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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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 11, 1998
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ITERATED SYSTEMS, INC.
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(exact name of registrant as specified in chapter)
<TABLE>
<S> <C> <C>
Georgia 0-24087 58-1741516
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(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3525 Piedmont Road
Seven Piedmont Center, Suite 600
Atlanta, Georgia 30305-1530
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(zip code)
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Registrant's telephone number, including area code: (404) 264-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On August 11, 1998, Iterated Systems, Inc. ("Iterated") announced that it
had reached an accord with MCI Telecommunications Corporation ("MCI") arising
from a dispute between the parties concerning certain provisions of their 1994
Development Agreement ("1994 Agreement"). The accord resulted in a new contract
between Iterated and MCI which allows the parties to further develop and market
products which had been developed under the 1994 Agreement. Iterated receives
the right to own certain patentable inventions resulting from MCI's use of its
technology and Iterated is under no market restrictions regarding the use of the
technology with any of its current or emerging technology. As a result of this
contract, Iterated granted MCI a four-year warrant to purchase up to 1,452,570
shares of Iterated's common stock at a price of US $5.00 per share. The issuance
of the warrant will cause Iterated to take a charge to earnings in the third
quarter of 1998, the amount of which is currently being determined by Iterated.
See "Exhibit 99.1 - Press Release."
Item 7. Financial Statements & Exhibits
(c) Exhibits:
Exhibit 99.1 (Press Release)
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 thereunto duly authorized.
ITERATED SYSTEMS, INC.
/s/ Haines H. Hargrett
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Date: August 20, 1998 Haines H. Hargrett
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
3
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EXHIBIT INDEX
Exhibit
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99.1
ITERATED SYSTEMS ANNOUNCES AGREEMENT WITH
MCI TELECOMMUNICATIONS CORPORATION
ATLANTA, GEORGIA (AUGUST 11, 1998)--Iterated Systems, Inc., a leading developer
of next-generation digital imaging technology, announced today that it has
reached an accord with MCI Telecommunications Corporation. The accord allows the
parties to develop and market products that include advanced imaging software
developed under a 1994 agreement between MCI and Iterated, and gives MCI the
option to purchase Iterated common stock. Iterated Systems receives the right to
own certain patentable inventions resulting from MCI's use of Iterated's
technology. Iterated Systems is under no market restrictions regarding the use
of the technology, including telecommunications use, with any of its current or
emerging technology.
Under the 1994 agreement, MCI held a market exclusivity arrangement for certain
Iterated technologies. The two companies had entered into a multi-million dollar
development and license arrangement for Iterated to develop advanced
technologies for MCI to commercialize. Today's accord frees both parties to
pursue markets and technologies that benefit their respective business models.
MCI and Iterated may now pursue OEM agreements to commercialize products
developed with Iterated's technology. In addition, Iterated receives the right
to certain patents resulting from such product commercialization by MCI.
Iterated is under no market restrictions regarding use of, or further
development of, such patents and technology with any of its current or emerging
technology.
As a result of this accord, MCI was granted a warrant to purchase up to ten
percent of Iterated common stock at a price of US $5.00 per share. Iterated
Systems trades on the Oslo Bors Stock Exchange in Norway. For investor relations
information, please contact [email protected].
"This accord offers Iterated an outstanding opportunity to extend our digital
imaging technology to a wide range of markets and industries," said John Bacon,
president and CEO of Iterated. "We are also pleased that a company of MCI's
stature will be employing our technology to develop new markets and products."
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ABOUT ITERATED SYSTEMS
Iterated Systems, Inc. is a leading developer of powerful digital imaging
technologies based on patented developments in advanced mathematics. Iterated's
imaging solutions give users the highest quality images, faster and at lower
cost than those provided by conventional image techniques. Since 1987,
Iterated's unique advances have provided the most demanding graphics users with
the ability to create extremely detailed, re-usable images based on fractal and
waveform technologies. Today, through its Imaging Systems Architecture(TM),
Iterated provides users in the prepress, graphic arts, digital photography and
video industries with unique, bandwidth-conserving, and often lossless imaging
capabilities. These solutions improve customer satisfaction while making
workflows faster and more efficient. For further information on Iterated
Systems, visit the company's World Wide Web site at www.iterated.com.
This press release may contain "forward-looking statements" which involve a
number of risks and uncertainties that could cause actual results to differ
materially from historical results or those anticipated. Potential risks and
uncertainties include, but are not limited to, those described in the Company's
Form 10 Registration Statement filed with the Securities and Exchange Commission
on April 24, 1998.
For additional information, please contact Christine Smith at
[email protected].
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Iterated Systems and Imaging Systems Architecture are trademarks of Iterated
Systems.
