Televideo Inc – ‘10-K’ for 10/31/98

As of:  Tuesday, 2/16/99   ·   For:  10/31/98   ·   Accession #:  1047469-99-6284   ·   File #:  0-11552

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         42    195K 
 2: EX-21.0     Subsidiaries of the Registrant                         1      5K 
 3: EX-23.0     Consent of Experts or Counsel                          1      6K 
 4: EX-27.0     Financial Data Schedule                                2      6K 

10-K   —   Annual Report
Document Table of Contents

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 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

------------------

FORM 10-K 

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT OF 1934.                                                      

 FOR THE FISCAL YEAR ENDED: OCTOBER 31, 1998

OR

[ ]    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: 0-11552

 TELEVIDEO, INC.
--------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

    DELAWARE                              94-2383795
-------------------------------              -------------------  
(STATE OR OTHER JURISDICTION OF                 (IRS EMPLOYER     
INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)  

 2345 HARRIS WAY, SAN JOSE, CALIFORNIA 95131
 -------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:        (408) 954-8333       
                                                   ---------------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:      NONE           
                                                       ---------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:                     

 COMMON STOCK, $0.01 PAR VALUE
 -----------------------------
(TITLE OF CLASS)

------------------

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  X   NO
           ---     ---

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     THE APPROXIMATE AGGREGATE MARKET VALUE OF REGISTRANT'S COMMON STOCK
HELD BY NON-AFFILIATES ON FEBRUARY 8, 1999 (BASED UPON THE CLOSING SALES PRICE  
OF SUCH STOCK AS REPORTED IN THE NASDAQ NATIONAL MARKET AS OF SUCH DATE) WAS    
$3,922,673.                                                                     

        AS OF FEBRUARY 8, 1999, 11,391,085 SHARES OF REGISTRANT'S COMMON STOCK
WERE OUTSTANDING.                                                               

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Definitive    
Proxy Statement to be used in connection with Registrant's Annual Meeting of    
Stockholders to be held on April 6, 1999 (Part III).                            

       INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,  
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION       
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY       
AMENDMENT TO THIS FORM 10-K. [ ]                                                

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS                                 

   This Annual Report on Form 10-K for the fiscal year ended October
31, 1998 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 Annual 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 kinds of statements are signified by words such as            
"believes," "anticipates," "expects," "intends," "may," "will" and other        
similar expressions. However, these words are not the exclusive means of        
identifying such 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. 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.              

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INTRODUCTORY STATEMENT

      References in this Form 10-K to "TeleVideo," the "Registrant" or the
"Company" refer to TeleVideo, Inc. and its subsidiaries unless the context      
indicates otherwise. This report contains registered and unregistered trademarks
of other companies.                                                             

PART I

ITEM 1.  BUSINESS                                                               

THE COMPANY                                                                     

    Founded in 1975, TeleVideo is a market leader providing innovative
high-end PC and Mac-compatible monitors and terminal display products; graphics 
boards, sound boards and multilingual multimedia upgrade kits. The Company      
markets its products worldwide through distributors, mass merchants, retail     
stores, value-added resellers ("VARs"), systems integrators and original        
equipment manufacturers ("OEMs").                                               

TeleVideo operates in one industry segment.                   

PRODUCTS                                                                        

WINDOWS-BASED TERMINALS                                                         

     TeleVideo has made a strategic return into the server based network
computing market by introducing the TeleCLIENT-TM- Windows-based terminal       
product line. The TeleCLIENT-TM-, with Microsoft's Windows-TM- CE operating     
system, allows users to access Windows-TM-, Java, and UNIX applications with    
Microsoft Windows-TM- NT 4.0 Terminal Server Edition and Citrix WinFrame and    
MetaFrame server operating systems. The TeleCLIENT is a network connected,      
diskless desktop device in which all applications and data are executed and     
stored on the server, and therefore reduces the total cost of ownership         
(TCO), increases productivity, and strengthens security throughout a            
corporate network computing environment.                                        

     During Fall Comdex 1998, TeleVideo introduced a family of sleek and
powerful TeleCLIENT-TM- Windows-based terminals. The TC7000 is a modular,       
compact, stand alone box that is ideal where desktop space is valuable. The     
TC7150 is an integrated solution with TeleVideo's 15" CRT monitor, while the    
TC7170 is integrated with TeleVideo's 17" CRT monitor. These two models also    
reduce the footprint at the desktop.                                            

 With TeleVideo's 2.5 million customer installation base of text
terminals, the TeleCLIENT-TM- product line is the ideal migration path for      
all it's existing customers and other text terminal users. The TeleCLIENT-TM-   
will allow users to access Windows-TM- applications, i.e. Microsoft Office      
products, and emulate TeleVideo's 955 terminal. TeleVideo 925/950/965/990,      
Wyse 50/60/325, ADDS VP/A2 UNIX console, DEC VT52/100/220/320, and IBM          
3151/3270/5250 emulations will also be embedded onto the TeleCLIENT-TM-. The    
TeleCLIENT-TM- will also feature a embedded internet browser. This browser      
will allow users to run Java applications to their desktop.                     

