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FORM 8-K
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) May 14, 1998
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.)
160 Knowles Drive
Los Gatos, California 95032
(Address of principal (Zip Code)
executive offices)
(408) 874-8200
Registrant's telephone number, including area code
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Item 5. Other Events
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On May 14, 1998, Digital Video Systems, Inc. (the "Registrant") announced
that it had entered into an agreement to acquire an exclusive, perpetual,
royalty-free license for certain intellectual property relating to DVD-ROM
technology from Hyundai Electronics Industries, Co., Ltd. ("Hyundai") for
2,000,000 shares of the Registrant's common stock and to acquire related
manufacturing capabilities for $1,000,000 in cash. None of the intellectual
property or manufacturing capabilities have been used in a going business by
Hyundai. Rather, they constitute part of a research and development project by
Hyundai in connection with the development of DVD-ROM technology. The project
does not yet have any commercial production, order backlog, customers, finished
goods inventory or accounts receivable.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
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The exhibits listed below are filed as part of this Current Report.
Exhibit No. Description of Exhibit
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99.1 Press Release of Registrant dated May 14, 1998
2.
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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: May 26, 1998 By: /s/ Thomas R. Parkinson
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Thomas R. Parkinson
President and
Chief Operating Officer
3.
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EXHIBIT INDEX
The exhibits listed below are filed as part of this Current Report.
Exhibit No. Description of Exhibit
- ----------- ----------------------
99.1 Press Release of Registrant dated May 14, 1998
4.
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Exhibit 99.1
Digital Video Systems Announces
the Acquisition of Hyundai
Electronics' DVD-ROM Technology and
Manufacturing Capabilities
May 14, 1998 4:29 PM EDT
LOS GATOS, Calif.--(BUSINESS WIRE)--May 14, 1998--
Hyundai Korea Purchase Buoys Ongoing Challenges In China
Digital Video Systems, Inc.,(NASDAQ:DVID) has signed a definitive agreement to
acquire the assets of the DVD manufacturing capabilities, research and
development team, and corresponding management from Hyundai Electronics
Industries Co., LTD, Seoul, Korea for a combination of stock and cash pending
various regulatory approvals. This acquisition offers DVS the ability to
manufacture DVD-ROM products almost in their entirety (only the optics will need
to be out sourced).
As part of the deal, DVS gets the years of expertise from one of Hyundai
Electronics' Senior Executives, Sung Hee Lee, who has joined DVS as the Managing
Director of DVS Korea Co., Ltd. (in the process of being formed); Mr. Lee built
this Hyundai division from the ground up.
"Hyundai has been honing its DVD-ROM capabilities and technology for several
years and is ready to produce product immediately," said Digital Video Systems'
President and COO, Tom Parkinson. "Korea's current IMF situation has left
Hyundai in a position where they have to focus on their core businesses.
Hyundai's long-standing relationship with DVS has provided us the opportunity to
complete this transaction. Accordingly, this Hyundai deal represents a
tremendous opportunity for DVS to obtain state-of-the-art DVD-ROM technology and
manufacturing capabilities. The management team will provide the solid controls
that we require to ensure the highest product quality, administrative and
accounting standards."
Mr. Parkinson further stated, "DVD-ROM is one of the fastest growing PC
Peripheral devices in the world today. DVD-ROM technology provides significantly
greater storage capacity than CD-ROM allowing multimedia PC to play full length
feature film among other capabilities. The combination of the Hyundai DVD-ROM
acquisition and the Company's Synchrome acquisition in August complement each
other very well; we are very excited by this unique opportunity. This comes at a
very crucial time for us given the Company's third and fourth quarter problems
with our Panyu, China facility."
TAKING CONTROL OF PANYU FACILITY
The Hyundai acquisition also shores up the Company's overall R&D, as well as its
manufacturing capabilities in the wake of ongoing challenges which have daunted
the company's Panyu, China, facilities. DVS currently has 90-percent ownership,
controlling the Panyu facility with new management to ensure the proper team
operation of the facility.
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Companies - Portfolio (DVID/Article) Page 2
Nevertheless, DVS anticipates its fourth quarter results will be
significantly below management's expectations. The Company believes its
overall performance will improve as the new products begin to generate
revenue in the near term.
For more information on DVS, contact Digital Video Systems, 160 Knowles
Drive, Los Gatos, CA 95032 or call 408/874-8200.
ABOUT DVS
Digital Video Systems develops, manufactures and markets Video CD players,
including subassemblies and components, Commercial Video products, digital
ad insertion products, develops and markets DVD-ROM products, DVD players,
and MPEG encoding and authoring products for entertainment for business and
educational uses.
Established in 1992, DVS is a publicly held company based in Los Gatos,
California, with branch offices in Suwanee (Metro-Atlanta), Georgia;
Taipei; Tokyo; and subsidiaries in Hong Kong; Seoul, Korea (in formation)
and Panyu Municipality, Guangdong Province, China. In the United States,
Digital Video Systems, Inc. recently acquired Synchrome Technology, Inc.,
which develops innovative and leading edge products for the multimedia PC
market. DVS is a trademark of Digital Video Systems, Inc.
This release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the private Securities Litigation Reform Act of
1995 that involve various risks and uncertainties, including, without
limitation, statements with respect to DVS's strategy, proposed sales of
DVS's products, markets, and the development of DVS's products. DVS's
actual results may differ materially from those described in those forward-
looking statements due to a number of factors, including, but not limited
to, the need to satisfy certain customary closing conditions for DVS to
complete the acquisition of the Hyundai assets, the risks of competition in
the DVD-ROM market, the risk of limited availability of key components for
the manufacture of DVD-ROM products, risks of competition and the
enforceability of the Company's intellectual property rights, risks
relating to the development and market acceptance of other products of DVS
(including these to be licensed from Hyundai), and risks relating to the
planned expansion of the business of DVS and the conduct of business by DVS
in foreign countries, which factors and others described in documents that
DVS files from time to time with the Securities and Exchange Commission,
including its Current Report on Form 8-K dated Jan. 7, 1997. All other
trademarks are the property of their respective owners.
(C) Business Wire. All rights reserved.
