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Telvue Corp · 10-Q · For 9/30/95

Filed On 11/7/95 · SEC File 0-17170 · Accession Number 839443-95-9

  As Of               Filer                 Filing     On/For/As Docs:Pgs

11/07/95  Telvue Corp                       10-Q        9/30/95    2:19

Quarterly Report · Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      18±    96K 
 2: EX-27       Article 5 Fin. Data Schedule for 3rd Qtr 10-Q          1      5K

10-Q · Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Exhibits and Reports on Form 8-K Financial Statements Fourth Management's Discussion and Analysis or Plan of Operation
1	1st Page
2	Item 1. Financial Statements
"	Item 6. Exhibits and Reports on Form 8-K
8	Item 2. Management's Discussion and Analysis or Plan of Operation
10	Fourth

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                                          EXHIBIT INDEX APPEARS ON PAGE 17

  SECURITIES AND EXCHANGE COMMISSION

   Washington, DC  20549

   FORM 10-QSB

   Quarterly Report Under Section 13 or 15(d) of the
   Securities Exchange Act of 1934

     For the quarterly period ended September 30, 1995

   Commission File Number: 0-17170

  TELVUE CORPORATION
   (Exact name of small business issuer as specified in its charter)

DELAWARE                                     51-0299879   
(State or other jurisdiction of                      (I.R.S. Employer           
incorporation or organization)                      Identification No.)         

16000 Horizon Way, Suite 500                                                    
Mt. Laurel, New Jersey                                      08054               
(Address of principal executive offices)                  (Zip Code)            

Issuer's telephone number, including area code:(609) 273-8888                   

Check whether the issuer (1) filed all reports required to be filed by          
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or      
for such shorter period that the issuer was required to file such reports)      
and (2) has been subject to such filing requirements for the past 90 days.      
Yes   X   No                                                                    
------   ------                                                         

Number of shares of registrant's common stock outstanding as of October 23,     
1995: 23,794,500 shares.                                                        

Transitional Small Business Disclosure Form:  Yes       No   X                  
                                   ------   ------
This report includes a total of 18 pages.                                       

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   TELVUE CORPORATION AND SUBSIDIARY

   INDEX

                                                                PAGE
                                                                 NO.
                                                                 -----

PART I.   FINANCIAL INFORMATION                                                 

Item 1.  Financial Statements                               

Consolidated Balance Sheets as of September 30, 1995        
(unaudited) and as of December 31, 1994                     

Consolidated Statements of Operations for the               
three months ended September 30, 1995 (unaudited)           
and September 30, 1994 (unaudited)                          

Consolidated Statements of Cash Flows for the               
nine months ended September 30, 1995 (unaudited)            
and September 30, 1994 (unaudited)                          

Notes to Consolidated Financial Statements (unaudited)      

PART II.  OTHER INFORMATION                                                     

Item 6.  Exhibits and Reports on Form 8-K                   

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                                                                · Download Table

PART I.  Financial Information                                               
ITEM I.  Financial Statements                                                

                         TELVUE CORPORATION AND SUBSIDIARY                   
                            CONSOLIDATED BALANCE SHEETS                      

                                                 September 30,   December 31,
                                                     1995            1994    
                                                 -------------   ----------- 
                                                                             

ASSETS                                            (Unaudited)                

CURRENT ASSETS                                                               
  Cash and cash equivalents                      $   169,230     $   164,588 
  Accounts receivable - trade                        755,788         473,924 
  Other receivables                                   27,794          66,346 
  Other current assets                                21,076           6,330 
                                                 -----------     ----------- 
     TOTAL CURRENT ASSETS                            973,888         711,188 

PROPERTY AND EQUIPMENT                                                       
  Machinery and equipment                          5,266,154       5,201,870 
  Less accumulated depreciation                    2,270,516       2,057,863 
                                                 -----------     ----------- 
                                                   2,995,638       3,144,007 

SECURITY DEPOSITS                                     10,050          10,050 
                                                 -----------     ----------- 
                                                 $ 3,979,576     $ 3,865,245 
                                                 ===========     =========== 

LIABILITIES AND STOCKHOLDERS' DEFICIT                                        

CURRENT LIABILITIES                                                          
  Accounts payable - trade                        $  370,555     $   136,097 
  Accounts payable - equipment                       136,335         581,263 
  Accrued expenses                                   188,939          92,151 
  Accrued dividends                                  301,920         119,052 
                                                  -----------    ----------- 
     TOTAL CURRENT LIABILITIES                       997,749         928,563 

NOTES PAYABLE - MAJORITY STOCKHOLDER               6,471,712       5,406,979 

ACCRUED INTEREST - MAJORITY STOCKHOLDER            1,448,474       1,006,085 

NOTE PAYABLE - SCIENCE DYNAMICS CORPORATION-                                 
  net of current portion                               --            541,000 

MINORITY INTEREST in equity of subsidiary              --            (38,987)

REDEEMABLE CONVERTIBLE PREFERRED STOCK, $1 par                               
  value, 6,900,000 and 3,000,000 shares                                      
  authorized, respectively, 2,031,877 shares                                 
  issued and outstanding, (liquidation                                       
  value $2,272,841)                                2,031,877       2,031,877 

STOCKHOLDERS' DEFICIT                                                        
  Common stock, $.01 par value, 100,000,000                                  
  and 80,000,000 shares authorized, respectively,                            
  23,794,500 shares issued and outstanding           237,945         237,945 
  Additional paid-in capital                       1,515,535       1,515,535 
  Accumulated deficit                             (8,723,716)     (7,763,752)
                                                 -----------     ----------- 
                                                  (6,970,236)     (6,010,272)
                                                 -----------     ----------- 
                                                 $ 3,979,576     $ 3,865,245 
                                                 ===========     =========== 

The accompanying unaudited notes are an integral part of these statements.   