   TeleCLIENT-TM- TC7000, TC7150, and TC7170 Windows-based terminals
provide a cost-effective solution for replacing both enterprise PCs and         
antiquated character based terminals. These low-cost, state-of-art              
TeleCLIENT-TM-Windows-based terminals will be the ideal solution for task       
oriented applications, such as retail, help desk, medical, government,          
financial, education, and manufacturing industries.                             

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COMPUTER MONITORS                                                               

       In November 1996, TeleVideo announced two product lines of quality PC
and Mac compatible color monitors, the SuperView Pro Series and SuperView       
Series. These finely crafted monitors allow a variety of utilization home,      
business, the ever-evolving digital world of Internet, DVD, sophisticated       
point-oriented desktop publishing, CAD/CAM applications and more.               

   The high quality SuperView Pro Series monitors include the SVP350
21-inch monitor (19.9" diagonal viewable area), the SVP300 19-inch monitor      
(18.0" diagonal viewable area), the SVP270 17-inch monitor (15.8" diagonal      
viewable area) and the SVP260 17-inch monitor (16.0" diagonal viewable area).   
These monitors feature high resolutions, advanced On Screen Display (OSD) and   
wide range of scanning frequency. The SVP260, SVP270 and SVP350 monitors feature
Mitsubishi's award winning Diamondtron Aperture Grille technology which delivers
flicker-free, sharp, and crystal-clear images for graphic designers and         
engineers for rendering intricate images as in CAD/CAM design work.             

      The SVP350 features an Aperture Grille pitch of 0.28mm and a maximum
resolution of 1600 x 1200 at an exceptional 85Hz refresh rate. Its horizontal   
scanning frequencies range from 30 to 107KHz and vertical frequencies of 50 to  
160Hz. The SVP270 has an Aperture Grille pitch of 0.25mm and a maximum          
resolution of 1600 x 1200 at 75Hz refresh rate for flicker-free display. It's   
horizontal scanning frequency range from 30 to 95KHz and vertical frequencies   
from 50 to 160Hz. The SVP260 features an Aperture Grille pitch of 0.25mm and a  
maximum resolution of 1600 x 1200 at 65Hz refresh rate, rising to a flicker-free
77Hz refresh rate at 1280 x 1024 resolution. Horizontal scanning frequencies are
from 24 to 82KHz and vertical frequencies from 50 to 120Hz.                     

  The SuperView Series offers affordable, high-capability monitors
designed primarily for conventional business use, home office, games,           
entertainment and education. The SV210 17-inch color monitor (16.0" diagonal    
viewable area) is a flat-screen monitor featuring a dot pitch of 0.26mm, a      
maximum resolution of 1280 x 1024 at 65Hz refresh rate, scanning frequencies of 
30 to 70KHz horizontal and 50 to 120Hz vertical for flicker-free operation. The 
SV200 17-inch color monitor (16.0" diagonal viewable area) features a small     
footprint with a 0.28mm dot pitch, maximum resolution of 1280 x 1024 with a 65Hz
refresh rate, and scanning frequencies of 30 to 70KHz horizontal and 50 to 120Hz
vertical for flicker-free display. The SV100 15" (13.8" diagonal viewable area) 
has a fine 0.28mm dot pitch with resolution reaching 1280 x 1024 at 65Hz refresh
rate. All three SuperView Series monitors feature Shadow Mask technology        
producing vivid images needed for a full range of applications.                 

        TeleVideo has streamlined its monitor line for 1999. TeleVideo will be
offering its award winning SV100, SV210, and SVP300 CRT monitors. The SVP260,   
SVP270, and SVP350 aperture grill monitors has been phased out.                 

      All TeleVideo monitors include TELEXPRES (TeleVideo Exchange Program
for Resellers and End-User Service, one of the most comprehensive "hassle free" 
3 year warranty and DOA replacement policy in the industry. All TeleVideo       
monitors come with a 3-year CRT, parts and labor warranty, unlimited technical  
support, BBS and Internet access to customers.                                  

        These products collectively accounted for approximately 29% and 18% of
the total revenues in fiscal 1998 and 1997 respectively.                        

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MULTIMEDIA PRODUCTS                                                             

        TeleVideo develops and markets an array of video graphics cards, sound
boards and multilingual multimedia kit products for the personal computer (PC)  
market. The current products include:                                           

       TeleSOUND 3D, a plug-and-play 16-bit sound board for PC audio systems
and delivers true CD-quality stereophonic sound. It features 32 polyphony, 16   
MIDI channels, 4 operator, 20-voice FM synthesis, and a General MIDI all in one 
board. Based on an OPL3 FM synthesis device, the TeleSOUND 3D is compatible with
existing multimedia sound standards including the Sound Blaster Pro, Ad Lib,    
Windows Sound System, MPU-40, and Windows 3.1 and Windows 95. All kits are MPC  
compliant.                                                                      

TeleWAVE Q32/3D featured surround sound, 32 polyphony, 16 MIDI
channels, 4 operator, 22-voice FM music synthesizer, a General MIDI and 100 MIPs
DSP wavetable power all in one board. It provides professional music studio     
quality stereophonic sound of real musical instruments. Using advanced DSP      
technology, the TeleWAVE Q32/3D allows users to turn their PC into a            
professional PC audio system with 128 general MIDI musical instrument sounds.   

