<PAGE>
FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 1, 1997
DIGITAL VIDEO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-28472 77-0333728
(Commission File Number) (I.R.S. Employer Identification No.)
2710 Walsh Avenue
Santa Clara, California 95051 95051
(Address of principal executive offices) (Zip Code)
(408) 748-2100
Registrant's telephone number, including area code
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
On August 1, 1997 Digital Video Systems, Inc. (the "Registrant")
completed the acquisition of substantially all of the assets (excluding accounts
receivable) of the Digital Video Division of Arris Interactive L.L.C. This Form
8-K/A amends the Registrant's Form 8-K filed with the Securities and Exchange
Commission on August 15, 1997, which Form 8-K describes the Acquisition in
greater detail.
(a) Financial statements of business acquired.
-----------------------------------------
Item 7(a) includes audited financial statements of Arris Interactive
L.L.C.'s Digital Video Division for the fiscal years ended December 31, 1995 and
December 31, 1996; an unaudited interim statement of net assets as of June 30,
1997; and unaudited interim statements of operations and cash flows for the six-
month periods ended June 30, 1996 and June 30, 1997.
2
<PAGE>
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' REPORT
Arris Interactive LLC - Digital Video Division
We have audited the accompanying statement of net assets of Arris Interactive
LLC - Digital Video Division (the "Company") as of December 31, 1996 and the
related statements of operations and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the statement of net assets of the Company at December 31, 1996 and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
- -------------------------
Atlanta, Georgia
August 8, 1997
3
<PAGE>
[LETTERHEAD OF ERNST & YOUNG LLP]
Report of Independent Auditors
Arris Interactive LLC
We have audited the accompanying statement of net assets/(liabilities) of Arris
Interactive LLC - Digital Video Division as of December 31, 1995 and the related
statements of operations and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Arris Interactive LLC - Digital
Video Division at December 31, 1995 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
- ---------------------
August 21, 1997
4
<PAGE>
ARRIS INTERACTIVE LLC - DIGITAL VIDEO DIVISION
STATEMENTS OF NET ASSETS/(LIABILITIES)
<TABLE>
<CAPTION>
Unaudited
December 31, June 30,
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,500 $ - $ -
Accounts receivable (net of an allowance for doubtful account 48,951 1,636,081 1,037,898
of $528,000 at December 31, 1995, a distributor discount of $63,000 at
December 31, 1996 and no allowances or discounts at June 30, 1997)
Inventories 790,185 645,981 656,889
---------- ---------- ----------
Total current assets 840,636 2,282,062 1,694,787
Property and equipment, net 1,011,998 1,392,135 1,308,268
---------- ---------- ----------
Total assets $1,852,634 $3,674,197 $3,003,055
========== ========== ==========
LIABILITIES
Current liabilities:
Accounts payable - trade $ 167,499 $ 545,730 $ 365,795
Accounts payable - Antec - 181,389 87,003
Employee compensation - 333,322 154,611
Accrued liabilities 35,508 414,067 320,473
---------- ---------- ----------
Total current liabilities 203,007 1,474,508 927,882
Long-term employee compensation 131,868 183,896 -
Notes payable to Antec 1,802,183 1,422,392 1,422,392
---------- ---------- ----------
Net assets/(liabilities) $ (284,424) $ 593,401 $ 652,781
========== ========== ==========
</TABLE>
See accompanying notes.