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                         TELVUE CORPORATION AND SUBSIDIARY                   
                       CONSOLIDATED STATEMENTS OF OPERATIONS                 
                                       (UNAUDITED)                           

                                             Three Months Ended September 30,
                                             --------------------------------
                                                     1995            1994    
                                                     ----            ----    
REVENUES                                         $ 1,226,315     $   917,709 

OPERATING EXPENSES                                                           
  Service                                            784,947         560,575 
  Selling and marketing                              180,183          82,378 
  General and administration                         161,379         117,985 
  Depreciation                                       210,673         199,214 
                                                 -----------     ----------- 
                                                   1,337,182         960,152 
                                                 -----------     ----------- 

OPERATING INCOME (LOSS)                             (110,867)        (42,443)

OTHER INCOME (EXPENSE)                                                       
  Interest expense                                  (149,477)       (105,006)
  Loss on disposal of property and equipment         (44,938)        (79,082)
  Minority interest in net loss of former subsidiary   1,737           2,953 
  Loss on disposition of subsidiary                  (45,572)           -    
                                                 -----------     ----------- 
                                                    (238,250)       (181,135)
                                                 -----------     ----------- 

NET LOSS                                            (349,117)       (223,578)

DIVIDENDS ON REDEEMABLE                                                      
  CONVERTIBLE PREFERRED STOCK                        (60,956)        (58,399)
                                                 -----------     ----------- 

NET LOSS AVAILABLE TO                                                        
  COMMON STOCKHOLDERS                            $  (410,073)    $  (281,977)
                                                 ===========     =========== 

NET LOSS PER COMMON SHARE                              $(.02)          $(.01)
                                                 ===========     =========== 

WEIGHTED AVERAGE NUMBER OF COMMON                                            
  SHARES OUTSTANDING                              23,794,500      23,773,848 
                                                 ===========     =========== 

The accompanying unaudited notes are an integral part of these statements.   

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                         TELVUE CORPORATION AND SUBSIDIARY                   
                       CONSOLIDATED STATEMENTS OF OPERATIONS                 
                                    (UNAUDITED)                              

                                              Nine Months Ended September 30,
                                              -------------------------------
                                                     1995            1994    
                                                     ----            ----    
REVENUES                                         $ 3,280,051     $ 2,540,773 

OPERATING EXPENSES                                                           
  Service                                          1,933,803       1,601,216 
  Selling and marketing                              490,402         332,985 
  General and administration                         465,802         297,892 
  Depreciation                                       623,739         553,683 
                                                 -----------     ----------- 
                                                   3,513,746       2,785,776 
                                                 -----------     ----------- 

OPERATING INCOME (LOSS)                             (233,695)       (245,003)

OTHER INCOME (EXPENSE)                                                       
  Interest expense                                  (442,389)       (264,885)
  Loss on disposal of property and equipment         (62,024)       (107,292)
  Minority interest in net loss of former subsidiary   6,585          20,187 
  Loss on disposition of subsidiary                  (45,572)          -     
                                                 -----------     ----------- 
                                                    (543,400)       (351,990)
                                                 -----------     ----------- 

NET LOSS                                            (777,095)       (596,993)

DIVIDENDS ON REDEEMABLE                                                      
  CONVERTIBLE PREFERRED STOCK                       (182,868)       (165,892)
                                                 -----------     ----------- 

NET LOSS AVAILABLE TO                                                        
  COMMON STOCKHOLDERS                            $  (959,963)    $  (762,885)
                                                 ===========     =========== 

NET LOSS PER COMMON SHARE                              $(.04)          $(.03)
                                                 ===========     =========== 

WEIGHTED AVERAGE NUMBER OF COMMON                                            
  SHARES OUTSTANDING                              23,794,500      23,749,353 
                                                 ===========     =========== 

The accompanying unaudited notes are an integral part of these statements.   

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                         TELVUE CORPORATION AND SUBSIDIARY                   
                       CONSOLIDATED STATEMENTS OF CASH FLOWS                 
                                    (UNAUDITED)                              

                                              Nine months Ended September 30,
                                              -------------------------------
                                                     1995            1994    
                                                     ----            ----    

CASH FLOWS FROM OPERATING ACTIVITIES             $  (777,095)    $  (596,993)
  Net Loss                                                                   
  Adjustments to reconcile net loss to net                                   
    cash provided (used) by operating activities:                            
    Depreciation                                     623,739         553,683 
    Loss on disposal of property and equipment        62,024         107,292 
    Minority interest in net loss of subsidiary       (6,585)        (20,187)
    Loss on disposal of subsidiary                    45,572            -    
  Changes in assets and liabilities:                                         
   Decrease (increase) in -                                                  
    Accounts receivable                             (281,864)       (114,664)
    Other receivable                                  38,552         (35,918)
    Other current assets                             (14,746)         (5,611)
    Security deposits                                   -             22,335 
   Increase (decrease) in -                                                  
    Accounts payable - trade                         234,458          14,320 
    Accounts payable - equipment                    (444,928)        423,834 
    Accrued expenses                                  96,788          47,160 
    Accrued interest - majority stockholder          442,389         264,669 
                                                 -----------     ----------- 
    NET CASH PROVIDED (USED) BY OPERATING                                    
    ACTIVITIES                                        18,304         659,920 
                                                 -----------     ----------- 

