~~Table~~UNITED ~~of Content~~STATES SECURITIES --AND ~~Click~~EXCHANGE ~~here to rapidly navigate through this document~~COMMISSION
Washington, DC 20549
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 31, ~~2003~~ 2004

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0000-11552

~~Televideo~~TELEVIDEO, ~~Inc~~INC. ~~(Exact name of registrant as specified in its charter)~~
(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

94-2383795

(IRS Employer Identification No.)

2345 Harris Way, San Jose, California 95131 ~~(Address of principal executive offices)~~

(Address of principal executive offices)

Registrant's telephone number, including area code: (408) 954-8333

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~ý No o~~

o No ý

The number of shares outstanding of registrant's Common Stock, as of ~~September~~February 54, ~~2003~~2005 is: 11,309,772.

TELEVIDEO, ~~DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS~~ INC.

This Quarterly Report on Form 10-Q for TeleVideo Inc. (the "Company") for the third quarter ended July 31, 2003, includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this report that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including, but not limited to, such matters as future product development, business development, marketing arrangements, future revenues from contracts, business strategies, expansion and growth of the Company's operations and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, including the risk factors discussed below, general economic and business conditions, the business opportunities (or lack thereof) that may be presented to and pursued by the Company, changes in law or regulations and other factors, many of which are beyond control of the Company. Prospective investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. INDEX

~~Table~~ PART I. FINANCIAL INFORMATION 4 Item 1. Condensed Consolidated Financial Statements (unaudited) 4 Condensed Consolidated Balance Sheets as of ~~Content~~July 31, 2004 and October 31, 2003 4 Condensed Consolidated Statements of Operations for the three and nine months periods ended July 31, 2004 and 2003 5 Condensed Consolidated Statements of Cash Flows for the three and nine month periods ended July 31, 2004 and 2003 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk 21 Item 4. Controls and Procedures 21 PART II. OTHER INFORMATION Item 1. Legal Proceedings 23 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23 Item 3. Defaults upon Senior Securities 23 Item 4. Submission of Matters to a Vote of Security Holders 23 Item 5. Other Information 23 Item 6. Exhibits 23 Signatures 24

EXPLANATORY NOTE

This Form 10-Q includes restated financial information for certain periods indicated below that ended prior to our fiscal year that began on November 1, 2003.

The Company has restated its consolidated financial statements for the fiscal years ended October 31, 2001 and 2002 and for the quarters ended January 31, 2001 through July 30, 2003. Accordingly, the consolidated financial statements for those periods described above that have been included in the Company's previous filings with the Securities and Exchange Commission ("SEC") in 2003 or earlier or included in previous announcements in 2003 or earlier should not be relied upon.

The Company's Form 10-K for the fiscal year ended October 31, 2003, filed with the SEC on December 20, 2004, contains restated information for all of the above mentioned periods. The restatement is discussed in the Form 10-K Item 6, "Selected Financial Data," Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Restatement of Financial Statements," Notes 2 and 15 of the notes to consolidated financial statements included in Item 8, and Item 9A, "Controls and Procedures."

Certain information concerning the restatement relating to the periods included in this report are contained in Part I to this Form 10-Q in Item 1, Note 2 to the condensed consolidated financial statements (unaudited), Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Item 4, "Controls and Procedures." This information should be read in conjunction with relevant information in the Company's most recent Form 10-K referred to above.

PART I. FINANCIAL INFORMATION

~~ITEM~~TELEVIDEO, 1INC. ~~FINANCIAL STATEMENTS.~~

~~TELEVIDEO, INC. INTERIM~~ CONDENSED CONSOLIDATED BALANCE SHEETS (INunaudited, ~~THOUSANDS~~in thousands, ~~EXCEPT~~except ~~SHARE~~share ~~AMOUNTS~~amounts)

			July 31, 2003		October 31, 2002
			(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	423	$	898
	Accounts receivable, net			1,668		1,558
	Inventories, net			1,531		1,420
	Marketable Securities			236		64
	Prepayments and other			352		244
	Notes receivable—current			87		84
		Total current assets		4,297		4,268
PROPERTY, PLANT AND EQUIPMENT:
	Production equipment			671		671
	Office furniture and equipment			1,251		1,251
	Leased property under capital lease			6,270		6,270
				8,192		8,192
	Less accumulated depreciation and amortization			3,702		3,340
		Property, plant and equipment, net		4,490		4,852
INVESTMENTS IN AFFILIATES				259		1,379
NOTE RECEIVABLE, LESS CURRENT PORTION				2,330		2,395
		Total assets	$	11,376	$	12,894
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
	Accounts payable			849		416
	Notes payable			3,258		2,517
	Accrued liabilities			732		707
	Deferred tax liabilities (CNET stock)			60		-
	Obligation under capital lease—current		$	392	$	372
	Deferred gain on sale of land and building—current			540		538
		Total current liabilities		5,831		4,550
	Obligation under capital lease—long-term			4,567		4,826
	Deferred gain on sale of land and building—long-term			5,069		5,475
		Total liabilities		15,467		14,851
STOCKHOLDERS' (DEFICIT):
Common stock, $.01 par value:
	Authorized—23,000,000 shares Outstanding—11,309,772 shares at July 31, 2003 and 11,309,772 shares at October 31, 2002			454		454
	Additional paid-in capital			95,734		95,734
	Accumulated other comprehensive income (loss), net			90		(22)
	Accumulated deficit			(100,369)		(98,123)
		Total stockholders' (deficit) equity		(4,091)		(1,957)
		Total liabilities and stockholders' (deficit) equity	$	11,376	$	12,894

July 31,
2004

~~The~~October ~~accompanying notes are an integral part of these financial statements.~~31, 2003

~~Table of Content~~ ASSETS
Current TELEVIDEO, INC. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2003 AND JULY 31, 2002 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited) assets:

			Three Months Ended July 31,				Nine Months Ended July 31,
			2003		2002		2003		2002
NET SALES			$	2,330	$	2,057	$	5,941		5,758
COST OF SALES				2,224		1,683		5,168		4,498
GROSS PROFIT				106		374		773		1,260
OPERATING EXPENSES:
	Sales and marketing			396		425		1,133		1,231
	Research and development			172		155		554		473
	General and administration			396		398		1,140		1,278
		Total operating expenses		964		978		2,827		2,982
		Loss from operations		(858)		(604)		(2,054)		(1,722)
INTEREST (EXPENSES) INCOME, net				(86)		(81)		(249)		(238)
EQUITY IN (LOSS) ON AFFILIATES				(393)		(60)		(914)		(140)
IMPAIRMENT LOSSES ON SECURITIES				(138)		(88)		(206)		(146)
OTHER INCOME, net				372		430		1,178		1,278
		Net loss	$	(1,103)	$	(403)	$	(2,245)		(968)
Net loss per share, basic and diluted			$	(.10)	$	(.04)	$	(.20)		(.09)
Weighted average shares outstanding				11,310		11,310		11,310		11,310

Cash and cash equivalents

~~The accompanying notes are an integral part of these financial statements.~~ $

~~Table of Content~~556

~~TELEVIDEO, INC. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JULY 31, 2003 AND JULY 31, 2002 (IN THOUSANDS) (Unaudited)~~ $

		Nine Months Ended July 31,
		2003		2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities		$	(1,038)	$	(747)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Net additions to property, plant and equipment		-		(105)
	Note receivable		61		58
	Proceeds from investments		-		418
Net cash (used in) provided by investing activities			61		371
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from notes payable		741		517
	Payments on lease obligations		(239)		(237)
Net cash provided by (used in) financing activities			502		280
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS			(475)		(96)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD			898		870
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		$	423	$	774

596

~~Table~~Marketable ofsecurities ~~Content~~

~~Non cash investing/financing activities:~~ -

In December 1998, the Company sold its main facility (land and building) for approximately $11.0 million and concurrently leased back this facility over a 15-year lease term expiring in December 2013. The land component has been recorded as an operating leaseback. The building element has been accounted for as a capital lease, whereby a leased building asset and capital lease obligation were recorded at the fair value of approximately $6.27 million. As a result of the sale for $11.0 million (which includes a $2.75 million note receivable) a deferred gain of approximately $8.0 million was recorded. The deferred gain attributable to the land element, which approximates $3.44 million, is being amortized over the 15 year lease life on a straight line method. The deferred gain attributable to the building element, which approximates $4.56 million, is being amortized over leased building asset life, which has been determined to be the 15 year lease term, on a straight line method. 265

~~The $2.75 million~~Accounts ~~note~~ receivable ~~bears interest at 7.25% per annum. Principal and accrued interest is payable in equal monthly installments of $21~~,~~735~~ ~~each~~net ~~on the first day of each month commencing on January 1, 1999. If not earlier paid in full, any unpaid principal and all accrued interest is due and payable to TeleVideo, Inc. on December 1, 2013.~~

~~In May 2001 the Company obtained a line of credit from Gem Management~~1, a company owned by Gemma Hwang, the spouse of majority stockholder, in amount of $3.5 million, including $200,000 previously loaned. The Company can borrow money under this line of credit when needed, in order to assure the continuity of the operations. In consideration of Gem Management loan to the Company, the Company pleads and grants to Gem Management a secured interest in the following described property: 342

~~b) 45,000 shares of the common stock of Biomax;~~908

~~c) 285,714 shares~~Loan ofto ~~the~~related ~~common stock of MultiMedia SOC, Inc. (Synertech);~~party

~~d) 60% from the TeleVideo Ningbo China equity, equivalent to 60% of the outstanding shares of TeleVideo Ningbo China;~~220

~~e) any and all intellectual property of TeleVideo, including but not limited to patents, hardware and software engineering documents;~~-

~~f) any and all trademarks~~Inventories, ~~trade~~net names and intangible assets of TeleVideo. Under this line of credit, which bears interest equal with prime rate plus one percent, payable monthly, the Company received $200,000 in February, $300,000 in June, $500,000 in July, $500,000 in September, $500,000 in December 2001, $500,000 in April, $500,000 in October 2002, $500,000 in April 2003 and $200,000 in June 2003. In November 2001 the Company paid back approximately $500,000 from this loan by giving in exchange its interest in Alpha Technology and the proceeds from Koram investment.

~~In June 2002~~1, due to the decrease recorded by the interest rate on the market, the interest rate for this note was changed from 8% to prime rate plus one percent. On June 6, 2003 the outstanding balance for this loan was approximately $3,017,000, and the interest rate was 5.25%. The note contains no explicit repayment terms and is therefore payable on demand from the holder. On April 4, 2003, Gem Management refused to extend further credit to the Company. 192

In June 2003, the Company and Gem Management agreed that the interest for the note to be included in the total note amount, instead to be paid monthly to Gem Management. At July 31, 2003 the Note amount was of approximately $3,~~258,000.~~ 696

~~The accompanying~~Prepaids ~~notes~~and ~~are~~other ancurrent ~~integral part of these financial statements.~~ assets

~~Table of Content~~328

~~TELEVIDEO, INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2003~~ 92

~~1. SUMMARY~~Notes OFreceivable - ~~SIGNIFICANT~~current ~~ACCOUNTING POLICIES:~~

~~BASIS OF PRESENTATION~~148

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The information at July 31, 2003 and for the nine months ended July 31, 2003 and 2002 include all adjustments that the management of the Company believes are necessary for fair presentation for the results of the periods presented. 90

~~Results for~~Total ~~any~~current ~~interim~~assets period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K.

~~PRINCIPLES OF CONSOLIDATION~~3,786

~~The condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiaries~~5, ~~after elimination of inter-company accounts and transactions. All of the Company's unconsolidated affiliates are accounted for using the equity or the cost method.~~ 647

~~USE~~Property, OFplant ~~ESTIMATES~~and equipment, net

~~In preparing financial statements in conformity with accounting principles generally accepted in the United States of America~~ 4, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting period. Actual results could differ from those estimates. 026

~~CASH AND CASH EQUIVALENTS~~ 4,366

~~The Company~~Other ~~considers~~assets ~~all highly liquid investments with original maturities of three months or less to be cash equivalents.~~

~~INVENTORIES~~222

Inventories are stated at the lower of cost or market. Costs are computed on a currently adjusted standard basis (which approximates average cost) or both finished goods and work-in-process and includes material, labor and manufacturing overhead costs. The cost of purchased parts is determined on a first-in, first-out basis. Amounts shown are net of reserves for obsolescence of $0.3 million at July 31, 2003 and $0.8 million at October 31, 2002: 222

	July 31, 2003		October 31, 2002
Purchased parts and subassemblies	$	632	$	252
Work-in-process		394		452
Finished goods		505		716
	$	1,531	$	1,420

Investments in affiliates

In the year 2001 the Company shipped car alarm systems back to Alpha Technology in value of approximately $0.9 million, in order to fix some functional problems. Because the Company considered it would be hard to sell these products in the U.S., the Company agreed to consign these products to Alpha Technology. The Company reclassified these amounts from other receivables to inventory again and increased the inventory reserve for these products by $0.5 million. 236

Considering that there were no future perspectives to sell these products, we have decided to write off the entire balance of approximately $0.4 million, and, consequently, at July 31, 2003 the Company scrapped the whole inventory held at Alpha location.236

~~REVENUE~~Note ~~RECOGNITION~~receivable, less current portion

~~In accordance with Staff Accounting Bulletin No. 101 "Revenue recognition in Financial Statements" the Company recognizes revenue when products are shipped~~2, by meeting all four of the following criteria: (i) persuasive evidence of arrangements exists; (ii) delivery has occurred; (iii) the Company's price to the buyer is fixed or determinable; and (iv) collectibility is reasonably assured. The Company performs periodic evaluations of its customers' financial condition and maintains a reserve for potential credit losses and adjusts the reserve periodically to reflect both actual and potential credit losses. In addition, such allowances provide for returns resulting from stock balancing agreements and price protection programs. Product warranties are based on the ongoing assessment of actual warranty expenses incurred.233

~~PROPERTY~~2, ~~PLANT AND EQUIPMENT~~305

~~Depreciation and~~Total ~~amortization are provided over the estimated useful lives of the~~ assets ~~using both straight line and accelerated methods.~~

Production equipment		1-10 years
Office furniture		1-10 years
Leased property		15 years

~~LOSS PER SHARE~~10,503

Loss per share is based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and common equivalent shares outstanding during the period. $

~~RECLASSIFICATIONS~~12,776

~~Certain reclassifications~~LIABILITIES ~~have~~AND ~~been~~STOCKHOLDERS' ~~made to conform to the 2003 presentation. None of such reclassifications are material to the financial statements taken as a whole.~~ DEFICIT
~~2. ACQUISITIONS~~Current ~~AND DIVESTITURES~~liabilities:

~~Valuation~~Accounts ~~Methodology~~ payable

TeleVideo has equity investments in several privately-held companies. While the preferred method of valuing this type of investment is to seek an appraisal from an experienced third party, the company may first perform a cost-benefit analysis comparing the cost of such an appraisal to the value of the investment and the potential value from a more accurate appraisal compared to the company's internal valuation methods. When TeleVideo determines that an appraisal is not cost-effective, it follows the valuation protocol described below, which it believes comports with the current best practices in the valuation industry. $