5
<PAGE>
ARRIS INTERACTIVE LLC - DIGITAL VIDEO DIVISION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Unaudited
Year Ended December 31, Six Months Ended June 30,
1995 1996 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 824,918 $ 3,291,408 $ 932,205 $ 1,190,147
Cost of Revenues 749,450 3,737,765 1,234,711 1,483,390
------------- ------------- ------------- ------------
Gross Profit 75,468 (446,357) (302,506) (293,243)
Operating Expenses:
Research and development 5,889,450 3,617,101 2,289,425 1,021,061
Selling, general and administrative 1,400,268 2,600,380 1,299,367 743,175
------------- ------------- ------------- ------------
Total operating expenses: 7,289,718 6,217,481 3,588,792 1,764,236
------------- ------------- ------------- ------------
Loss from operations (7,214,250) (6,663,838) (3,891,298) (2,057,479)
Interest expense - (223,786) (53,078) (325,711)
Interest income and other - 6,829 4,185 18,916
------------- ------------- ------------- ------------
Net Loss $ (7,214,250) $ (6,880,795) $ (3,940,191) $ (2,364,275)
============= ============= ============= ============
</TABLE>
See accompanying notes.
6
<PAGE>
ARRIS INTERACTIVE LLC - DIGITAL VIDEO DIVISION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Unaudited
Year Ended December 31, Six Months Ended June 30,
1995 1996 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating activities
Net loss $ (7,214,250) $ (6,880,795) $ (3,940,191) $ (2,364,275)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 265,620 211,459 68,313 168,470
Noncash interest expense - 223,786 53,078 325,711
Long-term employee compensation 131,868 183,896 91,948 -
Provision for bad debt 528,099 - - -
Changes in operating assets and liabilities;
Decrease (increase) in accounts receivable (577,049) (1,587,130) (883,254) 598,183
Increase (decrease) in accounts payable
and accrued liabilities 113,195 1,271,501 1,215,484 (546,626)
Decrease (increase) in other assets (109,449) - - -
Decrease (increase) in inventories (790,185) 144,204 (356,758) (10,908)
------------- ------------- ------------- -------------
Net cash used in operating activities (7,652,151) (6,433,079) (3,751,380) (1,829,445)
Investing activities
Additions of property and equipment (675,200) (908,984) (645,132) (84,603)
------------- ------------- ------------- -------------
Net cash used in investing activities (675,200) (908,984) (645,132) (84,603)
Financing activities
Cash contributed by Parent 8,327,851 7,340,563 4,395,012 1,914,048
------------- ------------- ------------- -------------
Net cash provided by financing activities 8,327,851 7,340,563 4,395,012 1,914,048
Change in cash and cash equivalents 500 (1,500) (1,500) -
Cash and cash equivalents at beginning of period 1,000 1,500 1,500 -
------------- ------------- ------------- -------------
Cash and cash equivalents at end of period $ 1,500 $ - $ - $ -
============= ============= ============= =============
</TABLE>
Supplemental disclosures of noncash investing and financing activities:
During the year ended December 31, 1996, DV transferred property and equipment
of $379,791 to Arris along with the associated note payable thereby reducing
DV's portion of that note by the same amount.
See accompanying notes.
7
<PAGE>
ARRIS INTERACTIVE LLC - DIGITAL VIDEO DIVISION
NOTES TO THE FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30,
1997 AND 1996 IS UNAUDITED)
- -------------------------------------------------------------------------------
1. THE DIVISION
These special purpose financial statements have been prepared with respect
to the sale on August 1, 1997 of substantially all of the assets of Arris
Interactive LLC-Digital Video Division ("DV") to Digital Video Systems,
Inc. ("DVID"). In these financial statements, DV refers only to those
assets, liabilities and lines of business which comprise the Digital Video
Division. DV provides a sophisticated, hierarchical video server system
that supports today's analog video networks and provides a migration path
to evolving digital networks.
DV began operations as a division of Antec Corporation ("Antec")
during March, 1994. In November 1995, Antec and Northern Telecom, Inc.
