AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 9, 1999
Registration Statement No. 333-69923
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ACTV, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7812 94-2907258
- --------------------------------------------------------------------------------
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Code) Identification No.)
incorporation or
organization)
1270 Avenue of the Americas
New York, New York 10020
(212) 217-1600
--------------
(Address, including zip code and telephone number,
including area code, of Registrant's principal executive offices)
WILLIAM C. SAMUELS
President
ACTV, INC.
1270 Avenue of the Americas
New York, New York 10020
(212) 217-1600
(Name, address, including zip code and telephone number,
including area code, of agent for service)
Copies To:
JAY M. KAPLOWITZ, ESQ.
Gersten, Savage & Kaplowitz, LLP
101 East 52nd Street
New York, New York 10022
(212) 752-9700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement and from
time to time.
------------
If the securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [x]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
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<TABLE>
<CAPTION>
=========================================================================================================================
Title of Securities To Amount Being Proposed Maximum Offering Proposed Maximum Amount of
Be Registered Registered Price Per Security Aggregate Offering Registration Fee
Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 9,307,067 $3.63(1) $33,738,117.88 $13,157.87
Stock, par value $.10 2,525,851 $5.00(2) $12,629,255.00 $ 4,925.41
per share
=========================================================================================================================
Total Registration Fee $18,083.28
=========================================================================================================================
Amount Previously Paid $18,083.28
=========================================================================================================================
Amount Due With Filing $ 0.00
=========================================================================================================================
</TABLE>
(1) Pursuant to Rule 457, estimated solely for the purpose of calculating the
registration fee for the registration of 9,307,067 shares of Common Stock
filed with the Form S-3, File No. 333-69923 on December 30, 1998, based
upon the last reported sales price of the Registrant's Common Stock of the
same class as quoted by the National Association of Securities Dealers
Automated Quotation System on December 22, 1998.
(2) Pursuant to Rule 457, estimated solely for the purpose of calculating the
registration fee for the registration of an additional 2,525,851 shares of
Common Stock filed with this Pre-Effective Amendment No. 1 to Form S-3,
File No. 333-69923, based upon the last reported sales price of the
Registrant's Common Stock of the same class as quoted by the National
Association of Securities Dealers Automated Quotation System on January
14, 1999.
* THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS
THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
ACTV, INC.
10,984,418 Shares of Common Stock
Shareholders of ACTV, Inc. named under the caption "Selling Security
Holders", from time to time, may offer and sell up to 10,984,418 shares of ACTV
common stock.
ACTV's common stock is traded on the Nasdaq SmallCap Market under
the symbol "IATV" and on the Boston Stock Exchange under the symbol "IAT". On
February 5, 1999, the last reported sale price of ACTV's common stock on Nasdaq
was $6 15/32.
You should read the prospectus and our information described under
"Where You Can Find More Information" before you invest.
An investment in these securities is risky. You should only purchase
these shares if you can afford to lose your entire investment. See Risk Factors
commencing on page 8.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
on the accuracy or adequacy of this Prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is February ___, 1999
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PROSPECTUS SUMMARY
This summary does not contain all of the information that may be
important. You should read the detailed information appearing elsewhere in this
prospectus including the documents incorporated by reference.
The Company
ACTV has developed proprietary and patented software technologies
that we call Individualized Television and HyperTV(TM). The software
technologies enable the creation of interactive programming for both the digital
television and Internet platforms.
ACTV's Individualized Television software technology provides the
tools needed to create, encode, distribute, decode and view live or pre-recorded
television programming that individualizes what the viewer sees and hears. The
proprietary software remembers every viewer's response, allowing the television
to literally respond to each viewer with tailored programming and advertising
content. Using a standard digital remote control, television viewers switch
channels seamlessly and instantly among multiple, real-time feeds of live or
pre-recorded video, audio and data. Because there is no observed channel
acquisition time, viewers perceive they are watching one channel that is
responsive to their input. In fact Individualized Television is a multi-channel
telecast of several elements of related programming material such as instant
replay on demand, an isolation camera on a star player, statistical data and/or
additional features. To receive Individualized Television programming a viewer
needs a standard digital television set-top box that is compatible with our
Individualized Television software technology.
The first commercial digital application of Individualized
Television will be a regional sports premium television network called Fox
Sports Plus. We plan to launch Fox Sports Plus in 1999 in the region served by
Fox Sports Southwest. Fox Sports Southwest distributes programming to more than
5 million households in Texas, Louisiana, Arkansas, Oklahoma and nine New Mexico
counties. The southwest regional network will feature individualized telecasts
of professional basketball (Houston Rockets, Dallas Mavericks, San Antonio
Spurs), hockey (Dallas Stars), and baseball (Texas Rangers, Houston Astros),
along with college sports events form the Southeastern, Southland and Western
Athletic conferences. We have an agreement with Tele-Communications Inc. to
distribute and market our Fox Sports Plus regional network to its digital
subscribers in Texas.
ACTV's first national individualized programming will be developed
and managed through a joint venture formed in September 1998 with Liberty Media
Corporation, called LMC IATV Events, LLC. LMC IATV Events, though an exclusive
license from ACTV, has the right to produce and distribute telecasts of major
events incorporating our individualized programming enhancements. As
consideration for granting such a license, ACTV received a fixed one-third
equity interest in the joint venture, with no obligations to make additional
capital contributions.
HyperTV(TM) software technologies enable the synchronized and
simultaneous delivery of streamed video and complementary material available on
the World Wide Web directly to personal computer users or television viewers.
The first commercial application of HyperTV(TM) was the on-line education market
including K-12 classrooms, universities, distance learning programs, and
corporations. The suite of integrated software products includes content
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creation software, student and teacher user software, and database assessment
software. We provide clients with Internet content design assistance, the
hosting of educational programs on our computer servers, and technical
consulting. Currently, all of our revenues are derived form sales to the online
learning market. We also plan to use HyperTV(TM) to enhance our planned Fox
Sports Plus television network.
ACTV was incorporated in Delaware on July 24, 1989. ACTV is the
successor, by merger effective November 1, 1989, to ACTV, Inc., a California
corporation, organized on July 11, 1983. Our executive offices are located at
1270 Avenue of the Americas, New York, New York 10020, telephone number (212)
217-1600.