    TeleGRAPHICS SX64V+ is the next-generation ultra fast graphics and
video accelerator board. It utilizes a 64-bit graphics engine with unique       
stream processor technology, enhanced 2D graphics acceleration and hardware     
assisted video playback. Features include 64-bit graphics and video             
co-processor, integrated 24-bit RAM-DAC with 135 MHz output pixel rate and      
dual clock synthesizer for true color (up to 32-bit per pixel) acceleration.    
It supports high resolution of up to 1600 x 1200 at color depth of 256 and      
800 x 600 with 16.7 million colors.                                             

     The TeleGRAPHICS 3D is a high performance plug-and-play 3D graphics
accelerator board designed for high resolution true color and multimedia        
capabilities on PC hardware and software platforms. It features an advanced     
64-bit PCI video graphics accelerator designed to give realistic 3 dimensional  
graphics for educational, entertainment and other multimedia applications. This 
highly advanced video processor with hardware-assisted video playback is capable
of scaling full-screen MPEG video clips up to 30 frames-per-second. It is also  
capable of full-screen display resolutions up to 1600 x 1200 with high picture  
quality.                                                                        

      TeleVideo also bundles CD-ROM drives with TeleVideo sound boards and
other multimedia products to meet the needs and requirements of OEMs,           
distributors, resellers and systems integrators. CD-ROM bundles are configured  
according to customer needs and requirements.                                   

     During fiscal 1998, the Company began a phase-out of all multimedia
products. As a result, multimedia products collectively accounted for           
approximately 13% of the total revenue in fiscal 1998 while these products      
accounted for 35% and 48% of the total revenue in fiscal 1997 and 1996,         
respectively.                                                                   

VIDEO DISPLAY TERMINALS                                                         

        TeleVideo designs, manufactures, markets and supports a broad range of
industry standard, high performance character-based Windows, Point-of-Sale,     
ASCII, ANSI and PC TERM video display terminals and terminal boxes which feature
high quality, low flicker, high contrast, high resolution and non-glare screens.
Current terminal series include:                                                

        The TeleVideo 9099 color terminal box, a high-performance and low-cost
ASCII, ANSI, PC terminal is designed to meet productivity goals into the 21st   
century. It features an IBM-compatible keyboard interface for wedge type bar    
code scanners, wand readers, credit card readers, and/or specialized keyboards  
for point-of-sale, bank teller, and similar applications. The 9099 also supports
standard ANSI color commands and MicroColor (color substitution for visual      
attributes) for legacy software with 64 colors available for both foreground and
background. In addition, the 9099 offers increased flexibility by allowing      
the user to select any monitor size for particular application.                 

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     The TeleVideo 9089 is a high-resolution, color windows terminal box
that provides 64 colors for both foreground and background selections in each   
of the six windows. The 9089 allows the user to work in multiple applications   
and toggle or copy and paste between the applications in different windows or   
hosts. It also offers flexibility by allowing user to select any monitor size   
for particular application.                                                     

  The TeleVideo 9060 high-performance 9-inch display terminal is a
multi-session, multi-personality terminal with ASCII, ANSI and PC TERM operating
modes. It can function as an independent terminal in single or dual host        
computer environments. It can also connect to light pen, bar code scanner and   
magnetic strip readers for point-of-sale, financial and similar applications.   

      The TeleVideo 995 14-inch monochrome AlphaWindow terminal allows the
user AlphaWindowing capability at a non-windowing price for new or existing     
software applications. The windows capability provides increased productivity   
for applications running on UNIX. The 995 also has a power management screen    
saver which protects the environment and promotes energy conservation.          

   The TeleVideo 995-65 14-inch terminal is specifically designed to
address the needs of customers who require a powerful, yet versatile solution   
which can emulate a wide range of industry-standard terminals. It features      
multi-session, multi-personality emulation of over 34 terminals, and is capable 
of operating as an independent terminal in single or dual-host computer         
environments.                                                                   

      The TeleVideo 990 terminal is a general purpose terminal with ASCII,
ANSI and PC TERM operating modes. For maximum versatility and flexibility, the  
terminal provides a choice of ASCII, AT or DEC style keyboards. The 990's       
mini-DIN keyboard connector permits connection to low-cost industry standard    
wedge type devices. This allows the user to interface to a bar code scanner,    
wand reader, credit card reader, electronics scale or a variety of specialized  
keyboards for point-of-sale or point-of-transaction processing.                 

The video display terminal products collectively accounted for
approximately 51%, 38% and 34% of the total revenue in fiscal 1998, 1997 and    
1996, respectively.                                                             

COMPUTER ENHANCEMENT PRODUCTS                                                   

      The Company, through its OMTI product line, manufactures and markets
multi-function data storage products for various bus architectures. These       
products collectively accounted for approximately 3%, 4% and 6% of total        
revenues in fiscal 1998, 1997 and 1996, respectively.                           