~~1. When the company involved is publicly traded, the company uses the most recent market price available on the relevant valuation date.~~381

2. When the company is not publicly traded, the company values its investment by looking to recent transactions concerning the company's stock, such as additional equity investments or sales of equity interests in arms' length transactions.$

~~3. When no such transactions have taken place~~2, the company's market value is determined based on discounted future cash flows reflected in management's financial projections. The cash flow period preferred to be used is five years, the discount rate used is based on the subject company's average cost of capital as adjusted from the risks associated with the company's operations (if no relevant information on this point has been provided, the discount rate used is 20%), and the terminal value is estimated based upon the terminal growth rate used by management (if no relevant information on this point has been provided, the terminal growth rate used is 5%). Information from management reflects management's best estimates regarding the company's future performance. 607

~~4. When~~Accrued ~~financial~~liabilities ~~projections are not available, an attempt is made to determine the company's value from straight line extrapolation of its recent financial results. In this case, a terminal growth rate of 5% is used.~~

5. Finally, when the recent financial results of the company are negative and show little past trend towards break-even, a determination is made whether the company's book value reasonably approximates the company's liquidation value. If so, then the company is valued at the amount of its shareholders' equity, and any equity position in the company is valued on a straight pro rata basis without any adjustment for private company status, minority ownership, or majority ownership. 808

~~This valuation model has been evaluated by TeleVideo's accountants to confirm that it comports with GAAP.~~307

~~Equity~~Related ~~Method~~ party note payable

~~Mulix~~4, ~~Inc.~~ 017

~~On February 2000~~3, the Company purchased for $1,000,000 in cash an aggregate of 14,269,230 shares of unregistered Series A Convertible Preferred Stock of Mulix, Inc., a Delaware corporation. The Company's investment in Mulix represents a 35% interest in this privately held corporation. 217

~~Mulix~~Obligation ~~was dissolved~~under ~~effective~~capital ~~November~~lease ~~30,~~- ~~2000.~~current ~~Thus, the entire investment of $1.0 million was written off as of October 31, 2000.~~

~~K&T Telecom, Inc.~~ 666

In July 2000, TeleVideo purchased an aggregate of 9,608 shares of common stock, or a 49% ownership interest, in K&T Telecom, Inc. for $600,000 in cash. K&T Telecom, Inc., a privately held Korean corporation, is a manufacturer of telecommunication and electronics devices, including a hands-free accessory and collision sensors. The investment is accounted for on the equity method of accounting. 407

~~The~~Deferred ~~financial statements~~gain ~~sent~~on tosale ~~the Company by K&T Telecom reports no sales for the first nine months~~ of ~~the~~land ~~year 2002~~ and anbuilding - ~~accumulated~~current ~~net loss from the start of the business of approximately $0.2 million.~~

Total assets were in amount of approximately $0.9 million and total liabilities were of approximately $0.5 million at September 30, 2002, resulting total stockholders' equity in amount of approximately $0.4 million. Considering that TeleVideo's interest in this company is 49%, the fair market value of this investment was estimated at approximately $0.2 million at the end of fiscal 2002. TeleVideo is currently considering the possibility of withdrawing from this joint venture.538

In reaching this valuation, TeleVideo considered the following factors: the company's shares are not publicly traded, there have been no known recent transactions in the company's shares, no financial projections are available from the company's management, and prior operating results have been negative. Therefore, in accordance with the valuation methodology adopted by TeleVideo, this company has been valued on a pro-rata share of stockholders' equity basis. The company's most recent financial results are not available to TeleVideo, and the stockholders' equity figure includes approximately $190,000 in quick assets, or more than 45% of the stockholders' equity figure.538

~~During~~Deferred ~~the~~rent ~~second~~liability ~~quarter~~- ~~of the fiscal 2003, K&T Telecom filed for bankruptcy and, consequently, the entire book value of approximately $0.2 million was written off.~~current

~~Alpha Technology, Inc.~~192

In August 2000, the Company purchased for $650,000 in cash an aggregate of 9,608 shares of stock of Alpha Technology, Inc. Alpha Technology, Inc. is a Korean company, manufacturing electronic and car accessories, including two-way car alarm systems. The Company's investment in Alpha Technology, Inc. represents a 49% interest in this privately held corporation. 125

~~TeleVideo~~Total ~~has~~current ~~the right~~liabilities to participate in future sales of Alpha Technology, Inc. securities to maintain its proportionate interest in this company. If Alpha Technology, Inc. increases its capital thereafter, TeleVideo will be given the opportunity to participate in the stock issuance in order to maintain the percentage of stock held currently by TeleVideo.

~~In the fiscal year 2001~~6, due to the decrease of the fair market value of Alpha Technology investment, the Company adjusted the carrying value of this investment on the financial statements from $600,000 to $418,033. In November 2001, the Company decided to withdraw from this joint venture, and to sell its interest in Alpha Technology to Gem Management, a company owned by Dr. Hwang's wife, Gemma Hwang. In exchange for the 9,608 shares of Alpha Technology, the amount of approximately $418,000 (the value of transaction and the book value of Alpha Technology investment as of July 31, 2001) will be deducted from the Note Payable owed by TeleVideo to Gem Management. Before the transaction, the Company owed to Gem Management $1.5 million, bearing an annual interest of 8%.602

~~Ningbo China~~ 7,201

InObligation ~~October~~under ~~2000, TeleVideo~~capital ~~acquired a 10% ownership interest in Televideo (China) Co.~~lease, ~~Ltd. ("Ningbo"), a~~less ~~manufacturer~~current ofportion computer terminals and monitors, through a $1 million investment. In December 2000, TeleVideo acquired an additional 20% ownership interest in Ningbo for $2 million. In that same month, TeleVideo changed its method of accounting for this investment to the equity method.

~~Under the terms of the investment~~4, TeleVideo would provide certain technology and professional training on its terminal products, including technology relating to the processor used for TeleClient, in exchange for $2.5 million payable over a two year term as follows: $1.2 million was to be received in December 2000 and the remaining $1.3 million was payable in two installments of $650,000 in June 2001 and June 2002. 094

~~To date~~4, TeleVideo has received only $1.42 million of the $2.5 million due from Ningbo. At one point, TeleVideo did agree to reschedule Ningbo's payments for the remaining $1,080,000; however, to date, Ningbo has failed to make any of the new payments. The unpaid balance has since been expensed as government and transfer fees. 419

InDeferred ~~the~~gain ~~third quarter~~on ofsale ~~fiscal 2001, the capital~~ of ~~Ningbo~~land decreased from $10 million to approximately $5 million due to the departure of two investors from the venture. Thereafter, the Chinese government requested that Ningbo change its initial agreement with TeleVideo to allow the payments made by Ningbo to TeleVideo to be recorded as a withdrawal of TeleVideo's investment instead of payments for technology and ~~training provided by TeleVideo. TeleVideo agreed with this change~~building, ~~and~~less ~~consequently,~~current ~~TeleVideo~~portion ~~has reduced the carrying value of this investment on its financial statements from $3.0 million to $1.7 million.~~

The financial statements sent to the Company by Ningbo reports sales of approximately $0.1 million and a net loss of approximately $0.2 million for the period January to September 2002. The accumulated net loss from the start of the business is approximately $0.7 million. 4,532

The total assets at September 30, 2002 were approximately $2.5 million, including technology and training prepaid to TeleVideo in amount of approximately $1.2 million. Total liabilities were in amount of $0.1 million, resulting total stockholders' equity of approximately $2.4 ~~million. Deducting the prepayment to TeleVideo~~, recorded as asset, the remaining total stockholders' equity is approximately $1.2 million, and, considering that the Company's interest increased to 60% after two investors had withdrawn, the fair market value of this investments was estimated to approximately $0.7 million at the end of fiscal 2002. Because TeleVideo does not have control over Ningbo operations, this investment is accounted under the equity method, not consolidation, conforming to FASB No. 94. 936

InDeferred ~~November~~rent ~~2002~~liability, ~~TeleVideo~~ ~~learned~~less ~~that~~current ~~certain persons involved with Ningbo had stolen and/or embezzled funds from that company. TeleVideo has undertaken efforts, including retaining investigators and attorneys, to seek the recovery of any~~ portion of its investment. Currently, TeleVideo has no reasonable estimate of the amount of funds it may be possible to recover, and the carrying value of this investment on the financial statements may have to be adjusted once again.

While the investment in this company is described as an equity investment, TeleVideo has been valuing it in accordance with TeleVideo's expected recovery of the funds invested after the embezzlement previously reported was discovered. TeleVideo has therefore not applied its valuation methodology to this investment.616

During the second quarter of 2003 Ningbo definitively stopped all its operation and closed all of its facilities. Consequently, the Company written off the entire value of this investment of approximately $0.7 million, as of April 30, 2003. The estimated fair value of the proceeds from the liquidation of Ningbo was determined considering total assets of $0.9 million, less depreciation and liabilities of $0.1 million. The cost of liquidation was estimated at 20% from the liquidation value, resulting total net proceeds from liquidation in amount of approximately $0.7 million. Considering that TeleVideo has 60% interest in Ningbo, the estimated proceeds from the liquidation of this investment are approximately $0.4 million, recorded in the Company's financial statements under the other assets section.592

~~After~~Total ~~all~~liabilities attempts to recover the money from this investment failed, the Company decided to write off its entire balance. Consequently, the balance amount of approximately $0.4 million was written off as of July 31, 2003.

15,844

17,148

Commitments and contingencies (Note 3)

Stockholders' deficit:

Preferred Stock, $0.01 par value
Authorized - 3,000,000 shares
Outstanding - None as of July 31, 2004 and October 31, 2003

Common stock, $0.01 par value
Authorized - 20,000,000 shares
Outstanding - 11,309,772 shares at July 31, 2004 and October 31, 2003 (net of 120,000 treasury shares)

453

Additional paid-in capital

95,735

Accumulated other comprehensive income

179

Accumulated deficit

(101,529)

(100,739)

Total stockholders' deficit

(5,341)

(4,372)

Total liabilities and stockholders' deficit

10,503

12,776

The accompanying notes are an integral part of these condensed consolidated financial statements.

TELEVIDEO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share amounts)

		Three Months Ended July 31,				Nine Months Ended July 31,
		2004		2003		2004		2003
				(As Restated)				(As Restated)
Net sales	$	2,330	$	2,254	$	7,460	$	5,698
Cost of sales		1,864		2,189		5,782		5,011
Gross profit		466		65		1,678		687
Operating expenses:
Sales and marketing		294		396		1,112		1,133
Research and development		123		172		419		555
General and administration		468		425		1,367		1,249
Total operating expenses		885		993		2,898		2,937
Loss from operations		(419)		(928)		(1,220)		(2,250)
Rental income		-		244		163		741
Gain on CNET stock sale		-		-		203		-
Equity in loss of affiliates		-		(393)		-		(914)
Impairment losses on investment in affiliates		-		(138)		-		(206)
Interest expenses, net		(121)		(86)		(365)		(247)
Other income, net		137		83		429		408
Net loss	$	(403)	$	(1,218)	$	(790)	$	(2,468)
Net loss per share, basic and diluted	$	(0.04)	$	(0.11)	$	(0.07)	$	(0.22)
Weighted-average shares outstanding		11,309,772		11,309,772		11,309,772		11,309,772

The accompanying notes are an integral part of these condensed consolidated financial statements.

TELEVIDEO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Nine Months Ended
July 31,

2004

2003

(As Restated)
Cash flows from operating activities:

Net loss

(790)

(2,468)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

340

349

Gain on marketable securities

(203)

(60)

Impairment of investment in affiliates

1,120

Changes in operating assets and liabilities:

Accounts receivable

(434)

133

Inventories

2,504

(274)

Prepaids and other current assets

(236)

178

Accounts payable

(2,226)

204

Accrued liabilities

501

Deferred rent

Deferred gain

(404)

(403)

Net cash used in operating activities

(857)

(1,039)

Cash flows from investing activities:

Proceeds from sales of marketable securities

289

Principal payments on note receivable

Loan to related party

(220)

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of note payable

800

741

Payments on capital lease obligations

(66)

(239)

Net cash provided by financing activities

734

502

Net decrease in cash and cash equivalents

(40)

(474)

Cash and cash equivalents at beginning of period

596

898

Cash and cash equivalents at end of period

556

424

The accompanying notes are an integral part of these condensed consolidated financial statements.

TELEVIDEO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company's consolidated financial position, results of operations, and cash flows as of and for the dates and periods presented. The condensed consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X of the rules and regulations of the Securities and Exchange Commission ("SEC").

These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2003 filed with the SEC on December 20, 2004. The results of operations for the three-month period and nine-month period ended July 31, 2004 are not necessarily indicative of the results for the entire fiscal year ended October 31, 2004 or any other period.

The Company used net cash in operations of approximately $0.9 million and $1.0 million for the nine-month periods ended July 31, 2004 and 2003, respectively. In January 2004, the Company sold all of its shares of CNET common stock and the proceeds have been used for regular business activities. Also, in November 2003, the Company increased the maximum amount of its line of credit with Gemma Hwang from $3.5 million to $4.0 million and borrowed an additional $0.8 million under this line of credit. As of July 31, 2004, this credit line was fully utilized and Gemma Hwang refused to extend additional funding to the Company. Due to the Company's experience of recurring losses, the Company may be required to raise additional financing through the issuance of debt, equity or through other means such as customer prepayments, asset sales or secured borrowings. If additional funds are raised through the issuance of equity, debt securities or secured borrowings, these securities could have rights, preferences and privileges senior or otherwise superior to that of the Company's common shares, and the terms of any debt could impose restrictions on the Company's operations. The sale of additional equity or convertible debt securities could result in additional dilution to the Company's shareholders and such securities may have rights, preferences and privileges senior or otherwise superior to those held by existing shareholders. If the Company cannot raise funds on terms favorable to it, or raise funds at all, the Company may not be able to develop or enhance its products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. If the Company is unable to raise additional funds, the Company may be required to reduce the scope of its planned operations, which could harm its business, or the Company may need to cease operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basic and Diluted Net Loss Per Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share should reflect potential dilution from outstanding stock options using the treasury stock method. However, as stated in the "Stock Based Compensation" paragraph below, the Company did not maintain accounting records needed to provide such information.

Investments in Affiliates

Investments in affiliated companies of which the Company owns 20% or more are accounted for using the equity method. Accordingly, consolidated net loss includes the Company's share of the net losses of those companies. Investments in affiliated companies of which the Company owns less than 20% are carried at cost. The Company makes periodic evaluations of the recoverability of its investments in affiliates based upon internal and external events affecting the expected realization of the Company's investment.