The Offering
Securities Offered 10,984,418 shares of common stock
Common Stock Outstanding 32,260,407 shares
Common Stock Market Symbols Nasdaq SmallCap Market - "IATV"
Boston Stock Exchange - "IAT"
Estimated Net Proceeds The selling security holders will receive
the net proceeds form the sale of the
shares. We will receive none of the proceeds
form the sale of the shares offered by this
prospectus.
Risk Factors An investment in the shares involves a high
degree of risk. See "Risk Factors"
commencing on the next page.
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RISK FACTORS
An investment in ACTV's shares involves a high degree of risk. You
should carefully consider the following risks, in addition to the other
information contained in this prospectus, before deciding to invest in ACTV's
shares.
Risks Related to Our Business
We have had operating losses and limited revenues to date and may not be able to
generate income or significant revenue in the future.
We have been operating at a loss to date. Losses applicable to
common shareholders for the nine months ended September 30, 1998, the years
ended December 31, 1997, 1996 and 1995 were $9,869,022, $10,358,683, $10,300,481
and $6,826,789, respectively. The 1995 fiscal year includes an extraordinary
gain of $94,117. Through September 30, 1998, we had an accumulated deficit of
approximately $61 million. We have had limited revenues. Revenues for the nine
months ended September 30, 1998 were $1,058,560, $1,650,955 in the 1997 fiscal
year, $1,476,329 in the 1996 fiscal year and $1,311,860 in the 1995 fiscal year.
We may not be able to be profitable or generate significant revenues in the
future.
Our individualized programming products are new to the new digital television
market and may not sell.
We have not had any sales of our digital individualized programming
service. While we plan to commercialize our individualized programming in
conjunction with Fox Sports Southwest and have conducted certain test marketing,
we have not yet introduced this product on a commercial basis. We can not assure
you that the initial monthly subscription price of $9.95 for Fox Sports Plus
will be successful. Therefore, the premium service should be viewed as a newly
introduced product, the demand for, and market acceptance of which, is
uncertain. Our individualized programming may not become commercially
successful, and there may not be sufficient demand and market acceptance for our
products to become profitable.
Sales of our HyperTVTM has been limited and may not be accepted by the market.
We made our first our HyperTVTM sale to the on-line education market
in the second quarter of 1997. We have had only a limited number of additional
sales to this market, which itself is a new, developing market in the process of
evolving. We can not assure you that sales growth in the on-line education
market will lead to profitability. In addition, we are only in the early
planning stages of extending the HyperTVTM software technology to entertainment
applications.
We will need additional financing which will dilute your investment.
We have required significant capital to develop our Individualized
Television and HyperTVTM technologies, to produce programming, to develop
marketing approaches and strategic alliances, and to cover costs of selling,
general and administrative expenses. We have also from time to time experienced
working capital deficits. To date, we have not generated revenues sufficient to
sustain our operations, and cannot generate such revenues, if at all, without
raising additional funds to implement our business plan. We have issued debt to
raise funds for
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the development of the southwest regional network; however, we are not yet
delivering our product to consumers or deriving any revenue from the southwest
regional network. Although we believe we have the necessary resources to launch
the southwest regional network, we will need additional funding to operate the
network at planned levels and to fund our operations before we breakeven. We
will need additional funding to launch networks in other regions. We currently
do not have any arrangements for additional financing and cannot assure you that
additional financing will be available on acceptable terms, or at all.
Additional equity financing may substantially dilute your investment in ACTV's
common stock.
We are dependent on business relationships with other companies.
We are dependent upon our relationships with General Instrument,
Scientific-Atlanta and other digital set-top box manufacturers to sell cable
systems digital boxes compatible with our downloadable software. In addition, we
are dependent upon Liberty Media Corporation to fund and direct LMC IATV, our
joint venture with Liberty Media. We are also dependent upon the cooperation of
FOX Sports Net in connection with the marketing of our regional sport network,
Fox Sports Plus, to cable systems. We can not assure you that these third
parties will dedicate sufficient resources to their relationships with us or
perform their obligations in a time frame that will allow us to implement our
current business plan. Their failure to do so could have a material adverse
effect on our operations, or result in delays in our ability to implement our
business plan in a timely manner.
We may not be able to protect our patents and proprietary information from
competitors.
We have obtained patents covering certain aspects of Individualized
Television and HyperTVTM and have patents pending with respect to other
developments or enhancements. We cannot assure you that:
o patents applied for will be granted;
o the patents we own or have rights to or that may be granted or
obtained by us in the future will be enforceable or will provide
us with meaningful protection from competition;
o any products developed by us will not infringe any patent or
rights of others; or
o we will possess the financial resources necessary to enforce any
patent rights that we hold.
We require each of our employees, consultants and advisors to
execute confidentiality and assignment of proprietary rights agreements upon the
commencement of employment or a consulting relationship with us. These
arrangements generally provide that all inventions, ideas and improvements made
or conceived by the individual arising out of the employment or consulting
relationship shall be our exclusive property. In addition, all proprietary
information is required to be kept confidential and not disclosed to third
parties except with our consent or in other specified circumstances. These
agreements, however, may not provide
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effective protection of our proprietary information in the event of unauthorized
use or disclosure of such information.
A delay in the launch of Fox Sports Plus Southwest could adversely effect our
marketing strategy.
The launch of Fox Sports Plus Southwest is planned for mid-1999 in
Dallas. A delay beyond Fall 1999 will not only increase our planned start-up
costs but, more importantly, affect our ability to take market feedback from the
first launch and commence activities in 2000 in other Fox Sports Net regions.
We are dependent upon key management and technical personnel.
We are largely dependent upon the efforts of William C. Samuels,
ACTV's Chairman of the Board, President and Chief Executive Officer, David
Reese, Executive Vice President and a Director of ACTV and President of ACTV
Entertainment, Inc., our Individualized Television division, and Bruce Crowley,
Executive Vice President and a Director of ACTV and President of ACTV Net, Inc.,
our Internet division. In August 1995, ACTV entered into employment agreements
with Mr. Samuels, which terminates December 31, 2003, and with each of Mr. Reese
and Mr. Crowley, which terminate on December 31, 2000. We currently do not
maintain "key employee" insurance on the lives of Messrs. Samuels, Reese or
Crowley. We may not be able to obtain such insurance at an acceptable cost
should we seek to acquire such insurance in the future.
