Would you loan this company a million at 12%?...
[Dr. Sun was a C-Cube founder]
DVS Shareholder Meeting Scheduled for November 7 or Sooner
08/19/1999
PR Newswire
(Copyright (c) 1999, PR Newswire)
MOUNTAIN VIEW, Calif., Aug. 19 /PRNewswire/ -- Digital Video Systems, Inc. (Nasdaq: DVICD) today announced that the Company has scheduled to hold a stockholder's meeting on or before November 7, 1999. The purposes being planned for the meeting include: ratifying and approving the Transaction with Dr. Sun as described hereinafter, electing Directors to serve on the Board, ratifying a stock option plan, ratifying the appointment of the Company's independent auditors, and transacting such other business as may properly be brought before the meeting or any and all adjournments thereof.
As previously reported, on May 28 1998, the Company borrowed $500,000 from Dr. Edmund Sun, the Company's Chairman and Chief Technology Officer. The interest rate on the loan was 12 percent per annum and the loan was convertible into common stock based on the average of closing sales prices for the ten days prior to the conversion date. This was a demand note with no fixed conversion date or fixed conversion price and was due by June 30, 1998, unless both parties agreed to extend the due date. On June 24, 1998, when the bid price of the Company's common stock was $1, Dr. Sun agreed to a second loan of an additional $500,000 and agreed to aggregate the two loans into one convertible loan. Dr. Sun agreed to purchase $1 million of common stock on July 8, 1998, and the loan converted into 1,331,479 shares of common stock at a conversion price of $0.756 per share (the "Transaction"). The Company used the proceeds of the loans to partially fund the acquisition of Hyundai Electronics Industries, Co., Ltd.'s DVD-ROM manufacturing capabilities and a related technology license.
The Company will submit this Transaction for shareholder approval, since Nasdaq has informed the Company that it must seek shareholder approval of this matter. Dr. Sun has agreed not to sell, dispose of or transfer in any fashion the shares that he received upon conversion of the note for a period of six months following shareholder approval of the Transaction, if obtained. Dr. Sun has also agreed not to vote the shares received in the transaction in connection with this shareholder approval.
About DVS
Digital Video Systems, Inc. is a technology company specializing in the development and application of DVD (Digital Versatile Disc) and digital-video related technologies. The Company currently develops and markets DVD-ROM drive, DVD Intelligent Loader, including subassemblies and components, VCD (Video Compact Disc) based Video Engine, and Ad-Insertion products for the consumer, commercial, and computer peripheral markets.
Established in 1992, DVS is publicly traded company headquartered in Mountain View, Calif., with subsidiaries in Hong Kong, Bermuda, South Korea, and China. 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' strategy, proposed sales of DVS' products, markets, and the development of DVS' products. DVS' actual results may differ materially from those described in those forward-looking statements due to a number of factors, including, but not limited to, risks of competition and the enforceability of DVS' patents and other intellectual property rights, risks relating to the development and market acceptance of DVS' products, and risks related to planned rapid growth of the DVS' business and the conduct of business by DVS in foreign countries, risks relating to the shortage of capital after substantial losses in prior years, which factors and others described in documents that DVS files from time to time with the Securities and Exchange Commission, including the Company's Form 10-KSB filed June 30, 1999 and Form 10QSB filed August 2, 1999. For more information on DVS' products, email to info@dvsystems.com, call 650-564-9699 or visit: www.dvsystems.com.
Contact: /CONTACT: Bob Werbicki of Digital Video Systems, Inc., 650-564-9699, or info@dvsystems.com/ 22:19 EDT
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