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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

  For the fiscal year ended December 31, 2002

  For the transition period from            to            

Commission File Number 0-27560

ACT Teleconferencing, Inc.

(Exact name of registrant as specified in its charter)

Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act:

Common stock, no par value

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 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  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes  ¨    No  x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2002 was $, $15.9 million based on the closing price of the Company’s common stock on the Nasdaq National Market on June 28, 2002 of $ 2.90 per share.

The number of shares outstanding of the Company’s Common Stock, no par value was 9,980,469 shares as of March 31, 2003.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information called for by Part III is incorporated by reference to specified portions of the definitive Proxy Statement for the Registrant’s 2003 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the Registrant’s fiscal year ended December 31, 2002.

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ACT Teleconferencing, Inc.

Form 10-K

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Caution Regarding Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expect, plan, intend, anticipate, believe, estimate, predict, potential or continue, the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined in our former registration statements or future registration statements. These factors may cause our actual results to differ materially from any forward-looking statement.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Important factors that could cause actual results to differ materially from such expectations described in this report include: the capital requirements required for the development and expansion of the Company’s business; risks relating to obtaining additional financing; risks associated with the expansion of the Company’s business and the possible inability of the Company to manage its growth; risks related to the Company’s expansion into new products and new technologies; the competitive nature of the teleconferencing business; and the Company’s dependence on its significant customers. Moreover, we do not assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this annual report to conform such statements to actual results or to changes in our expectations.

PART I

Item 1. Business

Overview

General. We are a full-service provider of audio, video, data and web-based teleconferencing services to businesses and organizations in North America, Europe and Asia Pacific. Our conferencing services enable our clients to cost-effectively conduct conference calls by linking participants in geographically dispersed locations. We are present in nine countries and provide local access dial in access from a total of 45 countries. Our primary focus is to provide high quality conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, telecommunications companies and other domestic and multinational companies.

We were incorporated in December 1989 and began offering audio teleconferencing services at our Denver location in January 1990. In 1992 we invested in an audio teleconferencing operation in the United Kingdom, and in 1995 we invested in a similar operation in the Netherlands. In 1997 we announced a capacity expansion plan intended to grow the Company from its then three locations in three countries (United States, United Kingdom and the Netherlands) into Canada, France, Germany, Australia, Hong Kong and Singapore offering a full range of audio, video and web-based conferencing

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services. In 2001 we acquired the assets of 1414c, the worldwide videoconferencing service delivery business of PictureTel Corporation. The assets acquired include equipment, software and customer contracts. The assets were previously used by PictureTel Corporation to provide videoconferencing bridging services to its customers.

In 2002 we acquired Proximity, Inc., which provides room-based videoconferencing services in over 3,000 locations worldwide. With these acquisitions, we are able to offer a full range of video conferencing services to augment our existing audioconferencing services. In 2002 we also signed an outsourcing agreement with AT&T to provide audioconferencing services to AT&T and its customers in 45 countries outside of the United States.

Teleconferencing Market Growth Factors

Several key trends in today’s business world are driving growth in the world market for teleconferencing services:

Audioconferencing Services. Our ActionCall^sm audioconferencing services include full-service attended conferencing; reservationless unattended conferencing; and a comprehensive suite of enhanced audioconferencing management services. Our data and web conferencing services supplement these offerings. Enhanced audioconferencing services, which are available on request, include:

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In a full-service attended conference, our conference coordinators either will call each participant (a dial-out conference) or provide participants with a toll free or local number for them to call at a certain time (a dial-in conference). In an unattended or automated conference, we provide the customer with a dial-in telephone number and a PIN code to allow the customers to arrange their own conferences on our bridging equipment. We can connect audioconference participants to a conference call from their office, home, project site or any mobile phone.

We generate revenues by charging clients a fee-per-minute for bridging, call management and various additional conferencing services, as well as charges related to long distance transmission.

Videoconferencing Services. We offer videoconferencing services through multipoint video bridging centers worldwide. In October 2001 we acquired the videoconferencing services business of PictureTel Corporation which included video operations centers in the United States, United Kingdom and Singapore; and secondary network operating facilities in other locations.

Our videoconferencing offerings include full-service advanced technical management features such as:

We generate revenues from videoconferencing in the same manner as audioconferencing, but at higher per-minute rates. Recent decreases in per-minute rates for video bridging and long distance transmission driven by improved technology and competition among the long distance companies, have stimulated the market for videoconferencing and are expected to continue to do so.

The introduction of affordable small-group systems greatly expanded the use of videoconferencing. We believe that the growing base of users with in-house systems, combined with the greater bandwidth now available through the integrated services digital network (ISDN) and improved business quality Internet bandwidth, will continue to drive increased usage.

Videoconferencing is a preferred medium in certain conferencing applications. Examples of professional and industry applications include: law (witness depositions), medicine (diagnosis and treatment through telemedicine), business (executive searches, meetings of executives, boards and committees) and education (distance learning discussions). The videoconferencing market nevertheless is smaller than the audioconferencing market because the equipment is more difficult to use than a standard telephone and the

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transmission costs are more expensive. We expect that improvements in equipment, increased familiarity with video, stable or declining transmission and equipment costs, and Internet technology will drive growth in video.

Internet Telephony Conferencing Services. An important next step in expanding the use of teleconferencing is to enable conference participants to participate in an interactive conference in which the participants can speak to each other using Internet telephony services at a similar level of quality as existing full duplex conferences conducted today over the public switched telephone network (PSTN). We have begun marketing of this service under the ClarionCall^SM name. Although we have successfully completed product testing, we presently derive no significant revenues from Internet telephony conferencing.

Internet telephony revenues have been included with video revenue in related segment information.

Web conferencing. Our customers use web conferencing to broadcast, share, review and edit data. Web conferencing enhances the audio or videoconference by simultaneously transmitting data over the Internet. Internet streaming broadcasts are especially useful in large conferences for training and presentations. Our revenues from web conferencing services are not yet significant. Web conferencing revenues have been included with video revenue in related segment information.

