AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 1999
Registration Statement No. 333-69923
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 4
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
Chairman
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 the 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.
9,858,172 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 9,858,172 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 March
31, 1999, the last reported sale price of ACTV's common stock on Nasdaq was
$11 3/8.
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 6.
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 April ___, 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). These software technologies
enable the creation of interactive programming for both digital television and
for applications merging television and the Internet.
ACTV's Individualized Television software technology provides the tools
needed to create live or pre-recorded television programming that individualizes
what the viewer sees and hears. The proprietary software can remember all of the
choices the viewer keys in with his TV remote control, 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 gap between the
viewer's selection and the display on the television, viewers do not realize
that they have changed channels, but perceive they are watching one channel that
is responsive to their choices. 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, and
statistical data. To receive our individualized 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 subscription television network that presents regional sports programming.
We plan to launch the network 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 Houston
Rockets, Dallas Mavericks, and San Antonio Spurs professional basketball games,
Dallas Stars professional hockey games, and Texas Rangers and Houston Astros
major league baseball games. Additional programming will include college sports
events from the Southeastern, Southland and Western Athletic conferences. We
have an agreement with Tele-Communications Inc., to distribute and market our
regional network to its digital television 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, through 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 simultaneous delivery of
streamed video and complementary material available on the World Wide Web
directly to personal
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computer users or television viewers. We announced the introduction of
HyperTV(TM) for entertainment applications in March 1999. The first commercial
application of HyperTV(TM) was the on-line education market including K-12
classrooms, universities, distance learning programs, and corporations. The
HyperTV(TM) software products include content creation software, student and
teacher user software, and software for assessing and storing student
performance. 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 on-line
learning market.
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
<TABLE>
<S> <C>
Securities Offered 9,858,172 shares of common stock
Common Stock Outstanding 33,217,184 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 from the
sale of the shares. We will receive
none of the proceeds from 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.
</TABLE>
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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 years ended December 31, 1998, 1997 and 1996 were
$20,868,324, $10,358,683, and $10,300,481, respectively. Through December 31,
1998, we had an accumulated deficit of approximately $71.9 million. We have had
limited revenues. Revenues for the years ended December 31, 1998, 1997 and 1996
were $1,405,838, $1,650,955, and $1,476,329, respectively. We may not be able to
generate significant revenues in the future. Also, we do not expect to achieve
profitability in the foreseeable 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 our southwest
regional network will be successful. Therefore, the subscription 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 HyperTV(TM) has been limited and may not be accepted by the market.
We made our first our HyperTV(TM) 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 HyperTV(TM) software technology to
entertainment and corporate applications.
We will need additional financing which will dilute your investment.
We have required significant capital to develop our Individualized
Television and HyperTV(TM) 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 the development of the southwest regional network; however, we
are not yet delivering our
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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 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.
Our efforts to protect our patents and proprietary information from
competitors may not be adequate to do so.
We have obtained patents covering certain aspects of Individualized
Television and HyperTV(TM) 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 effective protection of our proprietary
information in the event of unauthorized use or disclosure of such information.
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A delay in the launch of our southwest regional network could adversely effect
our marketing strategy.
The launch of our southwest regional network 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 and their loss
could put us at competitive disadvantage..
We are largely dependent upon the efforts of William C. Samuels, ACTV's
Chairman of the Board and Chief Executive Officer, David Reese, President, Chief
Operating Officer and Director and Bruce Crowley, Executive Vice President and a
Director of ACTV and President of HyperTV Networks, 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.
If the computer systems we rely upon are not year 2000 compliant our business
may be adversely affected.
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.
Risks Related to Our Industry
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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.
Our inability to keep pace with technological change may result in our products
becoming obsolete.
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 eSchool Online, our first HyperTV application, 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.
We may not be able to compete effectively in our industry.
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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 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 and can have
substantial influence on matters voted on by stockholders.
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 5.6 million
outstanding shares of common stock, or 15% of the outstanding shares of common
stock. This includes approximately 720,000 shares owned by the Washington Post
Company which William C. Samuels, our Chairman and Chief Executive Officer,
pursuant to a voting agreement, has voting control. Consequently Mr. Samuels has
voting control over approximately 3.6 million shares of common stock, or
approximately 10% 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, which they currently own or may acquire within 60 days, they
will have voting rights over 3.2 million shares, or 10% 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 10,285,022 shares of common stock that had not been
exercised. Of the shares of common stock subject to these unexercised options
and warrants 5,049,192 may be purchased for between $1.00 and $1.99 per share;
4,793,330 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; 125,000 may be purchased for
between $4.00 and $4.99 per share; and 167,500 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.
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Your investment may be substantially diluted upon conversion of convertible
preferred stock.
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 32,600 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 600,000 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 and Chief Executive
Officer, David Reese, ACTV's President, Chief Operating Officer and a director,
Bruce Crowley, ACTV's Executive Vice President and a director, 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,
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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:
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 Annual Report on Form 10-K for the year ended December 31, 1998, as
filed on March 19, 1999; 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.