CASH FLOWS FROM INVESTING ACTIVITIES                                         
  Purchases of property and equipment               (537,595)     (1,828,913)
  Proceeds from sale of property and equipment           200           9,413 
                                                 -----------     ----------- 
    NET CASH USED BY INVESTING ACTIVITIES           (537,395)     (1,819,500)
                                                 -----------     ----------- 

CASH FLOWS FROM FINANCING ACTIVITIES                                         
  Proceeds from stock options                           -              8,250 
  Proceeds from notes payable - majority stockholder 523,733       1,148,000 
  Payments on notes payable -                                                
    Science Dynamics Corporation                        -            (15,243)
                                                 -----------     ----------- 
    NET CASH PROVIDED BY FINANCING ACTIVITIES        523,733       1,141,007 
                                                 -----------     ----------- 
NET INCREASE (DECREASE) IN CASH AND                                          
  CASH EQUIVALENTS                                     4,642         (18,573)

CASH AND CASH EQUIVALENTS,                                                   
  BEGINNING OF PERIOD                                164,588         197,203 
                                                 -----------     ----------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD         $   169,230     $   178,630 
                                                 ===========     =========== 

The accompanying unaudited notes are an integral part of these statements.   

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                         TELVUE CORPORATION AND SUBSIDIARY                   
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS               
                                     (UNAUDITED)                             

1.  BASIS OF PRESENTATION:                                                   
    ----------------------                                                   

Summary Financial Information and Results of Operations                      
--------------------------------------------------------                     

In the opinion of the management, the accompanying unaudited financial       
statements have been  prepared in conformance with generally accepted        
accounting principles and with the regulations of the Securities and Exchange
Commission and contain all adjustments (consisting of only normal recurring  
adjustments) necessary to make the financial statements not misleading and to
present fairly the financial condition as of September 30, 1995, the results 
of operations for the three and nine months ended September 30, 1995 and     
1994, and cash flows for the three and nine months ended September 30, 1995  
and 1994.                                                                    

Interim Financial Information                                                
-----------------------------                                                

While management believes that the disclosures presented are adequate to     
prevent misleading information, it is suggested that these unaudited         
financial statements be read in conjunction with the audited financial       
statements and notes included in the Company's Form 10-KSB report for the    
fiscal year ended December 31, 1994 as filed with the Securities and Exchange
Commission.                                                                  

Prior period financial statements have been reclassified to conform with     
current quarter presentation.                                                

2.  SUPPLEMENTAL CASH FLOW INFORMATION:                                      
    -----------------------------------                                      

For purposes of Statements of Cash Flows, the Company considers investment   
instruments with an original maturity of three months or less to be cash     
equivalents.                                                                 

Supplemental disclosures of cash paid/received during the period-            

                                                    1995          1994       
                                                     ----          ----      
             Interest received                       $  0          $  0      
             Interest paid                           $  0          $216      

3.  NET LOSS PER COMMON SHARE:                                               
    --------------------------                                               

The net loss per Common Share is based on the weighted average number of     
shares of Common Stock outstanding during each period.                       

4.  DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK:                     
    ----------------------------------------------------                     

As of September 30, 1995, preferred undeclared dividends amounted to         
$301,920.                                                                    

5.  INCOME TAXES:                                                            
    -------------                                                            

Effective January 1, 1993, the Company adopted Statement of Financial        
Accounting Standards No. 109 "Accounting for Income Taxes".  At January 1,   
1995, the cumulative temporary differences between the Company's financial   
statement losses and the losses reported on the Company's tax returns        
consisted of accelerated tax depreciation of $369,000 and nondeductible      
interest expense of $1,006,000.  In addition, the Company has a net operating
loss carry forward of approximately $5,500,000 that may be offset against    
future taxable income through 2009.  The Company has not recorded a deferred 
tax asset at September 30, 1995, because the Company believes there is at    
least a 50% chance that the carryforward will expire unused.  Accordingly,   
any tax benefit of the loss carryforward and of the other cumulative         
temporary differences has been offset by a valuation allowance of the same   
amount.                                                                      

6.  NOTES PAYABLE AND ACCRUED INTEREST - MAJORITY STOCKHOLDER:               
    ----------------------------------------------------------               

As of September 30, 1995, the Company had various outstanding notes due to   
the majority stockholder in the aggregate amount of $6,471,712 and accrued   
interest due on these notes of $1,448,474.  Included in the $6,471,712 is a  
note in the amount of $541,000 which the majority stockholder acquired from  
Science Dynamics Corporation during January 1995.  Effective as of March 31, 
1995, the Company obtained from the majority stockholder an extension to     
January 1, 1997, of his prior agreement not to demand repayment of his loans 
or the accrued interest on the loans.  The Company has, therefore, classified
the notes and accrued interest as long-term liabilities.                     

7.  AUTHORIZED SHARES OF COMMON STOCK                                        
    ---------------------------------                                        

In September 1995, the Company's shareholders approved an increase in the    
number of authorized shares of Common Stock and Redeemable Convertible       
Preferred Stock to 100,000,000 and 6,900,000, respectively.                  

8.  DISPOSITION OF SUBSIDIARY                                                
    -------------------------                                                

On July 28, 1995 the Company terminated its partnership with Voice FX        
Corporation.  The consolidated financial statements include the accounts of  
the Company and the accounts of the TelVue-Voice FX Joint Venture, a         
partnership owned seventy percent (70%) by the Company, up until July 28,    
1995.  The Company is continuing to independently provide the services that  
were previously offered under the partnership.                               

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION            

     TelVue Corporation (the "Company") is a marketing and service company   
primarily selling automatic number identification ("ANI") telecommunications 
services to the cable television industry for the automated ordering of      
pay-per-view features and events (the "Service").  The Company provides the  
Service through equipment it purchases. The Company also leases trunk        
telephone lines from local and long distance telephone companies to connect  
present cable television subscribers to the Company's Points of Presence     
("POPs") for ordering the Service from their local cable television systems. 
The Company also leases data circuits from local and long distance telephone 
companies to link the POPS to the cable systems' billing vendors.            