Total Conferencing Services Market. We operate in a niche of the teleconferencing services market. Our focus is on high-value added services for large, multinational customers and large telecommunications providers with global operations. We estimate that these presently account for approximately two percent of the worldwide market for teleconferencing services, based on various market studies summarized as follows:

Sources: (1) Frost & Sullivan, “Introduction to the Audio, Document, and Web Conferencing Markets,” 2001 Frost & Sullivan; (2) Wainhouse Research, LLC, “Teleconferencing Market & Strategies,” Volume 3, Publication No. 936; (3) Telespan, “Forecast of the Demand for Audio Conference Calls,” 2001 Telespan Publishing Corporation.

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Audioconferencing Services Market. Based on the above research and our own estimates, we are planning our growth on the expectation that the audioconferencing services market will continue growing at or above that documented in the above table through year 2004.

Videoconferencing Services Market. We believe, based on industry sources and independent research, that the overall videoconferencing market could grow at or above the rate indicated in the above table through year 2004 reflecting mainly the small existing customer base, the adoption of more user-friendly equipment and lower costs for videoconferencing.

Web Conferencing and Internet Telephony Services Market. We are cautious in our approach to Internet conferencing. We envision Internet telephony conferencing to be an incremental service rather than a replacement for our existing teleconferencing solutions, but we believe that Internet-based services will comprise an important portion of the next generation of conferencing services. Currently, the Internet telephony market is dominated by consumer voice calling. Despite the attraction of lower costs and more convenience, consumers and businesses have been reluctant to embrace Internet telephony on a large scale; however we expect that adoption by business customers will follow improvements in quality and usability. We expect our customers to migrate toward Internet conferencing just as they are moving from fully-attended conferences to automated conferences. Web conferencing is a faster-growing market, and we will continue to participate in this market as it develops.

Strategy. Our strategy is to:

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Service Quality and Client Care

We train all employees in the principles of client care management which include: continuous service quality monitoring and the development of positive relationships with clients. We pursue a philosophy of continuous process improvement, and we consistently measure our performance and endeavor to improve it. We actively monitor, analyze and control all facets of a conference including: reservations, conference execution and billing and follow up with customer satisfaction surveys.

We also review our performance with our customers on a regular basis, set specific performance improvement goals and modify our operations accordingly. Feedback from our customers indicates that these factors contribute to a high customer retention rate.

Sales and Marketing

Our sales and marketing strategy involves two steps. First, we attract customers through various channels. Once the relationship has been established we cross-sell services throughout each customer’s organization worldwide.

We attract our customers through direct and indirect sales efforts such as customer referrals, telemarketing, trade show promotions and advertising. Our direct sales force focuses on multinational and mid-market accounts. We also leverage outsourcing relationships with large telecommunications providers. Our range of service offerings allows us to cross-sell our services once we have initially established an account.

We have built a customer base of approximately 3,000 established accounts ranging from small manufacturing firms to Fortune 500 companies. Our records contain detailed information of the schedulers, administrative staff and managers employed by these customers who are responsible for requesting or arranging conferences with us.

We have targeted the following customer groups for our conferencing services and applications:

Global Accounts. Our global account managers are responsible for some 30 multinational accounts. We focus on the home country or headquarters of these multinationals as a base for developing our global business relationships. Each account manager deals with the customer’s home country office or headquarters when establishing service.

The Company’s largest customer accounted for 7%, 25%, and 21%, of consolidated revenues and the Company’s second largest customer accounted for 7%, 9%, and 17% of consolidated revenues for the years ended December 31, 2002, 2001, and 2000, respectively. All other customers individually amounted to less than 5% of total consolidated revenues in any one year.

Midmarket Accounts. Our direct sales staff targets medium to large companies with a high volume of teleconferencing, as well as smaller companies with lower demand for our services. As in any business, purchasers of higher-volume sales benefit from volume discounts. While we continue to promote sales to our global accounts, we seek situations in which we can provide competitive services to mid-sized companies at higher margins.

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Our direct sales effort manages each of our midmarket accounts through contacts with our customers’ upper management and also with their administrative staff who are responsible for scheduling and travel. Once we have become a repeat provider of services for a customer, we stress personal contact with the call organizers, conference chairpersons and members of senior management within our customers’ organizations.

Outsourced and Co-Marketing Relationships. We participate in outsourcing and co-marketing relationships with major telecommunications companies. Our independence from other network providers allows us to serve these customers without making them feel that we would compete for their customers’ other telecommunications business.

Intellectual Property

We seek to protect our proprietary information and business practices as trade secrets. We have developed customized software which we consider proprietary for our service and quality control functions and have also developed in depth technical know-how with respect to the operation of telecommunications equipment and the coordination of large-volume conference calls. We currently have two provisional patent applications pending before the United States Patent and Trademark Office. We also require each of our employees to execute a nondisclosure agreement for the protection of confidential information.

We (or one of our subsidiaries) own the following United Kingdom trademark registrations (some of which include words that are intentionally repeated): ACT and design; ACTIONCAST ACTIONCAST; ACTIONCALL ACTIONCALL; ACTIONSHOW ACTIONSHOW; ACTION FAX ACTION FAX and ACTION VIEW. A subsidiary owns a Benelux trademark registration for ACT TELECONFERENCING. We own three pending U.S. trademark applications for the terms: MEETINGS ON CALL; CLARION CALL and READY CONNECT. We do not own a federal trademark registration for the term ACT in the United States. Since a wide variety of companies use the term in their corporate name or advertising, the trademark registration could be prohibitively expensive. We do claim a number of common law marks that use the terms ACT or ACTION as a part of such marks. We also believe that we are the only enterprise currently using ACT in the teleconferencing industry.

Suppliers

We are not dependent on any single carrier or supplier for any of the services we sell. We have negotiated volume discounts with our primary long distance carriers and believe we could negotiate similar arrangements at similarly competitive prices with one or more other carriers should our current carriers be unable to continue to provide service at competitive prices. For example, we have a three-year agreement to purchase the bulk of our network services from AT&T. However, we have the right to negotiate our commitments down to the level of actual usage — without penalty — in the event of a business downturn or volume reductions beyond our control.