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 by this prospectus. All proceeds from the sale of the security
holders' shares will be for the account of the selling security holders. 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, 1998 on March 19, 1999.
SELLING SECURITY HOLDERS
All of the shares of ACTV common stock offered under this prospectus may be
sold by the holders who either have previously acquired their shares or who will
acquire such shares from ACTV upon the exercise of options, warrants, or stock
appreciation rights, or upon conversion of ACTV's 10% Series B Convertible
Preferred Stock. ACTV will not receive any of the proceeds from sales of shares
offered under this prospectus, 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 shares by selling security holders will be
borne by such holders.
The selling security holders are offering a total of 9,858,172 shares of
ACTV's common stock. The following table sets forth:
o the name of each person who is a selling security holder;
o the number of securities owned by each such person at the time of this
offering; and
o 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:
o shares of common stock issuable upon exercise of all currently
exercisable options, warrants, and stock appreciation rights and
conversion of all Series B preferred stock, based on the lesser of
current or future conversion prices; and
o shares that have been registered on previous registration statements
but have not been sold as of March 12, 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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<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 2,227,665 6.34% 1,944,710 (1) 282,955 *
Elliott Associates, L.P. 2,159,476 6.14% 1,955,478 (2) 203,998 *
Ravich Children's Trust 366,444 1.09% 366,444 (3) 0 *
Ravich Revocable Trust of 1989 595,729 1.77% 595,729 (4) 0 *
US Bancorp Investments, Inc. 859,583 2.52% 859,583 (5) 0 *
Rand Ravich 87,753 * 63,673 (6) 24,080 *
Lee Helper 4,000 * 4,000 0 *
Larry Goldman 4,000 * 4,000 0 *
David Alworth 126,630 * 75,000 (7) 51,630 *
Banca del Gottardo 4,692,404 13.83% 25,000 (8) 4,667,404 13.76%
Richard Barron 85,630 * 25,000 (9) 60,630 *
Richard Carvalho 25,435 * 15,000 (9) 10,435 *
Christopher Cline 135,342 * 75,000 (10) 60,342 *
Peter Cohen 7,000 * 7,000 (9) 0 *
James Crook 82,442 * 5,000 (9) 77,442 *
Bruce Crowley 894,689 2.64% 583,000 (11) 311,689 *
Xiomara DeLeon 5,724 * 5,000 (8) 724 *
Frank Deo 75,000 * 75,000 (12) 0 *
Jeff Harrington 25,092 * 10,000 (9) 15,092 *
Brent Imai 80,539 * 25,000 (9) 55,539 *
Jennifer Lange 10,000 * 10,000 (8) 0 *
Kevin Liga 75,000 * 75,000 (13) 0 *
Eric Martinez 23,623 * 4,183 (9) 19,440 *
Margie Mercado 6,809 * 5,000 (8) 1,809 *
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 1,405,648 4.10% 957,000 (15) 448,648 1.35%
William Samuels 4,085,229 11.62% 1,773,000 (16) 2,312,229 6.92%
Amy Satin 15,000 * 15,000 (8) 0 *
Steven Schuster 38,334 * 12,500 (14) 25,834 *
Bill Frank 37,500 * 12,500 (19) 25,000 *
Patricia Wilson 5,117 * 5,000 (8) 117 *
Michael Freeman 324,746 * 32,000 (17) 292,746 *
Dorsey & Whitney 90,500 * 40,000 50,500 *
Craig Ullman 204,849 * 150,000 (18) 54,849 *
Russell Riopelle 3,072 * 3,072 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.
15
<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) Includes 16,666 shares 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 382,461 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 627,000 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 1,248,000 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.
(18) Consists of common stock issuable upon the exercise of options at $5.25 per
share.
(19) Consists of common stock issuable upon the exercise of options at $3.10 per
share.0
16
<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,
33,217,184 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 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. 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 paid in common stock upon conversion, of 7%
per annum. The Series A Preferred is convertible into ACTV 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 32,600 shares of
Series A Preferred remain outstanding and would be convertible into
approximately 600,000 shares of common stock if exchanged as of March 12, 1999.
ACTV has designated 6,110 shares of its preferred stock as Series B 10%
Convertible Preferred Stock. 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. 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 prohibited from converting any shares into common stock through
November 13, 1999, whether
17
<PAGE>
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, 2000, 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.
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 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 42,936,417 shares of common
stock outstanding. Of these shares, the shares being offered in this prospectus
will be freely tradable without restriction under the Securities Act of 1933,
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, 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:
o the average weekly trading volume in ACTV's shares during the four
calendar weeks preceding such sale; or
o 1% of the shares then outstanding.
18
<PAGE>
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 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 common stock.
19
<PAGE>
PLAN OF DISTRIBUTION
Up to 9,719,233 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 their 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,
including crosses or block transactions, by any of the following methods:
o on the Boston Stock Exchange;
o on the Nasdaq SmallCap Market;
o in the over-the-counter market;
o in transactions other than on any stock exchange or in the
over-the-counter market;
o through the writing of options on ACTV common stock; or
o by settlement of short sales of ACTV common stock.