Revenue Recognition

In accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements," the Company recognizes revenue when products are shipped and all four of the following criteria are met: (i) persuasive evidence of arrangements exists; (ii) delivery has occurred; (iii) the Company's price to the buyer is fixed or determinable; and (iv) collectibility is reasonably assured. The Company performs periodic evaluations of its customers' financial condition, maintains a reserve for potential credit losses, and adjusts the reserve periodically to reflect both actual and potential credit losses. In addition, such allowances provide for returns resulting from stock balancing agreements and price protection programs. Product warranties are based on the ongoing assessment of actual warranty expenses incurred.

Stock Based Compensation

The Company has elected to use the intrinsic value method under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", as permitted by Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), subsequently amended by SFAS 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" to account for stock-based awards issued to its employees. Accordingly, no accounting recognition is given to stock options granted at fair market value until they are exercised. Compensation expense related to employee stock options is recorded if, on the date of grant, the fair value of the underlying stock exceeds the exercise price. The Company did not maintain adequate supporting documentation necessary in order to provide stock option financial statement disclosures required under accounting principles generally accepted in the United States of America, including SFAS 123 and 148. See the Company's Form 10-K filed on December 20, 2004, Note 9 of the notes to consolidated financial statements included in Item 8, for more information regarding stock options.

Concentration of Risk

Financial instruments, which potentially subject the Company to concentration of risk, consist principally of trade and other receivables. In the ordinary course of business trade receivables are with a large number of customers, dispersed across a wide North American geographic base. The Company extends credit to customers in the ordinary course of business and periodically reviews the credit levels extended to customers, estimates the collectibility of accounts and creates an allowance for doubtful accounts, as needed. The Company does not require cash collateral or other security to support customer receivables. Provision is made for estimated losses on uncollectible accounts.

Allowance for Doubtful Accounts

The Company makes ongoing assumptions relating to the collectibility of accounts receivable in the calculation of the allowance for doubtful accounts. In determining the amount of the allowance, the Company makes judgments about the creditworthiness of customers based on ongoing credit evaluations and assesses current economic trends affecting our customers that might impact the level of credit losses in the future and result in different rates of bad debts than previously incurred. The Company also considers the historical level of credit losses. The Company's reserves historically have been adequate to cover actual credit losses.

Accounts receivable includes allowances for doubtful accounts of $0.3 million as of July 31, 2004 and $0.1 million as of October 31, 2003.

Inventories, net

Inventories are stated at the lower of cost or market. Cost is computed on a currently adjusted standard cost basis (which approximates average cost) for both finished goods and work-in-process and includes material, labor and manufacturing overhead costs.

Inventories consisted of the following (in thousands):

July 31,
2004

October 31,
2003

(unaudited)

Purchased parts and subassemblies

440

646

Work-in-process

177

790

Finished goods

575

2,260

1,192

3,696

Accrued Warranty and Related Costs

The warranty periods for the Company's products are generally between one and three years from the date of shipment. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, its warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage, or service delivery costs differ from the estimates, revisions to the estimated warranty accrual and related costs may be required. The Company assesses the adequacy of its warranty liability at least quarterly and adjusts the amounts as necessary based on actual experience and changes in future expectations.

The following table reconciles changes in the Company's accrued warranty, which is included in accrued expenses and related costs for the nine-month period ended July 31, 2004 (unaudited, in thousands):

Beginning accrued warranties and related costs	$	57
Warranties accrued		49
Warranties settled		(47)
Ending accrued warranties and related costs	$	59

Accumulated Other Comprehensive Income

The only component of accumulated other comprehensive income is an unrecognized gain from CNET stock owned by the Company. Accumulated other comprehensive income, net of tax, was approximately $0.2 million as of October 31, 2003. As of July 31, 2004, all CNET shares were sold, and no other comprehensive income was recorded.

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 151 ("SFAS 151"), "Inventory Costs, an amendment of ARB No. 43, Chapter 4". The amendments made by SFAS 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004. The Company has evaluated the impact of the adoption of SFAS 151, and does not believe the impact will be significant to the Company's overall results of operations or financial position.

In December 2004, the FASB issued SFAS No.123 (revised 2004) ("SFAS 123R"), "Share-Based Payment". SFAS 123R will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. SFAS 123R covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. SFAS 123R replaces SFAS 123, "Accounting for Stock-Based Compensation", and supersedes Accounting Principles Board Opinion No. 25 ("Opinion 25"), "Accounting for Stock Issued to Employees". SFAS 123, as originally issued in 1995, established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, SFAS 123 permitted entities the option of continuing to apply the guidance in Opinion 25, as long as the footnotes to financial statements disclosed what net income would have been had the preferable fair-value-based method been used. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. The Company has not yet determined which transition method will be adopted for the recognition of the stock based compensatory expense.

NOTE 2. RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its consolidated financial statements for the fiscal years ended October 31, 2001 and 2002 and for the quarters ended January 31, 2001 through July 31, 2003. All applicable financial information contained in this Form 10-Q gives effect to these restatements. Accordingly, the consolidated financial statements for those periods described above that have been included in the Company's previous filings with the SEC in 2003 or earlier or included in previous announcements in 2003 or earlier should not be relied upon.

The net effect of the restatement adjustments applicable to periods reported in this Form 10-Q is to increase the Company's net loss by $0.1 million, or $0.01 per share, for the quarter ended July 31, 2003. The Company's consolidated statements of cash flows have been restated to reflect changes in assets and liabilities resulting from restatement adjustments during the period as discussed above. The Company's Form 10-K for the fiscal year ended October 31, 2003, filed with the SEC on December 20, 2004, describes the net effect of other adjustments made pursuant to the restatement.

The information contained in these condensed consolidated financial statements (unaudited) should be read in conjunction with the relevant information contained in that Form 10-K.

NOTE 3. COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial and other resources.

The Company has been named as a defendant in a lawsuit filed in the normal course of its business. In the opinion of management, after consulting with legal counsel, the liabilities, if any, resulting from this matter will not have a material effect on the consolidated financial statements of the Company. In November 2004, the lawsuit was settled in the Company's favor.

NOTE 4. LINE OF CREDIT

In May 2001, the Company obtained a line of credit, payable on demand, from Gemma Hwang ("Mrs. Hwang"), the spouse of the Company's CEO and majority stockholder, Dr. K. P. Hwang, in the amount of $3.5 million. The Company can borrow money under this line of credit when needed in order to assure the continuity of the operations. The Company granted to Mrs. Hwang a security interest in the following described property as collateral for the line of credit:

15,278 shares of the common stock of Xeline (Keyin Telecom);
45,000 shares of the common stock of Biomax;
285,714 shares of the common stock of Synertech;
30% from the TeleVideo Ningbo China equity;
any and all intellectual property of TeleVideo, including but not limited to patents, hardware and software engineering documents;
any and all trademarks, trade names and intangible assets of TeleVideo.

Under this line of credit, which bears interest at prime plus one percent per annum, the Company received $0.3 million in June 2001, $0.5 million in July 2001, $0.5 million in September 2001, $0.5 million in December 2001, $0.5 million in April 2002, $0.5 million in October 2002, $0.5 million in April 2003 and $0.2 million in June 2003. In November 2001, the Company paid back approximately $0.5 million from this loan by giving its interest in Alpha Technology and the proceeds from the Koram investment. Starting in May 2003, the interest for this note began to be accrued, rather than paid, as agreed between the Company and Mrs. Hwang.

In November 2003, Gemma Hwang agreed to increase the maximum credit amount for the note payable from $3.5 million to $4.0 million, all other conditions remaining the same. Under the new agreement, the Company borrowed $0.3 million in November 2003 and $0.5 million in December 2003. As of July 31, 2004, the balance of the loan was $4.2 million, including principal of $4.0 million and accrued interest of approximately $0.2 million, and the interest rate was 5.25%.

NOTE 5. RELATED PARTY TRANSACTIONS

The Company's CEO, Dr. K. Philip Hwang, is a 5% shareholder of TeleMann, Inc., a subsidiary of Global Telemann Systems, Inc. ("GTS"), a privately held company. Starting in 1999, GTS subleased a portion of the building located at 2345 Harris Way from the Company. From January 2001 to November 2004, GTS was unable to pay the monthly rental obligations under the lease agreement. In the first quarter of fiscal year 2004, the Company agreed to loan GTS up to $0.2 million, with an annual interest rate of 6%. In the first and second quarters of fiscal year 2004, GTS borrowed a total of $0.2 million. In the third quarter of fiscal 2004, the Company agreed to increase the maximum amount of this loan to $250,000, and GTS borrowed an additional $20,000. The loan was personally guaranteed by the Company's CEO, Dr. K. Philip Hwang, and was expected to be paid back by July 31, 2004. As of July 31, 2004, the balance of the loan was of approximately $0.2 million.
Additionally, the Company has entered into a line of credit agreement with a related party. See Note 4 for more information regarding this transaction.

NOTE 6. INVESTMENTS IN AFFILIATES

Cost Method

mySimon, Inc.
In September 1998, the Company invested $1.0 million in the online comparison shopping Internet company, mySimon, Inc., receiving convertible preferred stock. In February 2000, CNET Networks, Inc. (formerly, CNET, Inc.) completed the acquisition of mySimon, Inc. As a result of this acquisition, the Company received 375,108 shares of common stock of CNET Networks, Inc. ("CNET") in exchange for 100% of its interest in mySimon, Inc. In connection with this transaction, the Company adjusted its consolidated balance sheet to reflect the conversion to a marketable security.

~~mySimon~~Biomax Co., ~~Inc~~Ltd.
On May 12, 2000, the Company purchased, for a cash investment of approximately $0.9 million, an aggregate of 45,000 ordinary shares of Biomax Co., Ltd. ("Biomax"). Biomax was a startup company, with its principal offices located in Seoul, Korea, engaged in developing an herbal product to help lower cholesterol levels in humans. Its existing technology was developed by and obtained from the Korea Research Institute of Bioscience and Biotechnology. The Company's investment in Biomax represents a 15% interest in this privately held corporation. The fair market value of this investment was estimated at approximately $0.1 million as of July 31, 2004.

InXeline ~~September~~(Keyin) ~~1998, the~~Telecom ~~Company invested $1 million in the online comparison shopping Internet company, mySimon, Inc~~Co., ~~receiving convertible preferred stock~~Ltd.
On May 12, 2000, the Company purchased for approximately $2.5 million an aggregate of 15,278 ordinary shares of Xeline (Keyin) Telecom Co. Ltd. ("Xeline"). Xeline is a private company located in Seoul, Korea, that is engaged in developing power line technology for electricity transportation. The Company's investment in Xeline represents a 5.75% interest in this corporation. The market value of this investment was estimated at approximately $0.2 million as of April 30, 2004.

OnNOTE ~~February 29, 2000, CNET Networks, Inc~~7. ~~(formerly,~~SEGMENT CNET, Inc. or "CNET") completed the acquisition of mySimon, Inc. As a result of this acquisition, the Company received 375,108 shares of common stock of CNET in exchange for 100% of its interest in mySimon, Inc. During same period of time, the Company also adjusted its balance sheet to reflect the conversion to a marketable security. The cost method used to book the investment in mySimon was changed to market value method in accordance with SFAS 115 to record the investment in CNET stock. REPORTING

~~During~~The ~~the~~Company, ~~fiscal year~~which ~~2000~~operates ~~and~~in ~~2001~~a single operating segment, ~~the~~designs, produces, and markets high performance thin client network devices and terminals designed for office and home automation both domestically and internationally. The Company ~~recognized~~maintains ~~gains~~all ~~from~~assets in the ~~sales~~United States of ~~CNET~~America. ~~stocks~~ The Company's chief executive officer reviews a single set of ~~$10.1 million~~financial data that encompasses the Company's entire operations for purposes of making operating decisions and ~~$0.3 million~~assessing ~~respectively~~performance.

OnTeleVideo ~~June 6~~had export sales, ~~2003~~ primarily to Europe, ~~the~~Asia ~~Company~~and ~~owned~~Latin America, of approximately 32$0.1 million in the third quarter of fiscal year 2004,~~500~~ ~~shares~~representing 2% of ~~CNET~~total ~~common~~net ~~stock~~sales, and $0.2 million in the ~~market~~ ~~value~~third ~~was~~quarter ~~approximately~~of ~~$5.80~~fiscal ~~per~~year ~~share~~2003, representing 10% of total net sales.

~~Koram~~The Company's sales are represented in principal by our two main products, ~~Inc~~thin clients and terminals. Below is the break-out of sales of these products for each of the three and nine months ended July 31, 2004 and 2003, (unaudited, in thousands):

~~In February 1998,~~ ~~the~~ Three ~~Company~~Months ~~purchased~~Ended aJuly ~~50%~~31, Nine ~~interest~~Months inEnded ~~Koram,~~July ~~Inc~~31, Product 2004 2003 2004 2003 (As aRestated) (As ~~Korean restaurant venture.~~Restated) ~~During~~ Thin ~~2000~~client $ 1, ~~the Company decided to discontinue its participation in this joint~~910 ~~venture. The Company's venture partner agreed to transfer the funds for our~~ ~~participation into the TeleVideo account when the exchange rate Korean Won and~~$ ~~US Dollar will be the most advantageous. Also~~ 1, ~~the Company changed its method of accounting for this investment to cost method. No~~543 ~~difference in the value of this investment was recorded as result of the~~ ~~change from the equity accounting method to the cost accounting method.~~ $ 6,268 $ 4,018 Terminals 370 694 1,126 1,580 Others 50 17 66 100 Total $ 2,330 $ 2,254 $ 7,460 $ 5,698

InNOTE ~~November 2001, the Company decided to pay back a portion from the Gem Management's loan with the funds deposited in Korea, which were in a total amount of approximately $64,000~~8. ~~Before~~SUBSEQUENT ~~the transaction, the Company owed Gem Management $1.5 million, bearing an annual interest of 8%.~~ EVENTS
~~Biomax~~Sale ~~Co,~~of ~~Ltd.~~Thin Client Business
In January 2005, the Company entered into a definitive agreement with Neoware, Inc. ("Neoware"), one of its competitors, under which Neoware will acquire the Company's thin client business including all thin client assets, certain contract obligations, a trademark license, product brands, customer lists, customer contracts and non-competition agreements for $5 million in cash plus a potential earn-out based upon performance. In addition, starting January 12, 2005, TeleVideo has retained Neoware as its exclusive distributor and sales agent and all TeleVideo thin client products are available directly from Neoware. The transaction is subject to regulatory approval, and the acquisition is expected to close in March 2005.

OnBuyback ~~May 12, 2000, the Company purchased for a cash investment~~ of ~~$917,431~~Headquarters ~~an aggregate of~~Property 45,000 ordinary shares of Biomax Co., Ltd. ("Biomax"). Biomax is a startup company, with its principal offices located in Seoul, Korea, engaged in developing an herbal product to help lower cholesterol levels in humans. Its existing technology was developed by and obtained from the Korea Research Institute of Bioscience and Biotechnology. The Company's investment in Biomax represents a 15% interest in this privately held corporation.
In February 2004, the Company entered into an agreement to buy back the property located in San Jose, California. Pursuant to a Purchase and Sale Agreement dated February 25, 2004, the Company purchased all the membership interests in TVCA, Inc. from affiliates of its landlord, Bentley Forbes. The transaction was consummated on August 9, 2004. TVCA, Inc. is the entity that owns the property at which the Company's headquarters are located. As consideration for the membership interests in TVCA, Inc., the Company paid an amount of $1.00. In addition to owning the property at 2345 Harris Way, TVCA, Inc. is also obligated under a certain non-recourse promissory note in the principal amount of $9,240,000 for which the property serves as security.