The equipment we purchase for use in our operations is also available from a variety of suppliers, some of which compete in the teleconferencing services business. We have historically purchased most of our equipment from Compunetix, a supplier based in Pittsburgh, Pennsylvania. According to Compunetix, it accounts for approximately 30

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percent of the worldwide market for conferencing bridges. Compunetix is a supplier of conferencing platforms to U.S. government agencies such as the National Aeronautics and Space Administration, the Federal Aviation Administration Emergency Management Platform and the U.S. Department of Defense, as well as major telecommunications providers. We recently added Spectel/Multilink, Polycom, Octave/Voyant and Accord to our list of major equipment suppliers.

Competition

We compete with major long distance companies, independently-owned conferencing companies, in-house services such as company-operated bridges and private-branch exchange equipment.

The principal competitive factors in the conferencing market are: service, quality, reliability, price, name recognition, value added features and available capacity. The location of an operations center can also be a competitive factor, as a local presence will reduce transmission costs and reflect the language, accent or business practices of local customers. In certain cities and countries we have opened local sales offices to ensure that marketing is more personal and effective.

Our competition comes from large companies such as British Telecom, AT&T, Bell Canada, France Telecom, Deutsche Telekom, Telstra, Hong Kong Tel, Worldcom and Sprint. We also face competition from independent conferencing companies similar to us including: Premiere Technologies, Intercall, V-Span, Raindance and Genesys. In the United States we may also face additional competition from the regional carriers which, under the Telecommunications Act of 1996, eventually will be allowed to provide long distance services nationwide under certain conditions, and whose long distance customers would expect access to conferencing services. This may become an additional opportunity for us, as certain carriers may choose to outsource their customers’ needs to independent conferencing providers.

Although the major long distance carriers hold a large share of the conferencing services market, conferencing is not a primary focus of their business. We have been able to compete with the conferencing divisions of long distance companies on the basis of quality of service for the large-volume business of prestigious companies such as investment banks, accounting and consulting firms, and law firms. Excess long distance line capacity enables the long distance companies to offer discounted prices to high-volume conferencing customers, but they generally charge higher conferencing prices to smaller- and medium-volume customers. This creates a pricing structure that enables us and others to compete on a price-and-service basis for the conferencing business of the medium and smaller businesses.

There are few regulatory barriers in the countries in which we operate, but new entrants into the conferencing business will face various economic barriers. The complex planning, installation and operation of a global conferencing platform involving multiple facilities and office locations such as ours, together with the implementation of network technology and coordination of operations would likely require extensive funding, management, and time to replicate.

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Some companies own and operate their own conferencing bridges, but many companies find that the costs of operating their own bridge outweigh the benefits and prefer to outsource their conferencing services. Technology is available to enhance private branch exchange conferencing capability (usually up to six calls), but private branch exchange-handled conference calls typically have poor sound quality, and each additional line weakens the overall sound volume. Additional competition may also develop from more sophisticated telephone sets and other centralized switching devices. These alternative techniques may enable our customers to conduct some of their own conferences, but we believe they will continue to outsource larger conferences particularly if their distance meetings require a collaboration of audio, video, data and Internet conferencing techniques.

Regulation

Although the telecommunications industry has historically been subject to extensive regulation, deregulation in the countries in which we currently operate has resulted in no material regulatory impact on the delivery of our teleconferencing services.

All of our foreign subsidiaries are established as statutory reporting companies incorporated under the laws of their local jurisdiction. We operate each foreign subsidiary in the local currency. All material subsidiaries are subject to statutory audits once a year, and these statutory results are reconciled to Generally Accepted Accounting Principles for consolidated reporting in the United States. We also pay excise taxes, import duties, sales taxes, payroll taxes and other taxes as required in each jurisdiction. We are in good standing in all the countries in which we operate.

Apart from company administration, tax laws and telecommunications laws the major other area of legislation that impacts us is labor legislation. Labor laws, especially in Europe, are particularly complex and expensive to administer in comparison to the flexibility of the United States labor markets. From time to time we incur a significant cost when there is a need to reduce our personnel in overseas jurisdictions. This cost is dependent upon the particular employee’s status, the employee’s history with us and the reason for dismissal, retrenchment or layoff.

Employees

As of December 31, 2002 we had a total of 416 full-time equivalent employees worldwide. Our entry into new markets eventually will require new employees, but we expect growth in the number of employees to be slow. We do not anticipate any material change in the number of employees in the near future. None of our employees are represented by labor unions. We have not experienced any work stoppages and consider our employee relations to be good.

Item 2. Facilities

Our development of local facilities serves the dual purpose of providing local language, local currency and local time zone services to the areas served by each service delivery center, as well as backup and overflow capacity among other centers in the event all or part of a conference needs to be re-routed from a service delivery center that is at full capacity.

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We currently lease office and service delivery space at our locations in: Denver (CO), Andover (MA), Burlington (VT); Toronto (ONT.); Ottawa (ONT.); London; Slough; Amsterdam; Heerlen; Paris; Frankfurt; Sydney; Adelaide; Hong Kong and Singapore—all of which we have listed in the table below.

All operations are in office locations close to the city center or in nearby suburbs. These leases expire or are renegotiable within the next five years and are adequate for our expansion plans. Forward lease commitments are listed in footnote 3 to the consolidated financial statements. We believe we could obtain comparable facilities at similar market rates if necessary.

Our service delivery centers provide us with a high degree of redundancy. We can reroute most of our conferences to other centers if necessary. By networking our service delivery centers in different time zones, we use idle evening and nighttime capacity in one center to fulfill daytime demand at another center.

Item 3. Legal Proceedings

On January 29, 2002, the Company received a complaint filed in the District Court of Colorado, alleging breach of contract pursuant to a term sheet executed between the Company and a prospective lender. The Company was in negotiations to obtain a loan from said lender, and due to various circumstances, including the expiration of the exclusivity agreement, the transaction was not completed.

On July 2, 2002, the Company also received a complaint, filed in the Superior Court of New Jersey, from a former audio conferencing employee claiming damages and lost commissions on sales made to a large videoconferencing customer. This is presently in arbitration.

The Company intends to vigorously defend these two lawsuits and believes these claims are without merit and does not expect them to become material events.

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The Company is engaged from time to time in minor legal proceedings such as debt collection and employee dispute and arbitration. These are in the normal course of business and are not considered material to the running of the business.

Item 4. Submission of Matters to a Vote of Security Holders

None

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Our common shares have been traded on the Nasdaq SmallCap or National Market under the symbol ACTT since March 11, 1996. We were listed on the Nasdaq SmallCap Market from March 11, 1996 to September 21, 2001. On March 31, 2003, the last reported sale price of our common stock was $1.74 per share.