     The acquisition of the Company's equipment and the installation of the  
leased local and long distance telephone company's trunks require a          
substantial expenditure of capital before meaningful revenues can be         
realized.  In addition, revenues are affected by the "buy rates" of          
subscribers connected to the Service.  The Company considers the buy rates of
its subscribers to be low compared to long term buy rates projected by       
industry pay-per-view analysts.                                              

     Since May 1992, the Company has had a POP which is located at the       
Company's home office in Mt. Laurel, New Jersey (the "National POP").  The   
National POP was established to provide enhanced service features which are  
not available with the equipment located at the regional POPs.  The Company  
believes these enhanced service features, which identify the cable operator  
by name ("Custom Greeting") and, on accepted orders, speaks the movie or     
event title, start-time and channel appearance ("Title Speak"), are required 
for it to remain competitive within the pay-per-view ANI industry.  The      
National POP is able to serve cable television systems across the United     
States via trunk lines and data circuits which it currently leases from both 
Sprint Communications ("Sprint") and MCI Telecommunications Corporation      
("MCI").  On May 31, 1995, the Company entered into a lease agreement with   
MCI for the leasing of trunk lines and data circuits.  The trunk usage per   
minute rate is at a lower cost than what the Company receives from Sprint.   
The MCI lease expires June 1, 2000.  The Company began moving its customers  
onto the MCI telephone network during September 1995, and plans to have all  
of its customers using the MCI telephone network by December 1995.           

     The National POP can service, without installing a new POP, cable       
television systems which are located in a state or telephone Local Access    
Transport Area ("LATA")  where a regional POP does not exist.  The Company   
can also move all regional cable television systems onto the National POP.   
As these systems are moved to the National POP, the regional POPs will be    
eliminated.  Cable television systems using the National POP are charged, in 
addition to their per order fee, installation and setup fees, monthly data   
circuit fees and enhanced feature fees.                                      

     The Company's net loss was $349,117 and $223,578 for the three months   
ended September 30, 1995 and 1994, respectively.  The net loss for the nine  
months ended September 30, 1995 and 1994 was $777,095 and $596,993,          
respectively.  Service revenue for the third quarter and the nine months     
ended September 30, 1995 increased $308,606 and $739,278, respectively, over 
comparable periods from the prior year.  The growth in service revenue is    
attributable to an increase in the average monthly buy rate from 21.1% and   
19.8% for the third quarter and the nine months ended September 30, 1994,    
respectively, to 24.5% and 23.2% for the third quarter and the nine months   
ended September 30, 1995, respectively. The service revenue increase is also 
a result of an increase in installation and data circuit revenue of $35,563  
for the third quarter of 1995 and $101,063 for the nine months ended         
September 30, 1995, over comparable periods from the prior year.  In         
addition, the Company had an increase in National POP feature revenue of     
$46,000 and $195,927 for the third quarter and the nine months ended         
September 30, 1995, respectively, over comparable periods from the prior     
year.  The Company had Pay-Per-View Plus revenue of $79,016 and $141,912 for 
the third quarter and the nine months ended September 30, 1995, respectively,
compared to $1,231 for both the third quarter and the nine months ended      
September 30, 1995 (see below).  The installation and data circuit revenue   
as well as the feature revenue are a result of customer additions to the     
National POP.  The Pay-Per-View Plus revenue increased over 1994 because the 
Pay-Per-View Plus service was still being tested during the majority of the  
first nine months of 1994.                                                   

     Service expenses for the third quarter and the nine months ended        
September 30, 1995, increased $224,372 and $332,587, respectively, over      
comparable periods from the prior year.  The increase in service expenses is 
partially attributable to an increase in trunk telephone usage as a result of
an increase in the average monthly buy rate (see above) along with the       
Company serving approximately 2,100,000 more subscribers on the National POP 
as of September 30, 1995 when compared to September 30, 1994.  However,      
reducing trunk usage expense for the nine months ended September 30, 1995 are
credits earned for trunk usage during the first quarter of 1995 in the amount
of $173,709 in accordance with the Company's agreement with Sprint.  The     
Company had earned $50,000 in trunk usage credits during the second quarter  
of 1994.                                                                     

     The Company migrated approximately 900,000 subscribers from the regional
POPs to the National POP during the nine months ended September 30, 1995.  As
of September 30, 1995, the Company was serving approximately 6,700,000 cable 
subscribers on the National POP compared to approximately 4,600,000 cable    
subscribers served as of September 30, 1994.  The Company had originally     
planned to have its remaining 400,000 regional POP cable subscribers migrated
to the National POP by the end of the third quarter of 1995.  This has been  
rescheduled to the fourth quarter of 1995 as a result of additional time     
being required to migrate the remaining regional subscribers to the National 
POP.  Some regional POP cable customers are reluctant to move to the National
POP because they will be required to pay a monthly data circuit fee which    
they are not currently paying on the regional POPs.                          