("Nortel") created Arris Interactive LLC ("Arris") as a joint venture
between the two organizations. Antec contributed certain fixed assets,
inventory and cash as well as the DV business in exchange for a 25%
ownership stake in Arris. Nortel also contributed certain fixed assets,
cash and its Cornerstone business in exchange for the remaining 75%
ownership of Arris. \
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - These special purpose financial statements have
been prepared in accordance with the generally accepted accounting
principles ("GAAP") of the United States. The accompanying financial
statements present the net assets and results of operations of DV as if
such division had operated as a separate corporate entity unaffiliated
with Arris. Accordingly, the results of operations reflect expenses common
to Arris and Antec as a whole which have been allocated to DV using a
proportional cost allocation method. These expenses include facilities
costs, general and administrative expenses and totaled $818,000 in 1995
and $723,000 in 1996. It is management's assertion that the proportional
cost allocation method used is a practical and reasonable method of
allocation of the common expenses of Arris. However, these financial
statements are not necessarily indicative of the financial position and
results of operations which would have occurred had DV been an independent
company.
Unaudited Interim Financial Statements - The unaudited financial
statements as of June 30, 1997 and for the six-month periods ended June
30, 1996 and 1997 include, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary to present
fairly the financial information set forth herein. Operating results for
the six-month period ended June 30, 1997 are not necessarily indicative of
the results that may be expected for the year-ended December 31, 1997 or
for any other future period.
Cash and cash equivalents - Arris provides a centralized cash management
function; accordingly, DV does not maintain separate cash accounts and its
cash disbursements and collections are settled by Arris.
Inventories - Inventories are stated at the lower of cost (first-in,
first-out basis) or market. The cost of finished goods and work-in-
process is comprised of material, labor, and manufacturing overhead.
Inventories have been reduced by an allowance which management estimates
to be adequate to absorb potential losses due to inventory obsolescence.
Property and Equipment - Property and Equipment is recorded at cost less
accumulated depreciation and amortization. Depreciation is calculated
using the straight-line method over the estimated useful lives of the
asset. The expected useful life of DV's property and equipment ranges from
three to ten years. Maintenance and repairs are charged to expense as
incurred.
Warranty Costs - DV accrues for known and expected warranty costs at the
time of sale.
Income Taxes - Antec uses the liability method of accounting for income
taxes which requires recognition of temporary differences between
financial statement and income tax basis of assets and liabilities,
measured by statutory rates.
8
<PAGE>
Revenue Recognition - Sales and related costs are recorded by DV upon
shipment of products.
Research and Development - Research and development costs are charged to
earnings in the periods in which they are incurred. Engineering, research
and development costs consist primarily of costs associated with
development of new products and manufacturing processes.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. INVENTORIES
Net inventories consisted of (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Raw Materials $ 187 $ 167 $ 253
Work-in-progress 176 101 295
Finished Goods 433 738 480
Reserves for obsolescence (6) (360) (371)
----- ----- -----
$ 790 $ 646 $ 657
</TABLE>
4. PLANT AND EQUIPMENT
Plant and equipment consisted of (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
Machinery and computer equipment 1995 1996 1997
-------------------------------- ---- ---- ----
<S> <C> <C> <C>
Basis $1,355 $1,604 $1,681
Accumulated depreciation (343) (212) (373)
------ ------ ------
Net book value $1,012 $1,392 $1,308
</TABLE>
5. ACCRUED LIABILITIES
The estimated liability of warranty and product defect costs during 1995
were immaterial since a substantial portion of DV sales were deemed
uncollectible and written-off. Included in accrued liabilities at December
31, 1996 and June 30, 1997 is $175,000 and $135,000 respectively, of
estimated warranty and product defect costs. For the year ended December
31, 1996 and the six months ended June 30, 1997, DV's health and welfare
plans were partially self-funded. Included in accrued liabilities for
December 31, 1996 and June 30, 1997 was $206,000 and $100,000, respectively
to cover DV's obligations under these plans.
6. PENSION PLANS
For the ten months ended October 31, 1995 while DV was part of Antec, DV
employees were covered by Antec's non-contributory defined-benefit pension
plans. The pension plan benefit formulas generally provided for payments to
retired employees based upon their length of service and compensation as
defined in the plans. Antec's policy is to fund the plans as required by
the Employee Retirement Income Security Act of 1994 (ERISA) and to the
extent that such contributions are tax deductible. Pension expense for the
year ended December 31, 1995 was approximately $132,000.
