EXHIBIT INDEX APPEARS ON PAGE
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2000
Commission File Number: 0-17170
TELVUE CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 51-0299879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16000 Horizon Way, Suite 500
Mt. Laurel, New Jersey 08054
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code:(856) 273-8888
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
------ ------
Number of shares of registrant's common stock outstanding as of October 30,
2000: 24,721,583 shares.
Transitional Small Business Disclosure Form: Yes No X
------ ------
This report includes a total of 15 pages.
TELVUE CORPORATION
INDEX
PAGE
NO.
-----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of September 30, 2000
(unaudited) and as of December 31, 1999
Statements of Operations for the three
months ended September 30, 2000 (unaudited)
and September 30, 1999 (unaudited)
Statements of Operations for the nine
months ended September 30, 2000 (unaudited)
and September 30, 1999 (unaudited)
Statements of Cash Flows for the nine
months ended September 30, 2000 (unaudited)
and September 30, 1999 (unaudited)
Notes to Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
PART I. Financial Information
ITEM I. Financial Statements
TELVUE CORPORATION
BALANCE SHEETS
September 30, December 31,
2000 1999
------------- -----------
<S> <C> <C>
ASSETS (Unaudited) *
CURRENT ASSETS
Cash and cash equivalents $ 521,533 $ 325,698
Accounts receivable - trade 668,497 752,297
Deferred tax asset 300,000 204,000
Other current assets 21,754 16,573
----------- ----------
TOTAL CURRENT ASSETS 1,511,784 1,298,568
PROPERTY AND EQUIPMENT
Machinery and equipment 5,067,976 5,039,277
Less accumulated depreciation 4,425,525 4,123,653
----------- ----------
642,451 915,624
OTHER ASSETS
Deferred tax asset 1,243,405 1,632,656
Other assets 9,300 13,875
---------- ----------
1,252,705 1,646,531
---------- ----------
$3,406,940 $3,860,723
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Notes payable-majority stockholder-current $ 346,811 $ 1,228,198
Accrued interest-majority stockholder-current 913,000 -
Accounts payable 64,368 355,343
Accrued expenses 315,069 171,610
Accrued dividends 1,161,171 844,488
----------- ----------
TOTAL CURRENT LIABILITIES 2,800,419 2,599,639
NOTES PAYABLE - MAJORITY STOCKHOLDER, net
of current portion - 29,901
ACCRUED INTEREST - MAJORITY STOCKHOLDER, net
Of current portion 1,507,174 2,420,174
REDEEMABLE CONVERTIBLE PREFERRED STOCK, $1 par
value, 6,900,000 shares authorized,
3,518,694 shares issued and outstanding 3,518,694 3,518,694
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, $.01 par value, 100,000,000
shares authorized, 24,721,583 and 24,199,500
shares issued and outstanding 247,216 241,995
Additional paid-in capital 1,582,310 1,550,985
Accumulated deficit (6,248,873) (6,500,665)
----------- -----------
(4,419,347) (4,707,685)
----------- -----------
$3,406,940 $3,860,723
=========== ===========
* Derived from audited financial statements.
The accompanying unaudited notes are an integral part of these statements.
<PAGE>
TELVUE CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
----------------------------
2000 1999
---- ----
REVENUES $ 1,200,307 $ 1,411,637
OPERATING EXPENSES
Service 456,373 638,450
Selling and marketing 133,255 130,582
General and administrative 128,867 155,386
Depreciation 86,376 147,049
----------- -----------
804,871 1,071,467
----------- -----------
OPERATING INCOME 395,436 340,170
OTHER INCOME (EXPENSE)
Interest income 5,879 6,653
Interest expense (66,146) (89,053)
----------- -----------
(60,267) (82,400)
----------- -----------
INCOME BEFORE INCOME TAXES 335,169 257,770
INCOME TAX (114,222) (87,663)
------------ ----------
NET INCOME 220,947 170,107
DIVIDENDS ON REDEEMABLE
CONVERTIBLE PREFERRED STOCK (105,561) (105,561)
----------- ------------
NET INCOME (LOSS) AVAILABLE TO
COMMON STOCKHOLDERS $ 115,386 $ 64,546
=========== ============
NET INCOME (LOSS) PER COMMON SHARE
BASIC $.00 $.00
============ ===========
DILUTED $.00 $.00
============ ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 24,677,209 24,194,500
========== ==========
DILUTED 87,013,313 83,818,420
========== ==========
The accompanying unaudited notes are an integral part of these statements.
