size="2">Reports on Form 8-K: None.</font>
      <p></p></td>
  </tr>
</table>


<p>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p16"></a>
<p align=center><font face="serif" size="2"><b>SIGNATURES</b></font></p>
<p><font face="serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements
  of the Securities Exchange Act of 1934, the registrant has duly caused this
  report to be signed on its behalf by the undersigned thereunto duly authorized.</font></p>
<p align=center></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width=50%>&nbsp;</td>
    <td><font face="serif" size="2"><b>ACTV, INC.</b></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">Registrant</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font face="serif" size="2">Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;November
      15, 2002</font></td>
    <td><font face="serif" size="2">/ s/ David Reese</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr size="1" noshade></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">David Reese</font></td>
  </tr>
  <tr>
    <td height="20">&nbsp;</td>
    <td><font face="serif" size="2">Chairman, Chief Executive Officer and Director</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font face="serif" size="2">Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;November
      15, 2002</font></td>
    <td><font face="serif" size="2">/ s/ Christopher C. Cline</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><hr size="1" noshade></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">Christopher C. Cline</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">Chief Financial Officer</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">(principal financial and accounting officer)</font></td>
  </tr>
</table>
<p></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p17"></a>
<p align=center><font face="serif" size="2"><b>Form of Sarbanes-Oxley Section 302(a) Certification</b></font></p>
<p><font face="serif" size="2">I, David Reese, Chief Executive Officer of ACTV, Inc., certify that:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">1.</font></td>
    <td><font face="serif" size="2">I have reviewed this quarterly report on Form
      10-Q/A of ACTV, Inc.;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">2.</font></td>
    <td><font face="serif" size="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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">3.</font></td>
    <td><font face="serif" size="2">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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">4.</font></td>
    <td><font face="serif" size="2">The registrant&#146;s other certifying officers
      and I are responsible for establishing and maintaining disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
      the registrant and we have:</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">a)</font></td>
    <td><font face="serif" size="2">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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">b)</font></td>
    <td><font face="serif" size="2">evaluated the effectiveness of the registrant&#146;s
      disclosure controls and procedures as of a date within 90 days prior to
      the filing date of this quarterly report (the &#147;Evaluation Date&#148;);
      and</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">c)</font></td>
    <td><font face="serif" size="2">presented in this quarterly report our conclusions
      about the effectiveness of the disclosure controls and procedures based
      on our evaluation as of the Evaluation Date.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">5.</font></td>
    <td><font face="serif" size="2">The registrant&#146;s other certifying officers
      and I have disclosed, based on our most recent evaluation, to the registrant&#146;s
      auditors and the audit committee of registrant&#146;s board of directors
      (or persons performing the equivalent functions):</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">a)</font></td>
    <td><font face="serif" size="2">all significant deficiencies in the design
      or operation of internal controls which could adversely affect the registrant&#146;s
      ability to record, process, summarize and report financial data and have
      identified for the registrant&#146;s auditors any material weaknesses in
      internal controls; and</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">b)</font></td>
    <td><font face="serif" size="2">any fraud, whether or not material, that involves
      management or other employees who have a significant role in the registrant&#146;s
      internal controls.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">6.</font></td>
    <td><font face="serif" size="2">The registrant&#146;s other certifying officers
      and I have indicated in this quarterly report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of our most
      recent evaluation, including any corrective actions with regard to significant
      deficiencies and material weaknesses.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<p><font face="serif" size="2">Date: November 15, 2002</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2"><u>/s/ David Reese</u> </font></td>
  </tr>
  <tr valign=top>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2">David Reese<br>
      Chief Executive Officer</font></td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<p></p>
<p align=center><font face="serif" size="2"> </font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p20"></a>
<p align=center><font face="serif" size="2"><b>Form of Sarbanes-Oxley Section 302(a) Certification</b></font></p>
<p><font face="serif" size="2">I, Christopher C. Cline, Chief Financial Officer of ACTV, Inc., certify that:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">1.</font></td>
    <td><font face="serif" size="2">I have reviewed this quarterly report on Form
      10- Q/A of ACTV, Inc.;</font></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td><font face="serif" size="2">2.</font></td>
    <td><font face="serif" size="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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">3.</font></td>
    <td><font face="serif" size="2">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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">4.</font></td>
    <td><font face="serif" size="2">The registrant&#146;s other certifying officers
      and I are responsible for establishing and maintaining disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
      the registrant and we have:</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">a)</font></td>
    <td><font face="serif" size="2">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;</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">b)</font></td>
    <td><font face="serif" size="2">evaluated the effectiveness of the registrant&#146;s
      disclosure controls and procedures as of a date within 90 days prior to
      the filing date of this quarterly report (the &#147;Evaluation Date&#148;);
      and</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">c)</font></td>
    <td><font face="serif" size="2">presented in this quarterly report our conclusions
      about the effectiveness of the disclosure controls and procedures based
      on our evaluation as of the Evaluation Date.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">5.</font></td>
    <td><font face="serif" size="2">&nbsp;</font><font face="serif" size="2">The
      registrant&#146;s other certifying officers and I have disclosed, based
      on our most recent evaluation, to the registrant&#146;s auditors and the
      audit committee of registrant&#146;s board of directors (or persons performing
      the equivalent functions):</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">a)</font></td>
    <td><font face="serif" size="2">all significant deficiencies in the design
      or operation of internal controls which could adversely affect the registrant&#146;s
      ability to record, process, summarize and report financial data and have
      identified for the registrant&#146;s auditors any material weaknesses in
      internal controls; and</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">&nbsp;</font></td>
    <td width="3%"><font face="serif" size="2">b)</font></td>
    <td><font face="serif" size="2">any fraud, whether or not material, that involves
      management or other employees who have a significant role in the registrant&#146;s
      internal controls.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">6.</font></td>
    <td><font face="serif" size="2">The registrant&#146;s other certifying officers
      and I have indicated in this quarterly report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of our most
      recent evaluation, including any corrective actions with regard to significant
      deficiencies and material weaknesses.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<p><font face="serif" size="2">Date: November 15, 2002</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2"><u>/s/ Christopher C. Cline</u></font></td>
  </tr>
  <tr valign=top>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2">Christopher C. Cline<br>
      Chief Executive Officer</font></td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>