Subsequent to October 31, 1996, DV employees were not covered by any
pension plans. Beginning in January 1996, DV employees were eligible to
participate in Arris's 401(k) plan. For the year ended December 31, 1996,
DV contributed approximately $103,000 to the employees' 401K plan.
7. EMPLOYEE INCENTIVE PLANS
For the year ended December 31, 1996, all DV employees were covered by both
Arris' short-term ("STIP") and long-term ("LTIP") incentive plans. At
December 31, 1996, DV had approximately $260,000 accrued under the STIP
incentive plan and $185,000 under the LTIP plans. A feature of the LTIP
plans is that the employee must be employed by Arris at the time of the
payout. Upon the sale of DV to DVID on August 1, 1997, the obligations
under the LTIP plans were discharged. DV employees were not covered by any
similar plans during 1995.
9
<PAGE>
8. NOTES PAYABLE
At December 31, 1995 and 1996, DV had a noninterest bearing note payable to
Antec due December 2000. The note payable represents fixed assets and
inventory contributed by Antec upon formation of Arris under the Joint
Venture Agreement of November, 1995. The note payable obligation remained
with Arris when DV was sold to DVID on August 1, 1997.
9. NET ASSETS
Prior to November 1995, DV's cash requirements were met by Antec. DV's cash
requirements have been met by Arris since November 1995. All operating,
investing and financing requirements were funded through the parents.
An allocation of Arris' interest income and expense has been included in
the results of operations for 1996.
10. SALES INFORMATION
For the year ended December 31, 1995, 78% of DV revenues were derived from
one customer, The Popcorn Channel. The receivable was deemed uncollectible
and written-off in 1996. No other customer contributed 10% or greater to
the gross revenues of DV for the year ended December 31, 1995. For the year
ended December 31, 1996, approximately 74% of DV's revenues were derived
from sales to four customers: Ameritech (34.9%), Cablevision (11.4%),
Bresnan Communications (17.1%) and Jones Intercable (10.4%).
11. ROYALTIES AND LICENSES
As part of the LLC agreement, Arris entered into nontransferable,
nonexclusive licensing agreements with Antec for a period of ten years. The
licensing agreement with Antec provided for royalty payments to Antec of 3%
on all DV product sales. In addition, by mutual consent, Arris agreed to
pay Antec a 2% finder's fee on certain DV sales. For the year ended
December 31, 1996, DV incurred expenses of $131,000 in royalties and
finder's fees under this arrangement, of which $87,000 was still owed to
Antec at year-end. Subsequent to year-end, as part of the sale of DV's
assets to DVID, the arrangement was renegotiated and no royalties on DV
product sales will be due for DV products shipped subsequent to August 1,
1997.
12. INCOME TAXES
For the ten months ended October 1995, DV's results were included in the
federal and state income tax returns of Antec. For the purpose of these
financial statements for the ten months ended October 31, 1995, the income
tax provision has been determined on a basis as if DV was a separate tax
payer. The income tax provision for the ten months ended October 31, 1995
consisted of a deferred tax benefit of $2,313,000 offset by a valuation
allowance of $2,313,000. The deferred tax benefit principally represents
net operating loss tax carryforwards which are not considered probable of
realization. Subsequent to the formation of the joint venture, DV has made
no provision for income taxes since the company of which it was a part is a
registered limited liability company. For tax purposes, all earnings and
losses flow through to Nortel and Antec, the owners of Arris.
13. SUBSEQUENT EVENT
On August 1, 1997 the lines of business and certain assets of DV were sold
by Arris (with the consent of Antec and Nortel) to DVID for $1.5 million in
cash, 600,000 shares of DVID restricted stock and a percentage of future DV
revenues not to exceed $5 million. DVID is publicly traded on the NASDAQ
exchange under the symbol DVID.
(b) Pro forma financial information.