<PAGE>
TELVUE CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
September 30,
----------------------------
2000 1999
---- ----
REVENUES $ 3,711,528 $ 4,423,531
OPERATING EXPENSES
Service 1,484,234 1,825,704
Selling and marketing 415,334 427,857
General and administrative 448,270 479,330
Depreciation 301,872 544,264
----------- -----------
2,649,710 3,277,155
----------- -----------
OPERATING INCOME 1,061,818 1,146,376
OTHER INCOME (EXPENSE)
Interest income 13,621 16,941
Interest expense (213,712) (283,059)
----------- -----------
(200,091) (266,118)
----------- -----------
INCOME BEFORE INCOME TAXES 861,727 880,258
INCOME TAX (293,252) (299,287)
------------ ----------
NET INCOME 568,475 580,971
DIVIDENDS ON REDEEMABLE
CONVERTIBLE PREFERRED STOCK (316,683) (316,683)
----------- ------------
NET INCOME (LOSS) AVAILABLE TO
COMMON STOCKHOLDERS $ 251,792 $ 264,288
=========== ============
NET INCOME (LOSS) PER COMMON SHARE
BASIC $.01 $.01
============ ===========
DILUTED $.01 $.01
============ ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 24,507,556 24,194,500
========== ==========
DILUTED 86,843,660 83,818,420
========== ==========
The accompanying unaudited notes are an integral part of these statements.
<PAGE>
TELVUE CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months Ended
September 30,
----------------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 568,475 $ 580,971
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 301,872 544,264
Deferred taxes 293,252 320,272
Changes in assets and liabilities:
Decrease (increase) in -
Accounts receivable - trade 83,800 (16,897)
Other receivables - 311
Other current assets (5,181) (15,819)
Other assets 4,575 -
Increase (decrease) in -
Accounts payable (290,975) (277,457)
Accrued expenses 143,458 77,388
Income taxes payable - (8,661)
Accrued interest - majority stockholder - (274,663)
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 1,099,276 929,709
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (28,699) (214,831)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt reduction:
Notes payable - majority stockholder (911,288) (793,178)
Issuance of common stock 36,546 -
----------- ----------
NET CASH USED BY FINANCING ACTIVITIES (874,742) (793,178)
----------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 195,835 (78,300)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 325,698 453,569
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 521,533 $ 375,269
========== ==========
The accompanying unaudited notes are an integral part of these statements.
<PAGE>
TELVUE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
----------------------
Summary Financial Information and Results of Operations
--------------------------------------------------------
In the opinion of management, the accompanying unaudited financial
statements have been prepared in conformance with generally accepted
accounting principles and with the regulations of the Securities and
Exchange Commission and contain all adjustments (consisting of only normal
recurring adjustments) necessary to make the financial statements not
misleading and to present fairly the financial condition as of September
30, 2000, the results of operations for the three and nine months ended
September 30, 2000 and 1999 and cash flows for the nine months ended
September 30, 2000 and 1999.
Interim Financial Information
-----------------------------
While management believes that the disclosures presented are adequate to
prevent misleading information, these unaudited financial statements must be
read in conjunction with the audited financial statements and notes included
in the Company's Form 10-KSB report for the year ended December 31, 1999, as
filed with the Securities and Exchange Commission.
Prior period financial statements have been reclassified to conform to
current quarter presentation.
2. SUPPLEMENTAL CASH FLOW INFORMATION:
-----------------------------------
Supplemental disclosures of cash paid (refunded) during the period-
2000 1999
---- ----
Income taxes - ($12,324)
Interest $213,712 $557,722
Non-cash Investing and Financing Transactions
---------------------------------------------
The Company accrued dividends on its redeemable convertible preferred stock
of 316,683 for each of the nine months ended September 30, 2000 and 1999.
During the nine months ended September 30, 2000 and 1999, no shares of
preferred stock were issued in payment of preferred stock dividends.
3. EARNINGS (LOSS) PER COMMON SHARE:
--------------------------------
Basic earnings per common share is computed by dividing net income, after
deduction of preferred stock dividends, by the weighted average number of
shares of outstanding. Diluted earnings per common share is computed by
dividing net income, after deduction of preferred stock dividends, when
applicable, by the weighted average number of shares outstanding adjusted
to include incremental common shares that would have been outstanding if
potentially dilutive common shares had been issued. Incremental shares of
62,336,104 and 59,623,920 for the nine months ended September 30, 2000 and
1999, respectively, were used in the calculation of diluted earnings per
common share.