The purchase price of the shares may be determined by the selling security
holder or by agreement between the selling security holder and underwriters,
brokers, dealers or agents or purchasers. The price may be at:
o market prices prevailing at the time of sale;
o prices related to such prevailing market prices;
o varying prices determined at the time of sale; or
o negotiated or fixed prices.
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 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 of 1933.
Because the selling security holders may each be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act of 1933,
the selling security holders will be subject to prospectus delivery requirements
under the Securities Act of 1933. 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 Securities
Exchange Act of 1934 until its participation in that distribution is completed.
20
<PAGE>
At the time 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 of 1933, 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:
o the name or names and addresses of any underwriters, dealers or
agents;
o the purchase price paid by any underwriter for securities purchased
from the selling security holder; and
o any discounts, commissions or concessions allowed or reallowed or paid
to dealers, and the proposed selling price to the public.
ACTV will bear all costs and expenses of the registration under the
Securities Act of 1933 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 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 ACTV common stock during the applicable two or nine days
"cooling off" period 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 Securities Exchange Act of 1934 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.
21
<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
ACTV's counsel, Gersten, Savage & Kaplowitz, LLP, or GSK, 101 East 52nd Street,
New York, New York 10022. Jay Kaplowitz, a partner in ACTV's counsel owns
options to purchase 25,000 shares of ACTV's 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 for the year ended December 31, 1998 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
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Paragraph "Twelfth" of the Restated Certificate of Incorporation of ACTV,
which contains a provision, as permitted by Delaware law, 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:
o disloyalty to ACTV or its stockholders;
o failing to act in good faith;
o for engaging in intentional misconduct or a knowing violation of law;
o for obtaining an improper personal benefit; or
o for approving an illegal dividend or stock repurchase.
The Restated Certificate of Incorporation and By-Laws of ACTV require ACTV
to indemnify directors and officers against expenses, judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative, other
than 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 incurred in connection with defense or settlement of such an action.
Moreover, Delaware 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 Securities Act of 1933 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,
22
<PAGE>
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 Securities Act of 1933 and will
be governed by the final adjudication of such issue.
23
<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
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary 4
Risk Factors 6
Where You Can Find More Information 13
Use of Proceeds 14
Material Changes 14
Selling Security Holders 14
Description of Capital Stock 17
Plan of Distribution 20
Legal Matters 22
Experts 22
Indemnification of Directors and Officers 22
</TABLE>
ACTV, INC.
9,858,172 shares of Common Stock offered by Selling Security Holders, consisting
of:
(a) 138,939 shares of Common Stock, and
(b) 9,719,233 shares of Common Stock issuable upon the exercise of options,
warrants, stock appreciation rights and upon the conversion of convertible
preferred shares
April___, 1999
24
<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. 4, 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 2nd of April, 1999.
ACTV, INC.
By: /s/ William C. Samuels
----------------------
William C. Samuels
Chairman of the Board and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and has appointed William C. Samuels, Chairman of the
Board 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. 4, has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William C. Samuels Chairman of the Board and Chief April 2, 1999
- ---------------------- Executive Officer
William C. Samuels
/s/ David Reese* President, Chief Operating Officer April 2, 1999
- ---------------- President--ACTV Entertainment, Inc.
David Reese and Director
/s/ Bruce Crowley* Executive Vice-President, April 2, 1999
- ------------------
25
<PAGE>
Bruce Crowley President--ACTV Net, Inc.
and Director
/s/ William A. Frank* Director April 2, 1999
- ---------------------
William A. Frank
/s/ Steven W. Schuster* Director April 2, 1999
- -----------------------
Steven W. Schuster
/s/ Christopher C. Cline* Senior Vice President, Chief Financial April 2, 1999
- ------------------------- Officer, Secretary and Chief Accounting
Christopher C. Cline Officer
</TABLE>
- ----------------------------------------------------
*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.
26
<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 Securities Act of 1933 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 Securities Act of 1933 and
will be governed by the final adjudication of such issue.
16. EXHIBITS
27
<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 Securities Act of
1933, 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.
28
<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.
29
EXHIBIT 5
[Gersten, Savage, & Kaplowitz, LLP Letterhead]
April 2, 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. 4, (the "Registration Statement"), under
the Securities Act of 1933, being filed by the Company with the Securities and
Exchange Commission.
The Registration Statement relates to an offering of 9,858,172 shares (the
"Selling Security Holders' Shares") of common stock (the "Offering"), par 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 Securities Act of 1933, 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
Securities Act of 1933 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
30
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Pre-Effective Amendment No.
4 to Registration Statement No. 333-69923 of ACTV, Inc. on Form S-3, of our
report dated March 11, 1999, appearing in the Annual Report on Form 10-K of
ACTV, Inc. for the year ended December 31, 1998, 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
April 2, 1999
31