Stockholders. As of December 31, 2002 we had approximately 350 common stockholders of record and an estimated 3,200 additional beneficial holders whose stock was held in street-name by brokerage houses.

Dividends. We have never paid any dividends on our common stock. We have paid dividends on our Series A and Series C Preferred Stock. Any future decision as to the payment of dividends will be at the discretion of our board of directors and will depend upon our earnings, financial position, capital requirements, plans for expansion, loan covenants and such other factors as the Board of Directors deems relevant.

Sales of Securities. From 1998 to 2002 we have issued and sold the following securities and warrants. All the issued securities were initially restricted securities and appropriate restrictive legends were affixed to the securities in each transaction, however in all cases the relevant stock and/or stock underlying the warrants either have been subsequently registered or are now

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qualified for resale under Rule 144. A summary table of all outstanding warrants appears in the notes to the financial statements.

In conjunction with the issuance of a $1,610,000 subordinated promissory note, the Company issued stock purchase warrants for the purchase of 216,802 shares of common stock at an exercise price of $7.00 per share to Sirrom Capital Corp. At December 31, 2002 Sirrom Capital Corp. had 216,802 warrants outstanding which will expire on April 1, 2003.

In conjunction with the issuance of a $890,000 subordinated promissory note, the Company issued stock purchase warrants for the purchase of 228,410 shares of common stock at an exercise price of $7.00 per share to Equitas L.P. At December 31, 2002 Equitas L.P. had 228,410 warrants outstanding which will expire on April 1, 2003.

In February 1999 we completed a private offering of 109,912 units each comprised of one share of common stock at $5.50 per share and one warrant to purchase one share of common stock. The private placement generated net proceeds of $592,505 which were used for general corporate purposes. The warrants are exercisable at $7.00 per share and will expire on December 31, 2003. The securities were purchased primarily by our officers, directors and employees.

On April 1, 1999 we issued 12,000 shares of common stock and 25,000 warrants to Adizes Institute in consideration for consulting services. The warrants were exercisable at $7.00 per share and expired on April 1, 2002.

On October 19, 1999 we issued 2,000 shares of Series A Preferred Stock to GMN Investors II, L.P. for $2 million. The issuance of Series A was accompanied by warrants to purchase 400,000 shares on common stock at $7.00 per share. The warrants will expire on October 19, 2006. The Preferred Stock has since been redeemed, and the warrants were repriced to $6.45 per share as part of the liquidation and redemption negotiations.

On October 19, 1999 we issued warrants to purchase 20,000 shares of common stock to Bathgate McColley Capital Group, LLC in consideration for Bathgate’s services as placement agent in our issuance of Preferred Stock to GMN Investors II, L.P. In November 2001 the warrants were exercised in a cashless conversion in which 6,876 shares were issued.

On January 1, 2000 we acquired the 20 percent minority interest of our Australian subsidiary, ACT Teleconferencing (Pty) Ltd. for $65,000 cash and 50,000 shares of our common stock from its managing director.

On January 1, 2000 we acquired a 16.7 percent minority interest in ACT Business Solutions Limited based in the United Kingdom by issuing 20,000 shares of our common stock to its three minority owners.

On January 6, 2000 we issued 36,000 shares and paid $50,000 cash to purchase the assets of Mueller Telecommunications, Inc. an Internet service provider.

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On January 6, 2000 we issued 40,000 shares of common stock and warrants to purchase 60,000 shares of common stock to Dinway Services, Ltd. in consideration for consulting services. The warrants were exercisable at $10 per share and expired on January 6, 2003.

On July 1, 2000 we issued 50,000 warrants to John Pfeiffer at an exercise price of $5.00 per share. These warrants have been exercised in a cashless conversion.

On July 31, 2000 we acquired the teleconferencing services business of Asia Pacific Business Services Limited based in Hong Kong for approximately $440,000 including 14,000 shares of our common stock.

On January 17, 2001 we acquired the 40 percent minority interest of our United Kingdom subsidiary, ACT Teleconferencing Limited, from its managing director for notes payable of $6,111,000, cash of $794,000 and 360,000 shares of our common stock valued at $2,182,000.

On April 5, 2001 we issued warrants to purchase 10,000 shares of common stock to Bathgate McColley Capital Group in consideration for services rendered. The warrants are exercisable at $7.00 and will expire on April 5, 2005.

On May 24, 2001 we issued warrants to purchase 18,000 shares of common stock to the Adizes Institute in consideration for consulting services. The warrants are exercisable at $10.00 and will expire on May 24, 2004.

On June 6, 2001 we issued 12,500 shares of common stock to the Adizes Institute for consulting services.

On September 28, 2001 we issued a total of 769,231 shares of common stock to Special Situations Fund III, L.P., Special Situations Cayman Fund, L.P. and Special Situations Private Equity Fund, L.P. for $5,000,000 cash or $6.50 per share.

On October 10, 2001 we issued 769,231 shares of common stock to PictureTel Corp. as partial consideration for the assets of the 1414c videoconferencing service delivery business of PictureTel.

On October 11, 2001, we issued 200,000 shares of common stock to GMN Investors II, L.P., together with a payment of $690,000 cash and $338,176 in accrued dividends and a repricing of 400,000 warrants to purchase our common stock from $7.00 to $6.45 per share, to liquidate the 2,000 shares of Series A preferred stock that we had issued to GMN in October 1999.

On January 2, 2002 we issued 350,000 shares of common stock to certain shareholders of Proximity as consideration for our acquisition of Proximity.

On May 17, 2002 we issued 500 shares of 6.5 percent Series C Convertible Preferred Stock to an investor group for $4.635 million (net of financing fees of $365,000). The preferred stockholders may, at their election, convert their outstanding preferred stock into shares of common stock at a fixed purchase price of $5.00 per share.

As part of the preferred stock issuance, we also issued warrants to the investors to purchase 279,885 shares of common stock, of which 229,885 are callable, by the Company at $5.00 per warrant and have an expiration date of May 17, 2007.