-------------------------------
In August 1997 the Registrant completed the acquisition of the business and
certain assets and liabilities of Arris Interactive LLC - Digital Video
Division ("DV") in a transaction accounted for as a purchase. The total
purchase price of approximately $3.5 million included cash of $1.5 million,
the issuance of 600,000 shares of common stock of the Company and related
acquisition costs of $141,000. Arris is not entitled to transfer or sell
the shares of common stock for a period of twelve months after the closing.
After the expiration of this twelve month period, Arris will be entitled to
transfer or sell 50% of this stock and will be entitled to transfer or sell
the remaining 50% after the expiration of a further twelve month period.
Net assets acquired included tangible assets totaling $1.8 million,
developed technology and other intangible assets of $4.7 million and $1.5
million of acquired in-process research and development, less assumed
liabilities of $170,000.
The unaudited pro forma combined condensed balance sheet was prepared as if
the transaction had occurred at June 30, 1997. The unaudited pro forma
combined condensed statements of operations combine (i) the Company's
statement of operations for the year ended March 31, 1997 with DV's
statement of operations for the year ended December 31, 1996 and (ii) the
Company's statement of operations for the three months ended June 30, 1997
with DV's statement of operations for the same period, as if the
transaction had occurred at the beginning of the periods presented.
The unaudited pro forma combined condensed balance sheet and statements of
operations are presented for illustrative purposes only and are not
necessarily indicative of the balance sheet and operating results that
would have occurred had the transaction occurred on June 30, 1997, April 1,
1997 or April 1, 1996, nor are they necessarily indicative of future
operating results.
Unaudited Pro Forma Combined Condensed Balance Sheet
<TABLE>
<CAPTION>
Arris Interactive -
Digital Video Digital Video
Systems, Inc. Division Pro Forma
June 30, 1997 June 30, 1997 Adjustments Combined
------------- ------------------- ----------- --------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents 25,724 (1,500)e 24,224
Short Term Investments 1,189 1,189
Accounts receivable, net 3,655 1,038 (1,038)b 3,655
Inventories 2,024 657 2,681
Prepaid expenses and other
current assets 1,040 1,040
Total current assets 33,632 1,695 32,789
Property and equipment, net 1,357 1,308 (787)a 1,878
Purchased research and technology 598 a -
(598)c
Intangible assets 1,872 a 1,872
Other assets 88 88
Total assets 35,077 3,003 36,627
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable 2,068 453 (453)b 2,068
Accrued liabilities 841 475 142 a 1,153
(305)b
Total current liabilities 2,909 928 3,221
Notes payable to Antec 1,422 (1,422)b -
Stockholders' Equity
Common stock 2 1e 3
Additional paid-in capital 54,631 1,835e 56,466
Accumulated deficit (22,292) (598)c (22,890)
Foreign currency translation adj. (90) (90)
Deferred Compensation (83) (83)
Total stockholders' equity 32,168 33,406
Total liabilities and stockholders'
equity 35,077 36,627
</TABLE>
Pro Forma Condensed Combined Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Digital Video Arris Interactive -
Systems Inc. Digital Video
Year Ended Division
March 31, Year Ended Pro Forma
1997 December 31, 1996 Adjustments Combined
------------- ------------------- ----------- --------
<S> <C> <C> <C> <C>
Total Revenue 14,121 3,291 17,412
Cost of Revenue 14,840 3,738 18,578
Gross Profit (719) (447) (1,166)
Operating Expenses:
Research and Development 2,761 3,617 549 d 6,927
Sales and Marketing 1,785 103 d 1,888
General & Administrative 5,122 2,600 54 d 7,776
Purchased in-process research &
Development 1,819 1,819
Total operating expenses 11,487 6,217 17,704
Loss from Operations (12,206) (6,664) (18,870)
Other Income (expense), net 559 (217) 342
Net Loss before extraordinary item (11,647) (6,881) (18,528)
Extraordinary Item (1,264) - (1,264)
Net loss (12,911) (6,881) (19,792)
Net loss per share before
extraordinary item (1.19) (1.79)
