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Palo Alto, CA.,
04/29/05
Digital Video Systems, Inc., or DVS, announced that it has reached an agreement with its former CEO and Co-chairman, Ms. Mali Kuo, to settle her $3.42 million judgment against the Company by the issuance of 1,001,470 shares of the Company’s common stock plus warrants to purchase 100,147 shares of common stock at $4.50 for one year. This settlement values the Company’s common stock at $3.43 per share, a premium to the $2.56 per share closing price on of April 28, 2005. In a separate agreement, Ms. Kuo committed to arrange an additional $3.42 million in equity investment within approximately 45 days as the first step of a total equity financing of up to $25 million that would be available to the Company over the next 12 months.
As a result of these agreements, the Company’s net equity is projected to remain above $2.5 million as necessary to satisfy Nasdaq SmallCap listing requirements set forth in Marketplace Rule 4310(c)(2) - Qualification Requirements for Domestic and Canadian Securities. The Company believes that the additional financing Ms. Kuo has committed to raise would be sufficient to satisfy its operating requirements for the foreseeable future, thereby mitigating the “going-concern” risk which had been recently reported by the Company.
Tom Spanier, Chairman and CEO, commented that “We are relieved to end this difficult and costly chapter in the history of Digital Video Systems. With the legal uncertainties relating to this litigation behind us and with the promise of adequate financing going forward, we can return the focus of our attention to building the Company’s core business and further developing new products and new business to achieve the substantial potential we believe Digital Video Systems has always had.”
Ms. Kuo and her investors had previously invested approximately $15 million in the Company between 1998 to 2001.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995
Any statements made in this release that
are not historical facts contain forward-looking information that
involves risks and uncertainties. These forward-looking statements
include, but are not limited to, statements regarding the strategic
direction of DVS and DVS Korea, the benefits resulting from a change
in management, DVS’s products and its market position and
business activities proposed for India. Important factors that may
cause actual results to differ include, but are not limited to,
the timely availability of components, sufficiency of working capital,
the impact of competitive products and services, the company's ability
to manage growth and acquisitions of technology or businesses, the
effect of economic and business conditions, and other risks detailed
from time to time in the company's filings with the Securities and
Exchange Commission. Digital Video Systems, Inc. assumes no obligation
to update these forward-looking statements, and does not intend
to do so.
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About
DVS
Established in 1992, DVS is a publicly held company specializing in the development and application of digital video technologies enabling the convergence of data, digital audio, digital video and high-end graphics. DVS is headquartered in Palo Alto, California, with subsidiaries and manufacturing facilities in South Korea and China and a subsidiary in India. Additional information may be obtained at www.dvsystems.com.
For additional information please contact:
Digital
Video Systems, Inc.
430 Cambridge Ave., Suite 110,
Palo Alto, CA 94306
Tel: 650.322.8108
Fax:650.322.8109
DVS
Contact:
Larissa Licea
Office: 650.322.8108 X106
Cell: 408-712-4165
E-Mail:
ir@dvsystems.com
Investor Relations Contact:
Sean Collins, Partner
CCG Investor Relations
(818) 789-0100, ext. 202.
E-Mail:
sean.collins@ccgir.com
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