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The stock is subject to 15 mandatory, monthly liquidating redemptions of $333,333 commencing on August 17, 2002 for a total of $5 million. At our election we may make redemption payments in cash or by delivering shares of our common stock based on a 10 percent discount to the five-day volume weighted average market price of our common stock at that time. The Preferred Stockholders have the right to defer any payment that we elect to be made in common stock until one month following the latest scheduled (deferred) payment. Terms of the investment prevent the Preferred Stock investors from holding more than 10 percent of our outstanding common stock. As of December 31, 2002, five payments had been made in cash to a value of $1,666,667 leaving a total redeemable face-value of $3,333,333 (or ten payments of $333,333). As of March 31, 2003 the face value to be redeemed amounts to $2,333,333.

In late 2002 we registered 400,000 shares of common stock pursuant to an ACT employee-wide performance improvement incentive plan. Under the Plan (which was offered to all ACT employees) a large number of our employee base voluntarily elected to reduce their salaries for the five quarters commencing October 1, 2002 in exchange for a potential performance-based cash bonus, in addition to certain stock and stock option incentives for participating. No shares were issued during 2002 under this plan, but we do expect to issue part or all of the shares during 2003 and 2004 as our operating performance improves and the targets are achieved. The principal performance targets are to significantly improve profits and cash flow through December 31, 2003.

Item 6. Selected Consolidated Financial Data

Selected Consolidated Financial Data

The following selected consolidated financial data should be read in conjunction with the Consolidated Financial Statements and related Notes to the Consolidated Financial Statements appearing elsewhere in the filing and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additionally, quarterly selected financial data is presented in the Notes to the Consolidated Financial Statements.

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Components of Major Revenue and Expense Items

Revenues. We earn revenues from fees charged to clients for audio, video, data and web-based teleconference bridging services, from charges for enhanced services, and from rebilling certain long-distance telephone costs. We also earn revenue on conferencing product sales and video event services.

Cost of Sales. Cost of sales consists of long distance telephony costs, depreciation on our teleconferencing bridges and equipment, equipment product costs, operator and operations management salaries and office expenses for operations staff.

Selling, General and Administration Expense. Selling, general and administration expense consist of: salaries, benefits, professional fees and office expenses of our selling and administrative organizations.

Significant Accounting Policies

Internal Use Software—Under the guidance provided in Statement of Position 98-1, we capitalize costs incurred in developing internal use computer software. We capitalized internal use software development costs of $1.0 million, $1.1 million, and $250,000 for the years ended December 31, 2001, 2000, and 1999, respectively, but prior to 1999, we did not develop any internal software.

Goodwill—Goodwill represents the excess of purchase price over tangible and other intangible assets acquired less liabilities assumed arising from business combinations. In compliance with SFAS No. 142 , Goodwill and Other Intangible Assets”’ (“SFAS 142”), issued in June 2001, the company has not amortized goodwill for business combinations after June 2001 and has ceased amortizing all such goodwill effective January 1, 2002. Prior to the adoption of SFAS 142, goodwill was amortized on a straight-line basis over 15 or 25 years.

As required by SFAS 142, the company also completed the initial goodwill impairment test required by SFAS 142. In completing this assessment, the Company compared the estimated fair value to the current carrying value of goodwill.

As a result of this assessment, an impairment was identified in the goodwill of the video segment of the business. This resulted in a noncash charge to continuing operations and a goodwill write-down of $2,000,000 in 2002. As of December 31, 2002 the Company had a total of $18.3 million in net goodwill. $14.5 million is attributed to acquisitions occurring in 2001 and $3.9 million is related to the acquisition of Proximity in January, 2002.

Transactions with Related Parties as Defined by SFAS No. 57—The Company has a note receivable from a key officer with an outstanding balance of $268,464 and $251,383 at December 31, 2002 and 2001. This note bears interest at a rate of 7.5% and is due June 30, 2003. The purpose of this note was to retain a key executive responsible for implementing our worldwide network.

Also in July 2001 and subsequently in July 2002, the board of directors authorized loans, with recourse, to one of its officers in the amount of $466,757. The purpose of these loans was to assist the officer in exercising stock options. These loans are secured by a general pledge of personal assets of the officer, bear interest at 6%, and mature on November 1, 2006. The shares issued upon exercise of the stock options are recorded in shareholders’ equity but this transaction has no financial effect on shareholders’ equity as the loan is offset by the amount recorded to common stock resulting from the exercise of the options. An increase in shareholders’ equity will be recognized as the loan is paid back to the Company.

On January 6, 2003, the company entered into a loan agreement for $500,000 with one of its directors. The purpose of this loan is to provide bridge financing through a period of growth while the Company arranges subordinated debt financing. The loan bears interest at 12% and matures on May 6, 2003.

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Foreign Currency Conversion—Our foreign subsidiaries’ financial statements have been translated into United States dollars at the average exchange rate during the year for the statement of operations and year-end rate for the balance sheet. Our policy for the long term is to invest in the international teleconferencing market as it is a growth market. For as long as this policy remains in effect, our net income, assets, and liabilities in overseas markets will continue to fluctuate and be translated in accordance with exchange rate fluctuations.

Employee Stock Options—We have elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25) instead of FASB Statement No. 123, “Accounting for Stock-Based Compensation.” If we had elected to adopt FASB Statement No. 123, our net income/(loss) available to common shareholders would have been approximately $(9,060,538), $(1,314,000), and $362,000 or $(1.01), $(0.20), and $0.06 per diluted share for the years ended December 31, 2002, 2001, and 2000 respectively, as compared to our actual reported net income/(loss) of $(8,285,231), $(593,545), and $1,235,409 or $ (0.93), $(0.09), and $0.21 per diluted share for the years ended December 31, 2002, 2001, and 2000, respectively.

Significant Business Activities

During 2002 the following developments were of significance:

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The following table summarizes the most important revenue trends:**

Concert Downsizing

As noted, Concert revenues reached their peak in late 2001 at an annualized revenue run rate of approximately $12 million and downsized during 2002 as Concert was closed. ACT however continued to maintain its worldwide capital infrastructure, telecommunications network and dedicated employee base which had been installed for Concert through this period at an estimated cost, including depreciation, of approximately $5 million, during 2002. The reason for continuing to incur this significant infrastructure cost was due to the anticipation of significant new revenue streams in 2002 and 2003 as a result of the signing of an outsourced agreement with AT&T in August 2002.