We are also dependent on a group of employees, who are expert in the
Java computer language. The Internet industry is very competitive and there is
large demand for, and a high turnover rate of, qualified Java programmers. If we
were required to replace such personnel, we may not be readily able to do so.
Even if we are able to hire such qualified replacements, our business
development may be delayed.
Computer systems we rely upon may not be year 2000 compliant.
The year 2000 issue is the result of computer software that was
written with only two digits rather than four digits to represent the year in a
date field. Computer hardware and software applications that are date-sensitive
may interpret a date represented as "00" to be the year 1900 rather than the
year 2000. The result could be system failure or miscalculations causing the
disruption of operations.
We believe that our internal systems, relating to both computer
hardware and software, will function properly with respect to dates in the year
2000 and beyond. In addition, we believe that our proprietary software either
sold directly to third parties or incorporated in products sold to third parties
is year 2000 compliant. Having performed an assessment of the potential year
2000 problem, we do not expect to incur significant costs related to year 2000
issues.
However, there is general uncertainty regarding the year 2000
problem and its effect on the overall business environment. We cannot determine
at this time whether the year 2000 problem will have a material impact on our
operations or financial condition as the result of significant disruptions to
the U.S. economy and/or business infrastructure.
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Risks Related to Our Industry
Delivery of our digital programming is dependent upon timely upgrade of analog
cable distribution systems.
The success of our individualized programming is dependent upon the
slowly evolving digital television market. The number of potential subscribers
to our digital programming services is directly affected by the speed with which
cable systems operators both upgrade their current programming distribution
systems for digital distribution and deploy digital set top boxes to their
subscribers. In order to utilize individualized programming, subscribers must
have a digital television set-top box installed in their homes. The timely
deployment of digital television set-top boxes is entirely out of our control.
There may not be a sufficient number of potential subscribers to receive digital
television set-top boxes in the near future so as to enable us to deploy our
individualized programming in accordance with our business plan. Material delays
in the deployment of digital television distribution systems and set-top boxes
could have a material effect on our results of operations and financial
condition.
We may not be able to keep pace with technological change.
Both the digital television and Internet platforms are characterized
by extensive research efforts and rapid, significant technological change, often
resulting in product obsolescence or short product life cycles. Our ability to
compete will depend in large part on our capacity to introduce individualized
programming and Internet products in a timely manner, to continually enhance and
improve individualized programming and Internet products, and to adapt to
technological changes and advances in the markets in which we compete. Our
competitors may develop technologies or products that render our individualized
programming and/or Internet products obsolete or less marketable. We may not be
able to keep pace with the demands of an ever-changing marketplace.
There may become a possible shortage of available channels for in-home cable
applications.
In order for our individualized programming to be delivered over
cable and direct broadcast satellite systems to the home, we must compete with
other programming services for digital channel space. Most distributors of
television programming have channel capacity limitations. Our individualized
programming applications currently require four channels of band-width in a
digital system. We believe, although there can be no assurance, that the cable
and direct broadcast satellite industries, in general, will continue to increase
digital channel capacity. We cannot assure you that distributors of television
programming will devote a sufficient number of channels of band-width to our
individualized programming in the future, even they do increase channel
capacity.
Changes in government funding could hurt our Internet division.
The success of our Internet division is dependent on public schools'
continuing to receive various federal and state funding for Internet
connectivity and a broader distribution of computers. If such government funding
were to be substantially reduced or eliminated, it could have a material adverse
effect on our operations and financial condition.
Our individualized programming has significant competition.
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There are two major new digital television applications that
directly compete with us for use of the new digital distribution capability:
high definition television and multicasting. High definition television provides
better color quality, but has the disadvantage of requiring the consumer to
purchase a new expensive television set. Multicasting increases the quantity of
programs available within a channel that used to be able to distribute only one
television program before the conversion to digital. Individualized Television
offers the consumer in depth programming that is tailored to each person's
preferences. It is premature to determine the relative consumer demand for
improved color offered by high definition television, versus greater quantity
offered by multicasting, versus the individualization of content offered by
Individualized Television.
We compete with many other companies that provide programming for
the television industry and, in particular, with companies that provide sports
programming. Our enhanced version of Fox Sports Net, Fox Sports Plus, will
compete with the simultaneous telecast of the un-enhanced version of the same
event.
Risks Related to the Offering
Our officers and directors control significant voting rights.
If our officers and directors exercise their options that are
exercisable within 60 days of the date of this prospectus and convert their
convertible preferred stock, they will have the right to vote approximately 6.9
million outstanding shares of common stock, or 21% of the outstanding shares of
common stock. This includes 2,341,334 shares owned by the Washington Post
Company which William C. Samuels, our Chairman, President and Chief Executive
Officer, pursuant to a voting agreement, has voting control. Consequently, Mr.
Samuels has voting control over approximately 5.0 million shares of common
stock, or approximately 15% of the outstanding shares of common stock.
Accordingly, Mr. Samuels could have substantial influence over the affairs of
ACTV, including the election of directors. If our officers and directors sell
their shares included in this prospectus, they will have voting rights over 3.8
million shares, or 12% of the outstanding shares of common stock.
Your investment may be substantially diluted upon exercise of outstanding
options and warrants.
As of the date of this Prospectus, ACTV has granted options and
warrants to purchase an aggregate of 9,964,340 shares of common stock that had
not been exercised. Of the shares of common stock subject to these unexercised
options and warrants 4,801,177 may be purchased for between $1.00 and $1.99 per
share; 4,785,663 may be purchased for between $2.00 and $2.99 per share; 150,000
may be purchased for between $3.00 and $3.99 per share; 225,000 may be purchased
for between $4.00 and $4.99 per share; and 2,500 may be purchased for between
$5.00 to $5.99 per share. To the extent that the outstanding stock options and
warrants are exercised, our stockholders' interest in ACTV will be diluted.