The following is reconciliation from basic earnings per share to diluted
earnings per share for the nine months ended September 30, 2000 and 1999.
Net Income
Available Average
to Common Shares Earnings
Stockholders Outstanding Per Share
------------ ----------- ---------
2000 $ 251,792 24,507,556 $ .01
Effect of dilution
Warrants - 29,915,160
Convertible preferred stock 316,683 31,200,660
Convertible accrued interest - 955,701
Vested unexercised stock options - 264,583
---------- ---------- -----
Diluted $ 568,475 86,843,660 $ .01
========== ========== =====
1999 $ 264,288 24,194,500 $ .01
Effect of dilution
Warrants - 29,915,160
Convertible preferred stock 316,683 28,385,559
Convertible accrued interest - 955,701
Vested unexercised stock options - 367,500
---------- ---------- -----
Diluted $ 580,971 83,818,420 $ .01
========== ========== =====
4. DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK:
----------------------------------------------------
As of September 30, 2000, undeclared dividends on outstanding preferred
stock amounted to $1,161,171.
5. CORPORATE INCOME TAXES:
-----------------------
The Company uses the asset and liability method of accounting for income
taxes in accordance with Financial Accounting Standards Board Statement
(SFAS) No. 109, "Accounting for Income Taxes". SFAS 109 requires
recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the differences between the financial
statement carrying amounts and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse. Differences between financial reporting and tax bases
arise most frequently from differences in timing of income and expense
recognition. Deferred income tax expense is measured by the change in the
net deferred income tax asset or liability during the year.
The provisions for income tax benefit (expense) consist of the following
components:
2000 1999
----------- ----------
Current
Federal $ - $ 20,985
State - -
----------- ----------
- $ 20,985
Deferred
Federal (293,252) (320,272)
State - -
---------- ----------
(293,252) (320,272)
---------- ----------
$(293,252) $(299,287)
========== ==========
The Company has a net operating loss carryforward of approximately
$1,798,000 on a tax-reporting basis. The carryforward will begin to expire
in 2004, if not utilized.
Differences between the effective income tax rate and the statutory federal
income tax rate were primarily the result of the change in the valuation
allowance.
6. NOTES PAYABLE AND ACCRUED INTEREST - MAJORITY STOCKHOLDER:
----------------------------------------------------------
As of September 30, 2000, the Company had various outstanding notes due to
the majority stockholder, Mr. H.F. Lenfest, in the aggregate principal
amount of $346,811 and accrued interest due on these notes in the aggregate
amount of $2,420,174. Effective as of March 31, 2000, the Company obtained
from the majority stockholder an extension to January 1, 2002, of his prior
agreement not to demand repayment of his loans or the accrued interest on
the loans. The Company has decided to voluntarily make, and the majority
stockholder has agreed to accept, monthly payments in the amount of $125,000
through December 31, 2000. The Company makes current interest payments from
the monthly payment and the balance of the payment is applied to loan
principal. The Company may make monthly payments in excess of $125,000 when,
in the opinion of management, the Company has excess cash that is not needed
to fund operations. The Company made payments of $1,125,000 during the nine
months ended September 30, 2000. The Company expects to pay the entire
principal balance within the next twelve months and therefore has classified
the principal balance as a current liability on the balance sheet. The
Company has also classified $913,000 of the accrued interest as a current
liability on the balance sheet.
7. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company has received notice from a cable operating company customer
asserting its right to be indemnified against claims of patent infringement
made against the cable operator by a third party. The third party has
alleged to the cable operator that portions of the cable operator's pay-
per-view operations infringe one or more patents held by such party. The
Company has not received any notice of alleged infringement from the third
party. The Company has retained independent patent counsel to review the
third party patents and the alleged infringement. The Company is unable at
this time to determine if it has liability under the indemnity provisions
of the contracts with the cable operator or the amount of such liability if
it exists.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
TelVue Corporation (the "Company") is a marketing and service company
that primarily sells automatic number identification ("ANI")
telecommunications services to the cable television and direct broadcast
satellite ("DBS") industries for the automated ordering of pay-per-view
features and events (the "Service"). The Company provides the Service
through equipment it purchases. The Company's equipment for providing the
Service nationwide is located at the Company's home office in Mt. Laurel,
New Jersey. The equipment provides enhanced service features, such as,
"Custom Greeting" which identifies the cable operator by name, "Title
Speak" which speaks the movie or event title, start-time and channel
appearance on accepted orders, and "Call Redirect" which automatically
redirects unaccepted order calls to the cable operator's customer service
representative for assistance. The Company believes these enhanced service
features are necessary for it to remain competitive within the pay-per-view
ANI industry. The equipment also speaks promotional messages for products
and services (the "PPV+ service") at the time a cable or direct broadcast
satellite subscriber (the "Subscribers") places an order for a pay-per-view
movie or event. The Company serves cable television and DBS systems across
the United States via trunk lines and data circuits that it currently
leases from MCIWorldcom. The Company believes it receives a favorable trunk
usage rate from MCIWorldcom.