     The National POP currently requires and the regional POPs had required  
a substantial purchase of equipment. Depreciation accounted for 16% and 18%  
of the total operating expenses for the third quarter and nine months ended  
September 30, 1995, compared to 21% and 20% for the third quarter and nine   
months ended September 30, 1994, respectively.  For the nine months ended    
September 30, 1995, selling and  marketing expenses increased 47% and general
and administrative expenses increased 56% over the comparable 1994 period.   
The increase in selling and marketing expenses is attributable to an increase
in commissions of $29,154 as a result of customer additions and contract     
renewals, an increase in payroll and payroll tax expense of $83,883 as a     
result of three additional personnel; one for the Pay-Per-View Plus service  
(see below), one for the DRTV (see below), and one in connection with the    
fulfillment of the Company's obligation under its management agreement with  
Lenfest Networks, Inc. which is prorated between general and administrative  
expenses and selling and marketing expenses (see below).  There was an       
increase of $22,032 in cable show expense as a result of the Company renting 
booth space at cable shows to make itself more visible as well as an increase
in travel expenses of $24,598 as a result of additional personnel.  The      
increase in general and administrative expenses is due to an increase in     
payroll and payroll tax expense of $55,188 as a result of additional         
personnel and salary increases, an increase in office rent and utilities     
expense of $16,870 as a result of locating to a larger office space during   
July 1994, and an increase in consulting expenses of $65,587.  Of the        
consulting expense increase, $49,827 is related to computer programming      
expenses incurred in relation to DRTV development (see below).               

     For the nine months ended September 30, 1995, the Company recorded a    
loss on the disposal of property and equipment of $62,024.  This loss was a  
result of being unable to use or sell excess equipment inventory made        
available by the retirement of eight regional POPs.  The retirement of the   
eight regional POPs resulted from the migration of customers from the        
regional POPs to the National POP.  As additional regional POPs are retired, 
the Company will have a surplus of equipment inventory.  The Company will    
need to dispose of this excess equipment if it is unable to obtain a         
purchaser.                                                                   

     Total liabilities increased by $1,074,295 along with an increase in     
total assets of $114,331 for the nine months ended September 30, 1995.  The  
increase in total liabilities was partially due to the Company's draws of a  
total of $523,733 under funding arrangements with H.F. Lenfest, the Company's
principal stockholder ("Mr. Lenfest") plus an increase in accrued interest of
$442,389 on outstanding loans from Mr. Lenfest.  The increase in assets is   
attributable to an increase in accounts receivable of $281,864 as a result of
increased billings.  The Company's number of days for sales in accounts      
receivable is 51 days for the nine months ended September 30, 1995 compared  
to 50 days for the nine months ended September 30, 1994.  The Company        
believes the increase of one day is not material.  The Company does not offer
incentives/discounts to its customers, nor has it changed its credit terms   
with its customers.                                                          

     During the nine months ended September 30, 1995, the Company purchased  
$537,595 of equipment compared with $1,828,913 purchased during the nine     
months ended September 30, 1994.  Included in the equipment purchases are    
software enhancements and peripheral equipment for the National POP totaling 
$318,447, caller recording software enhancements in the amount of $51,304,   
which is to be used for the Pay-Per-View Plus service (see below), and       
$91,033 in software to be used to provide service to Video Jukebox Network,  
Inc. ("VJN") (see below).                                                    

     During October 1993, the Company entered into a Joint Venture with Voice
FX Corporation ("Voice FX").  The name of the Joint Venture was "TelVue-Voice
FX Joint Venture" (the "Partnership"), and the Partnership was doing business
as "TelVue FX".  The business of the Partnership was to target the cable     
television subscriber market for direct response type products, order        
processing and for the sale and/or marketing of products and services,       
including, but not limited to, coupons, audio-text, information, polling,    
surveys, fax-back and database marketing (the "Pay-Per-View Plus Service").  
The participation percentage for the Partnership was 70% for the Company and 
30% for Voice FX.  On July 28, 1995, the Company and Voice FX agreed to      
terminate the Partnership.  The Partnership was terminated because the only  
promotions which the Partnership was handling were pay-per-view industry     
promotions and the Company is able to market and handle these promotions     
alone.  Under the terms of the Partnership dissolution, the Company must pay 
to Voice FX 30% of gross revenues received by the Company for the period June
1, 1995, through December 31, 1995, for premium channel upgrade promotions   
under contracts that Voice FX had originally sold. In addition, the Company  
must pay to Voice FX 10% of gross revenues received by the Company for the   
period January 1, 1996, through December 31, 1996, for premium channel       
upgrade promotions under contracts that Voice FX had originally sold.  The   
Company had a loss of $45,572 resulting from the write off a loan and        
interest receivable due from the partnership, net of losses previously       
recognized on the consolidated financial statements prior to termination.    

     The Partnership had revenue of $45,354 for the nine months ended        
September 30, 1995, compared to $1,231 for the same period of 1994.  The     
Partnership had a net loss of $21,950 for the nine months ended September 30,
1995, compared to a net loss of $67,291 for the nine months ended September  
30, 1994.  The loss for the nine months ended September 30, 1995, is         
attributed to payroll, advertising and travel expenses associated with       
marketing the Pay-Per-View Plus Service.  After intercompany adjustments, 70%
or $7,918 of the net loss for the nine months ended September 30, 1995, is   
included in the Company's net loss for the nine months ended September 30,   
1995. During the nine months ended September 30, 1995, the Company borrowed  
from Mr. Lenfest, under the terms of the TelVue Partnership loan, $132,612 to
pay for equipment required for use in the Partnership as well as to pay other
Partnership expenses.  The Company will continue to utilize the equipment    
that it previously purchased for use in the partnership for the Company's    
business operations.                                                         

     On September 27, 1994, the Company entered into a service agreement with
VJN.  The Company acts as a 900 call service bureau to facilitate the        
ordering, by VJN customers, of music videos on the cable home dish of the VJN
customer.  Mr. Lenfest has guaranteed the obligation of the Company to remit 
the funds received by the Company on behalf of VJN under the terms of the    
service agreement.  As of October 23, 1995, Mr. Lenfest has loaned the       
Company $358,267 for equipment purchases required to provide service to VJN  
(the "VJN" loan).  Interest on the loan is set at the floating prime rate of 
PNC Bank, Philadelphia plus 1%. Mr. Lenfest is the Chairman of the Board of  
Directors of VJN.  He also controls a corporation which is a partner in a    
partnership which is the principal stockholder of VJN.  The Company believes 
that the terms of the service agreement with VJN are at market rates.  The   
Company plans to begin service to the VJN cable customers in November 1995.  