Moreover, the terms upon which we will be able to obtain additional equity
capital may be affected adversely, since the holders of the outstanding options
and warrants can be expected to exercise them at a time when we would, in all
likelihood, be able to obtain any needed capital on more favorable terms than
those provided in the outstanding options and warrants.
Your investment may be substantially diluted upon conversion of convertible
preferred stock.
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In November 1998, we issued 5,018 shares of ACTV's Series B 10%
Convertible Preferred Stock, which has a face value of $5,018,000 and pays an
annual dividend of 10%. The dividend may be paid either in cash or in kind, at
our option. We may redeem the Series B Preferred at any time at a 10% premium
above face value plus accrued dividends. The Series B Preferred holders may not
convert any Series B Preferred into common stock until November 13, 1999,
whether or not we give a redemption notice prior to such date. If the Series B
Preferred shares are not redeemed for cash by November 13, 1999, the holders may
convert each Series B Preferred share into common stock at a price of $2.00 per
share until February 13, 2000. If the Series B Preferred is not redeemed by
February 13, 2000, its conversion price will be adjusted to a fixed price of
$1.33 per share for the remainder of its life.
ACTV has outstanding 56,300 shares of Series A Convertible Preferred
Stock which is convertible into common stock based upon a conversion rate of
$1.50 per share of common stock, or approximately 1.0 million shares of common
stock.
Common stockholders will be diluted by future conversions to common
stock, if they should occur, by holders of our convertible preferred stock.
Additionally, since such shares of common stock will be registered for sale in
the marketplace, future offers to sell such shares could have a potentially
depressive effect upon the price of the common stock and make future sales of
common stock by ACTV or our stockholders difficult.
Certain officers' options to acquire voting control of certain of our
subsidiaries may make a takeover difficult.
ACTV has issued to William C. Samuels, ACTV's Chairman, President
and Chief Executive Officer, David Reese, ACTV's Executive Vice President and a
director, Bruce Crowley, ACTV's Executive Vice President, Christopher Cline,
ACTV's Senior Vice President, Chief Financial Officer and Secretary and certain
other employees, options to acquire Class B Common Stock of certain of our
material subsidiaries. The ten year options are currently fully vested. In each
case, the Class B Common Stock is identical to the common stock of each such
subsidiary that is owned by ACTV, but has voting rights of 25 votes per share.
If exercised, such options will result in the optionees' having approximately
75% of the voting power of each subsidiary. As a result, should such options be
exercised as to any such subsidiary, the holders thereof would have the right to
elect the Board of Directors of such subsidiary and otherwise control its
business and affairs. The holders have also entered into an agreement as to the
voting of certain of such shares if issued. The exercise of the options to
acquire the Class B Common Stock of such subsidiaries might render it more
difficult, and therefore discourage, an unsolicited takeover proposal such as a
tender offer, proxy contest or removal of incumbent management, even if such
actions would be in the best interest of our stockholders.
Forward looking information may not be realized.
To the extent that the information presented in this prospectus
discusses financial projections, information or expectations about our products
or markets, or otherwise makes statements about future events, such statements
are forward-looking. Although we believe that the expectations reflected in
these forward-looking statements are based on reasonable assumptions, there are
a number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These include, among others:
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o the successful and timely development of new products;
o market place acceptance of our new products; and
o the availability of sufficient funding to effect such product
development.
When considering such forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in this prospectus.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. ACTV is
listed on the Nasdaq SmallCap Market and the Boston Stock Exchange. Our periodic
reports, proxy statements, and other information can be inspected at the offices
of Nasdaq at 1735 K Street, NW, Washington, DC, 20006, or the offices of the BSE
at 1 Boston Place, Boston, Massachusetts, 02108.
The SEC allows us to "incorporate by reference" the information we
file with them. This Prospectus incorporates important business and financial
information about ACTV which is not included in or delivered with this
Prospectus. The information incorporated by reference is an important part of
this Prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the following SEC filings:
o Quarterly Report on Form 10-Q/A for the quarter ended
September 30, 1998 as filed on November 19, 1998;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 1998
as filed on August 14, 1998;
o Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 as filed on May 5, 1998;
o Annual Report on Form 10-K for the year ended December 31, 1997
as amended by Form 10-K/A1 filed on April 20, 1998;
o Current Report on Form 8-K filed on February 6, 1998; our Proxy
Statement for the year ended December 31, 1997; and
o future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until all of the shares
offered by the selling security holders have been sold.
You may obtain a copy of these filings, without charge, by writing
or calling us at:
ACTV, Inc.
1270 Avenue of the Americas
New York, New York 10020
Attention: Secretary
(212) 217-1600
If you would like to request these filings from us, please do so at
least five business days before you have to make an investment decision.
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You should rely only on the information incorporated by reference or
provided in this Prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this Prospectus or the documents incorporated by reference is
accurate as of any date other then the date on the front of those documents.
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USE OF PROCEEDS
ACTV will not receive any proceeds from the sale of the Security
Holders' Shares offered hereby. All proceeds from the sale of the Security
Holders' Shares will be for the account of the Selling Security Holders
described herein. See "Selling Security Holders."
MATERIAL CHANGES
There have been no material changes since the filing of ACTV's Form
10-K for the year ended December 31, 1997 on March 31, 1998 as amended by ACTV's
Form 10-K/A1 filed on April 20, 1998, except as set forth on the Form 10-Q/A for
the period ended September 30, 1998, as filed on November 19, 1998.
SELLING SECURITY HOLDERS
All of the shares of common stock of ACTV ("Common Stock") offered
under this Prospectus ("Security Holders' Shares") may be sold by the holders
("Selling Security Holders") who have acquired previously or will acquire such
shares from ACTV (i) upon the exercise of currently exercisable options,
warrants, or stock appreciation rights, or (ii) upon conversion of ACTV's 10%
Series B Convertible Preferred Stock. ACTV will not receive any of the proceeds
from sales of Selling Security Holders' Shares, but will receive the exercise
price upon the exercise of the options or warrants described above.
All costs, expenses and fees in connection with the registration of
the Security Holders' Shares will be borne by ACTV. All brokerage commissions,
if any, attributable to the sale of Security Holders' Shares by Selling Security
Holders will be borne by such Selling Security Holders.