The Concert revenue downsizing (which resulted in a reduction of approximately $10 million in annual revenues) caused a resultant reduction in net income of

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approximately $8 million. This is clearly evidenced in the decline in the Company’s net income and operating cashflow results. It is also the main reason for the net loss incurred by the Company in 2002.

AT&T Outsourcing Contract

Among many other telecommunications services, AT&T provides high quality teleconferencing services to large corporate customers in the U.S.A. With over four million corporate customers, many of these use teleconferencing services domestically but also have international requirements

As AT&T was previously a 50 percent shareholder in Concert and due to the existence of ACT’s established and extensive global service platform built for Concert, it was decided that ACT’s worldwide teleconferencing network with established and dedicated local facilities would be an effective way to provide conferencing services to those subsidiaries of American multinationals who are already AT&T customers in the U.S. but who require conferencing services overseas.

We started implementing this outsource contract in August, 2002 and have seen rapid revenue growth since then. Current monthly revenues are at an estimated annualized run rate of approximately $4.8 million as of January 2003 with significant additional potential growth opportunities to come in 2003 and 2004.

The outsource contract requires ACT to provide detailed levels of quality, sales and service positioning, customer provisioning and comprehensive pricing for a number of different conferencing products, services and applications. The relationship between both contracting parties is excellent; and in the absence of any (presently unknown) adverse factors, we expect this revenue stream to grow to an annualized revenue run rate of approximately $10 million by the end of the first year of implementation thereby substantially replacing the lost Concert revenues. Revenues will depend on customer usage.

Audioconferencing Revenues

Automated voice conferencing volumes continued to grow at a rapid rate for 2002 and pricing remained competitive. Most of our U.S. and Canadian customers have already made the transition to automated services, and we now expect strong growth in automated services in the European and Asian Pacific markets over the next few years. We expect that the growth of automated services at reduced prices will continue unabated, but the emergence of this product line nevertheless has highlighted some fundamental applications whereby operator-attended services will continue to be required by our customers. Our strategy remains to provide a broad range of services to our customers which fit their different communications needs. We expect our automated services to complement our fully-attended offering, and vice versa.

Attended voice conferencing services remains one of our core business and still accounts for approximately 40 percent of total revenues. The Company is focused on developing new markets and applications for customers in the attended voice conferencing services especially in areas such as training, education and large participant calls. While we do

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expect this overall market will grow at a much lower rate over the next few years we also believe that the ACT growth rate could be faster, as we are one of the specialized, niche players and have the capacity for faster growth internationally.

Videoconferencing revenues

Our videoconferencing revenues tripled over 2001 mainly due to the acquisition of two companies, namely: PictureTel’s 1414c videoconferencing division (acquired in October 2001) and Proximity (acquired in January 2002).

Although Proximity sales were flat, sales by PictureTel 1414c (renamed ACT Videoconferencing) reflected a significant increase in revenues of $9.6 million due to strong customer acquisition. As with audioconferencing, we expect to see continued growth in the videoconferencing areas—especially as companies continue to reduce travel costs and executives prefer to avoid non-essential travel. In today’s uncertain climate with the threat of terrorism and warfare, videoconferencing remains an attractive proposition for high-level executives unwilling to travel.

As we are approaching our second year following these two videoconference unit acquisitions, we believe we have identified good opportunities for further cost reduction and network rationalization especially in the telecommunications costs area. We have also identified opportunities to cross-sell our services from audioconferencing to videoconferencing, and vice versa.

We expect that our videoconferencing business will see a strong stimulus for usage as large-volume users transition their telecom usage over to the Internet thus significantly lowering telecom costs. Internet transmission not only lowers telecom costs for videoconferencing users but also provides higher-quality transmission and lower network failure rates. As transmission costs are fixed, these users are able to utilize videoconferencing services for as long as they need to without incurring the significant additional long distance telephony costs which, up to now, have been a major impediment to the development of videoconferencing.

The much awaited high-growth rates in videoconferencing, nevertheless, may be tempered by the emergence of web conferencing applications. Many applications which were previously more suited to a videoconference can now be handled by combining voice and web conferencing at a less expensive price. We believe therefore that videoconferencing will continue to only be used in situations where it is specifically required by business executives for a specific reason. Web and audioconferencing will be used in most other conferencing situations.

Results of Operations

Fiscal Year Ended December 31, 2002, compared to Fiscal Year Ended December 31, 2001

Net Revenues. Net revenues increased 16 percent to $53.9 million for the year ended December 31, 2002, compared to $46.6 million for 2001. The 16 percent revenue growth resulted from an increase in video conferencing revenues due to two acquisitions, but was offset by the decline in Concert audio conferencing revenues. Concert revenues declined by $9.6 million or 83% in 2002. This was somewhat offset by a $4.2 million increase in Global Service Channel audioconferencing. Audioconferencing accounted for 67 percent, 89 percent and 93 percent of revenue in 2002, 2001 and 2000 respectively. Videoconferencing and other revenue grew by $12.9 million, or 256% in 2002. It accounted for the balance of our revenue. For a detailed discussion of changes in our revenue streams refer to Significant Business Activities, above.

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Geographic Breakdown: In 2002 North America, Europe and Asia/Pacific—the Company’s three primary geographic markets—generated approximately 61 percent, 31 percent and 8 percent, respectively, of our revenue.

Gross Profit. Gross profit declined 16 percent to $18.5 million for the year ended December 31, 2002, compared to $22.1 million for the prior year. Gross profit percentage decreased to 34 percent of net revenues for the year ended December 31, 2002, compared to 47 percent of net revenues for 2001. This gross profit decrease reflects the increased volume of higher cost videoconferencing volumes due to the higher network costs associated with videoconferencing. The decline in gross profit also highlights the loss of Concert business which had high margins, and the residual high fixed costs as a result of keeping our telecom network, and our capital and operating infrastructure intact worldwide as discussed above (pending implementation of the AT&T contract). Over time we expect, with the growth of AT&T services and other volumes plus the further stabilization of our operating costs (which is being achieved) as well as continual reduction in our video and audio network costs, that our gross margins will eventually improve back towards our target of 50 percent of net revenues.