      ~~The~~ITEM ~~agreement gives the Company the right to nominate one member to the Biomax Board of Directors~~2. ~~Dr. K. Philip Hwang, the Company~~MANAGEMENT'sS ~~Chairman~~DISCUSSION ofAND ~~the~~ANALYSIS ~~Board~~OF ~~and Chief~~FINANCIAL ~~Executive~~CONDITION ~~Officer,~~AND ~~was~~RESULTS ~~nominated~~OF ~~and elected to the Biomax board.~~ OPERATIONS
      The ~~Company~~following ~~has the~~discussion ~~right~~should tobe ~~participate~~read in ~~future~~conjunction ~~sales~~with ofour ~~Biomax~~unaudited ~~securities~~condensed toconsolidated ~~maintain~~financial ~~its proportionate~~statements ~~interest~~and related notes included elsewhere in ~~Biomax~~this report on Form 10-Q. This Inreport on Form 10-Q contains forward-looking statements within the ~~event~~meaning of Section 21E of the ~~Company~~Securities ~~wants~~Exchange toAct ~~sell~~of ~~all~~1934, ~~or a~~as ~~portion~~amended, and Section 27A of ~~its~~the ~~shares~~Securities Act of 1993, itas ~~has~~amended. The ~~given~~words ~~Biomax~~"expects," "anticipates," "believes," "intends," "plans" and ~~Biomax's~~similar ~~President~~expressions identify forward-looking statements. In addition, ~~who~~any ~~is its~~statements ~~controlling~~which ~~shareholder~~refer to expectations, aprojections ~~right~~or other characterizations of ~~first~~future ~~refusal~~events or circumstances are forward-looking statements. We undertake no obligation to ~~purchase~~publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this Form 10-Q with the ~~shares~~Securities and Exchange Commission. ~~The~~ These ~~controlling~~forward-looking ~~shareholder~~statements ~~also~~are ~~must~~subject ~~obtain~~to ~~the~~risks ~~Company's~~and ~~prior~~uncertainties, ~~written consent~~including, without limitation, those discussed below in ~~order~~"Risk toFactors." Accordingly, ~~sell~~our ~~over~~future ~~10%~~results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Our fiscal year ends on the actual calendar month end of ~~Biomax~~October 31.
      ~~Biomax~~Restatement ~~also agreed to discuss with the Company certain specified kinds~~ of ~~events~~Financial and transactions that could materially impact Biomax's business, capital structure and financial condition. The agreement further prohibits Biomax from sharing its technology with third parties or assisting with research and development efforts of third parties without the prior written consent of the Company, other than in the normal course of business, and further prohibits the controlling shareholder from engaging in businesses that could compete with Biomax. The restrictions and promises in the agreement will terminate at such time as the Company has sold at least 70% of the shares it acquired under the agreement. Statements

~~The financial~~We ~~statements~~have ~~received~~restated ~~from~~our ~~Biomax~~consolidated ~~reports~~financial ~~sales~~statements offor $the ~~0.1~~fiscal ~~million~~years ~~and~~ended aOctober ~~net~~31, ~~loss~~2001 ~~of approximately~~and ~~$0.1 million~~2002 and for the ~~first~~quarters ~~three~~ended ~~months~~January of31, ~~the~~2001 ~~year~~through July 31, 2003. ~~The accumulated~~All ~~net~~applicable ~~loss~~financial ~~from~~information contained in this Form 10-Q gives effect to these restatements. Accordingly, the ~~start~~financial ofstatements for those periods described above that have been included in our previous filings with the ~~business~~Securities isand Exchange Commission ("SEC") in ~~amount~~2003 ~~of approximately~~or $1earlier or included in previous announcements in 2003 or earlier should not be relied upon.~~0 million.~~

~~Total~~Our ~~assets~~Form ~~were in~~10-K ~~amount~~for ofthe ~~approximately~~fiscal ~~$1.0 million~~year ~~and~~ended ~~total~~October ~~liabilities~~31, ~~were~~2003, ~~of approximately~~filed ~~$0.4 million~~with atthe ~~March 31~~SEC on December 20, ~~2003~~2004, ~~resulting~~contains ~~total stockholders'~~restated ~~equity~~information infor ~~amount~~all of ~~approximately~~the $0above mentioned periods.~~7 million.~~ ~~Considering that~~The ~~Televideo~~restatement ~~interest~~is discussed in ~~this~~the ~~company~~Form is10-K, ~~15%~~Item 6, ~~the~~"Selected ~~fair~~Financial ~~market~~Data," ~~value~~Item 7, "Management's Discussion and Analysis of ~~this~~Financial Condition and Results of Operations ~~investment~~- ~~was~~Restatement ~~estimated~~of atFinancial ~~approximately~~Statements," ~~$0.1 million~~Notes at2 ~~July~~and 3115 of the notes to consolidated financial statements included in Item 8, ~~2003~~and Item 9A, "Controls and Procedures. "

InThe ~~reaching~~information contained in this ~~valuation,~~ ~~TeleVideo~~Form ~~considered~~10-Q ~~the~~should ~~following~~be ~~factors:~~read ~~the~~in ~~company's~~conjunction ~~shares are~~with ~~not~~the ~~publicly~~relevant ~~traded,~~information ~~there~~contained ~~have~~in ~~been~~that noForm ~~known~~10-K. ~~recent~~The ~~transactions~~net ineffect of the ~~company's~~ ~~shares,~~restatement noadjustments ~~financial~~applicable ~~projections~~to ~~are~~periods ~~available~~reported ~~from~~in ~~the~~this ~~company's management,~~Form ~~and~~10-Q ~~prior~~is ~~operating~~to ~~results~~increase ~~have~~our ~~been~~net ~~negative~~loss by approximately $0.1 ~~Therefore~~million, ~~in accordance~~or ~~with~~$0.01 ~~the~~per ~~valuation~~share, ~~methodology~~for ~~adopted~~the byquarter ~~TeleVideo~~ended July 31, ~~this~~2003. ~~company~~Our ~~has~~ consolidated statements of cash flows have been ~~valued~~restated onto areflect ~~pro-rata~~changes ~~share~~in ofassets ~~stockholders'~~and ~~equity~~liabilities ~~basis~~resulting from restatement adjustments during the period as discussed above. ~~The~~Our ~~company reported~~Form ~~tangible~~10-K ~~assets~~for ofthe ~~$456~~fiscal year ended October 31,~~000~~ ~~against~~2003, afiled ~~most~~with ~~recent~~the ~~quarterly~~SEC ~~loss~~on ~~of $64~~December 20,~~000.~~ ~~This~~2004, ~~information~~describes ~~further supports~~ the ~~choice~~net effect of ~~the~~other ~~stockholders'~~adjustments ~~equity~~made ~~method~~pursuant ~~and~~to the ~~valuation derived therefrom~~restatement.

~~Xeline (Keyin) Telecom Co. Ltd.~~ Overview

OnWe ~~May 12, 2000,~~continue to focus our efforts toward providing high-performance Windows-based terminals to the ~~Company~~business ~~purchased~~and ~~for~~consumer $2markets. In recent years,~~522,972~~ anwe ~~aggregate~~have ofphased ~~15,278~~out ~~ordinary shares~~the sale of ~~Xeline~~multimedia ~~(Keyin)~~products ~~Telecom~~and ~~Co.~~monitors ~~Ltd.~~to ~~("Xeline").~~focus ~~Xeline~~on isutilizing aour ~~private company~~expertise ~~located~~in server-based network computing to forge new ground in ~~Seoul,~~delivering ~~Korea~~thin-client solutions. In November 1998, ~~which~~we islaunched ~~engaged~~our Windows-based terminal products. We face strong competition in ~~developing~~the ~~power~~marketplace ~~line technology~~and continue to look for ~~electricity~~ways ~~transportation~~to improve operating efficiency. ~~The~~To ~~Company's~~lower ~~investment~~the inproduction ~~Xeline represents~~costs, awe ~~5.75%~~have ~~interest~~continued into ~~this~~negotiate ~~corporation~~with suppliers and have also shifted many production processes overseas to subcontractors.

~~The~~Recent Company has the right to participate in future sales of Xeline securities to maintain its proportionate interest in Xeline. In the event the Company wants to sell all or a portion of its shares, it has given Xeline and its controlling shareholder, who is also its President and Chief Executive Officer, a right of first refusal to purchase the shares. Events

~~Xeline~~In ~~also~~November ~~agreed to~~2003, ~~keep~~we increased the ~~Company~~maximum ~~expressly~~amount ~~advised~~of ~~regarding~~our ~~certain~~line ~~specified~~of ~~kinds~~credit ~~of events~~with ~~and~~Gemma ~~transactions~~Hwang, ~~that~~who ~~could~~is ~~materially~~the ~~impact~~spouse ~~Xeline~~of the Company's ~~business, capital~~CEO ~~structure~~ and ~~financial~~majority ~~condition~~stockholder, Dr. K. ~~Xeline~~P. ~~has~~Hwang, ~~agreed~~from ~~that~~$3.5 itmillion ~~will~~to ~~not transfer~~$4.0 ~~its~~million, ~~power~~and ~~line~~borrowed ~~communications~~an ~~("PLC")~~additional ~~technology~~$0.8 tomillion aunder ~~third~~this ~~party without~~line ~~the~~of ~~prior~~credit. ~~written~~In ~~consent~~December ~~of the Company~~2003, ~~except~~Gemma inHwang ~~the~~refused ~~context~~to ofextend ~~a strategic~~additional ~~technology~~funding ~~transfer~~to ~~agreement~~us. ~~approved~~As byof ~~the~~April ~~Xeline~~30, ~~Board.~~2004, ~~The restrictions~~the ~~and~~credit ~~promises~~line inwith ~~the~~Gemma ~~agreement~~Hwang ~~will~~was ~~terminate~~fully atutilized, ~~such~~having ~~time~~a asbalance ~~the Company~~of ~~has~~approximately ~~sold~~$4.2 atmillion, ~~least~~including ~~70%~~approximately of$4.0 ~~the~~million ~~shares~~principal itand ~~acquired~~approximately ~~under~~$0.2 ~~the~~million ~~agreement~~accrued interest.

~~The~~On ~~investment agreement~~January ~~also~~10, ~~contemplates~~2004, ~~that~~the ~~TeleVideo~~sublease ~~will~~agreement ~~participate~~with inour atenant ~~strategic alliance~~ended, ~~with~~and, ~~Xeline~~as ~~under~~a ~~the~~result, ~~terms~~cash ofinflow ~~which~~was ~~TeleVideo~~significantly ~~will~~reduced. ~~support~~Consequently, ~~Xeline~~we ~~in its~~were ~~overseas~~unable ~~marketing~~to ~~and~~fulfill ~~sales~~our ~~activities~~obligations ~~related~~under tothe ~~Xeline's~~lease ~~PLC~~agreement ~~technology.~~for Inthe ~~addition,~~headquarters ~~TeleVideo and~~building. ~~Xeline~~During ~~will~~the ~~cooperate~~following tofour ~~incorporate~~months, ~~Xeline's~~we ~~PLC~~made ~~technology~~payments ~~into TeleVideo's~~to ~~computer~~compensate ~~products,~~the ~~including~~landlord for the ~~Tele-Client~~use ~~series~~of the property. The ~~parties contemplate~~payments ~~entering~~were ~~into~~an aaverage ~~separate~~of ~~sale~~$30,000 ~~and~~per ~~marketing~~month, ~~agreement~~as compared to ~~more fully~~monthly ~~document~~obligations ~~the~~of ~~terms~~approximately ~~and~~$120,000 ~~conditions~~according to the terms of the ~~strategic~~lease ~~relationship~~agreement.

~~The~~In ~~financial~~January ~~statements sent~~2004, towe ~~the~~sold ~~Company~~all byof ~~Xeline~~our ~~reports~~shares ~~sales~~ of ~~approximately~~CNET ~~$36,000 and~~common astock ~~net~~and ~~loss~~the proceeds of approximately $0.3 million ~~for~~were ~~the~~used ~~first~~for ~~four~~regular ~~months of the year 2003. The accumulated net loss from the start of the~~ business ~~is of approximately $4~~activities.~~0 million.~~

~~Total~~On ~~assets~~August ~~were~~ 9, 2004, we purchased all the membership interests in ~~amount~~TVCA, Inc. from affiliates of ~~approximately~~its $9landlord, Bentley Forbes.~~3 million~~ TVCA, ~~and~~Inc. ~~total~~is ~~liabilities~~the ~~were~~entity that owns the property at which our headquarters are located. As consideration for the membership interests in TVCA, Inc., we paid an amount of ~~approximately~~ $61.~~5 million~~00. In addition to owning the property at ~~June 30~~2345 Harris Way, ~~2002~~TVCA, ~~resulting~~Inc. ~~total stockholders'~~is ~~equity~~also obligated under a certain non-recourse promissory note in the principal amount of ~~approximately~~ $29,240,000 for which the property serves as security.~~8 million.~~ This ~~Considering that~~transaction ~~Televideo~~will ~~interest~~be recorded in ~~this~~August ~~company~~2004 isand ~~5.75%,~~will affect the ~~fair~~following ~~market~~balance ~~value~~sheet ofcaptions: property, ~~this investment~~note ~~was~~receivable, ~~estimated~~obligation atunder ~~approximately~~capital ~~$0.2 million~~lease, atnote ~~July 31~~payable, ~~2003~~deferred gain and deferred rent.

InCritical ~~reaching~~Accounting this valuation, TeleVideo considered the following factors: the company's shares are not publicly traded, there have been no known recent transactions in the company's shares, no financial projections are available from the company's management, and prior operating results have been negative. Therefore, in accordance with the valuation methodology adopted by TeleVideo, this company has been valued on a pro-rata share of stockholders' equity basis. For the most recent period for which TeleVideo has financial results, the company recorded a loss in excess of its gross sales for the period. Based on this result, any analysis other than the stockholders' equity method would result in a negative value for the business. However, the company has $1.8 million in current assets, which lends support to its stockholders' equity figure.Policies

~~MultiMedia SOC, Inc. (formerly described as~~Warranty ~~Synertek, Inc.)~~
We generally offer a one-year to three-year warranty on all products. A liability is recorded based on estimates of the costs that may be incurred under the warranty obligations and a charge is made to cost of product revenues. While we engage in product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, the warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. Estimates of anticipated rates of warranty claims and costs per claim are primarily based on historical information and future forecasts. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. If actual warranty claims are significantly higher than forecast, or if the actual costs incurred to provide the warranty is greater than the forecast, the gross margins could be adversely affected.

