<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
ACTV, Inc
(Exact name of registrant as specified in its charter)
DELAWARE 94-2907258
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(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
1270 Avenue of the Americas
New York, New York 10020
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(Address of principal executive offices) (Zip Code)
(212) 217-1600 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___
As of August 11, 2000, there were 50,591,501 shares of the registrant's common
stock outstanding.
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INTRODUCTORY NOTE
This amendment on Form 10-Q/A amends the Registrant's Quarterly Report on Form
10-Q filed by the Registrant on August 14, 2000 and is being filed to reflect
the restatement of the Registrant's Consolidated Balance Sheet (the
"Restatement"). To record the Company's receipt of a warrant on
April 13, 2000, which the Company has valued at $76,016,175. The Restatement
does not impact the Company's Consolidated Statements of Operations, Cash Flows
or Stockholders' Equity for the reported periods.
ACTV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
ASSETS DECEMBER 31, 2000
1999 (UNAUDITED)
---------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents......................... $8,816,368 $135,863,898
Accounts receivable-net........................... 1,160,036 1,386,262
Other............................................. 1,589,430 6,946,910
---------------- ----------------
Total current assets.......................... 11,565,834 144,197,070
---------------- ----------------
Property and equipment-net............................. 3,392,219 4,501,660
---------------- ----------------
Other assets:
Investment in warrant............................. 76,016,175
Investments - at cost............................. 250,000 4,000,000
Patents and patents pending....................... 8,142,928 8,078,185
Software development costs........................ 2,183,950 2,297,303
Goodwill 1,788,444 1,575,258
Other............................................. 828,683 1,655,428
---------------- ----------------
Total other assets............................ 13,194,005 93,622,349
---------------- ----------------
Total ................................... $28,152,058 $242,321,079
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses.............. $1,708,611 $1,790,135
Deferred revenue................................... 3,619,818
----------------- ----------------
Total current liabilities...................... $1,708,611 $5,409,953
Deferred revenue................................... 72,396,357
Long-term notes payable............................ 4,803,342 ---
Minority interest....................................... 2,000,593 3,072,596
----------------- ----------------
Total liabilities.............................. $8,512,546 $80,878,906
Stockholders' equity:
Common stock, $0.10 par value, 200,000,000 shares
authorized: issued and outstanding 42,167,997 at
December 31, 1999, 50,551,169 at June 30, 2000.... 4,216,800 5,055,117
Additional paid-in capital........................ 110,692,842 267,105,450
Accumulated deficit............................... (95,270,130) (110,718,394)
----------------- ----------------
Total stockholders' equity..................... 19,639,512 161,442,173
----------------- ----------------
Total..................................... $28,152,058 $242,321,079
================= ================
</TABLE>
See notes to consolidated financial statements.
2
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. SEGMENT INFORMATION
We have two principal business segments that develop and market proprietary
technologies for individualized television programming and for
television/Internet convergence. Since our inception, we have been engaged in
the development of individualized programming, the production of programs that
use individualized television programming and marketing and sales of the various
products and services incorporating individualized television programming.
During 1995, we developed HyperTV for the enhanced television convergence
market.
Information concerning the our business segments for the six and three-month
periods ending June 30, 1999 and 2000 are as follows:
<TABLE>
<CAPTION>
For the Six Months Ended For the Three Months Ended
June 30, 1999 June 30, 2000 June 30, 1999 June 30, 2000
<S> <C> <C> <C> <C>
Revenues
Individualized Television $ - $ - $ - $ -
HyperTV 854,507 1,896,656 453,713 1,056,419
Unallocated corporate - 6,000 - 6,000
----------------- ---------------- ---- ----------------- -----------------
Total $ 854,507 $ 1,902,656 $ 453,713 $ 1,062,419
================= ================ ==== ================= =================
DEPRECIATION & AMORTIZATION
Individualized Television $ 404,538 $ 657,154 $ 214,557 $ 339,369
HyperTV 182,782 417,920 38,662 218,211
Unallocated Corporate 296,040 503,719 153,234 252,051
----------------- ---------------- ----------------- -----------------
Total $ 883,360 $ 1,578,793 $ 406,453 $ 809,631
================= ================ ================= =================