PRODUCT DEVELOPMENT                                                             

        Markets that TeleVideo serves are characterized by rapid technological
change. TeleVideo has an ongoing program to develop new products. Although the  
Company's research and development staff consists of 4 employees as of January  
19, 1999, various joint projects of the Company are supported by many talented  
pools of engineers from participating companies. During fiscal 1998, TeleVideo  
spent approximately $0.4 million on company-sponsored research and development. 
Company-sponsored research and development expenses for fiscal 1997 and 1996    
were approximately $0.8 million and $1.1 million, respectively. The Company did 
not engage in any customer-sponsored research and development during such years.

         Because of the fast pace of technological advances, the Company must be
prepared to design, develop and manufacture new and more powerful low-cost      
products in a relatively short time. TeleVideo believes it has had mixed success
to date in accomplishing these goals simultaneously. Like other companies in the
computer industry, it will continue to experience delays in completing new      
product design and tooling. There is no assurance that the Company will be able 
to design and manufacture new products, including thin clients, that respond to 
the rapid changes in the market place.                                          

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SALES, MARKETING AND CUSTOMERS                                                  

       North American sales are handled from TeleVideo sales offices located
in San Jose, California; Morristown, New Jersey and Hoffman Estates, Illinois.  
Products are sold through distributors, mass merchants, retail stores, VARs,    
systems integrators and OEMs.                                                   

     Products sold in Europe, Asia Pacific, Africa and Latin America are
handled by the Company's office in San Jose, California through distributors,   
OEMs and international representatives.                                         

   TeleVideo distributors generally do not have exclusive geographic
territories. Distributor contracts can be terminated by either party without    
cause upon advanced written notice of 30 days or 60 days. TeleVideo's           
distributors typically handle a variety of computer-related products, including 
products competitive with those of TeleVideo. The typical distribution          
arrangement requires the distributor to purchase TeleVideo products with certain
limited stock rotation rights. Distributors may also exercise price protection  
rights should the Company's product price be reduced.                           

      TeleVideo, through its headquarters' marketing and supporting staff,
plans to continue to work closely with its distributors, mass merchants, retail 
stores, VARs, systems integrators and original OEMs. TeleVideo marketing staffs 
also provide the customers with training, sales and promotional materials,      
cooperative advertising programs, trade show participation and sales leads. The 
marketing organization also leads the product marketing role giving direction   
to product management and competitive positioning. The Company spent            
approximately 7.3% ($1.07 million), 6.6% ($1.3 million) and 2.4% ($0.52         
million) of its revenues on advertising in fiscal 1998, 1997 and 1996,          
respectively.                                                                   

       TeleVideo's customers typically purchase the Company's products on an
as-needed basis. Therefore, the Company will continue to manufacture its        
products based on sales forecasts and upon customer orders. As a result of this 
strategy, the Company believes that backlog is not material to its business     
taken as a whole. The Company's order backlog as of October 31, 1998 was        
approximately $0.9 million, as compared with approximately $1.4 million at      
October 31, 1997, and approximately $2.8 million at October 31, 1996.           
TeleVideo's order backlog includes orders with a specified delivery schedule    
within twelve months. Because of the possibility of customer changes in delivery
schedules or cancellation of orders, which is not uncommon in the computer      
industry, the Company's backlog as of any particular date may not be indicative 
of actual net sales for any succeeding period. See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations."                     

      TeleVideo's largest customer accounted for approximately 12.3% ($1.8
million) of net sales in fiscal 1998. Another customer accounted for 11.2%      
($1.66 million) of net sales in fiscal 1998. TeleVideo's product sales are      
primarily made for cash, due net 30, 45 or 60 days, or in the case of some      
foreign sales, payment by letter of credit is required.                         

INTERNATIONAL SALES                                                             

       International sales of TeleVideo's products constituted approximately
$2.1 million (14.0%) of net sales for fiscal 1998, approximately $2.7 million   
(13.7%) of net sales for fiscal 1997 and approximately $3.41 million (15.8%) of 
net sales for fiscal 1996.                                                      

        TeleVideo's international sales are subject to certain risks common to
non-United States operations, including but not limited to governmental         
regulations, import restrictions and export control regulations, changes in     
demand resulting from fluctuations in exchange rates, as well as risks such as  
tariff regulations. TeleVideo's international sales are U.S. dollar-denominated 
and, therefore, are not directly subject to international currency fluctuations.
The strength of the dollar in relation to certain international currencies may, 
however, adversely affect the Company's sales to international customers.       

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FOREIGN JOINT VENTURE ACTIVITY                                                  

COMMONWEALTH OF INDEPENDENT STATES                            

    TeleVideo continues to pursue business opportunities in the former
Soviet Union, now referred to as the Commonwealth of Independent States. These  
may or may not involve sale or production of the Company's products, and        
TeleVideo may invest cash in these ventures.                                    

INTERTERMINAL                                                 

In April 1994, the Company acquired a 51% ownership of the    
"InterTerminal" joint venture in exchange for a $5,100 cash investment and a    
commitment to fund a $3.65 million loan, at a 20% interest rate, interest free  
for one year, to the venture. The main purpose of the joint venture was the     
construction of a truck terminal (approximately 100,000 square feet)            
approximately 25 miles outside of Moscow, and the construction was complete in  
early 1995. TeleVideo sold its 51% ownership in May 1995. The $3.65 million loan
was repaid to the Company in fiscal 1995. An additional amount of $1,369,500 was
received and recognized as a gain in fiscal 1996.                               