     The Company has entered into an agreement to provide management services
to Lenfest Networks, Inc. ("LNI"), a company wholly-owned by Mr. Lenfest.    
LNI owns and operates a personal advertising television video programming    
service with pay-per-call applications, and does business as "INTRONET".  The
Company has authority to perform all services necessary for the management of
the business, other than to acquire or dispose of assets, to incur debt other
than in the ordinary course of business or to encumber the assets of the     
business.  The Company is compensated in the amount of $10,000 per month plus
reimbursement for expenses and costs incurred in performing its management   
duties.  The Company believes the terms of the management agreement with LNI 
are at market rates.                                                         

     The Company is developing a new line of business. The purpose of the    
business is to provide cable systems with direct response commercials from a 
number of sources, and then pay the cable operators a percentage of sales    
generated from the commercials ("DRTV").  The Company is currently providing 
the service to cable networks, some of which are owned by an affiliate, and  
plans to eventually have cable systems directly using the service.  As of    
September 30, 1995, the Company has earned $1,975 in service revenue and has 
incurred $98,366 of expenses in connection with developing the DRTV service  
(see discussion above regarding selling and marketing and general and        
administrative expenses).                                                    

     The Company had positive cash flow from operations of $18,304 during the
nine months ended September 30, 1995.  Ignoring changes in operating assets  
and liabilities which result from timing issues, and considering only        
adjustments to reconcile net loss to net cash provided by operating          
activities, the Company would have negative cash flow from operating         
activities of $52,345 for the nine months ended September 30, 1995, compared 
to positive cash flow of $43,795 for the nine months ended September 30,     
1994.  The primarily reason for the decrease in cash flow is due to the      
additional expenses incurred in relation to the DRTV service (see above).    
The Company was able to continue operations without borrowing additional     
funds for operating activities as a result of Mr. Lenfest agreeing to defer  
interest payments of $442,389 during the nine months ended September 30,     
1995.  Mr. Lenfest has agreed to defer interest payments on outstanding      
borrowings through January 1, 1997, thereby, increasing cash available for   
operations.                                                                  

     The Company's 1995 unconsolidated budget indicates that the Company will
have sufficient cash flow to meet operating expenses for its pay-per-view    
core business through 1995 as long as Mr. Lenfest continues to defer payment 
of principal and interest. Based upon the 1995 unconsolidated budget, the    
Company plans to pay for 1995 National POP equipment purchases made during   
1995 from its earnings before depreciation and interest expense.             

     The Company believes that increases in accrued interest under the loans 
from Mr. Lenfest do not have a direct material effect on operations or       
continued availability of credit.  The Company believes its suppliers  look  
primarily to the Company's timely payment of outstanding invoices.           
Historically, the Company has paid all the suppliers it deals with on a      
timely basis and, therefore, the cash flow from operations has no effect on  
the Company's availability of credit from key suppliers of goods and         
services.  The payment terms with Syntellect Network Systems, Inc.           
("Syntellect"), the Company's major equipment supplier, vary based upon the  
terms the Company negotiates with Syntellect.  The negotiated terms are      
affected by the equipment purchased, the date by which the equipment is      
needed and the Company's ability to pay.  The negotiated payment terms range 
from net 30 days to net 90 days or to installment payments over a period of  
months.  The payment terms for the Company's equipment supplier of peripheral
equipment, Dacon Corporation, is net 30 days.                                

     Since November 2, 1989, the Company has funded its expansion and        
operating deficit from the $2,500,000 of proceeds from the sale of shares of 
the Company's Common Stock and Preferred Stock to Mr. Lenfest and from       
borrowings from Mr. Lenfest.  From November 2, 1989, through December 31,    
1993, the Company had borrowed $3,690,000 from Mr. Lenfest under various loan
agreements.  On March 8, 1994, Mr. Lenfest agreed to loan to the Company up  
to $1,500,000 for the purchase of additional equipment needed to expand the  
National POP. Interest on the National Equipment Loan is set at the floating 
prime rate of PNC Bank plus 1%.                                              
Interest on the National Equipment Loan is to be paid quarterly.  At the     
option of the Company, the interest may be paid by the delivery of shares of 
the Company's Preferred Stock at the rate of one share of Preferred Stock for
each one dollar of accrued interest.  As of October 23, 1995, the Company had
borrowed $1,471,272 under the terms of the National Equipment Loan.  The     
Company had paid accrued interest on the National Equipment Loan through     
September 30, 1994, in the amount of $27,377 with 27,377 shares of Preferred 
Stock. As of September 30, 1995, interest in the amount of $134,833 had been 
accrued, but not paid, on the National Equipment Loan. It has not been       
determined whether the interest will be paid with shares of preferred stock. 
During January 1995, Mr. Lenfest purchased a $541,000 non-interest bearing   
note from Science Dynamics Corporation.  As of October 23, 1995, Mr. Lenfest 
had loaned $411,173 under the TelVue Partnership Loan and $358,267 under the 
VJN loan, bringing aggregate borrowings from Mr. Lenfest to $6,471,712.      
Interest on $5,019,539 of the borrowings is set at the floating prime rate of
PNC Bank plus 1%.  Interest on $500,000 of the loan is set at 12%.  Interest 
on $411,173 is set at the floating prime rate of PNC Bank plus 2%.  In       
addition, effective as of March 31, 1995, the Company obtained from Mr.      
Lenfest an extension to January 1, 1997, of his prior agreement not to demand
cash repayment of his loans or the accrued interest on the loans.            