InRevenue ~~June 2000, the~~Recognition Company purchased for $1,000,000 in cash an aggregate of 285,714 shares of common stock of MultiMedia SOC, Inc. (formerly described as Synertek, Inc.), a Nevada corporation, representing an 8% interest in this company. MultiMedia SOC, Inc. manufactures and sells handheld digital multimedia and communications appliances.
In accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements," we recognize revenue when products are shipped and all four of the following criteria are met: (i) persuasive evidence of arrangements exists; (ii) delivery has occurred; (iii) our price to the buyer is fixed or determinable; and (iv) collectibility is reasonably assured. We perform periodic evaluations of customers' financial condition, maintain a reserve for potential credit losses, and adjust the reserve periodically to reflect both actual and potential credit losses. In addition, such allowances provide for returns resulting from stock balancing agreements and price protection programs. Product warranties are based on the ongoing assessment of actual warranty expenses incurred.

~~The~~Allowance ~~financial statements sent to the Company by MultiMedia SOC, Inc. report sales of approximately $0.2 million and a net loss of approximately $0.9 million~~ for ~~the~~Doubtful ~~year 2002. The accumulated net loss recorded from the start of the business~~Accounts ~~is approximately $1.9 million.~~
We make ongoing assumptions relating to the collectibility of accounts receivable in the calculation of the allowance for doubtful accounts. In determining the amount of the allowance, we make judgments about the creditworthiness of customers based on ongoing credit evaluations and assess current economic trends affecting our customers that might impact the level of credit losses in the future and result in different rates of bad debts than previously incurred. We also consider the historical level of credit losses. Our reserves historically have been adequate to cover actual credit losses.

~~Total~~Deferred ~~assets were~~Taxes in amount of approximately $1.9 million at the end of 2002. Total liabilities were approximately $0.2 million, resulting total stockholders' equity in amount of approximately $1.7 million. Considering that TeleVideo's interest in this company is 8%, the fair market value of this investment was estimated at approximately $0.1 million at the end of fiscal 2002.
We account for income taxes using the asset and liability method in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A deferred tax valuation allowance is provided for deferred tax assets when it is determined that it is more likely than not that amounts will not be recovered.

~~In reaching this~~Inventories valuation, TeleVideo considered the following factors: the company's shares are not publicly traded, there have been no known recent transactions in the company's shares, no financial projections are available from the company's management, and prior operating results have been negative. Therefore, in accordance with the valuation methodology adopted by TeleVideo, this company has been valued on a pro-rata share of stockholders' equity basis. This method values the company at approximately $1.7 million.
Inventories are stated at the lower of cost or market. Cost is computed on a currently adjusted standard cost basis (which approximates average cost) for both finished goods and work-in-process and includes material, labor and manufacturing overhead costs. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors.

~~MultiMedia SOC~~Results ~~has signed a termsheet for a substantial investment by a third party. The amount~~ of the investment, the terms, and the implied valuation of MMSOC are confidential. If the investment is not consummated, there is a high likelihood that MMSOC will become insolvent and dissolve. TeleVideo is unable to make an assessment of what the dollar value of its proportionate share of the recovery, if any, would be. This information further supports the choice of the stockholders' equity method and the valuation derived therefrom. Operations

~~Because~~The ~~the~~following ~~investment~~table ~~was~~sets ~~not consummated,~~forth ~~the~~for ~~Company expects that MMSOC will become insolvent and will dissolve in~~ the ~~near~~periods ~~future,~~indicated ~~and~~our noresults ~~proceeds are expected from this process. Consequently, the entire balance~~ of ~~approximately~~operations ~~$0.1~~expressed ~~million~~as ~~was~~a ~~written~~percentage ~~off as~~ of ~~July 31, 2003.~~ sales:

Three Months Ended July 31, Nine Months Ended July 31, 2004 2003 2004 2003 (As Restated) (As Restated) Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 80.0 97.1 77.5 87.9 Gross profit 20.0 2.9 22.5 12.1 Operating expenses: Sales and marketing 12.6 17.6 14.9 19.9 Research and development 5.3 7. ~~LETTER~~6 OF 5.6 ~~CREDIT~~ 9.7 ~~AGREEMENT~~ General and administration 20.0 18.9 18.3 21.9 Total operating expenses 37.9 44.1 38.8 51.5 Loss from operations (18.0) (41.2) (16.4) (39.5) Rental income - 10.8 2.2 13.0 Gain on CNET stock sale - - 2.7 - Equity in loss of affiliates - (17.4) - (16.0) Impairment losses on investment in affiliates - (6.1) - (3.6) Interest expenses, net (5.2) (3.8) (4.9) (4.3) Other income, net 5.9 3.7 5.8 7.2 Net loss (17.3) (54.0) (10.6) (43.3)

AtComparison ~~July 31,~~of ~~2003,~~Three ~~the~~Months ~~Company~~Ended ~~had~~July no31, ~~letters~~2004 ofand ~~credit agreements.~~ 2003
~~4. SALE~~Net ~~AND LEASEBACK OF BUILDING~~Sales
Net sales for the second quarter of fiscal year 2004 were approximately $2.3 million for the three months ended July 31, 2004 and 2003. Net sales of thin client products increased in the third quarter of fiscal year 2004 to approximately $1.9 million, from approximately $1.5 million for the same period in 2003. Net sales of terminal products decreased to approximately $0.4 million in the third quarter of fiscal year 2004, from approximately $0.7 million for the same period in 2003.

~~In December 1998,~~Cost the Company sold its main facility (land and building) for approximately $11.0 million and concurrently leased back this facility over a 15-year lease term expiring in December 2013. The land component has been recorded as an operating leaseback. The building element has been accounted for as a capital lease, whereby a leased building asset and capital lease obligation were recorded at the fair value of ~~approximately $6.27 million. As a result of the sale for $11.0 million (which includes a~~Sales $2.75 million note receivable) a deferred gain of approximately $8.0 million was recorded. The deferred gain attributable to the land element, which approximates $3.44 million, is being amortized over the 15 year lease life on a straight line method. The deferred gain attributable to the building element, which approximates $4.56 million, is being amortized over leased building asset life, which has been determined to be the 15 year lease term, on a straight line method.
Cost of sales was approximately $1.9 million in the third quarter of fiscal year 2004, compared to $2.2 million for the same period in 2003, a decrease of approximately $0.3 million or 15%. The decrease in cost of sales is due principally to old inventory of mobile electronics products being scrapped in the third quarter of fiscal year 2003, of approximately $0.4 million. As a percent of net sales, cost of sales was approximately 80% in the third quarter of fiscal year 2004, compared to approximately 97% for the same period in 2003.

~~The $2.75 million~~Gross ~~note receivable bears interest at 7.25% per annum.~~ Profit
Gross profit was approximately $0.5 million for the third quarter of fiscal 2004, compared to approximately $0.1 million for the same period in 2003, an increase of approximately $0.4 million, or 617%. The increase is due principally to old inventory of mobile electronics products being scrapped in the third quarter of fiscal year 2003, of approximately $0.4 million. As a percent of net sales, gross profit was approximately 20% in the third quarter of fiscal year 2004, compared to 3% for the same period in 2003.

~~Principal and~~Sales ~~accrued interest is payable in equal monthly installments of $21,735 each on the first day of each month commencing on January 1, 1999. If not earlier paid in full, any unpaid principal~~ and ~~all accrued interest is due and payable to TeleVideo, Inc. on December 1, 2013.~~ Marketing
Sales and marketing expenses were approximately $0.3 million for the third quarter of fiscal year 2004, compared to approximately $0.4 million for the same period in 2003, a decrease of $0.1 million or 26%. As a percent of net sales, sales and marketing expenses decreased to approximately 13% in the third quarter of fiscal year 2004, from approximately 18% for the same period in 2003. The decrease is due principally to the reduction of sales and marketing personnel during the fiscal year 2004.

~~In December 2000,~~Research ~~the~~and ~~Company subleased a part of it's headquarter space. The leasing agreement is for a period of three years, beginning January 2001 with a monthly rent~~Development ~~amount of approximately $81,000. This sublease will not affect the Company's manufacturing facilities.~~
Research and development expenses remained approximately the same with $0.1 million for the third quarter of fiscal year 2004, compared to approximately $0.2 million for the same period in 2003, a decrease of approximately $49,000, or 28%.

~~Under the~~General lease agreement, the sublessee is required to open a standby letter of credit in the TeleVideo favor in amount of $500,000. The letter of credit has an initial term of one year, beginning January 2001, and ~~this term was automatically extended until the end of the leasing contract, which is January 10, 2004.~~ Administrative

General and administrative expenses were approximately $0.5 million for the third quarter of fiscal year 2004, compared to approximately $0.4 million for the same period in 2003, an increase of $43,000 or 10%. The increase is due principally to expenses related to audit and restatement of our financial statements. As a percent of net sales, general and administrative expenses increased to approximately 20% for the third quarter of fiscal year 2004, compared to approximately 19% for the same period in 2003.

~~5. SUBSEQUENT~~Rental ~~EVENTS~~Income

Rental income was approximately $0.2 million in the third quarter of fiscal year 2003. Due to the termination of the sublease contract in January 2004, no rental income was recorded for the third quarter of fiscal year 2004.

~~On August 29,~~Equity ~~2003,~~in ~~TeleVideo~~Loss ~~announced that its board~~ of ~~directors has~~Affiliates terminated the merger agreement, dated as of November 26, 2002 by and between Homebound Acquisition, Inc., a Delaware corporation, and TeleVideo. A 8-K report and an amendment to the Schedule 13-E3 were filed on September 2, 2003.
Loss from investments was approximately $0.4 million in the third quarter of fiscal year 2003, due to the decrease of the estimated fair market value of these investments. No loss from investments was recorded in the third quarter of fiscal year 2004.

~~Table~~Interest ofExpenses, ~~Content~~net
Interest expenses were approximately $0.1 million during the third quarter of fiscal year 2004, consistent with the third quarter of fiscal year 2003.

Other Income ~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~
Other income was approximately $0.1 million during the third quarter of fiscal year 2004, consistent with the third quarter of fiscal year 2003.

~~COMPARISON~~Net ~~OF RESULTS FOR THE THREE MONTHS ENDED JULY 31,~~Loss ~~2003 AND THE THREE MONTHS ENDED JULY 31, 2002~~
In the third quarter of fiscal year 2004, we recorded a net loss of approximately $0.4 million, compared to a net loss of approximately $1.2 million for the same period in 2003, a decrease of approximately $0.8 million or 67%.

~~Net~~Comparison ~~sales for the third quarter~~ of ~~fiscal~~Nine ~~2003~~Months ~~were~~Ended ~~$2.3 million,~~July ~~compared with $2.1 million in the third quarter of fiscal 2002~~31, an2004 ~~increase of $0.2 million or 10%. The increase is due in principal to the supplemental revenue provided by our new TeleClient line of products, which are equipped with a new 533MHz microprocessor~~ and are offered as stand-alone or integrated units with 15 or 17 inch flat screen, with options like touch screen, Windows CE.Net, XP Embedded or Linux operating systems and 24-bit screen color resolution. The supplemental revenue provided by these new products was around $0.2 million.2003
~~Cost~~Net ~~of sales~~Sales was $2.2 million in the third quarter of fiscal 2003, compared with $1.7 million in the third quarter of fiscal 2002, an increase of $0.5 million or 29%. The increase is due in principal to the Alpha inventory scrapped in the third quarter of fiscal 2003, in amount of $0.4 million, and to the increase in the total net sales. Without the scrapped amount, the cost would increase by $0.1 million or 6%.
Net sales for the first nine months of fiscal year 2004 were approximately $7.5 million, compared to approximately $5.7 million for the same period in 2003, an increase of approximately $1.8 million, or 31%. The increase is due principally to higher demand for our thin client products, especially integrated models.
Net sales of thin client products increased in the first nine months of fiscal year 2004 to approximately $6.3 million, from approximately $4.0 million for the same period in 2003. Net sales of terminal products decreased to approximately $1.1 million in the first nine months of fiscal year 2004, from approximately $1.6 million for the same period in 2003.

~~Sales~~Cost ~~and marketing expenses were $0.4 million in the third quarter~~ of ~~fiscal 2003,~~Sales same as in the third quarter of fiscal 2002. As a percentage of net sales, sales and marketing expenses decreased to 17% in the third quarter of fiscal 2003, compared with 19% in the third quarter of fiscal 2002, due to the increase recorded in the total net sales.
Cost of sales was approximately $5.8 million in the first nine months of fiscal year 2004, compared to approximately $5.0 million for the same period in 2003, an increase of approximately $0.8 million or 15%. As a percent of net sales, cost of sales was approximately 78% in the first nine months of fiscal year 2004, compared to approximately 88% for the same period in 2003. The decrease of cost of sales as percentage of net sales is due principally to the cost of old inventory of mobile electronics products being scrapped in the third quarter of fiscal year 2003 of approximately $0.4 million.

~~Research~~Gross ~~and~~Profit development expenses were $0.2 million in the third quarter of fiscal 2003, same as in the third quarter of fiscal 2002. As a percentage of net sales, research and development expenses decreased to 9% in the third quarter of fiscal 2003, compared with 14% in the third quarter of fiscal 2002, due to the increase recorded in the total net sales.
Gross profit was approximately $1.7 million for the first nine months of fiscal year 2004, compared to approximately $0.7 million for the same period in 2003, an increase of approximately $1.0 million, or 144%. The increase is due principally to the cost of old inventory of mobile electronics products being scrapped in the third quarter of fiscal year 2003 of approximately $0.4 million and to the increase in thin client net sales. As a percent of net sales, gross profit was approximately 23% in the first nine months of fiscal year 2004, compared to approximately 12% for the same period in 2003.

~~General~~Sales and ~~administrative~~ ~~expenses were $0.4 million in the third quarter of fiscal~~Marketing 2003, same as in the third quarter of fiscal 2002. As a percentage of net sales, general and administrative expenses decreased to 17% in the third quarter of fiscal 2003 compared with 19% in the third quarter of fiscal 2002.
Sales and marketing expenses were approximately $1.1 million for the first nine months of fiscal year 2004, consistent with the first nine months of fiscal year 2003. As a percent of net sales, sales and marketing expenses decreased to approximately 15% in the first nine months of fiscal year 2004, from approximately 20% for the same period in 2003. The decrease is due principally to the reduction of sales and marketing personnel during the fiscal year 2004.

~~The~~Research ~~Company's loss~~and ~~from operations was approximately $0.9 million in the third quarter~~Development of fiscal 2003 compared with approximately $0.6 million in the third quarter of fiscal 2002. The increase is due in principal to the Alpha inventory scrapped in the third quarter of fiscal 2003, in amount of $0.4 million.
Research and development expenses were approximately $0.4 million for the first nine months of fiscal year 2004, compared to approximately $0.6 million for the same period in 2003, a decrease of approximately $0.1 million or 25%. The decrease is due principally to expenses in the first nine months of fiscal year 2003 in connection with the design, development and testing of management software for thin clients.