Selling, General and Administrative Expense. Selling, general and administrative expense for the year ended December 31, 2002 was $22.5 million or 42 percent of revenue, compared to $20.1 million or 43 percent of revenue for 2001. The 12 percent increase in such expense was incurred mainly as a result of the increase in selling, general and administrative staff arising as a result of our two videoconferencing acquisitions—namely, the 1414c division of PictureTel and Proximity, Inc. We expect, with continued strong control of our operating expenses, that our selling, general and administrative costs will stabilize during 2003.

Operating Income (Loss). Operating income (loss) declined by $8 million to a loss of $6.1 million and reflected the following:

Interest Expense. Net interest expense grew by 15 percent from $1.3 million to $1.5 million. This is due primarily to an increase in debt during the year as well as the addition of debt for acquisitions during 2001.

Provision for Income Taxes. Provision for income taxes decreased to approximately $125,000 from $875,000 for the year ended December 31, 2002, compared to 2001, due to reduced taxable income earned by our United Kingdom and Canada subsidiaries. We paid no other income taxes due to domestic and international tax loss carry-forwards of approximately $12 million.

Net Income (Loss). Net income (loss) increased by $7.4 million for the same reasons discussed under Operating Income (Loss), above.

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Fiscal Year Ended December 31, 2001, compared to Fiscal Year Ended December 31, 2000

Net Revenues. Net revenues increased 24 percent to $46.6 million for the year ended December 31, 2001, compared to $37.7 million for 2000. The 24 percent revenue growth resulted from an increase in conference call volume of 48 percent offset by a shift in product mix from attended conference calls to automated conference calls, which resulted in a lower average revenue per minute. Audioconferencing revenues grew by 16 percent while video, data, Internet and other enhanced conferencing services grew by 103 percent due to our acquisition of the PictureTel assets. Video equipment sales grew by 43 percent. Audioconferencing accounted for 89 percent and 93 percent of our revenues in 2001 and 2000, respectively. In the fourth quarter videoconferencing revenue increased to approximately 25 percent of our total revenue due to the October acquisition of the assets of 1414c, the video conferencing service delivery business of PictureTel Corporation. In 2001 North America, Europe and Asia Pacific, our three primary geographic markets, generated approximately 60 percent, 34 percent and 6 percent of our total revenue, respectively.

Gross Profit. Gross profit increased 15 percent to $22.1 million for the year ended December 31, 2001, compared to $19.3 million for the prior year. Gross profit percentage decreased to 47 percent of net revenues for the year ended December 31, 2001, compared to 51 percent of net revenues for 2000. This gross profit decrease is almost entirely due to the higher volume of videoconferencing, which has lower margins than our traditional voice business due to the higher network costs associated with videoconferencing. In the fourth quarter of 2001, our videoconferencing network costs exceeded our ongoing acceptable benchmarks, and we are currently in the process of reconfiguring our videoconferencing network to reduce our costs. This decrease in gross profit percent was offset by some significant economies of scale associated with volume increases in voice conferencing as a result of automation.

Selling, General and Administrative Expense. Selling, general and administrative expense for the year ended December 31, 2001 was $20.1 million or 43 percent of revenue, compared to $15.4 million or 41 percent of revenue for 2000. The 28 percent increase in such expense was incurred mainly as a result of the 32 percent increase in selling, general and administrative staff from 142 to 188 employees to develop new locations and introduce new products and services associated with Internet based and other high-speed digital conferencing products.

Interest Expense. Net interest expense grew by 18 percent from $1.1 million to $1.3 million as a result of overall debt and capital leases increasing by $6.5 million from $8.6 million in 2000 to $15.1 million in 2001. This increase is mainly due to debt associated with the acquisitions completed. We incurred debt of approximately 2.4 million for general financing purposes, $6.1 million on the acquisition of the remaining 40 percent minority interest in ACT Teleconferencing, Limited and $2.5 million for the PictureTel acquisition. During 2001 we paid off debt of $4.7 million and liquidated Preferred Stock of $2.0 million.

Provision for Income Taxes. Provision for income taxes increased 12 percent to $875,000 for the year ended December 31, 2001, compared to $780,000 for 2000, due to increased taxable income earned by our United Kingdom subsidiaries and deferred tax

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charges in Canada. We paid no other income taxes due to domestic and international tax loss carry-forwards of approximately $6.5 million.

Minority Interest. Minority interest was reduced to zero for the year ending December 31, 2001, compared to $709,000 for the same period last year. This decrease reflects the acquisition of the remaining 40 percent interest in ACT Teleconferencing, Limited.

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Liquidity, Capital Resources and Cashflow

Sources and Uses of Funds

For the year ended December 31, 2002 we generated and used cash proceeds as follows:

At December 31, 2002 we had approximately $16.2 million in current assets, in relation to $18.1 million in current liabilities (excluding the deferred income of $1.7 million which is not a cash liability).

We have assessed our cashflow needs for 2003 as follows:

With the expected growth in our business we may also need to seek additional sources of financing which may include: additional public or private debt, equity financing by us and/or our subsidiaries, or other financing arrangements. However, there is no assurance

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that the financing will be available to us and/or on acceptable terms should we decide to seek it.

The facilities-based teleconferencing service business is a capital intensive business. Our operations have required and will continue to require capital investment for: (i) the purchase and installation of conferencing bridges and other equipment in existing bridging networks and in additional bridging networks to be constructed in new service areas; (ii) the acquisition and expansion of conferencing platforms currently owned and operated by other companies; and (iii) the evolution of the platform to support new products, services and technologies. Our expected capital expenditures for general corporate and working capital purposes include: (i) expenditures with respect to our management information system and corporate service support infrastructure and (ii) operating and administrative expenses with respect to new bridging platforms, networks and debt service. We plan to make substantial capital investments in connection with plans to construct and develop new bridging networks, as well as for technology upgrades. Expansion of our bridging networks will include the geographic expansion of our existing operations, and we will consider the development of new markets. In addition, we may acquire existing conferencing companies and their bridging platforms and networks in the future.

Occasionally we evaluate potential acquisitions of conferencing assets currently owned and operated by other companies, and expect to continue to do so. In the event we enter into a definitive agreement with respect to any acquisition, it may require additional financing.

