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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1 )*
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FAROUDJA, INC.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
311643 10 0
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(CUSIP Number)
MERV ADELSON, 10900 WILSHIRE BOULEVARD, SUITE 950,
LOS ANGELES, CALIFORNIA 90024
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 9, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 6 Pages
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CUSIP No. 311643 10 0 13D Page 2 of 6 Pages
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(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
MERV ADELSON
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
PF
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
UNITED STATES OF AMERICA
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Number of Shares (7) Sole Voting
Beneficially Owned Power 750 Shares
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 1,033,429 Shares
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(9) Sole Dispositive
Power 750 Shares
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(10) Shared Dispositive
Power 1,033,429 Shares
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,034,179 Shares
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
8.57%
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(14) Type of Reporting Person*
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP No. 311643 10 0 13D Page 3 of 6 Pages
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(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
ADELSON INVESTORS, LLC
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(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
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(3) SEC Use Only
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(4) Source of Funds*
WC
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
Delaware
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Number of Shares (7) Sole Voting
Beneficially Owned Power -0-
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 958,093
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(9) Sole Dispositive
Power -0-
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(10) Shared Dispositive
Power 958,093
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
958,093
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
7.94%
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(14) Type of Reporting Person*
OO
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP NO. 311643 10 0 SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the Common Stock, $.001 par value, of
Faroudja, Inc., whose principal executive offices are located at 750 Palomar
Avenue, Sunnyvale, California 94096.
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is filed on behalf of Merv Adelson and Adelson Investors,
LLC, a Delaware limited liability company. The business address of Mr. Adelson
and Adelson Investors, LLC is 10900 Wilshire Boulevard, Suite 950, Los Angeles,
California 90024. Mr. Adelson is a private investor and Adelson Investors, LLC
is a Delaware limited liability company.
Neither Mr. Adelson nor Adelson Investors, LLC has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), nor has either of them been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as the result of
which either of them was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activity subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Mr. Adelson is a citizen of the United States of America and Adelson
Investors is a Delaware limited liability company.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Adelson Investors, LLC directly owns 958,093 shares of Faroudja, Inc.
common stock, all of which were acquired with working capital in the following
manner:
(a) In March, 1996 (i) Faroudja, Inc. issued 1,043,105 shares of its
Common Stock for an aggregate purchase price of $4.0 million of which 213,642
shares were issued to Adelson Investors, LLC; (ii) Yves and Isabell Faroudja
(the "Founders") sold an aggregate of 3,569,395 share of Common Stock of
Faroudja, Inc. for an aggregate purchase price of $14.0 million, of which
731,062 shares were purchased by Adelson Investors, LLC; and (iii) the Founders
granted Adelson Investors, LLC an option to purchase 486,875 shares of Faroudja,
Inc.'s Common Stock (the "Founder's Option") for an exercise price of $3.90 per
share.
(b) In September, 1997, Adelson Investors, LLC exercised its
Founder's Option for a total purchase price of $1,898,813.
(c) In June, 1998, Adelson Investors, LLC distributed to its Members
an aggregate of 473,486 shares.
Mr. Adelson directly owns 76,086 shares of Common Stock of Faroudja, Inc.
750 shares were issued to Mr. Adelson by Faroudja, Inc. as compensation for
services rendered as a member of the Board of Directors of Faroudja, Inc. and
30,000 shares were purchased in the open market in joint tenancy with his spouse
(the "Joint Shares"). The Joint Shares were purchased from personal funds for
$8.00 per share, or an aggregate purchase price of $240,000. 23,618 shares were
distributed to his spouse from Adelson Investors, LLC. 21,718 shares covered by
the Warrant issued pursuant to the Consulting Agreement are currently
exercisable.
ITEM 4. PURPOSE OF TRANSACTION
Adelson Investors, LLC distributed shares to members of Adelson Investors,
LLC pursuant to Adelson Investors Operating Agreement. Neither Adelson
Investors, LLC nor Mr. Adelson has any plans or proposals which relate to or
would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer; provided, however, that
Adelson Investors, LLC and Mr. Adelson reserve the right to acquire additional
securities or dispose of securities from time to time.
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
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(d) any change in the present Board of Directors or the management of
the Issuer, including any plans or proposals to change the number or term of
Directors or to fill any existing vacancies on the Board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's Certificate of Incorporation or Bylaws or
other actions which may impede the acquisition of control of the Issuer by any
person;
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Adelson Investors, LLC directly owns 958,093 shares of Common Stock of
Faroudja, Inc. representing 7.94% of the outstanding shares. This number
includes (i) 213,642 shares purchased from Faroudja, Inc. in March, 1996;
(ii) 731,062 shares purchased from the Founders in March, 1996; (iii) 486,875
shares obtained upon exercise of the Founder's Option; and (iv) is reduced by
473,486 shares distributed to members of Adelson Investors, LLC in June, 1998.
Mr. Adelson beneficially owns 1,034,179 shares of Common Stock of
Faroudja, Inc., representing 8.57% of the outstanding shares. This number
includes (i) 958,093 shares owned directly by Adelson Investors, LLC of which
Mr. Adelson has sole voting and investment power; (ii) 30,000 shares owned in
joint tenancy with his spouse; (iii) 23,618 shares distributed to his spouse
from Adelson Investors, LLC; (iv) 750 shares received from Faroudja, Inc., as
compensation for services as a member of the Board of Directors; and (v) 21,718
shares covered by the Warrant issued pursuant to the Consulting Agreement.
Mr. Adelson is the managing member of Adelson Investors, LLC, and
Mr. Adelson has sole voting and investment power with respect to the 958,093
shares directly owned by Adelson Investors, LLC.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
In December 1996, Faroudja, Inc. (the "Company") entered into a three year
consulting agreement ("Adelson Consulting Agreement") with Merv Adelson, a
director of the Company pursuant to which Mr. Adelson agreed to provide certain
consulting services in the analysis and implementation of potential strategic
alliances ("Proposed Strategic Alliances") in the specific field of TV signal
enhancement for TV, cable TV, satellite TV and DVDs, including, but not limited
to (i) providing the Company with a list of possible corporate investors,
partners, customers, buyers, lenders and joint ventures ("Proposed Strategic
Alliance Partners"), (ii) coordinating and making approaches to Proposed
Strategic Alliance Partners, and (iv) assisting in the negotiation of the
principal forms of Proposed Strategic Alliances and preparation of all
contracts, documents, approvals and related matters necessary to consummate a
Proposed Strategic Alliance with a Proposed Strategic Alliance Partner. The
Company has agreed to compensate Mr. Adelson for any strategic alliance or
combination of strategic alliances during the term of the agreement in which the
Company receives consideration (as defined in the agreement) of at least $5
million, through the issuance of a three year warrant to Adelson for the
purchase of 65,152 shares of Common Stock with an exercise price of $.015 per
share. 21,718 shares covered by the Warrant are currently exercisable. During
the term of the Consulting Agreement, the Company also agreed to use its best
efforts to cause the election to the Board of Directors of Mr. Adelson (or a
designee of Mr. Adelson reasonably acceptable to the Board of Directors) and an
additional designee of Mr. Adelson reasonably acceptable to the Board of
Directors. Pursuant to such efforts, Mr. Adelson and Stuart D. Buchalter, as
designee of Mr. Adelson, were elected to the Board of Directors.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: June 28, 1998
/s/ Merv Adelson
Merv Adelson
Adelson Investors, LLC
By: /s/ Merv Adelson
Merv Adelson, Managing Member