The Selling Security Holders are offering hereby a total of
11,832,918 shares of ACTV's common stock. The following table sets forth the
name of each person who is a Selling Security Holder, the number of securities
owned by each such person at the time of this offering and the number of shares
of common stock such person will own after the completion of this offering.
The following table assumes the exercise of all options and warrants
beneficially owned by each such security holder and the conversion of all Series
B Preferred Stock into shares of Common Stock. The column "Beneficial Ownership
Prior to Offering includes (i) shares of Common Stock issuable upon exercise of
all options, warrants, and stock appreciation rights and conversion of all
Series B Preferred, based on the lesser of current or future conversion prices
and (ii) shares that have been registered on previous registration statements
but have not been sold as of February 5, 1999. The column "Beneficial Ownership
After Offering" gives effect to the sale of all the shares of Common Stock being
offered hereby.
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<PAGE>
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership Shares Ownership
Prior to Included in After
Name Offering % This Offering Offering %
<S> <C> <C> <C> <C> <C>
Westgate International, L.P. 2,185,019 6.4% 1,944,710 (1) 240,309 *
Elliott Associates, L.P. 2,274,922 6.6% 1,955,478 (2) 319,444 *
Ravich Children's Trust 366,444 1.1% 366,444 (3) 0 *
Ravich Revocable Trust of 1989 810,729 2.5% 765,729 (4) 45,000 *
US Bancorp Investments, Inc. 889,583 2.7% 859,583 (5) 30,000 *
Rand Ravich 63,673 * 63,673 (6) 0 *
Lee Helper 4,000 * 4,000 0 *
Dean Bender 4,000 * 4,000 0 *
Larry Goldman 4,000 * 4,000 0 *
David Alworth 126,000 * 75,000 (7) 51,000 *
Banca del Gottardo 4,715,820 14.1% 25,000 (8) 4,690,820 14.1%
Richard Barron 85,000 * 25,000 (9) 60,000 *
Richard Carvalho 25,000 * 15,000 (9) 10,000 *
Christopher Cline 131,489 * 75,000 (10) 56,489 *
Peter Cohen 7,000 * 7,000 (9) 0 *
James Crook 79,294 * 5,000 (9) 74,294 *
Bruce Crowley 833,800 2.5% 524,000 (11) 309,800 *
Xiomara DeLeon 5,260 * 5,000 (8) 260 *
Frank Deo 75,000 * 75,000 (12) 0 *
Jeff Harrington 25,000 * 10,000 (9) 15,000 *
Brent Imai 77,500 * 25,000 (9) 52,500 *
Jennifer Lange 10,000 * 10,000 (8) 0 *
Kevin Liga 75,000 * 75,000 (13) 0 *
Eric Martinez 22,600 * 4,183 (9) 18,417 *
Margie Mercado 6,050 * 5,000 (8) 1,050 *
Ted O'Donnell 15,000 * 15,000 (14) 0 *
Eric Pack 12,653 * 12,500 (8) 153 *
Stanley Plesent 10,000 * 10,000 (9) 0 *
David Reese 1,305,500 3.9% 860,000 (15) 445,500 1.4%
William Samuels 5,397,817 15.9% 1,619,000 (16) 3,778,817 11.7%
Amy Satin 15,000 * 15,000 (8) 0 *
Steven Schuster 30,000 * 12,500 (14) 17,500 *
Patricia Wilson 5,000 * 5,000 (8) 0 *
Michael Freeman 346,598 1.1% 32,000 (17) 314,598 *
Dorsey & Whitney 112,500 * 40,000 72,500 *
Value Partners Ltd. 1,417,746 4.3% 1,417,746 0 *
Russell Riopelle 10,072 * 10,072 0 *
Bratskeir & Co. 29,700 * 7,800 21,900 *
</TABLE>
* Less than one percent
(1) Consists of 660,671 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share and 1,284,039 shares of Common Stock issuable
upon conversion of Series B Preferred Stock at $1.33 per share.
(2) Consists of 664,329 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share and 1,291,149 shares of Common Stock issuable
upon conversion of Series B Preferred Stock at $1.33 per share.
16
<PAGE>
(3) Consists of 124,491 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share and 241,953 shares of Common Stock issuable
upon conversion of Series B Preferred Stock at $1.33 per share.
(4) Includes 178,016 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share and 345,980 shares of Common Stock issuable
upon conversion of Series B Preferred Stock at $1.33 per share.
(5) Consists of 292,024 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share and 567,559 shares of Common Stock issuable
upon conversion of Series B Preferred Stock at $1.33 per share.
(6) Consists of 21,632 shares of Common Stock issuable upon the exercise of
warrants at $2.00 per share per share and 42,041 shares of Common Stock
issuable upon conversion of Series B Preferred Stock at $1.33 per share.
(7) Consists of 25,000 shares of Common Stock issuable upon the exercise of
options at $1.50 per share and 50,000 shares of Common Stock issuable upon
the exercise of stock appreciation rights at $1.50 per share.
(8) Consists of Common Stock issuable upon the exercise of options at $1.60
per share.
(9) Consists of Common Stock issuable upon the exercise of options at $1.50
per share.
(10) Consists of 25,000 shares of Common Stock issuable upon the exercise of
options at $1.60 per share and 50,000 shares of Common Stock issuable upon
the exercise of stock appreciation rights at $1.50 per share.
(11) Consists of 323,000 shares of Common Stock issuable upon the exercise of
options at $1.50 per share and 201,000 shares of Common Stock issuable
upon the exercise of options at $1.60 per share.
(12) Consists of 62,500 shares of Common Stock issuable upon the exercise of
warrants at $1.50 per share and 12,500 shares of Common Stock issuable
upon the exercise of options at $1.60 per share.
(13) Consists of 50,000 shares of Common Stock issuable upon the exercise of
warrants at $1.50 per share and 25,000 shares of Common Stock issuable
upon the exercise of options at $1.60 per share.
(14) Consists of Common Stock issuable upon the exercise of options at $1.63
per share.
(15) Consists of 530,000 shares of Common Stock issuable upon the exercise of
options at $1.50 per share and 330,000 shares of Common Stock issuable
upon the exercise of options at $1.60 per share.
(16) Consists of 1,094,000 shares of Common Stock issuable upon the exercise of
options at $1.50 per share and 525,000 shares of Common Stock issuable
upon the exercise of options at $1.60 per share.