TELEVIDEO-RUS                                                 

       In January 1996, TeleVideo set up a company called "TeleVideo-RUS" in
the Commonwealth of Independent States with an initial investment of $150,000.  
The main purpose of this company is to act as a liaison between TeleVideo and   
the authorities in the CIS. One of the projects that the Company is anticipating
will be the construction of truck terminals similar to the "InterTerminal" joint
venture.                                                                        

 In October 1997, the Company received $250,000 from the sale of
TeleVideo-RUS. The Company recognized a $100,000 profit during fiscal 1997.     

RISKS OF OPERATIONS IN THE COMMONWEALTH OF INDEPENDENT STATES 

      There are a number of risks involved in TeleVideo's participation in
foreign joint ventures located in the Commonwealth of Independent States. These 
risks include the ability to execute and enforce the agreements, the future     
regulations governing the repatriation of funds, the political and economic     
instability and the dependence on future events which can influence the success 
or failure of the ventures and, thus, may affect the recoverability of the      
amounts invested by TeleVideo. Management of the Company is aware of the        
attendant risks relating to these ventures and continually monitors the         
conditions in the CIS and the activities of the joint ventures. Management      
further believes the investments to be secure and thus no reserves were required
as of October 31, 1998. However, there can be no assurance that conditions in   
the CIS will not deteriorate and place the Company's investments in jeopardy.   

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TLK, INC.                                                     

       In November 1996, the Company invested $150,000 in exchange for a 20%
ownership in TLK, Inc. for the China Power Plant projects in Lin Zhang, Quin    
Yuan and Henan Provinces in China. The Company expects to have a return on      
investment within the next twelve months. However, there can be no assurance    
that this will materialize.                                                     

KORAM, INC.                                                   

      On March 3, 1997, the Company deposited $224,820 in escrow in Korea,
which amount is to be used to purchase a 50% interest in a restaurant venture in
Seoul, Korea. The amount deposited has been written down to $109,820 due to the 
devaluation of the Korean won.                                                  

COMPETITION                                                                     

TeleVideo believes that brand recognition, product quality,   
availability, extensive standard product features, service and price are        
significant competitive factors in the Company's markets. In addition to the    
factors listed above, the principal considerations for distributors and         
resellers in determining which products to offer include profit margins,        
immediate delivery, product support, and credit terms. TeleVideo has continued  
and in the future will likely continue to face significant competition, with    
respect to these factors, particularly from the large international             
manufacturers. Most of these companies have significantly greater financial,    
marketing and technological resources than the Company, and may be able to      
command better terms with their suppliers due to higher purchasing volumes.     
Therefore, there is no assurance that the Company will be able to successfully  
compete in the future.                                                          

PRODUCTION                                                                      

  The Company subcontracts all of the manufacture of its terminal,
monitor and multimedia products to manufacturers in Japan, Taiwan, The People's 
Republic of China and South Korea. TeleVideo does not have any long-term        
contracts with its overseas manufacturers. The testing, inspection and some     
minor assembly work are done at its California headquarters. The Company        
believes its current manufacturing facilities in California will continue to be 
adequate for its purposes for the foreseeable future.                           

  The Company generally uses standard parts and components for its
products, although certain components are presently available and secured       
only from a single source. The Company's largest supplier accounted for         
approximately 26.2% (approximately $3.9 million), 7.1% (approximately $1.1      
million), and 5.6% (approximately $0.8 million), respectively, of net           
purchases in fiscal 1998. Loss of this supplier might have an adverse effect    
on the product supply of the Company. The Company believes, however, that in    
most cases, alternative sources of supply could be arranged as and when         
needed by the Company. To date, TeleVideo has not experienced any significant   
difficulties or delays in production of its monitor, terminal and multimedia    
products.                                                                       

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PRODUCT SERVICE AND WARRANTY                                                    

       TeleVideo's products are serviced worldwide primarily by distributors
and OEMs.                                                                       

 The Company provides end-user customers with a one-year factory
warranty on terminal products and a three-year factory warranty on monitor and  
multimedia products.                                                            

PROPRIETARY RIGHTS                                                              

        The Company regards certain aspects of its products as proprietary and
relies upon a combination of trademark and copyright laws, trade secrets,       
confidentiality procedures and contractual provisions to protect its proprietary
rights. The Company has registered trademarks in the United States and in over  
20 foreign countries for "TeleVideo" and the TeleVideo logo.                    