<hr noshade align="center" width="100%" size="2">

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>b321448_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<html>
<head>
    <title>Prepared and filed by St Ives Burrups</title>
</head>
<body>

<p align=right><font face="serif" size="2"><b>Exhibit 99.1</b></font></p>


<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align=center><font face="serif" size="2"><b>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE  SARBANES-OXLEY ACT OF 2002</b></font></p>
<p><font face="serif" size="2">In connection with the Quarterly Report of ACTV, Inc. (the &#147;Company&#148;) on Form 10-Q/A for the period ending March  31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the &#147;Report&#148;), I, David Reese, Chief  Executive 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:</font></p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">1)</font></td>
    <td><font face="serif" size="2">&nbsp;</font><font face="serif" size="2">The
      Report fully complies with the requirements of section 13(a) or 15(d) of
      the Securities Exchange Act of 1934; and</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td width="3%"><font face="serif" size="2">2)</font></td>
    <td><font face="serif" size="2">&nbsp;</font><font face="serif" size="2">The
      information contained in the Report fairly presents, in all material respects,
      the financial condition and result of operations of the Company.</font></td>
  </tr>
  <tr>
    <td><font face="serif" size="2">&nbsp;</font></td>
  </tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr valign=top>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr valign=top>
    <td width="50%">&nbsp;</td>
    <td width="5%"><p><font face="serif" size="2">By:<br>
        Name: Title:</font></p></td>
    <td><font face="serif" size="2"><i><u>/s/</u></i><u> David Reese<br>
      </u>David Reese<br>
      Chief Executive Officer</font></td>
  </tr>
  <tr valign=top>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>

<hr noshade align="center" width="100%" size="2">
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>b321448_ex99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<html>
<head>
    <title>Prepared and filed by St Ives Burrups</title>
</head>
<body>


<p align=right><font face="serif" size="2"><b>Exhibit 99.2</b></font></p>


<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align=center><font face="serif" size="2"><b>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE  SARBANES-OXLEY ACT OF 2002</b></font></p>
<p><font face="serif" size="2">In connection with the Quarterly Report of ACTV,
  Inc. (the &#147;Company&#148;) on Form 10-Q/A for the period ending March 31,
  2002 as filed with the Securities and Exchange Commission on the date hereof
  (the &#147;Report&#148;), I, Christopher C. Cline, Chief Financial 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:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="3%"><font face="serif" size="2">&nbsp;1)</font></td>
    <td><font face="serif" size="2">The Report fully complies with the requirements
      of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and </font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><font face="serif" size="2">2)</font></td>
    <td><font face="serif" size="2">The information contained in the Report fairly
      presents, in all material respects, the financial condition and result of
      operations of the Company.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="50%">&nbsp;</td>
    <td width="5%"><font face="serif" size="2">By:<br>
      Name:<br>
      Title: </font></td>
    <td><font face="serif" size="2"><i><u>/s/</u></i><u> Christopher C. Cline</u><br>
      Christopher C. Cline <br>
      Chief Financial Officer </font></td>
  </tr>
</table>
<p>&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
</body>
</html>

</TEXT>
</DOCUMENT>
</SUBMISSION>