~~Other~~General ~~income was~~and ~~$0.4 million in the third quarter of fiscal 2003, same as in the third quarter of fiscal 2002.~~Administrative

General and administrative expenses were approximately $1.4 million for the first nine months of fiscal year 2004, compared to approximately $1.2 million for the same period in 2003, an increase of $0.1 million or 9%. As a percent of total net sales, general and administrative expenses decreased to approximately 18% for the first nine months of fiscal year 2004, compared to approximately 22% for the same period in 2003. The decrease as percentage of sales is due principally to the increase in total net sales, partially offset by expenses related to the audit and restatement of our financial statements.

~~Loss~~Rental ~~from investments~~Income ~~was $0.5 million in the third quarter of fiscal 2003, compared with a loss from investments of $0.1 million recorded in the third quarter of fiscal 2002.~~
Rental income was approximately $0.2 million and approximately $0.7 million in the first nine months of fiscal years 2004 and 2003, respectively. The decrease is due to termination of the sublease agreement in January 2004.

~~Net~~Gain ~~loss~~on ~~for the~~CNET ~~third~~Stock ~~quarter of fiscal 2003 was $1.1 million compared with a net loss~~Sales ~~of $0.4 million in the third quarter of fiscal 2002.~~
In the first nine months of fiscal 2004, we recorded a gain of approximately $0.2 million from the sale of CNET stock. No sale of marketable securities was made during the first nine months of fiscal 2003.

~~COMPARISON~~Equity OFin ~~RESULTS~~Loss ~~FOR~~of ~~THE NINE MONTHS ENDED JULY 31,~~Affiliates ~~2003 AND THE NINE MONTHS ENDED JULY 31, 2002~~
Loss from investments was approximately $0.9 million in the first nine months of fiscal year 2003, due to the decrease of the estimated fair market value of these investments. No loss or income from investments was recorded in the first nine months of fiscal year 2004.

~~Net~~Interest ~~sales for the first nine months of fiscal 2003 were $5.9 million~~Expenses, ~~compared with $5.8~~net million in the first nine months of fiscal 2002, an increase of $0.1 million or 2%. The increase is due in principal to the supplemental revenue provided by our new TeleClient line of products, which are equipped with a new 533MHz microprocessor and are offered as stand-alone or integrated units with 15 or 17 inch flat screen, with options like touch screen, Windows CE.Net, XP Embedded or Linux operating systems and 24-bit screen color resolution.
Interest expenses were approximately $0.4 million during the first nine month of fiscal year 2004, compared to approximately $0.2 million in the first nine months of fiscal year 2003, an increase of $0.1 million or 48%. The increase is due principally to additional interest for new amounts borrowed under the credit line with Gemma Hwang.

~~Cost~~Other ~~of sales~~Income was $5.2 million in the first nine months of fiscal 2003, compared with $4.5 million in the first nine months of fiscal 2002. The increase in cost is due in principal to the Alpha inventory scrapped in the third quarter of fiscal 2003, in amount of $0.4 million and to the lower gross margin, after the Company decreased the prices of thin client products in March 2003.
Other income was approximately $0.4 million during the first six months of fiscal year 2004, consistent with the same period in 2003.

~~Sales~~Net ~~and~~Loss marketing expenses were $1.1 million in the first nine months of fiscal 2003, compared with $1.2 million in the first nine months of fiscal 2002. As a percentage of net sales, sales and marketing expenses decreased to 19% in the first nine months of fiscal 2003 compared with 21% in the first nine months of fiscal 2002.
In the first nine months of fiscal year 2004, we recorded a net loss of approximately $0.8 million, compared to a net loss of approximately $2.5 million for the same period in 2003, a decrease of approximately $1.7 million, or 68%.

~~Research~~ Liquidity and ~~development~~ ~~expenses~~Capital were $0.6 million in the first nine months of fiscal 2003, compared with $0.5 million in the first nine months of fiscal 2002. The increase is due primarily to the supplementary expenses recorded with the software development for our products.Resources

~~General~~For ~~and administrative~~the ~~expenses~~nine ~~were~~month period ended July 31, 2004, net cash used in operating activities of $10.1 9 million was primarily attributable to a net loss from operations, a decrease in ~~the~~accounts ~~first~~payable ~~nine~~and ~~months~~an ofincrease ~~fiscal 2003~~in accounts receivable and prepaids, ~~compared~~partially ~~with~~offset $1by a decrease in inventories and an increase in accrued liabilities.3 ~~million~~The decrease in accounts payable was due principally to payments made during the ~~first~~period ~~nine~~for ~~months~~inventory acquired at the end of fiscal ~~2002.~~year As2003 ~~a percentage~~related to the replacement of ~~net~~our ~~sales~~old motherboard for thin clients, ~~general~~VIA, with a new motherboard, TRANSMETA, while decrease in inventory and ~~administrative~~increase ~~expenses~~in ~~decreased~~accounts receivable were due to ~~19%~~an increase in net sales. Prepayments were also made during the ~~first~~period to our suppliers in connection with purchase orders issued. The increase in accrued liabilities is related to unpaid lease obligation after we stopped payments in January 2004. For the nine ~~months~~month ofperiod ~~fiscal~~ended July 31, 2003, ~~compared~~net ~~with~~cash ~~23%~~used in operating activities of $1.0 million was primarily attributable to a net loss from operations and an increase in inventory, partially offset by a decrease in accounts receivable and prepaids and an increase in accounts payable. The lower inventory at the ~~first~~beginning ~~nine~~of ~~months~~fiscal 2003 was due principally to higher sales recorded at the end of fiscal year 2002. InThe ~~the~~decrease ~~second~~in ~~quarter~~accounts ofreceivable was due to payments received for sales made at the end of fiscal year 2002. For the ~~Company~~nine ~~prepared~~month ~~and held~~period ~~the~~ended ~~annual~~July ~~shareholders~~31, ~~meeting~~2004, ~~resulting~~net ~~higher~~cash ~~general~~provided by investing activities of approximately $0.1 million was represented by proceeds from CNET stock sold in January 2004 and ~~administrative~~ ~~expenses~~payments received for ~~that~~note ~~period~~receivable, partially offset by a loan granted to a related party. InFor the ~~fiscal~~nine month period ended July 31, 2003, ~~due~~net tocash ~~the~~provided ~~going~~by investing activities of approximately $0.1 million was represented by payments received for note receivable. ~~private~~For ~~process~~the nine month period ended July 31, 2004, net cash provided by financing activities of approximately $0.7 million was represented by amounts borrowed from Gemma Hwang for the ~~meeting~~line of credit, partially offset by payments for the lease agreement. For the nine months ended July 31, 2003, net cash provided by financing activities of approximately $0.5 million was ~~not~~represented ~~held~~by amounts borrowed from Gemma Hwang for the line of credit, partially offset by payments for the lease agreement.

~~The~~In ~~Company's loss~~March ~~from~~2000, ~~operations~~we ~~was~~received approximately $2375,000 shares of CNET common stock when CNET acquired mySimon, an internet company.~~1 million~~ inDuring fiscal 2000, we sold approximately 335,000 shares of CNET stock, the ~~first~~aggregate ~~nine~~proceeds ~~months~~ of which were $10,953,000. During fiscal ~~2003~~2001, ~~compared~~we ~~with~~sold approximately 8,000 shares of CNET stock for approximately $10.73 million. inIn ~~the~~January ~~first~~2004, ~~first nine~~we ~~months~~sold all remaining CNET shares of ~~fiscal~~stock ~~2002~~and the proceeds of approximately $0. 3 million were used for regular business activities.

~~Other~~In ~~income was~~December 1998, we sold our 69,360 square foot headquarters building in San Jose, California, including land and improvements, to TVCA, LLC, a Delaware limited liability company ("TVCA") unaffiliated with TeleVideo, for $111.0 million. Consideration consisted of $8.25 million in cash and a $2.75 million promissory note. The note bears interest at 7.25% per annum. Principal and accrued interest are payable in equal monthly installments of $21,735 on the first ~~nine~~day ~~months~~ of ~~fiscal~~each ~~2003~~month through December 1, ~~compared~~2013, with the remaining principal due at that time. $1We concurrently leased back this facility over a 15-year lease term expiring in December 2013.3 The land component has been recorded as an operating leaseback. The building component has been accounted for as a capital lease, whereby a leased building asset and capital lease obligation were recorded at the fair value of approximately $6.27 million. inAs a result of the ~~first~~ ~~nine~~sale ~~months~~for $11.0 million, a deferred gain of ~~fiscal~~approximately ~~2002~~$8.0 million was recorded. The deferred gain attributable to the land element, which approximates $3.5 million, is being amortized over the 15-year lease life using the straight-line method. The deferred gain attributable to the building element, which approximates $4.5 million, is being amortized over the leased building asset life, which has been determined to be the 15-year lease term, on a straight-line method.

~~The~~In ~~loss~~December ~~from~~2000, ~~investments was~~we ~~$1.1~~entered ~~million~~into ina ~~the~~lease ~~first~~agreement ~~nine~~to ~~months~~sublease a portion of ~~fiscal~~our ~~2003,~~main ~~compared~~facility ~~with~~to a ~~loss~~company ~~of $0~~unaffiliated with us.3 ~~million~~The inoperating sublease provided that the ~~first~~sublessee ~~nine~~pay ~~months~~taxes, ofmaintenance, ~~fiscal~~insurance ~~2002~~and other occupancy expense applicable to the subleased premises. The lease agreement expired on January 10, 2004 and was not renewed.

~~Net loss for~~Commitments the first nine months of fiscal 2003 was $2.2 million, compared with $1.0 million in the first nine months of fiscal 2002. The increase is due in principal to the loss from investments recoded in the first nine months of fiscal 2003 and to the Alpha inventory scrapped in the third quarter of fiscal 2003, in amount of $0.4 million.
On January 10, 2004, our sublease agreement with our tenant ended, and, as a result, cash inflow was significantly reduced. Consequently, we were unable to fulfill our obligations under the lease agreement for the headquarters building. During the following four months, we made payments to compensate the landlord for the use of the property. The payments were an average of $30,000 per month, as compared to monthly obligations of approximately $120,000 according to the terms of the lease agreement.

~~LIQUIDITY~~In ~~AND~~May ~~CAPITAL~~2001, ~~RESOURCES~~we obtained a line of credit from Gemma Hwang ("Mrs. Hwang"), the spouse of the Company's CEO and majority stockholder, Dr. K. P. Hwang, in the amount of $3.5 million. We can borrow money under this line of credit when needed, in order to assure the continuity of the operations. We granted Mrs. Hwang a security interest in the following described property as collateral for the line of credit:

Ata) ~~July 31~~15,278 ~~2003,~~shares of the ~~Company~~common ~~had $0.4 million~~stock inof ~~cash~~Xeline ~~and~~(Keyin ~~cash~~Telecom); ~~equivalents~~b) 45, ~~compared~~000 ~~with~~shares ~~$0.9 million at the end~~ of ~~fiscal 2002. The decrease is due in principal to~~ the ~~increase~~common instock ~~inventory value~~ of ~~approximately~~Biomax; ~~$0.1~~c) ~~million~~285,714 toshares ~~the~~of ~~increase in~~ the ~~prepayments~~common ~~amount~~stock of ~~$0.1~~Synertech; ~~million, to~~d) ~~the~~30% ~~increase~~from ofthe ~~accounts~~TeleVideo ~~receivable~~Ningbo inChina ~~amount~~equity; ~~of approximately~~e) ~~$0.1~~any ~~million~~ and toall ~~the~~intellectual ~~cash~~property ~~used~~of inTeleVideo, ~~operating~~including ~~activities.~~but ~~Net~~not ~~cash~~limited ~~used~~to inpatents, ~~operating~~hardware ~~activities was~~and ~~$1.0 million in~~software ~~the~~engineering ~~first~~documents; ~~nine~~f) ~~months~~any ofand ~~fiscal~~all ~~2003~~trademarks, ~~compared with~~trade ~~$0.7 million~~names ~~used~~and ~~for~~intangible ~~the~~assets ~~same~~of ~~period in fiscal 2002~~TeleVideo.

~~In December 1998~~Under this line of credit, ~~the~~which ~~Company~~bears ~~sold~~interest ~~its~~at 69prime plus one percent per annum,~~360~~ ~~square~~payable ~~foot~~monthly, ~~headquarters~~we ~~building~~received $0.3 million in ~~San~~June ~~Jose~~2001, ~~California,~~$0.5 ~~including~~million ~~land~~in ~~and~~July ~~improvements~~2001, to$0.5 ~~TVCA~~million in September 2001, ~~LLC~~$0.5 million in December 2001, an$0.5 ~~unaffiliated~~million ~~Delaware limited~~in ~~liability~~April ~~company~~2002, ~~("TVCA")~~$0.5 ~~for~~million in October 2002, $110.5 million in April 2003 and $0 .2 million in June 2003. ~~The~~In ~~nature~~November of2001, ~~the~~we ~~consideration~~paid ~~was~~back approximately $80.25 5 million from this loan by giving its interest in ~~cash~~Alpha Technology and athe ~~$2.75 million~~proceeds ~~promissory~~from ~~note~~the Koram investment. ~~The~~Starting ~~note~~in ~~bears~~May 2003, the interest ~~at 7~~for this note began to be accrued, rather then paid, as agreed between Mrs.~~25%~~ ~~per~~Hwang ~~annum~~and us.

~~Principal and~~In ~~accrued~~November ~~interest~~2003, ~~are~~we ~~payable~~increased inthe ~~equal~~maximum ~~monthly~~amount ~~installments~~of our line of credit with Gemma Hwang from $213.5 million to $4.0 million,~~735~~ onand ~~the~~borrowed ~~first~~an ~~day~~additional $0.8 million under this line of ~~each~~credit. ~~month~~As of July 31, ~~commencing~~2004, ~~January 1~~the credit line with Gemma Hwang was fully utilized, ~~1999.~~having Ifa ~~not~~balance ~~earlier~~of ~~paid~~approximately in$4.2 ~~full~~million, ~~any unpaid~~including approximately $4.0 million principal and ~~all~~approximately $0.2 million accrued interest. ~~shall~~In beDecember ~~due~~2003, ~~and~~Gemma ~~payable~~Hwang refused to ~~TeleVideo, Inc.~~extend onadditional ~~December 1,~~funding ~~2013.~~to our Comapny.

~~In December 1998,~~Summary the Company leased back this facility over a 15-year lease term expiring in December 2013. The land component has been accounted for as a capital lease, whereby a leased building asset and capital lease obligation were recorded at the fair value of ~~approximately $6.27 million. As a result of the sale for $11.0 million, a~~Liquidity deferred gain of approximately $8.0 million was recorded. The deferred gain attributable to the land element, which approximates $3.44 million, is being amortized over the 15 year lease life on a straight line method. The deferred gain attributable to the building element, which approximates $4.56 million, is being amortized on a straight line basis over the leased building asset life, which has been determined to be the 15 year lease term.
We used net cash in operations of approximately $0.9 million and $1.0 million for the nine-month periods ended July 31, 2004 and 2003, respectively. In the first quarter of 2004, we sold all CNET shares of stock and used the proceeds for regular business activities. Also, in the first quarter of 2004, we increased the maximum amount of our line of credit with Gemma Hwang from $3.5 million to $4.0 million, and borrowed an additional $0.8 million under this line of credit. As of end of the third quarter of 2004, the credit line with Gemma Hwang was fully utilized, and Gemma Hwang refused to extend additional funding to our Company.