      The continuing development of the Company's products and business is
dependent, primarily, on the knowledge and skills of certain of its employees.  
To protect its rights to its proprietary information, the Company requires all  
employees and consultants to enter into confidentiality agreements that prohibit
the disclosure of confidential information to persons unaffiliated with the     
Company. There can be no assurance, however, that these agreements will provide 
meaningful protection for the Company's technology or other confidential        
information in the event of any unauthorized use or disclosure. There also can  
be no assurance that third parties will not independently develop products      
similar to or duplicative of products of the Company. The Company believes that 
due to the rapid pace of technological change in its industry, the Company's    
success is likely to depend more upon continued innovation, technical expertise,
marketing skill and customer support than on legal protection of the Company's  
proprietary rights.                                                             

GOVERNMENT REGULATIONS                                                          

      Most of the Company's products are subject to regulations adopted by
the Federal Communications Commission ("FCC"), which establishes radio frequency
emanation standards for computing equipment. TeleVideo believes that all of the 
Company's products that are subject to such regulations comply with these       
regulations. Although there can be no assurance, the Company has no reason to   
believe that new products will not also be approved. Failure to comply with the 
FCC specifications could preclude the Company from selling non-complying systems
in the United States until appropriate modifications are made. To date, the     
Company has not encountered any FCC compliance problems.                        

EMPLOYEES                                                                       

   As of January 19, 1999, the Company's full-time employees totaled
41, a decrease of 25% in the number of employees, which was 56, reported at     
the end of fiscal 1997. Of the total number of employees, 21 are engaged in     
product research, engineering, development and manufacturing; 8 in marketing    
and sales; and 12 in general management and administration. The Company-wide    
reorganization, which had started in previous fiscal years, has been            
completed during fiscal 1998. The Company has now stabilized its workforce      
and is well poised to embark on future tasks. The Company believes that its     
future success will depend, in part, on its ability to continue to attract      
and retain highly skilled technical, marketing and management personnel.        

       None of the Company's employees is subject to a collective bargaining
agreement or represented by a union, and the Company has never experienced a    
work stoppage. The Company believes that its employee relations are good.       

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ITEM 2.  PROPERTIES                                                             

The Company's headquarters, research and development and      
administrative operations are housed in a 69,630 square foot building located   
on 2.5 acres in San Jose, California, which was owned by the Company. On        
December 28, 1998, the Company sold the building and has leased it back.  The   
lease expires on December 31, 2013.                                             

The Company leases a domestic sales office in Hoffman Estates,
Illinois. The lease is on a month to month basis with a current monthly         
rental rate of $1,201. Management believes that the Company would be able to    
secure an extension to the lease if such an extension is deemed necessary in    
the future. In May 1997, the Company opened an eastern regional sales office    
in Morristown, New Jersey. The office is currently located at the residence     
of the employee until such time that an appropriate site is located. During     
fiscal 1997, the Company closed its domestic sales office in Newport Beach,     
California.                                                                     

ITEM 3.  LEGAL AND OTHER PROCEEDINGS                                            

TAX AUDITS                                                    

      On July 14, 1997, the State of Massachusetts issued to the Company a
certificate of withdrawal to do business in the state. Consequently, $250,000   
was removed from deferred taxes and was recognized as other income. The only    
issue pending is the California Franchise Tax exposure resulting from the       
previous Federal Income Tax audits. The Company believes that a resolution of   
this audit could occur in fiscal 1999 and its maximum exposure will not         
exceed $350,000. The Company has accrued this full amount at October 31, 1998.  

OTHER LEGAL PROCEEDINGS                                       

       The Company has been named, along with dozens of other manufacturers,
designers, and distributors of computer equipment, as a defendant in several    
lawsuits regarding product liability in connection with the alleged defective   
design of computer terminal keyboards and the size of the computer monitor      
screens. The first claim alleges that the various plaintiffs have suffered some 
form of severe wrist injury from the use of these keyboards. The second claim   
alleges that there was false advertising which claimed that the video screens   
were 17 inches in size, when in reality they were only 15 inches. The Company's 
attorneys have prepared a defense for these cases and the Company's insurance   
carriers are informed of the plaintiffs' claims. The Company intends to         
vigorously defend against the allegations of these suits. Management believes   
that the ultimate outcome of these lawsuits will not have a material adverse    
effect on the Company's financial position.                                     

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    

    No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 1998.                                                  

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 PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER      
MATTERS                                                       

     The Company's Common Stock is traded in the over-the-counter market
and prices are quoted on the Nasdaq National Market under the symbol "TELV."    
The following table sets forth for the periods indicated the high and low       
last sales prices for the Common Stock as reported by Nasdaq. The prices        
quoted below reflect inter-dealer prices, without retail mark-ups, markdowns    
or commissions and may not necessarily represent actual transactions.           

                                                                [Download Table]

                                 High         Low  
                               --------     -------
                                                   
FISCAL 1997:                                       

        First Quarter           $2.2500     $1.3752
        Second Quarter           1.7500      0.8752
        Third Quarter            1.8752      1.1252
        Fourth Quarter           4.1252      1.2500

FISCAL 1998:                                       

        First Quarter           $3.3750     $1.7500
        Second Quarter           3.1250      1.3750
        Third Quarter            2.0625      0.9688
        Fourth Quarter           1.0313      0.7188

   There were 756 holders of record of the Company's Common Stock at
February 8, 1999.                                                               

      On February 8, 1999, the closing price of the Company's Common Stock
in the over-the-counter market, as reported on the Nasdaq National Market,      
was $0.90625 per share. The Company effected a 4-for-1 reverse stock split of   
its outstanding common stock on April 23, 1998 in order to meet the Nasdaq      
National Market Maintenance Criteria. Stock prices after the effective date     
of the reverse split reflect the reverse stock split. Stock prices before the   
effective date of the reverse split also reflect the reverse stock split        
retroactively.                                                                  

   The Company has never paid cash dividends on its Common Stock and
does not anticipate paying cash dividends in the foreseeable future. The        
Company presently intends to retain any earnings for use in its business.       