The Company had net income of $220,947 and $568,475 for the three and
nine months ended September 30, 2000, respectively, compared to $170,107
and $580,971 for the three and nine months ended September 30, 1999,
respectively. Included in net income is income tax expense $114,222 and
$293,252 for the three and nine months ended September 30, 2000,
respectively, compared to $87,663 and $299,287 for the three and nine
months ended September 30, 1999, respectively. As of September 30, 2000,
the Company's net operating loss carryforward was approximately $1,798,000
on a tax-reporting basis (see Note 5 to the Company's financial
statements).
Service revenue decreased $211,330 and $712,003 for the three and nine
months ended September 30, 2000, respectively. This is a result of a
decrease in the average monthly buy rate from 13.0% to 8.2% and from 13.7%
to 9.1% for the three and nine months ended September 30, 2000,
respectively. The Company believes the decrease in the buy rates is
attributable to a somewhat weak movie product, a lack of major special
events and the movement of cable operators to impulse ordering on digital
cable systems (see below).
There was a corresponding decrease in service expenses of $182,077 and
$341,470 for the three and nine months ended September 30, 2000,
respectively, which is primarily a result of a decrease in trunk expense of
$204,628 and $412,455 for the three and nine months ended September 30,
2000, respectively. The trunk expense decrease is due to the buy rate
reduction (see above), a decrease in the telephone rates charged by
MCIWorldcom, and retroactive credits received from MCIWorldcom during the
third quarter 2000, as a result of new contract rates.
During the nine months ended September 30, 2000, the Company purchased
$28,699 of equipment compared to $214,831 purchased during the nine months
ended September 30, 1999. Although the Company has continued to add
subscribers to its service during the nine months ended September 30, 2000,
additional equipment to expand call capacity has not been needed because of
the reduced call volume associated with the lower buy rates. Depreciation
accounted for 11% of total operating expenses for the nine months ended
September 30, 2000, compared to 17% for the nine months ended September 30,
1999.
Selling and marketing expenses increased 2% and decreased 3% for the
three and nine months ended September 30, 2000, respectively. These nominal
increases and decreases in selling and marketing expenses are the net
result of fluctuations in various expense categories that are unrelated to
the buy rates. General and administrative expenses decreased 17% and 6%
for the three and nine months ended September 30, 2000, respectively. The
decrease for the three months ended September 30, 2000, is partially a
result of a decrease in legal expense of $16,989 and a decrease in
consulting expense (see below). During the third quarter 1999, legal
expenses were incurred related to the drafting of the Company's stock
option plan. No such expense was incurred in the third quarter 2000.
Another contributor to the decrease in general and administrative expenses
was a decrease in consulting expense of $8,680 and $42,333 for the three
and nine months ended September 30, 2000, respectively. During 1999, the
Company incurred consulting expenses related to a business development
project. No such expense was incurred during the three and nine months
ended September 30, 2000.
As of September 30, 2000, the Company was serving approximately
17,097,000 full-time cable subscribers and 1,446,000 part-time cable
subscribers, compared to approximately 12,200,000 full-time cable
subscribers and 4,100,000 part-time cable subscribers served as of
September 30, 1999. The part-time subscribers did not significantly
contribute to the revenue or service expenses for the nine months ended
September 30, 2000 and 1999.
Total liabilities decreased $742,121 and total assets decreased
$453,783 for the nine months ended September 30, 2000. The decrease in
total liabilities was primarily a result of a decrease in notes payable -
majority stockholder of $911,288, due to debt repayment. The decrease in
assets is partially attributable to a decrease in deferred tax asset of
$293,251, and an increase in accumulated depreciation of $301,872. The
Company's days for sales in accounts receivable is 52 days at September 30,
2000 compared to 49 days at September 30, 1999. The Company does not offer
incentives or discounts to its customers, nor has it changed its credit
terms with its customers.