In the event that our plans or assumptions change or prove to be inaccurate, or the foregoing sources of funds prove to be insufficient to fund our growth and operations, or if we complete acquisitions or joint ventures, we will be required to seek additional capital sooner than currently anticipated. Our revenue and costs are dependent upon factors that are not within our control, such as regulatory changes, changes in technology, customer mergers and acquisitions and increased competition. Due to the uncertainty of these and other factors, actual revenue and costs may vary from expected amounts, possibly to a material degree, and such variations are likely to affect the level of our future capital expenditures and expansion plans.

The Company’s Contractual Obligations as of December 31, 2002 are as follows:

New Accounting Pronouncements

Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”) supercedes Statement No. 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” (“SFAS 121”). SFAS 144 retains the basic requirements of SFAS 121 regarding when to record an impairment loss and provides additional guidance on how to measure an impairment loss. SFAS 144 excludes goodwill and intangibles not being amortized from its scope. SFAS 144 also supercedes the provisions of Accounting Principles Board (“APB”) Opinion No. 30, “Reporting the Results of Operations,” pertaining to discontinued operations. This statement is effective for the Company beginning January 1, 2002. The implementation of SFAS 144 did not have an effect on the Company’s financial position, results of operations or liquidity.

SFAS No. 148, “Accounting for Stock-Based Compensation—Transition Disclosure” (“SFAS 148”), amends SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), to provide alternative methods of transition to the SFAS 123 fair value method of accounting for stock-based compensation. SFAS 148 also amends the disclosure provisions of SFAS 123 and APB Opinion No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. The Company has implemented all required disclosures of SFAS 148 in the Consolidated Financial Statements.

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 145, “Recission of FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections.” (“SFAS 145”) SFAS 145 addresses whether the treatment of gains and losses on extinguishment of debt should be extraordinary or not. The Company adopted SFAS 145 during 2002. According to SFAS 145, upon adoption, any gain or loss on extinguishment of debt previously classified as extraordinary in prior periods that does not meet the criteria of Accounting Principles Board Opinion No. 30 for such classification should be reclassified to conform with the provisions of SFAS 145. As a result, the Company has reclassified the $416,366 extraordinary items recorded in December 31, 2001 to selling, general and administrative expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our interest expense is sensitive to changes in the general level of interest rates. In this regard, changes in interest rates can affect the interest paid on our long term debt. To mitigate the impact of fluctuations in interest rates, we generally enter into fixed rate financing arrangements. We believe the fair value of long-term debt approximates the related carrying amount based on market interest rates available to us. Almost all our long term debt is denominated in United States dollars. The following table provides information about our financial instruments that are sensitive to changes in interest rates:

We are also subject to foreign exchange currency rate risk as a result of our international operations. Our foreign subsidiaries financial statements have been translated into United States dollars at the average exchange rate during the year for the statement of operations and year-end rate for the balance sheet. Our policy for the long term is to invest in the international teleconferencing market as it is a growth market. For as long as this policy remains in effect, our net income, assets, and liabilities in overseas markets will continue to fluctuate in accordance with exchange rate fluctuations. We historically have not entered into any derivative arrangements to hedge foreign currency risks and have no firmly committed future sales exposures.

Item 8. Financial Statements and Supplementary Data

See “Index to Consolidated Financial Statements” at page F-1.

Item 9. Changes in and Disagreements with Accountants

None

PART III

Item 10. Directors and Executive Officers of the Registrant

Incorporated by reference from the Company’s Proxy Statement for Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2002.

Item 11. Executive Compensation

Incorporated by reference from the Company’s Proxy Statement for Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2002.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

Incorporated by reference from the Company’s Proxy Statement for Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2002.

Item 13. Certain Relationships and Related Transactions

Incorporated by reference from the Company’s Proxy Statement for Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2002.

Within the 90 days prior to the date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in causing information to be recorded, processed, summarized, and reported to ensure that the quality and timeliness of the Company’s public disclosures comply with its SEC disclosure obligations. There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) (1), (2) The Financial Statements and Schedule I –Condensed Financial Information of Registrant and Schedule II –Valuation and Qualifying Accounts listed on the index on Page F-1 following are included herein by reference. All other schedules are omitted, either because they are not applicable or because the required information is shown in the financial statements or the notes thereto.

(a) (3) Exhibits:

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(b) Reports on Form 8-K—We filed the following reports on Form 8-K with the Securities and Exchange Commission during the last quarter of 2002 and the first quarter of 2003:

On October 15, 2002, we furnished a press release on Form 8-K providing an update on our third quarter revenues.

On October 22, 2002, we filed a press release on Form 8-K regarding our $4.5 million services debt financing.

On October 29, 2002, we filed a Form 8-K regarding an agreement with a supplier for 5,000 audioconferencing parts.

On November 7, 2002, we furnished a press release on Form 8-K providing updated revenue trend information for our Global Services Platform.

On November 7, 2002, we furnished a Form 8-K regarding frequently asked shareholder questions and current trends in our business.

On November 15, 2002, we filed a press release on Form 8-K to announce our third quarter 2002 financial performance.

On December 24, 2002, we furnished a press release on Form 8-K regarding our revenue growth from August through November 2002.

On January 28, 2003, we furnished a press release on a Form 8-K regarding our fourth quarter 2002 and first quarter 2003 revenues.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant, and in the capacities and on the dates indicated.

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CERTIFICATIONS

I, Gerald D. VanEeckhout, certify that:

Date: April 15, 2003

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I, Gavin J. Thomson, certify that:

Date: April 15, 2003

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Item 15A. ACT Teleconferencing, Inc. Index to Consolidated Financial Statements

Contents

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Report of Independent Auditors

The Board of Directors and Shareholders

ACT Teleconferencing, Inc.

We have audited the accompanying consolidated balance sheets of ACT Teleconferencing, Inc. as of December 31, 2002 and 2001, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2002. Our audits also included the financial statement schedules listed in the index at page F-1. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of ACT Teleconferencing, Inc. at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Also in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, the Company ceased amortizing goodwill in accordance with the requirements of Statement of Financial Accounting Standards No. 142.

/s/    ERNST & YOUNG LLP

Denver, Colorado

March 09, 2003

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ACT Teleconferencing, Inc.

Consolidated Balance Sheets

December 31, 2002 and 2001