Net Loss per share (1.32) (1.91)
Shares used in computing net
loss per share 9,777 600 e 10,377
</TABLE>
Pro Forma Condensed Combined Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Digital Video Arris Interactive -
Systems Inc. Digital Video
3 months ended Division
June 30, 3 months ended Pro Forma
1997 June 30, 1997 Adjustments Combined
------------- ------------------- ----------- --------
<S> <C> <C> <C> <C>
Total Revenue 5,388 1,061 6,449
Cost of Revenue 5,086 929 6,015
Gross Profit 302 132 434
Operating Expenses:
Research and Development 904 491 137 d 1,532
Sales and Marketing 585 54 d 639
General & Administrative 1,258 543 14 d 1,815
Purchased in-process research &
Development
Total operating expenses 2,747 1,034 3,986
Loss from Operations (2,445) (902) (3,552)
Other income (expense), net 450 (156) 294
Net Loss (1,995) (1,058) (3,258)
Net loss per share (0.17) (0.26)
Shares used in computing net
loss per share 11,893 600 e 12,493
</TABLE>
1. BASIS OF PRESENTATION
The pro forma information presented is theoretical in nature and not necessarily
indicative of the future consolidated results of operations of the Company or
the consolidated results of operations which would have resulted had the
transaction occurred on June 30, 1997, April 1, 1997 or April 1, 1996.
2. PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENT ADJUSTMENTS
(a) Reflects the allocation of the purchase price, based on fair values, to
the historical balance sheet.
(b) Reflects the elimination of DV assets and liabilities that were not part
of the transaction.
(c) Reflects the write-off of purchased research and development identified
in the purchase price allocation. The pro forma statements of operations
exclude the write-off of purchased research and development due to its
non-recurring nature.
(d) Amortization of assembled workforce, corporate customers, backlog and
developed technology being amortized over their estimated useful lives
ranging from 5 months to three years.
(e) Reflects the cash paid and an increase in common stock for the shares
issued in connection with the purchase price of DV for the net assets
acquired.
(c) Exhibits
--------
The exhibits listed below are filed as part of this Current Report.
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
2.1 Asset Purchase Agreement dated as of July 25, 1997 by and between
the Registrant and Arris. *
2.2 Amendment to Asset Purchase Agreement dated as of August 1, 1997. *
4.1 Form of Escrow Agreement dated as of August 1, 1997 by and between
the Registrant and Arris. *
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
</TABLE>
* Previously filed on Form 8-K dated August 15, 1997
10
<PAGE>
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 hereunto duly authorized.
DIGITAL VIDEO SYSTEMS, INC.
Date: October 10, 1997 By: /s/ Thomas R. Parkinson
------------------------------------
Thomas R. Parkinson
President
11
<PAGE>
EXHIBIT INDEX
The exhibits listed below are filed as part of this Current Report.
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----
<C> <S> <C>
2.1 Asset Purchase Agreement dated as of July 25, 1997
by and between the Registrant and Arris. *
2.1 Amendment to Asset Purchase Agreement dated as of
August 1, 1997. *
4.1 Form of Escrow Agreement dated as of August 1, 1997
by and between the Registrant and Arris. *
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
</TABLE>
* Previously filed on Form 8-K dated August 15, 1997.
12
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated August 21, 1997, with respect to
the financial statements of Arris Interactive LLC - Digital Video Division for
the year ended December 31, 1995 included in this Current Report on Form 8-K/A
of Digital Video Systems, Inc.
/s/ ERNST & YOUNG LLP
October 10, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement No.
333-32225 of Digital Video Systems, Inc. on Form S-3 of our report dated August
8, 1997 on the financial statements of Arris Interactive LLC-Digital Video
Division for the year ended December 31, 1996, appearing in this Current Report
on Form 8-K/A of Digital Video Systems, Inc.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
October 9, 1997