The Company had positive cash flow from operating activities of
$1,099,276 for the nine months ended September 30, 2000, compared to
$929,709 for the nine months ended September 30, 1999. Net cash provided
by operating activities increased over 1999, primarily because the Company
paid $274,663 in accrued interest on the loans to the majority stockholder
during the nine months ended September 30, 1999. During the nine months
ended September 30, 2000, no accrued interest was paid to the majority
stockholder, rather only current monthly interest was paid. Ignoring
changes in operating assets and liabilities that result from timing issues,
and considering only adjustments to reconcile net income to net cash
provided by operating activities, the Company would have positive cash flow
from operating activities of $1,163,599 for the nine months ended September
30, 2000, compared to positive cash flow from operating activities of
$1,445,507 for the nine months ended September 30, 1999. The decrease in
cash is a result of a reduction in service revenue due to the decrease in
buy rates (see above).
Since November 2, 1989, the Company has funded its expansion and
operating deficit from the proceeds from the sale of shares of the
Company's Common Stock and Preferred Stock to Mr. Lenfest and from
borrowings from Mr. Lenfest. From November 1989 to February 1996, the
Company borrowed an aggregate of $6,128,712 from Mr. Lenfest. The interest
rates on the loans range from a floating rate based on the prime rate of
PNC Bank to a fixed rate of 12%. Interest on one of the loans is payable
quarterly and, at the option of the Company may be paid by the delivery of
shares of the Company's Preferred Stock at the rate of one share of
Preferred Stock for each one dollar of accrued interest. Accrued interest
on this loan was $143,348 as of September 30, 2000, and there was no
outstanding principal. Interest due on this loan prior to 1998, in the
amount of $473,682 has been paid with 473,682 shares of Preferred Stock. In
addition, during January 1995, Mr. Lenfest purchased from Science Dynamics
Corporation the Company's non-interest bearing note in the amount of
$541,000.
The Company remains dependent upon the deferral of a lump sum
repayment of principal and interest due to Mr. Lenfest to fund operations
and capital expenditures from operating cash flow. Effective as of March
31, 2000, the Company obtained from Mr. Lenfest a written agreement stating
he will not demand repayment of his loans or the cash payment of accrued
interest on the loans through January 1, 2002. On January 1, 1999, the
Company began to pay current monthly interest payments to Mr. Lenfest from
its monthly loan payment. The balance of the payment is applied to loan
principal. During the nine months ended September 30, 2000, the Company
made payments to Mr. Lenfest of $125,000 per month bringing the total
payments to $1,125,000 for the nine months ended September 30, 2000. The
Company intends to continue to make voluntary monthly repayments to Mr.
Lenfest in the amount of $125,000 through the remainder of 2000 and
management believes it will be able to fund its core business from
operating cash flow through December 31, 2000. The aggregate outstanding
loan balance due to Mr. Lenfest as of September 30, 2000, is $346,811 in
loan principal and $2,420,174 in accrued interest (see Note 6 to the
Company's financial statements).
The Company's ability to fund its operating expenses primarily depends
on three factors: (i) the continued expansion of the Company's subscriber
base, (ii) the cable industries buy rates, and (iii) the continued deferral
by Mr. Lenfest of a lump sum cash repayment of his loans to the Company.
Management believes its present marketing strategies will further increase
the customer base, although there can be no assurances that the Company
will be
able to attract any further customers or that it will retain its current
customers. In addition, revenues are affected by the "buy rates" of
subscribers connected to the Service. The Company has no control over the
buy rates and therefore cannot assure that buys rates will increase or will
remain at their current level. As noted above, the Company experienced a
decrease in the average monthly buy rate from 13.0% and 13.7% for the three
and nine months ended September 30, 1999, respectively, to 8.2% and 9.1%
for the three and nine months ended September 30, 2000, respectively.
The decrease in buy rates noted above is partially a result of the
movement of cable operators to impulse ordering on digital cable systems.
Some cable operators have begun deploying digital services to their
customers. These digital services will allow cable operators to offer
additional channels and to offer additional pay-per-view channels. Where
the cable operators have activated two-way cable plant (i.e. the operator
is able to send a signal to and receive a signal from its customer), the
digital service can also allow the cable operator to process ordering of
pay-per-view movies and events directly from its customers, without using
the Company's service. The long-term effect of the deployment of digital
two-way service on the Company is not clear. The deployment of digital
cable and the activation of two-way service require a significant capital
commitment from the cable operator. In addition, the Company has found
that some cable operators with digital service have chosen to use the
Company's single number ordering technology for pay-per-view ordering. In
addition, the Company believes that the Company's patent pending Internet
pay-per-view technology for pay-per-view order processing may be used by
cable operators as an additional method for the operator's customers to
order pay-per-view movies and events. The Company intends to monitor
developments in the rollout of digital services by its cable operator
customers and to attempt to position the Company to continue to be the
cable operator's provider of choice for processing pay-per-view orders.