~~In December 2000,~~Due to the ~~Company~~our ~~subleased~~experience aof ~~part~~recurring losses, we may be required to raise additional financing through the issuance of ~~it's~~debt ~~headquarter~~or ~~space~~equity or through other means such as customer prepayments, asset sales or secured borrowings. ~~The~~If ~~leasing~~additional ~~agreement~~funds isare ~~for~~raised athrough ~~period~~the issuance of ~~three~~equity, ~~years~~debt securities or secured borrowings, ~~beginning~~these ~~January 2001~~securities ~~with~~could ahave ~~monthly~~rights, ~~rent amount~~preferences and privileges senior or otherwise superior to that of ~~approximately~~our ~~$81~~common shares,~~000~~ and the terms of any debt could impose restrictions on our operations. ~~This~~The ~~sublease~~sale ~~will~~of additional equity or convertible debt securities could result in additional dilution to our shareholders and such securities may have rights, preferences and privileges senior or otherwise superior to those held by existing shareholders. If we cannot raise funds on terms favorable to it, or raise funds at all, we may not ~~affect~~be ~~the~~able ~~Company's~~to ~~manufacturing~~develop ~~facilities~~or enhance our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. If we are unable to raise additional funds, we may be required to reduce the scope of its planned operations, which could harm our business, or we may need to cease operations.

~~Under the~~As ~~lease agreement, the sublessee is required to open a standby letter~~ of ~~credit~~July in31, ~~the TeleVideo favor in amount of $500~~2004,~~000.~~ ~~The~~we ~~letter~~had ofa ~~credit~~working ~~has~~capital andeficit ~~initial term~~ of ~~one year,~~approximately ~~beginning January~~$2.8 ~~2001~~million, ~~and~~compared ~~this~~with ~~term~~$1.6 million ~~will~~capital bedeficit ~~automatically~~recorded ~~extended~~as ~~until the end~~ of ~~the~~October ~~leasing~~31, ~~contract~~2003, ~~which~~an isincrease ~~January 10,~~of ~~2004~~$1.2 million or 81%.

~~Net accounts~~Recent ~~receivable~~Accounting were $1.7 million at July 31, 2003, compared with $1.6 million at October 31, 2002, an increase of $0.1 million, or 6%, while net inventories were $1.5 million at July 31, 2003, as compared with $1.4 million at October 31, 2002, an increase of $0.1 million, or 7%. The increase in accounts receivable is the result of the increase in net sales recorded in the last two months of the third quarter. The increase in inventory reflects the purchase of additional terminal and TeleCLIENT products during the period.Pronouncements

~~FACTORS~~In ~~THAT~~November ~~MAY~~2004, ~~AFFECT~~the ~~FUTURE~~Financial ~~RESULTS~~Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 151 ("SFAS 151"), "Inventory Costs, an amendment of ARB No. 43, Chapter 4". The amendments made by SFAS 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004. The Company has evaluated the impact of the adoption of SFAS 151, and does not believe the impact will be significant to the Company's overall results of operations or financial position.

~~COMPETITIVE~~In ~~MARKETS~~December 2004, the FASB issued SFAS No.123 (revised 2004) ("SFAS 123R"), "Share-Based Payment". SFAS 123R will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. SFAS 123R covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. SFAS 123R replaces SFAS 123, "Accounting for Stock-Based Compensation", and supersedes Accounting Principles Board Opinion No. 25 ("Opinion 25"), "Accounting for Stock Issued to Employees". SFAS 123, as originally issued in 1995, established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, SFAS 123 permitted entities the option of continuing to apply the guidance in Opinion 25, as long as the footnotes to financial statements disclosed what net income would have been had the preferable fair-value-based method been used. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. The Company has not yet determined which transition method will be adopted for the recognition of the stock based compensatory expense.

~~The terminal~~Factors market is intensely competitive. The principal elements of competition are pricing, product quality and reliability, price/performance characteristics, compatibility, marketing and distribution capability, service and support, and reputation of the manufacturer. TeleVideo competes with a large number of manufacturers, most of which have significantly greater financial, marketing and technological resources than TeleVideo. There can be no assurance that ~~the~~May ~~Company~~Affect ~~will~~Future ~~be able to continue to compete effectively.~~ Results
(Risk Factors)

~~PRODUCT~~Additional ~~DEVELOPMENT~~Financing

~~The computer~~We ~~market~~may isrequire ~~characterized~~additional bycapital ~~rapid~~to ~~technological~~fund ~~change~~our ~~and~~operations ~~product~~during ~~obsolescence~~the ~~often~~remainder ~~resulting~~of infiscal ~~short~~2004 ~~product life cycles~~ and ~~rapid price declines~~beyond. ~~The~~We ~~Company's~~have ~~success will~~had ~~continue~~recurring tonet ~~depend~~losses ~~primarily~~in onthe ~~its~~past ~~ability~~three tofiscal ~~continue~~years ~~to reduce costs through manufacturing efficiencies~~ and ~~price~~for ~~negotiation with suppliers,~~ the ~~continued~~first ~~market~~six ~~acceptance~~months of ~~its~~fiscal ~~existing products~~year ~~and its ability to develop and introduce new products~~2004. ~~There~~Management ~~can~~is becurrently noattempting ~~assurance~~to ~~that~~create ~~TeleVideo~~and ~~will~~execute ~~successfully~~plans ~~develop~~intended ~~new~~to ~~products~~increase orrevenues ~~that~~and ~~the~~margins, ~~new products it develops will be introduced in a timely manner~~ and ~~receive~~to ~~substantial~~reduce ~~market acceptance~~spending. ~~There~~If ~~can~~we ~~also~~are beunable noto ~~assurance~~raise ~~that~~additional ~~product~~funds, ~~transitions~~we ~~will~~may be ~~managed~~ inrequired ~~such a way~~ to ~~minimize~~reduce ~~inventory~~the ~~levels~~scope ~~and product obsolescence~~ of ~~discontinued~~our ~~products.~~planned ~~The~~operations, ~~Company's~~which ~~operating results~~ could beharm ~~adversely~~our ~~affected~~business, ifor ~~TeleVideo~~we ismay ~~unable~~need to ~~manage~~cease ~~all aspects of product transitions successfully~~operations.

~~SINGLE~~In ~~SOURCED~~the ~~PRODUCTS~~first quarter of 2004, we increased the maximum amount of our line of credit with Gemma Hwang from $3.5 million to $4.0 million, and borrowed an additional $0.8 million under this line of credit. As of end of the first quarter of 2004, the credit line with Gemma Hwang was fully utilized, and Gemma Hwang refused to extend additional funding to our Company.

~~The Company~~Competitive generally utilizes standard parts and components available from multiple suppliers. However, certain parts and components used in the Company's products are available from a single source. If, contrary to its expectations, the Company is unable to obtain sufficient quantities of any single-sourced components, the Company will experience delays in product shipments. Markets

~~RELIANCE~~The ONthin ~~FORECASTS~~client and terminal markets are intensely competitive. The principal elements of competition are pricing, product quality and reliability, price/performance characteristics, compatibility, marketing and distribution capability, service and support, and reputation of the manufacturer. We compete with a large number of manufacturers, most of which have significantly greater financial, marketing, and technological resources than TeleVideo. There can be no assurance that we will be able to compete effectively against these companies.

~~The Company~~Product offers its products through various channels of distribution. Changes in the financial condition of, or in the Company's relationship with, its distributors could cause actual operating results to vary from those expected. Also, the Company's customers generally order products on an as-needed basis. Therefore, virtually all product shipments in a given fiscal quarter result from orders received in that quarter. The Company anticipates that the rate of new orders will vary significantly from month to month. The Company's manufacturing plans and expenditure levels are based primarily on sales forecasts. Consequently, if anticipated sales and shipments in any quarter do not occur when expected, expenditure and inventory levels could be disproportionately high and the Company's operating results for that quarter, and potentially future quarters, would be adversely affected. Development

~~FACTORS~~The ~~THAT~~computer ~~COULD~~market ~~AFFECT~~is ~~STOCK~~characterized ~~PRICE~~by rapid technological change and product obsolescence, often resulting in short product life cycles and rapid price declines. Our operations will continue to depend primarily on our ability to continue to reduce costs through manufacturing efficiencies and price negotiation with suppliers, the continued market acceptance of its existing products, and our ability to develop and introduce new products. There can be no assurance that we will successfully develop new products or that the new products we develop will be introduced in a timely manner and receive substantial market acceptance. There can also be no assurance that product transitions will be managed in such a way as to minimize inventory levels and obsolescence of discontinued products. Our operating results could be adversely affected if we are unable to manage successfully all aspects of product transitions.

~~The market~~Single-sourced price of TeleVideo's common stock could be subject to fluctuations in response to quarter to quarter variations in operating results, changes in analysts' earnings estimates, market conditions in the computer technology industry, as well as general economic conditions and other factors external to the Company. Products

~~FOREIGN~~We ~~CURRENCY~~generally ~~AND~~use ~~POLITICAL~~standard ~~RISK~~parts and components available from multiple suppliers. However, certain parts and components used in our products are obtained from a single source. If, contrary to our expectations, we are unable to obtain sufficient quantities of any single-sourced components, we will experience delays in product shipments.

~~The Company~~Reliance ~~markets~~on ~~its products worldwide. In addition, a large portion of the Company's part and component manufacturing, along with key suppliers, are located outside the United States.~~ Forecasts

~~Accordingly,~~We ~~the~~offer ~~Company's~~our ~~future~~products ~~results~~through ~~could~~various bedistribution ~~adversely~~channels. ~~affected~~Changes byin athe ~~variety~~financial condition of, ~~factors~~or in our relationship with, ~~including~~our ~~without~~distributors ~~limitation~~could cause actual operating results to vary from those expected. Also, ~~fluctuation~~our incustomers ~~foreign~~generally ~~currency~~order ~~exchange~~products ~~rates~~on an as-needed basis. Therefore, ~~changes~~virtually all product shipments in a ~~specific country's~~given orfiscal ~~region's~~quarter ~~political~~result orfrom ~~economic~~orders ~~conditions~~received in that quarter. We anticipate that the rate of new orders will vary significantly from month to month. Our manufacturing plans and expenditure levels are based primarily on sales forecasts. Consequently, ~~trade~~if ~~protection~~anticipated ~~measures~~sales and shipments in any quarter do not occur when expected, ~~import~~expenditure orand ~~export~~inventory ~~licensing~~levels ~~requirements~~could be disproportionately high, ~~unexpected~~and ~~changes~~our inoperating ~~regulatory~~results ~~requirements~~for that quarter, and ~~natural~~potentially ~~disasters.~~future quarters, would be adversely affected.

~~INVESTMENTS~~Factors INthat ~~AFFILIATES~~Could Affect Stock Price

~~Investments in~~The ~~affiliates~~market ~~represent~~price ~~approximately 3%~~ of ~~the~~our ~~Company's~~common ~~total~~stock ~~assets~~could atbe ~~July 31, 2003.~~subject Asto afluctuations ~~result,~~in ~~the~~response ~~Company's~~to ~~success~~quarter ~~will~~to bequarter ~~adversely~~variations ~~affected~~in ifoperating ~~the investees~~results, ~~fail~~changes toin ~~execute~~analysts' ~~their~~earnings ~~business~~estimates, ~~plans.~~and Ifmarket ~~there~~conditions ~~is an impairment~~ in the ~~carrying~~computer ~~value~~technology ofindustry, ~~the~~as ~~affiliate~~well ~~investments~~as ~~the~~general ~~Company~~economic ~~will~~conditions ~~reduce~~and ~~the~~other ~~carrying~~factors ofexternal ~~such~~to ~~investments~~us.

~~Table~~Foreign ofCurrency ~~Content~~and Political Risk

We ~~ITEM~~market 3our products worldwide. ~~QUANTITATIVE~~In ~~AND~~addition, ~~QUALITATIVE~~a ~~DISCLOSURES~~large ~~ABOUT~~portion ~~MARKET~~of ~~RISK~~our part and component manufacturing, along with key suppliers, are located outside the United States. Accordingly, our future results could be adversely affected by a variety of factors, including fluctuation in foreign currency exchange rates, changes in a specific country's or region's political or economic conditions, trade protection measures, import or export licensing requirements, unexpected changes in regulatory requirements, and natural disasters.

~~The~~Investments ~~Company is subject to market risk for changes~~ in interest rates, because its line of credit with Gem Management has a variable interest rate, equal with Wall Street prime rate published at beginning of each month, plus one percent. Anyway, the Company could renegotiate its agreement with Gem Management, regarding the interest rate, as it happened in fiscal 2002, but the success of these negotiations can not be assured. The market risk for changes in interest rate for the Company's investments is not significant because these investments are limited to highly liquid instruments with maturities of three months or less. At July 31, 2003, the Company has approximately $0.4 million classified as cash and cash equivalents.Affiliates

~~The~~Investments ~~Company~~in ~~is also~~affiliates ~~subject~~represent toapproximately ~~equity~~2% ~~price~~of ~~risk~~our ~~related~~total toassets ~~its~~at ~~investments in marketable securities. At September~~April 530, ~~2003,~~2004. ~~the~~If ~~Company~~there ~~owned~~is ~~approximately~~additional ~~32,508 shares~~impairment ofin ~~CNET common stock and~~ the ~~estimated~~carrying ~~fair~~ value of ~~these~~the ~~marketable~~affiliate ~~securities was approximately $274~~investments,~~000.~~ ~~All~~we ofwill reduce the ~~Company's~~ ~~transactions~~carrying ~~with~~value ~~international~~of ~~customers~~such ~~and suppliers are denominated in US dollars~~investments.

AsLegislative ofActions July 31, 2003, the Company had a long-term note receivable (the "Note") of $2.7 million. The Company received the Note, which bears interest at a fixed rate of 7.25% per annum, as partial consideration for the sale of the Company's headquarters facility in December 1998. The interest rate on the Note is fixed over the life of the Note, with principal and ~~interest~~New ~~payable~~Accounting inPronouncements equal monthly installments of $21,735 each on the first day of each month commencing on January 1, 1999. If not earlier paid in full, any unpaid principal and all accrued interest shall be due and payable to TeleVideo, Inc. on December 1, 2013.