(17) Consists of Common Stock issuable upon the exercise of stock appreciation
rights at $1.50 per share.
17
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The total authorized capital stock of ACTV consists of 65,000,000
shares of Common Stock, par value $0.10 per share, and 1,000,000 shares of
Preferred Stock, par value $0.10 per share. The following descriptions of
capital stock are qualified in all respects by reference to the Restated
Certificate of Incorporation and By-Laws of ACTV, which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part.
Common Stock
The holders of Common Stock will elect all directors and are
entitled to one vote for each share held of record. As of the date of this
Prospectus, 32,260,407 shares of Common Stock were issued and outstanding. All
shares of Common Stock will participate equally in dividends, when and as
declared by the Board of Directors and in net assets on liquidation. The shares
of Common Stock will have no preference, conversion, exchange, preemptive or
cumulative voting rights.
Preferred Stock
ACTV's Certificate of Incorporation authorizes the issuance of
1,000,000 shares of Preferred Stock with designations, rights and preferences
determined from time to time by its board of directors. Accordingly, ACTV's
Board of Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion or other rights that
could adversely affect the rights of holders of the Common Stock. Except as set
forth below, ACTV has no current plans to issue any shares of its Preferred
Stock, but there can be no assurance that it will not do so in the future.
ACTV has designated 120,000 shares of its Preferred Stock as Series
A 7% Convertible Preferred Stock ("Series A Preferred"). In November 1997, ACTV
issued 86,200 shares of the Series A Preferred in exchange for consideration
equal to $25.00 per share. The Series A Preferred has a liquidation preference
$25.00 per share and pays a dividend, in cash or accumulated and pain in Common
Stock upon conversion, of 7% per annum. The Series A Preferred is convertible
into Common Stock. The number of shares issued upon conversion is determined by
dividing the liquidation value of $25.00 plus accrued dividends by the
conversion price of $1.50 per common share. As of the date of this Prospectus
56,300 shares of Series A Preferred remain outstanding and would be convertible
into approximately 1.0 million shares of Common Stock if exchanged as of January
19, 1999.
ACTV has designated 6,110 shares of its Preferred Stock as Series B
10% Convertible Preferred Stock ("Series B Preferred"). In November 1998, ACTV
issued 5,018 shares of the Series B Preferred as a partial exchange for
approximately 179,000 shares of exchangeable preferred stock, which had been
issued by a subsidiary of ACTV (see "Other Derivative Securities"). The Series B
Preferred has a liquidation preference $1,000.00 per share and pays a dividend,
in cash or accumulated and paid in Common Stock upon conversion, of 10% per
annum.
The Series B Preferred is fully redeemable by ACTV at any time at a
10% premium above face value plus accrued dividends. The holders of Series B
Preferred are
18
<PAGE>
prohibited from converting any shares into Common Stock through November 13,
1999, whether or not ACTV gives a notice of redemption during this period.
Beginning November 13, 1999, the number of shares issued upon conversion is
determined by dividing the liquidation value of $1,000.00 plus accrued dividends
by the conversion price of $2.00 per common share. Beginning February 13, 1998,
the number of shares issued upon conversion is determined by dividing the
liquidation value of $1,000.00 plus accrued dividends by the conversion price of
$1.33 per common share. As of the date of this Prospectus 5,018 shares of Series
B Preferred remain outstanding. Such preferred shares are currently not
convertible into Common Stock and will be convertible into Common Stock only
after November 13, 1999.
Other Derivative Securities
In August 1996, one of ACTV's wholly-owned subsidiaries conducted a
private placement in which it issued an aggregate of 400,000 shares of
exchangeable preferred stock ("Exchangeable Preferred Stock") at $25.00 per
share and placement agent's warrants to purchase an aggregate of 36,000 shares
of Exchangeable Preferred Stock at $25.00 per share. The Exchangeable Preferred
Stock was exchangeable into Common Stock at varying prices.
During November and December 1998, all of the outstanding
Exchangeable Preferred Stock was either exchanged for Common Stock or for a
combination of Common Stock, warrants and Series B Preferred. In addition all of
the outstanding warrants to purchase Exchangeable Preferred Stock were exercised
and simultaneously converted into Common Stock.
Transfer Agent
ACTV's transfer agent is Continental Stock Transfer & Trust Company,
New York, New York 10007.
Shares Eligible for Future Sale
Assuming exercise/conversion of all of the Common Stock offered in
this prospectus that are issuable pursuant to warrants, options, stock
appreciation rights, and Series B Preferred Stock, there will be 41,515,474
shares of Common Stock outstanding. Of these shares, the Shares being registered
hereby will be freely tradable without restriction under the Securities Act, for
so long as this Prospectus is kept current by ACTV. An aggregate of
approximately 2.6 million shares of Common Stock held by existing stockholders
will be "restricted" shares as defined in Rule 144.
In general, under Rule 144 a person (or group of persons whose
shares are aggregated) who has beneficially owned restricted shares of ACTV for
at least one year, including any person who may be deemed to be an "affiliate"
of ACTV (as the term "affiliate" is defined under the Securities Act), is
entitled to sell in normal brokerage transactions during the periods when
certain information regarding ACTV is publicly available, within any three-month
period, an amount of shares that does not exceed the greater of (i) the average
weekly trading volume in ACTV's shares during the four calendar weeks preceding
such sale or (ii) 1% of the shares then outstanding. A person who has not been
an "affiliate" of ACTV for the three months prior to such sale and who has held
restricted shares for at least two years would be entitled to sell such shares
without restriction. Most of such restricted shares are held by non-affiliates
of ACTV who will not be able to sell such shares under Rule 144 until October
1999. Actual sales, or the prospect of
19
<PAGE>
sales by the present stockholders of ACTV, or by future holders of restricted
securities under Rule 144, or otherwise, may, in the future, have a depressive
effect upon the price of ACTV's shares of Common Stock in any market that may
develop therefor.