However, there can be no assurances that the Company will be successful in
this effort.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Certificate of Incorporation of the Company (incorporated by
reference to the Company's Registration Statement on Form S-8, dated
March 30, 1989 (the "Registration Statement")).
3.2 Bylaws of the Company (incorporated by reference to the Company's
Registration Statement).
3.3 Certificate of Amendment of Certificate of Incorporation of the
Company, dated April 11, 1990 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1991, (the "1991 Form 10-K")).
3.4 Certificate of Amendment of Certificate of Incorporation of the
Company, dated March 15, 1991 (incorporated by reference to the 1991
Form 10-K).
3.5 Form of copy of Amendment of Certificate of Incorporation of the
Company, filed September 25, 1995 (incorporated by reference to the
Company's Form 10-QSB for the period ended September 30, 1995, (the
September 30, 1995 Form 10-QSB)).
4.3 Warrant Agreement, dated March 15, 1991, between the Company and
H.F. Lenfest (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1990, (the "1990
Form 10-K")).
4.4 Certificate of Designation of Class A Preferred Stock (incorporated
by reference to the September 30, 1990 Form 10-Q).
4.5 The TelVue Corporation 1999 Stock Option Plan (incorporated by
reference to Exhibit 99 of the Company's Registration Statement on
Form S-8, dated September 23, 1999), (the "1999 Stock Option Plan")).
4.6 Form of ISO Option Agreement issued pursuant to the 1999 Stock Option
Plan (incorporated by reference to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999, (the "1999 Form 10-
KSB")).
4.7 Form of NQSO Option Agreement issued pursuant to the 1999 Stock
Option Plan (incorporated by reference to the 1999 Form 10-KSB).
10.1 Distributorship Agreement, dated November 2, 1989, between the
Company and Science (incorporated by reference to the 1989 Form
10-K).
10.2 Stock Purchase Agreement, dated November 2, 1989, between the
Company and H.F. Lenfest (incorporated by reference to the Company's
Report on Form 8-K, dated November 15, 1989, (the "1989 Form 8-K")).
10.3 Shareholders' Agreement, dated November 2, 1989, among the Company
and certain of its stockholders (incorporated by reference to the
Company's 1989 Form 8-K).
10.5 Form of Credit Agreement between the Company and H.F. Lenfest
(incorporated by reference to the 1990 Form 10-K).
10.7 Form of Line of Credit Agreement between the Company and H.F.
Lenfest (incorporated by reference to the 1990 Form 10-K).
10.8 Subordinated Promissory Note, dated November 15, 1994 the principal
amount of $541,000 payable to Science Dynamics Corporation
(incorporated by reference to the 1994 Form 10-KSB).
10.10 Letter Agreement dated November 8, 1990 between Science Dynamics
Corporation and H.F. Lenfest (incorporated by reference to the
Company's Report on Form 8-K for November 16, 1990).
10.11 Loan Agreement dated December 24, 1991, between the Company and H.F.
Lenfest (incorporated by reference to the 1991 Form 10-K).
10.12 Lease Agreement for office space and the First Amendment to Lease
dated March 30, 1994 ("Office Lease Agreement"), between the Company
and Bloom Associates (incorporated by reference to the 1994 Form
10-KSB).
10.14 Second Amendment to Office Lease Agreement Dated May 5, 1999,
between the Company and Bloom Associates (incorporated by reference
to the 1999 Form 10-KSB).
10.15 Letter effective as of March 31, 2000, from H.F. Lenfest, waiving
the repayment of loans and accrued interest until January 1, 2002.
(incorporated by reference to the Company's Form 10-QSB for the three
months ended March 31, 2000, (the "3/31/00 Form 10-QSB")).
11. Statement re: Computation of Per Share Earnings (see the Company's
September 30, 2000 Financial Statements included herein).
27. Financial Data Schedule
SIGNATURES
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.
TELVUE CORPORATION
Dated: 8/13/00 By: /s/Frank J. Carcione
-------------------------------------------
Frank J. Carcione
President (Chief Executive Officer)
Dated: 8/13/00 By: /s/Irene A. DeZwaan
-------------------------------------------
Irene A. DeZwaan
Treasurer (Controller)
<PAGE>
<PAGE>
</TABLE>