~~Because~~ Regulatory changes, including the ~~interest~~Sarbanes-Oxley ~~rate~~Act of 2002, and new accounting pronouncements or regulatory rulings, have had and will have an impact on ~~the~~our ~~Note~~future isfinancial ~~fixed~~position ~~for~~and ~~the~~results ~~term~~of operations. The Sarbanes-Oxley Act of ~~the~~2002 ~~Note,~~and ~~any~~other ~~change~~rule inchanges ~~interest~~and ~~rates~~proposed ~~would~~legislative ~~not~~initiatives ~~affect~~are ~~the~~likely ~~Company's~~to ~~earnings~~increase orgeneral ~~cash~~and ~~flows~~administrative ifcosts. itFurther, ~~chose~~changes toin ~~hold~~accounting ~~onto~~rules, including the ~~note,~~ ~~although~~accounting afor ~~change~~employee instock ~~interest~~options ~~rates~~as ~~could~~an ~~affect~~expense ~~the~~will ~~market~~increase ~~value~~our ofgeneral ~~the~~and ~~Note~~administrative ifexpenses. ~~the~~These ~~Company~~and ~~chose~~other topotential ~~sell~~changes could materially increase the ~~note~~expenses ~~prior~~we toreport ~~maturity.~~under generally accepted accounting principles, and adversely affect our operating results.

~~Table~~ITEM of3. ~~Content~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk for changes in interest rates, because its line of credit with Gemma Hwang has a variable interest rate, equal to the Wall Street Journal prime rate published at the beginning of each month, plus one percent. The Company may be able to renegotiate its agreement with Gemma Hwang, regarding the interest rate, as it happened in fiscal 2002, but the success of these negotiations cannot be assured. As of July 31, 2004, the balance of this note was approximately $4.2 million, including approximately $0.2 million accrued interest, and the interest rate was 5.25%.

The market risk for changes in the interest rate for the Company's investments is not significant because these investments are limited to highly liquid instruments with maturities of three months or less. As of July 31, 2004, the Company had approximately $0.6 million classified as cash and cash equivalents.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures:. ~~The~~Our ~~Company's~~management, ~~Chief~~with ~~Executive~~the ~~Officer~~participation of our chief executive officer, or CEO, and ~~Chief~~chief ~~Financial Officer~~financial ~~have~~officer, or CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-1415(e) and 15d-1415(e) ofunder the Securities Exchange Act) as of ~~1934~~ July 31, as2004. ~~amended~~In designing and evaluating our disclosure controls and procedures, ~~within~~our ~~90 days~~management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applied its judgment in evaluating the ~~filing~~cost-benefit relationship of ~~this~~possible ~~Quarterly~~controls ~~Report~~and ~~on Form 10-Q~~procedures. Based on ~~such~~this evaluation, ~~they~~our ~~have~~CEO and CFO concluded that, as of ~~such date~~July 31, ~~the~~2004, ~~Company's~~our disclosure controls and procedures ~~are~~were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our CEO and CFO by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Securities and Exchange Commission ("SEC") Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, except for the material weaknesses disclosed below.

~~Changes~~In inconnection ~~Internal~~with ~~Controls:~~the ~~There were~~audit noof ~~significant~~the ~~changes~~consolidated infinancial statements for the ~~Company's~~year ~~internal~~ended ~~controls~~October or31, in2003, ~~other factors~~Burr, ~~that~~Pilger ~~could~~& ~~significantly~~Mayer ~~affect~~LLP ~~these~~identified ~~controls~~significant ~~subsequent~~deficiencies, which represent material weaknesses. The material weaknesses were related to the ~~date~~inadequacy of ~~their~~ ~~evaluation.~~supporting documentation relating to the Company's accounting records and the inadequacy of review and supervision of the preparation of accounting records.

Prior to the issuance of the Company's consolidated financial statements, we completed the account reconciliations, analyses and our management review such that we can certify that the information contained in the consolidated financial statements as of and for each of the three years in the period ended October 31, 2003, fairly presents, in all material respects, the financial condition and results of operations of Televideo, except for the lack of stock option records mentioned in Note 9 to the consolidated financial statements, included in the Form 10-K filed with SEC on December 20, 2004..

(b) Changes in Internal Controls. There was no change in our internal control over financial reporting that occurred during the quarter ended July 31, 2004 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company has been named as a defendant in a lawsuit filed in the normal course of its business. In the opinion of management, after consulting with legal counsel, the liabilities, if any, resulting from this matter will not have a material effect on the financial statements of the Company. In November 2004, the lawsuit was settled in the Company's favor.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

~~Table~~ITEM of3. ~~Content~~DEFAULTS UPON SENIOR SECURITIES

ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K.

(a) EXHIBIT(S).

(1)		Exhibit 99.1: Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(2)		Exhibit 99.2: Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) REPORTS ON FORM 8-K.

None.

~~Table~~ITEM of4. ~~Content~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS
Exhibits

31.		Separate Certifications of the Chief Executive Officer and Chief Financial Officer of the Registrant required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.		Combined Certification of the Chief Executive Officer and Chief Financial Officer of the Registrant required by Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this ~~amended~~ report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TELEVIDEO, INC.
	(REGISTRANT)
DATE: September 12, 2003	BY:	/s/ RICHARD KIM
		Richard Kim Vice President and Chief Financial Officer

TELEVIDEO, INC.
(Registrant)

By: /s/ K. PHILIP HWANG

                                                                    Date:
                              K. Philip Hwang                                                                                 February 16, 2005
                              Chairman of the Board and Chief Executive Officer

By: /s/ RICHARD KIM

                             Date:
                              Richard Kim                                                                                         February 16, 2005
                              Vice President of Marketing and Human Resources
                              and Acting Chief Financial Officer

CERTIFICATIONS

I,Exhibit K31. ~~PHILIP HWANG, certify that:~~ 1

I, K. Philip Hwang, certify that:

1. I have reviewed this quarterly report on Form 10-Q offor ~~Televideo, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make~~ the ~~statements~~quarter ~~made,~~ended inJuly ~~light of the circumstances under which such statements were made~~31, ~~not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge~~2004, ~~the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results~~ of ~~operations and cash flows of the registrant as of~~Televideo, ~~and for, the periods presented in this quarterly report; 4~~Inc. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:;

a)2. ~~designed~~Based ~~such~~on ~~disclosure~~my ~~controls~~knowledge, ~~and~~this ~~procedures~~report todoes ~~ensure~~not ~~that~~contain ~~material~~any ~~information~~untrue ~~relating~~statement toof ~~the~~a ~~registrant,~~material ~~including~~fact ~~its~~or ~~consolidated~~omit ~~subsidiaries, is made known~~ to usstate bya ~~others~~material ~~within~~fact ~~those~~necessary ~~entities,~~to ~~particularly~~make ~~during~~ the ~~period~~statements made, in ~~which~~light ~~this quarterly report is being prepared; b) evaluated the effectiveness~~ of the ~~registrant's~~circumstances ~~disclosure~~under ~~controls~~which ~~and~~such ~~procedures~~statements aswere ofmade, anot ~~date~~misleading ~~within~~with 90respect ~~days prior~~ to the ~~filing~~period ~~date~~covered ofby this ~~quarterly~~ report ~~(the "Evaluation Date")~~; ~~and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;~~

53. ~~The~~Based ~~registrant's~~on ~~other~~my ~~certifying~~knowledge, ~~officers~~the ~~and~~financial Istatements, ~~have~~and ~~disclosed,~~other ~~based~~financial oninformation ~~our~~included ~~most~~in ~~recent~~this ~~evaluation~~report, tofairly ~~the~~present ~~registrant's~~in ~~auditors~~all ~~and~~material respects the ~~audit~~financial ~~committee~~condition, results of operations and cash flows of the registrant's ~~board~~as of, ~~directors~~and ~~(or~~for, ~~persons~~the ~~performing~~periods ~~the~~presented ~~equivalent~~in ~~function):~~this report;

a)4. ~~all~~The ~~significant deficiencies in the design or operation of internal controls which could adversely affect the~~ registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

6.a) ~~The~~designed ~~registrant's~~such ~~other~~disclosure ~~certifying~~controls ~~officers~~ and Iprocedures, ~~have~~or ~~indicated~~caused insuch ~~this~~disclosure ~~quarterly~~controls ~~report~~and ~~whether~~procedures orto ~~not~~be ~~there~~designed ~~were~~under ~~significant~~our ~~changes~~supervision, into ~~internal~~ensure ~~controls~~that ormaterial ininformation ~~other~~relating ~~factors~~to ~~that~~the ~~could~~registrant, ~~significantly~~including ~~affect~~its ~~internal~~consolidated ~~controls~~subsidiaries, ~~subsequent~~is tomade ~~the~~known ~~date~~to ofus ~~our~~by ~~most~~others ~~recent~~within ~~evaluation~~those entities, ~~including~~particularly ~~any~~during ~~corrective~~the ~~actions~~period ~~with~~in ~~regard~~which tothis ~~significant~~report ~~deficiencies~~is ~~and~~being ~~material~~prepared; ~~weaknesses.~~and

~~Date:~~b) ~~September~~evaluated ~~12,~~the ~~2003~~effectiveness ~~/s/~~of K.the ~~Philip Hwang K. Philip Hwang Chairman and Chief Executive Officer~~registrant

's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Ic) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, ~~RICHARD~~or ~~KIM~~is reasonably likely to materially affect, ~~certify~~the ~~that:~~registrant's internal control over financial reporting; and

15. IThe ~~have~~registrant's ~~reviewed~~other ~~this~~certifying ~~quarterly~~officer ~~report~~and onI ~~Form~~have ~~10-Q of Televideo~~disclosed, ~~Inc.;~~based ~~2. Based~~ on myour ~~knowledge,~~most ~~this~~recent ~~quarterly~~evaluation ~~report does not contain any untrue statement~~ of ainternal ~~material~~control ~~fact~~over orfinancial ~~omit to state a material fact necessary to make the statements made~~reporting, ~~in light of the circumstances under which such statements were made, not misleading with respect~~ to the ~~period~~registrant's ~~covered~~auditors ~~by this quarterly report; 3. Based on my knowledge, the financial statements,~~ and ~~other financial information included in this quarterly report, fairly present in all material respects~~ the ~~financial~~audit ~~condition,~~committee ~~results~~ of ~~operations and cash flows of~~ the registrant ~~as of, and for, the periods presented in this quarterly report; 4. The registrant~~'s ~~other~~Board ~~certifying~~of ~~officers~~Directors ~~and I are responsible for establishing and maintaining disclosure controls and procedures~~ (asor ~~defined~~persons inperforming ~~Exchange Act Rules 13a-14 and 15d-14) for~~ the ~~registrant~~equivalent ~~and we have~~functions):

a) ~~designed~~all ~~such~~significant ~~disclosure~~deficiencies ~~controls~~ and ~~procedures to ensure that~~ material ~~information~~weaknesses ~~relating~~in to the ~~registrant,~~design ~~including~~or ~~its~~operation ~~consolidated~~of ~~subsidiaries,~~internal iscontrol ~~made~~over ~~known~~financial toreporting ~~us by others within those entities, particularly during the period in~~ which ~~this~~are ~~quarterly~~reasonably ~~report~~likely ~~is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior~~ to ~~the~~adversely ~~filing~~affect ~~date of this quarterly report (~~the ~~"Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;~~registrant

's ability to record, process, summarize and report financial information; and

5.b) ~~The~~any ~~registrant's other certifying officers and I have disclosed~~fraud, ~~based~~whether onor ~~our~~not ~~most recent evaluation~~material, tothat ~~the~~involves ~~registrant's~~management ~~auditors~~or ~~and~~other ~~the~~employees ~~audit~~who ~~committee~~have ofa ~~the~~significant ~~registrant's~~role ~~board~~in ~~of directors (or persons performing~~ the ~~equivalent function):~~registrant

's internal control over financial reporting.

a)Dated: ~~all~~February ~~significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record~~16, ~~process,~~2005 ~~summarize and report financial data and have identified for the registrant'~~/s/ ~~auditors~~K. ~~any~~PHILIP ~~material~~HWANG ~~weaknesses~~K. inPhilip ~~internal~~Hwang ~~controls;~~Chairman and b)Chief ~~any~~Executive ~~fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and~~Officer

6.Exhibit The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses31.2

~~Date: September 12~~I, ~~2003 /s/~~ Richard Kim, ~~Richard~~certify ~~Kim~~that: ~~Vice President and Chief Financial Officer~~

~~Table of Content DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS PART I. FINANCIAL INFORMATION ITEM~~ 1. ~~FINANCIAL~~I ~~STATEMENTS. TELEVIDEO,~~have ~~INC.~~reviewed ~~INTERIM~~this ~~CONDENSED~~quarterly ~~CONSOLIDATED~~report ~~BALANCE~~on ~~SHEETS~~Form ~~(IN~~10-Q ~~THOUSANDS,~~for ~~EXCEPT~~the ~~SHARE AMOUNTS) TELEVIDEO,~~quarter ~~INC.~~ended ~~INTERIM~~July ~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30~~31, ~~2003~~ ~~AND APRIL 30~~2004, ~~2002~~of ~~(IN THOUSANDS~~Televideo, ~~EXCEPT PER SHARE AMOUNTS) (Unaudited) TELEVIDEO, INC~~Inc. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED APRIL 30, 2003 AND APRIL 30, 2002 (IN THOUSANDS) (Unaudited) TELEVIDEO, INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS APRIL 30, 2003 ;

~~ITEM~~ 2. ~~MANAGEMENT'S~~Based ~~DISCUSSION~~on ~~AND~~my ~~ANALYSIS~~knowledge, OFthis ~~FINANCIAL~~report ~~CONDITION~~does ~~AND~~not ~~RESULTS~~contain OFany ~~OPERATIONS. ITEM~~untrue 3.statement ~~QUANTITATIVE~~of ~~AND~~a ~~QUALITATIVE~~material ~~DISCLOSURES~~fact ~~ABOUT~~or ~~MARKET~~omit ~~RISK. ITEM~~to 4.state ~~CONTROLS~~a ~~AND~~material ~~PROCEDURES~~ fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

~~PART II~~3. ~~OTHER~~Based ~~INFORMATION ITEM~~on 1.my ~~LEGAL~~knowledge, ~~PROCEEDINGS. ITEM~~the 6.financial ~~EXHIBIT~~statements, ~~AND~~and ~~REPORTS~~other ONfinancial ~~FORM~~information ~~8-K. SIGNATURES CERTIFICATIONS~~ included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant

's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant

's internal control over financial reporting.



Dated: February 16, 2005		/s/ RICHARD KIM
		Richard Kim Vice President of Marketing and Human Resources and Acting Chief Financial Officer

Exhibit 32 .1

TELEVIDEO, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, for the purposes of 18 U.S.C. Section 1350, in his capacity as an officer of Televideo, Inc. (the "Company"), that, to his knowledge:

(a) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended July 31, 2004, as filed with the Securities and Exchange Commission (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 16, 2005

By:

/s/ K. PHILIP HWANG

K. Philip Hwang
Chairman and Chief Executive Officer

By:

/s/ RICHARD KIM

Richard Kim
Vice President of Marketing and Human Resources and Acting Chief Financial Officer

This certification is not deemed to be "filed" for purposes of section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. This certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.

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