     The Company's ability to fund its operating expenses is directly related
to the cable industry's buy rates and, therefore, is volatile.  The Company  
is also dependent upon the deferral of interest payments due to Mr. Lenfest  
in order to fund its operating expenses.  Since the Company's cash flow is   
subject to factors over which the Company has no control, there can be no    
assurance that the Company will continue to fund its operations without      
seeking outside financing. Should the Company require funding in the future  
for operations or National POP equipment purchases, it will seek additional  
financing from Mr. Lenfest and other sources.  In November 1994, Mr. Lenfest 
expressed his desire to review the nature and terms of his continued equity  
and debt investments in the Company with the goal of realizing a return in   
the near term on his investments.   In the event Mr. Lenfest should decide to
terminate funding, for either equipment purchases, or future operations, the 
Company will seek additional funds from other third parties, although there  
can be no assurance that such funds will be available or will be available on
terms that are acceptable to the Company.  The Company has been unable to    
obtain such funding in the past.  In the event that the Company is unable    
to secure additional needed funds, the Company will take actions necessary to
continue operations with the funds available, including, without limitation, 
reducing capital expenditures for existing POPS and downsizing the work      
force.  If additional needed funds do not become available, unless the       
Company is able to continue to fund its operating activities, it will not be 
able to continue its business operations.                                    

     Shares of Common Stock which have had the same beneficial owner since   
April 21, 1988, or which have had the same beneficial owner for a continuous 
period in excess of two years prior to the record date of any meeting of     
stockholders, are entitled to ten votes per share in any matters submitted   
for vote, at a meeting of stockholders.  All other stockholders have one vote
per share unless this limitation is waived by the Board of Directors.  As of 
September 30, 1995, 16,707,225 shares of the Company's Common Stock were     
entitled to ten votes per share.  The remaining 7,087,275 shares of Common   
Stock were entitled to one vote per share.  Mr. Lenfest owns 12,896,968      
shares of Common Stock which are entitled to ten votes per share and         
1,660,485 shares of Common Stock that are entitled to one vote per share.    

PART II.  OTHER INFORMATION                                                  

ITEM 6.   Exhibits and Reports on Form 8-K.                                  

(a)    Exhibits                                                              

3.1    Certificate of Incorporation of the Company (incorporated by reference
       to the Company's Registration Statement on Form S-8, dated March 30,  
       1989 (the "Registration Statement")).                                 

3.2    Bylaws of the Company (incorporated by reference to the Company's     
       Registration Statement).                                              

3.3    Certificate of Amendment of Certificate of Incorporation of the       
       Company, dated April 11, 1990 (incorporated by reference to the       
       Company's Annual Report on Form 10-K for the year ended December 31,  
       1991, (the "1991 Form 10-K")).                                        

3.4    Certificate of Amendment of Certificate of Incorporation of the       
       Company, dated March 15, 1991 (incorporated by reference to the 1991  
       Form 10-K).                                                           

3.5    Form of copy of Amendment of Certificate of Incorporation of the      
       Company, filed September 25, 1995.                                    

4.1    Incentive Stock Option Plan (incorporated by reference to the         
       Company's Registration Statement).                                    

4.2    Form of Stock Option Agreement (incorporated by reference to the      
       Company's Annual Report on Form 10-K for the year ended December 31,  
       1989, (the "1989 Form 10-K")).                                        

4.3    Warrant Agreement, dated March 15, 1991, between the Company and H.F. 
       Lenfest (incorporated by reference to the Company's Annual Report on  
       Form 10-K for the year ended December 31, 1990, (the "1990 Form       
       10-K")).                                                              

4.4    Certificate of Designation of Class A Preferred Stock (incorporated by
       reference to the June 30, 1990 Form 10-Q).                            

10.1   Distributorship Agreement, dated November 2, 1989, between the Company
       and Science (incorporated by reference to the 1989 Form 10-K).        

10.2   Stock Purchase Agreement, dated November 2, 1989, between the         
       Company and H.F. Lenfest (incorporated by reference to the Company's  
       Report on Form 8-K, dated November 15, 1989, (the "1989 Form 8-K")).  

10.3   Shareholder's Agreement, dated November 2, 1989, among the Company    
       and certain of its stockholders (incorporated by reference to the     
       Company's 1989 Form 8-K).                                             

10.4   Option Agreement, dated November 2, 1989, among the Company and       
       certain of its stockholders (incorporated by reference to the 1989    
       Form 8-K).                                                            

10.5   Form of Credit Agreement between the Company and H.F. Lenfest         
       (incorporated by reference to the 1990 Form 10-K).                    

10.7   Form of Line of Credit Agreement between the Company and H.F. Lenfest 
       (incorporated by reference to the 1990 Form 10-K).                    

10.8   Subordinated Promissory Note, dated November 15, 1994 in the principal
       amount of $541,000 payable to Science Dynamics Corporation            
       (incorporated by reference to the 1994 Form 10K-SB).                  

10.10  Letter Agreement dated November 8, 1990 between Science Dynamics      
       Corporation and H.F. Lenfest (incorporated by reference to the        
       Company's Report on Form 8-K for November 16, 1990).                  

10.11  Loan Agreement dated December 24, 1991, between the Company and H.F.  
       Lenfest (incorporated by reference to the 1991 Form 10-K).            