20
<PAGE>
PLAN OF DISTRIBUTION
Up to 10,984,418 of the Security Holders' Shares may be sold by the
Selling Security Holders who will have acquired such shares from ACTV upon the
exercise of options, warrants, stock appreciation rights, and conversion of
Series B Preferred Stock. ACTV will not receive any of the proceeds from any
sales by Selling Security Holders of the Security Holders' Shares, but will
receive the exercise price upon the exercise of options and warrants by the
Selling Security Holders. See "Selling Security Holders."
The Selling Security Holders have advised ACTV that the sale or
distribution of the Common Stock may be effected directly to purchasers by the
Selling Security Holders as principals or through one or more underwriters,
brokers, dealers or agents from time to time in one or more transactions (which
may involve crosses or block transactions) (i) on the Boston Stock Exchange, on
the Nasdaq SmallCap Market, or in the over-the-counter market, (ii) in
transactions otherwise than on any stock exchange or in the over-the-counter
market, or (iii) through the writing of options (whether such options are listed
on an options exchange or otherwise) on, or settlement of short sales of, the
Common Stock. Any of such transactions may be effected at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at varying prices determined at the time of sale or at negotiated or
fixed prices, in each case as determined by the Selling Security Holder or by
agreement between the Selling Security Holder and underwriters, brokers, dealers
or agents or purchasers. If the Selling Security Holders effect such
transactions by selling Common Stock to or through underwriters, brokers,
dealers or agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
Selling Security Holders or commissions from purchasers of Common Stock for whom
they may act as agent (which discounts, concessions or commissions as to
particular underwriters, brokers, dealers or agents may be in excess of those
customary in the types of transactions involved). The Selling Security Holders
and any brokers, dealers or agents that participate in the distribution of the
Common Stock may be deemed to be underwriters, and any profit on the sale of
Common Stock by them and any discounts, concessions or commissions received by
any such underwriters, brokers, dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act.
Because the Selling Security Holders may each be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act, the
Selling Security Holders will be subject to prospectus delivery requirements
under the Securities Act. Furthermore, in the event of a "distribution" of its
shares, the Selling Security Holder, any selling broker or dealer and any
"affiliated purchasers" may be subject to Regulation M under the Exchange Act
until its participation in that distribution is completed.
At the time of a particular offer of Security Holders' Shares is
made by or on behalf of any of the Selling Security Holders, to the extent such
offer constitutes a distribution under the Securities Act, a supplement to this
Prospectus will be distributed, which will set forth the type and number of
securities being offered by such Selling Security Holders and the terms of such
offering, including the name or names and addresses of any underwriters, dealers
or agents, the purchase price paid by any underwriter for securities purchased
from the Selling Security Holder and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, and the proposed selling price to the
public.
21
<PAGE>
ACTV will bear all costs and expenses of the registration under the
Securities Act and certain state securities laws of the Security Holders'
Shares. However, all brokerage commissions, if any, attributable to the sale of
such shares by holders thereof will be borne by such holders.
The shares that may be offered from time to time by Selling Security
Holders may be sold through ordinary brokerage transactions in the
over-the-counter market or on the Boston Stock Exchange, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices.
Under the Securities Exchange Act of 1934 (the "Exchange Act") and
the regulations thereunder, any person engaged in a distribution of the
securities offered by this Prospectus may not simultaneously engage in
market-making activities with respect to shares of the Common Stock during the
applicable "cooling off" period (two or nine days) prior to the commencement of
such distribution. In addition, and without limiting the foregoing, the Selling
Security Holders will be subject to applicable provisions of the Exchange Act
and the rules and regulations thereunder, including, without limitation,
Regulation M, in connection with transactions in the securities, which
provisions may limit the timing of purchases and sales of the securities by the
Selling Security Holders.
22
<PAGE>
LEGAL MATTERS
Certain legal matters, including the legality of the issuance by
ACTV of the shares of Common Stock offered herein, are being passed upon for
ACTV by Gersten, Savage & Kaplowitz, LLP ("GSK"), 101 East 52nd Street, New
York, New York 10022. Jay Kaplowitz, a partner in GSK, ACTV's counsel, owns
options to purchase 25,000 shares of ACTV, Inc. Common Stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this Prospectus by reference from ACTV's
Annual Report on Form 10-K/A1 for the year ended December 31, 1997 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, (which expresses an
unqualified opinion and includes an explanatory paragraph related to the
restatement described in Note 16), and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to paragraph "Twelfth" of the Restated Certificate
of Incorporation of ACTV (Exhibit 3(i)), which contains a provision, as
permitted by Section 145 of the Delaware General Corporation Law, which
eliminates the personal liability of directors to ACTV and its stockholders for
monetary damages for unintentional breach of a director's fiduciary duty to
ACTV. This provision does not permit any limitation on, or elimination of the
liability of a director for disloyalty to ACTV or its stockholders, for failing
to acting good faith, for engaging in intentional misconduct or a knowing
violation of law, for obtaining an improper personal benefit or for paying a
dividend or approving a stock repurchase that was illegal under the Delaware
General Corporation Law.
The Restated Certificate of Incorporation and By-Laws of ACTV
require ACTV to indemnify directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation (a "derivative action") if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of ACTV,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe their conduct was unlawful. A similar standard of care is applicable
in the case of derivative actions, except that indemnification only extends to
expenses (including attorneys fees) incurred in connection with defense or
settlement of such an action. Moreover, the Delaware General Corporation Law
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to ACTV.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of ACTV pursuant to the foregoing provisions, or otherwise, ACTV has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by ACTV of expenses incurred or paid by
a director, officer or controlling
23
<PAGE>
person of ACTV in the successful defense of any action, suit or proceeding) in
connection with the securities being registered, ACTV will, unless in the
opinion of counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
24
<PAGE>
You may rely only on the information contained in this Prospectus. We have not
authorized anyone to provide information different from that contained in this
Prospectus. Neither the delivery of this Prospectus nor sale of common stock
means that information contained in this Prospectus is correct after the date of
this Prospectus. This Prospectus is not an offer to sell or solicitation of an
offer to buy these shares of common stock in any circumstances under which the
offer or solicitation is unlawful.
TABLE OF CONTENTS
Page
----
Prospectus Summary 4
Risk Factors 6
Where You Can Find More Information 13
Use of Proceeds 15
Material Changes 15
Selling Security Holders 15
Description of Capital Stock 18
Plan of Distribution 21
Legal Matters 23
Experts 23
Indemnification of Directors and Officers 23
ACTV, INC.