(The remainder of this page was left blank intentionally.)      

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ITEM 6.  SELECTED FINANCIAL DATA                                                

The following selected financial data reflects the continuing 
operations of TeleVideo. The data below has been derived from the Company's     
audited consolidated financial statements for the fiscal years presented and    
should be read in conjunction with such audited financial statements and        
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" presented elsewhere herein.                                         

 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                   Year Ended October 31,                     
                                   ---------------------------------------------------------------------------
                                      1998             1997             1996            1995            1994  
                                   ---------        ---------        ---------       ---------        --------
                                                                                                              
STATEMENT OF OPERATIONS DATA:                                                                                 

Net sales                            $14,751          $19,884          $21,576         $16,914        $13,232 
    Income (loss) from continuing                                                                             
       operations                     (4,727)          (3,115)          (4,638)         (4,741)        (1,869)

Net income (loss)                     (8,881)(4)       (3,294)(3)       (2,917)(2)         415(1)        (907)
   Income (loss) from continuing                                                                              
       operations (per share)          (0.42)           (0.28)           (0.41)          (0.42)         (0.16)
    Net income (loss) (per share)      (0.78)           (0.29)           (0.26)           0.04          (0.08)

BALANCE SHEET DATA:                                                                                           

Cash and cash equivalents            $ 1,640          $ 3,604          $ 4,496         $ 5,145        $ 2,131 
Working capital                        2,533            9,208           13,239          13,035          7,246 
Total assets                          10,659           17,918           23,090          24,600         26,045 
Stockholders' equity                   6,437           15,288           18,544          21,345         21,832 


      See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 2 of Notes to Consolidated Financial Statements 
for a discussion of operating results, liquidity needs and acquisitions and     
dispositions during the periods.                                                

                                                                [Download Table]
                                                                             
(1)    Includes net gains (loss) from the following (in thousands):          

       (A)      Sale of building                                      $1,350 
       (B)      Disposition of Russian joint venture interest          1,910 
       (C)      Sale of interest in Kabil Electronics                  1,422 
       (D)      Disposal of SMS product line                            (346)
                                                                      ------ 
                                                                      $4,336 
                                                                      ------ 
                                                                      ------ 

(2)  Includes net gain from the sale of InterTerminal joint venture          
     interest of $1,370,000.                                                 

(3)  Includes net gains(loss) from the following (in thousands):             

      (A) Loss from investment in APT venture                         $ (623)
      (B) Gain from Russian investment                                   100 
      (C) Gain from tax settlement                                       250 
      (D) Korean currency valuation adjustment                          (115)
                                                                       ----- 
                                                                      $ (388)
                                                                      ------ 
                                                                      ------ 
(4)  Includes net loss from investment in APT venture of $ 4,076,903.        

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ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND        
RESULTS OF OPERATIONS                                         

       This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities     
Exchange Act of 1934. The forward-looking statements contained herein are based 
on current expectations, and actual results may differ materially. Factors that 
might cause such differences include, but are not limited to, those discussed   
under "Factors that may Affect Future Results," below.                          

GENERAL                                                                         

  The Company focused its resources on the terminal and multimedia
product lines after the Company completed a phase-out of its personal           
computer products in fiscal 1993. In November 1996, the Company announced its   
entry into the computer monitors market. Efforts continued to expand in the     
development of new multimedia products and upgrade kits in fiscal 1996 and      
fiscal 1997. During fiscal 1998, with continued expansion of monitor            
products, the Company started a phase-out of its multimedia products. Results   
in fiscal 1998, as well as in previous fiscal 1997, were also impacted by a     
continued shift in product mix, with the Company's monitors and terminal        
products contributing approximately 80% of the total sales. In November 1998,   
the Company launched its Windows-based terminal products.                       

         The Company has reduced its marketing and sales force from 15 employees
at October 31, 1997 to 8 employees at October 31, 1998, as a result of          
its continuing effort to reduce operating costs and to improve operating        
efficiency. In order to lower the production costs, the Company has continued to
negotiate with its suppliers and has also shifted its production process from   
in-house to overseas manufacturing.                                             

RESULTS OF OPERATIONS                                                           

FISCAL 1998 COMPARED TO FISCAL 1997                           

     Net sales for fiscal year 1998 were approximately $14.75 million, a
decrease of approximately 25.8% compared to $19.88 million net sales in fiscal  
1997. The decrease in net sales in fiscal 1998 was mainly due to the decrease in
the sale of multimedia products, which the Company is gradually phasing out,    
from approximately $6.5 million in 1997 to approximately $1.9 million in 1998, a
decrease of 70.7%. Additionally, there were decreases in the sales of OMTI      
board, spares, repairs and miscellaneous products from approximately $2.3       
million in 1997 to $1.2 million in 1998, or 52.4%. However, monitor net sales   
increased from $3.5 million in 1997 to $4.4 million in 1998, an increase of     
24%, to offset the decrease in net sales of multimedia and other products.      