10.12  General Partnership Agreement of TelVue-Voice FX Joint Venture dated  
       October 12, 1993 (incorporated by reference to the September 30, 1993 
       Form 10-QSB).                                                         

10.13  Letter effective as of March 31, 1995, from H.F. Lenfest, waiving the 
       repayment of loans and accrued interest until January 1, 1997         
       (incorporated by reference to the Company's Form 10Q-SB for the period
       ended March 31, 1995).                                                

10.14  Lease Agreement for office space and the First Amendment to Lease     
       dated March 30, 1994, between the Company and Bloom Associates        
       (incorporated by reference to the 1994 Form 10-KSB).                  

10.15  Maximum Value Plan Agreement dated January 27, 1994, between Sprint   
       Communications Company L.P. and the Company (incorporated by reference
       to the Company's Form 10Q-SB for the period ended September 30, 1994, 
       (the September 30, 1994 Form 10Q-SB)).                                

10.16  Addendum to Clarity Maximum Value Plan Agreement dated March 3, 1994, 
       between Sprint Communications Company L.P. and the Company            
       (incorporated by reference to the September 30, 1994 Form 10Q-SB).    

10.17  Service Agreement dated September 27, 1994, between Video Jukebox     
       Network, Inc., and the Company (incorporated by reference to the      
       September 30, 1994 Form 10Q-SB).                                      

10.18  Management Agreement, dated March 10, 1995, between the Company and   
       Lenfest Networks, Inc (incorporated by reference to the Company's Form
       10Q-SB for the period ended June 30, 1995).                           

11.    Statement re: Computation of Per Share Earnings (see the Company's    
       September 30, 1995 Financial Statement included herein).              

                               SIGNATURES                                    

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the     
undersigned, thereunto duly authorized.                                      

                                            TELVUE CORPORATION               

Dated:  11/07/95           By:   /s/Frank J. Carcione                        
                                 --------------------------------------------
                                 Frank J. Carcione, (Chief Executive Officer)

Dated:  11/07/95            By:  /s/Irene A. DeZwaan                         
                                 ------------------------------------------- 
                                 Irene A. DeZwaan, Treasurer (Controller)    

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                                                                  Page No.   
                                                                  --------   
3.5    Form of copy of Amendment of Certificate of                           
       Incorporation of the Company, filed September                         
       25, 1995.                                                             

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                    CERTIFICATE OF AMENDMENT                                 
                              OF                                             
                  CERTIFICATE OF INCORPORATION                               
                              OF                                             
                       TELVUE CORPORATION                                    
                      ********************                                   

          TELVUE CORPORATION, a corporation organized and existing under and 
by virtue of the General Corporation Law of the State of Delaware, as amended
(the "Corporation"), DOES HEREBY CERTIFY:                                    

          FIRST:  That by Unanimous Written Consent of the Board of Directors
of the Corporation resolutions were duly adopted setting forth a proposed    
amendment to the Certificate of Incorporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of the Corporation for   
consideration thereof.  The resolution setting forth the proposed amendment  
is as follows:                                                               

          RESOLVED, that the Certificate of Incorporation of the Corporation 
be, and it hereby is, amended by changing the Article thereof numbered       
"Fourth" so as to read in full as follows:                                   

          FOURTH:   The total number of shares of stock which the Corporation
shall have authority to issue is 100,000,000 common shares with a par value  
of one cent ($0.01) per share and 6,900,000 shares of Class A Cumulative     
($0.06 semi-annual dividend) Convertible, Redeemable, Payment-in-Kind,       
Non-Voting Preferred Stock with a par value of one dollar ($1.00) per share. 

          SECOND:  That thereafter, pursuant to resolution of its Board of   
Directors, a meeting of the stockholders of the Corporation was duly called  
and held, upon notice in accordance with Section 222 of the General          
Corporation Law of the State of Delaware, as amended, at which meeting the   
necessary number of shares as required by statute were voted in favor of the 
amendment.                                                                   

          THIRD:  That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of     
Delaware, as amended.                                                        

          FOURTH:  That the capital of the Corporation shall not be reduced  
under or by reason of said amendment.                                        

          IN WITNESS WHEREOF, said Telvue Corporation has caused its         
corporate seal to be hereunto affixed and this certificate to be signed by   
Frank J. Carcione, its President, and Irene A. DeZwaan, its Secretary, this  
day of September, 1995.                                                      

                                   TELVUE CORPORATION                        

                              BY:    /s/Frank J. Carcione                    
                                   ----------------------------------------- 
                                   President                                 

(CORPORATE SEAL)                                                             

ATTEST:                                                                      

BY:   /s/Irene A. DeZwaan                                                    
     ----------------------------------                                      
     Secretary

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10-Q Filing	Date	First	Last	Other Filings

	1/1/93	7
	9/30/93	8
	10/12/93	8
	12/31/93	8
	1/27/94	8
	3/3/94	8
	3/8/94	8
	3/30/94	8
	9/27/94	8
	9/30/94	2	8
	11/15/94	8
	12/31/94	2	7
	1/1/95	7
	3/10/95	8
	3/31/95	7	8
	5/31/95	8
	6/1/95	8
	6/30/95	8		10-Q
	7/28/95	7	8
	9/25/95	8	9
For The Period Ended	9/30/95	1	8
	10/23/95	1	8
Filed On / Filed As Of	11/7/95
	12/31/95	8		10KSB
	1/1/96	8
	12/31/96	8		10-K
	1/1/97	7	8
	6/1/0	8

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Telvue Corp · 10-Q · For 9/30/95

Filed On 11/7/95 · SEC File 0-17170 · Accession Number 839443-95-9

Quarterly Report · Form 10-QFiling Table of Contents

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