10,984,418 shares of Common Stock offered by Selling Security Holders,
consisting of:
(a) 1,729,351 shares of Common Stock, and
(b) 9,255,067 shares of Common Stock issuable upon the exercise of options,
warrants, stock appreciation rights and upon the conversion of convertible
preferred shares
February ___, 1999
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a Form S-3 Registration Statement and has duly
caused this Form S-3 Registration Statement, Pre-Effective Amendment No. 2, to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York and State of New York on the 8th of February, 1999.
ACTV, INC.
By: /s/ William C. Samuels
----------------------
William C. Samuels
Chairman of the Board, Chief
Executive Officer, President and
Director
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and has appointed William C. Samuels, President and
Chief Executive Officer, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same and all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Form S-3 Registration Statement, Pre-Effective Amendment No. 2, has been signed
by the following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ William C. Samuels Chairman of the Board, Chief February 8, 1999
- ------------------------- Executive Officer and President
William C. Samuels
/s/ David Reese* Executive Vice-President, February 8, 1999
- ------------------------- President--ACTV Entertainment, Inc.
David Reese
and Director
26
<PAGE>
/s/ Bruce Crowley* Executive Vice-President, February 8, 1999
- ------------------------- President--ACTV Net, Inc.
Bruce Crowley and Director
/s/ William A. Frank* Director February 8, 1999
- -------------------------
William A. Frank
/s/ Steven W. Schuster* Director February 8, 1999
- -------------------------
Steven W. Schuster
/s/ Christopher C. Cline* Senior Vice President, February 8, 1999
- ------------------------- Chief Financial Officer,
Christopher C. Cline Secretary and Chief Accounting
Officer
- ----------------------------------------------------
* Executed by the Registrant's President and Chief Executive Officer, William C.
Samuels, pursuant to Power of Attorney filed by the Registrant with
Pre-Effective Amendment No. 1 to Form S-3.
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
14. OTHER EXPENSE OF ISSUANCE AND DISTRIBUTION.
SEC registration fee $18,083.28
Fees and expenses of counsel 5,000.00
Miscellaneous 2,000.00
Total $25,083.28
15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to paragraph "Twelfth" of the Restated Certificate of
Incorporation of the Registrant (Exhibit 3(i)), which contains a
provision, as permitted by Section 145 of the Delaware General
Corporation Law, which eliminates the personal liability of directors
to the Registrant and its stockholders for monetary damages for
unintentional breach of a director's fiduciary duty to the Registrant.
This provision does not permit any limitation on, or elimination of the
liability of a director for disloyalty to the Registrant or its
stockholders, for failing to acting good faith, for engaging in
intentional misconduct or a knowing violation of law, for obtaining an
improper personal benefit or for paying a dividend or approving a stock
repurchase that was illegal under the Delaware General Corporation Law.
The Restated Certificate of Incorporation and By-Laws of the
Registrant require the Registrant to indemnify directors and officers
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits
or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation (a "derivative action") if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to
expenses (including attorneys fees) incurred in connection with defense
or settlement of such an action. Moreover, the Delaware General
Corporation Law requires court approval before there can be any
indemnification where the person seeking indemnification has been found
liable to ACTV.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) in connection
with the securities being registered, the Registrant will, unless in
the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
16. EXHIBITS
28
<PAGE>
3.1.c Certificate of Designation of Series B 10% Convertible Preferred
Stock of ACTV, Inc.*
5. Opinion of Gersten, Savage & Kaplowitz, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Gersten, Savage & Kaplowitz, LLP (Contained in
Exhibit 5)
*Incorporated by reference to ACTV, Inc.'s Form S-3 Registration Statement filed
December 30, 1998.
17. UNDERTAKINGS.
ACTV hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or in the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the Offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling
persons of ACTV pursuant to the foregoing provisions, or otherwise,
ACTV has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by ACTV of expenses incurred or paid by a director,
officer, or controlling person of ACTV in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered,
ACTV will, unless in the opinion of counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
29
<PAGE>
EXHIBIT INDEX
3.1.c Certificate of Designation of Series B 10% Convertible Preferred Stock
of ACTV, Inc.*
5. Opinion of Gersten, Savage & Kaplowitz, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Gersten, Savage & Kaplowitz, LLP (contained in Exhibit 5)
* Incorporated by reference to ACTV, Inc.'s Form S-3 Registration Statement
filed December 30, 1998.
30
EXHIBIT 5
[Gersten, Savage, & Kaplowitz, LLP Letterhead]
February 8, 1999
ACTV, Inc.
1270 Avenue of the Americas
New York, New York 10020
Gentlemen:
You have requested our opinion, as counsel for ACTV, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement of
Form S-3, Pre-Effective Amendment No. 2, (the "Registration Statement"), under
the Securities Act of 1933 (the "Act"), being filed by the Company with the
Securities and Exchange Commission.
The Registration Statement relates to an offering of 10,984,418 shares (the
"Selling Security Holders' Shares") of common stock (the "Offering"), per value
$ .10 (the "Common Stock"). The Selling Security Holders' Shares may be sold by
security holders who have previously acquired such shares from the Company.
We have examined such records and documents and made such examination of law as
we have deemed relevant in connection with this opinion. It is our opinion that
when there has been compliance with the Act, the Selling Security Holders'
Shares, when issued, delivered, and paid for, will be fully paid, validly issued
and nonassessable.
No opinion is expressed herein as to any laws other than the State of New York,
of the United States and the corporate laws of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In so doing, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the Act
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Gersten, Savage, & Kaplowitz, LLP
- -------------------------------------
GERSTEN, SAVAGE, & KAPLOWITZ, LLP
31
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective Amendment No.
2 to Registration Statement No. 333-69923 of ACTV, Inc. on Form S-3, of our
report dated March 18, 1998, April 17, 1998, as to Note 16, (which expresses an
unqualified opinion and includes an explanatory paragraph relating to the
restatement described in Note 16), appearing in the Annual Report on Form 10-K/A
of ACTV, Inc. for the year ended December 31, 1997, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche, LLP
- --------------------------
New York, New York
February 8, 1999
32