INTEREST (EXPENSE) INCOME
Individualized Television $ (498,747) $ (241,803) $ (282,021) $ 8,078
HyperTV (2,084) 2,626 197 2,104
Unallocated corporate 103,063 3,345,567 63,714 2,194,253
----------------- ---------------- ----------------- -----------------
Total $ (397,768) $ 3,106,390 $ (218,110) $ 2,204,435
================= ================ ================= =================
NET (LOSS)
Individualized Television $ (2,526,401) $ (5,001,023) $ (1,350,169) $ (3,218,004)
HyperTV (1,275,872) (4,304,277) (599,548) (2,295,267)
Unallocated corporate (9,180,016) (3,430,311) (3,652,104) (2,561,323)
----------------- ---------------- ----------------- -----------------
Total $ (12,982,289) $ (12,735,611) $ (5,601,821) $ (8,074,594)
================= ================ ================= =================
CAPITAL EXPENDITURES
Individualized Television $ 581,213 $ 1,297,471 $ 277,089 $ 981,906
HyperTV 1,870,690 1,032,791 1,520,562 542,413
Unallocated corporate 47,574 193,398 13,812 173,975
----------------- ---------------- ----------------- -----------------
Total $ 2,499,477 $ 2,523,660 $ 1,811,463 $ 1,698,294
================= ================ ================= =================
</TABLE>
Balance Sheet Accounts as of June 30, 1999 & 2000
3
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CURRENT ASSETS
<TABLE>
<S> <C> <C>
Individualized Television $ 655,369 $ 2,293,994
HyperTV 954,472 1,739,495
Unallocated corporate 18,815,542 140,163,581
----------------- -----------------
Total $ 20,425,383 $ 144,197,070
================= =================
TOTAL ASSETS
Individualized Television $ 4,060,028 $ 6,927,428
HyperTV 3,061,521 81,820,516
Unallocated corporate 21,933,739 153,573,135
----------------- -----------------
Total $ 29,055,288 $ 242,321,079
================= =================
</TABLE>
12. RESTATEMENT OF JUNE 30, 2000 CONSOLIDATED BALANCE SHEET
The June 30, 2000 consolidated balance sheet of the Company has been restated
to record the warrant received in connection with the transaction described
in the following paragraphs. The restatement has no effect on stockholders
equity, operations, or cash flows.
The Company and Liberty Livewire LLC, a unit of Liberty Livewire Corporation
("Livewire") (formerly known as Todd AO Corporation), entered into a joint
marketing venture "HyperTV-Registered Trademark- with Livewire" on April 13,
2000. "HyperTV with Livewire" will use ACTV's patented HyperTV convergence
technology to combine the emotive power of television with the interactivity
of the Internet, and will provide turnkey convergence services, including
application hosting, web authoring services, data management, e-commerce and
other value-added services for advertisers, television programmers, studios
and networks.
The Company received a warrant to acquire 2,500,000 shares of Livewire at $30
per share in connection with entering into the joint marketing agreement. The
warrant becomes exercisable at the rate of 500,000 shares per year,
commencing on April 13, 2001, includes a demand registration right, and may
be exercised until March 31, 2015. With certain exceptions, the warrant is
not transferable. As a result, the June 30, 2000 balance sheet has been
restated from amounts previously reported to record an investment and
deferred revenue in the amount of $76,016,175, the estimated value of the
warrant. The Company estimated the value of the warrant using the Black
Scholes pricing model with a risk free rate of 6.5%, a volatility of 80% and
assuming no cash dividends. For accounting purposes, the Company will
periodically estimate the value of the warrant. Any change in estimated value
attributable to shares that are both exercisable and are expected to become
registered within one year will be recorded through increases or decreases in
Other Comprehensive Income. The deferred income recorded by the Company will
be amortized into income over a period of 21 years, the contractual term of
the joint marketing venture commencing July 1, 2000 when the joint marketing
agreement becomes operationally effective.
A summary of the significant effects of the restatement are as
follows:
<TABLE>
<CAPTION>
June 30, 2000
----------------------------
As
Previously
Reported As Restated
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<S> <C> <C>
Total Other Assets 17,606,174 93,622,349
Current Liabilities- 3,619,818
Deferred Revenue
Non Current Liabilities- 72,396,357
Deferred Revenue
</TABLE>
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4
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Cooperative Venture Agreement by and among HyperTV
Networks, Inc., Liberty Livewire, LLC and HyperTV
with Livewire, LLC, dated April 13, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACTV, Inc.
Registrant
Date: October 26, 2000 /s/ William C. Samuels
---------------- -----------------------------
William C. Samuels
Chairman, Chief Executive Officer
and Director
Date: October 26, 2000 /s/ Joseph P. Dwyer
---------------- -------------------
Joseph P. Dwyer
Executive Vice President and Chief
Financial Officer (principal financial
and accounting officer)
5