      Cost of sales decreased from approximately $17.79 million in 1997 to
$13.38 million in 1998, a decrease of 24.8%. Cost of sales as a percentage of   
net sales increased from 89.5% in 1997 to 90.7% in 1998, primarily due to       
lower profit margins for multimedia products. Manufacturing expenses (which     
are included in cost of sales) decreased from approximately $1.3 million in     
fiscal 1997 to approximately $1.1 million in fiscal 1998, a decrease of         
$182,000 or 14.4%. The decrease was mainly due to the decrease in number of     
employees from 27 in 1997 to 17 in 1998.                                        

Sales and marketing expenses decreased from approximately $3.0
million in fiscal 1997 to approximately $2.4 million in fiscal 1998, a          
decrease of 18.6%. As a percentage of net sales, sales and marketing expenses   
were almost the same for 1997 and 1998 from 15% to 16.5%, respectively. The     
decrease in actual expenses was primarily due to the decrease in employee       
headcount in sales and marketing departments and a reduction in advertising     
expenses.                                                                       

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    Research and development expenses decreased as a percentage of net
sales from approximately 4% in fiscal 1997 to 3% in fiscal 1998, as actual      
expenses decreased from $762,000 in 1997 to $370,000 in 1998, a decrease of     
51.4%. The decrease was due mainly to the further reduction in employee         
headcount in the Company's engineering department.                              

      General and administrative expenses increased as a percentage of net
sales from approximately 7.3% in fiscal 1997 to approximately 22.3% in fiscal   
1998 while actual expenses also increased from approximately $1.46 million in   
fiscal 1997 compared to approximately $3.3 million in fiscal 1998, a 126%       
increase. The increase was due primarily to the increase in bad debts from      
approximately $293,000 recovery in fiscal 1997 to approximately $2.3 million    
in expense in 1998.                                                             

The Company has completely written off its accounts and note  
receivable from Applied Computer Technology, Inc., resulting in a total         
loss of approximately $1.96 million.                                            

The loss from operations reported in fiscal 1998 increased    
approximately $1.6 million or approximately 52%, from approximately $3.1        
million in fiscal 1997 to approximately $4.7 million in fiscal 1998. The        
increase was primarily due to the increase in general and administration        
expenses stemming from the recognition of bad debt from major customers, and    
the decrease in net sales from $19.9 million in fiscal 1997 to $14.8 million    
in fiscal 1998.                                                                 

   The net loss for fiscal year 1998 was approximately $8.9 million,
compared with a $3.3 million net loss for fiscal 1997. In addition to the       
various factors noted above, the loss from equity investment in Applied         
Photonics Technology, Inc. of approximately $4.08 million was the paramount     
reason for the approximately 170% increase in net loss.                         

 Net loss per share in fiscal 1998 was $0.78 based on 11,387,685
weighted average shares outstanding, compared to a net loss per share in fiscal 
1997 of $0.29 based on 11,374,810 weighted average shares outstanding. The      
shares outstanding numbers reflect a 4-for-1 reverse stock split effected in    
April 1998.                                                                     

      No income tax expense or credit was provided for in fiscal 1998. The
Company has approximately $98 million in federal net operating loss and credit  
carryovers and approximately $32 million in state net operating loss carryovers 
to offset future federal and state corporate income tax liabilities. No net     
deferred tax asset has been recognized by the Company for any future tax benefit
to be provided from the loss carry forwards since realization of any such       
benefit is not assured.                                                         

FISCAL 1997 COMPARED TO FISCAL 1996                           

     Net sales for fiscal year 1997 were approximately $19.88 million, a
decrease of approximately 7.8% from approximately $21.58 million in net sales   
reported in fiscal 1996. The decrease in net sales in fiscal 1997 was mainly due
to the decrease in the sale of multimedia products from approximately $10.35    
million in 1996 to approximately $6.5 million in 1997, a decrease of $3.85      
million or 37.2%. However, the launching of computer monitor products starting  
in November 1996 offset the decrease in multimedia sales. Computer monitor sales
for fiscal 1997 were approximately $3.55 million or 17.9% of net sales.         

     Cost of sales decreased from approximately $20.63 million in fiscal
1996 to approximately $17.79 million in fiscal 1997, resulting in a decrease in 
the percentage of sales from approximately 95.6% to 89.4% during the same       
period. The percentage decrease in cost of sales and the corresponding increase 
in gross margin in fiscal 1997 (an increase from approximately 4.4% to 10.6%)   
were primarily the results of lower multimedia sales which historically have a  
lower profit margin.                                                            

        Inventory reserves were decreased by approximately $140,000 for fiscal
1997. The Company reduced the reserve during the year by $519,000 reflecting    
reductions in ending reserved inventory and increased the reserve by $379,000   
reflecting additional charges to cost of goods sold for obsolete and slow moving
inventory.                                                                      

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     Manufacturing expenses increased from approximately $1.2 million in
fiscal 1996 to approximately $1.3 million in fiscal 1997, an increase of        
$113,000 or 9.8%. The increase was mainly due to the increase in depreciation   
of production equipment and outside consulting.                                 

      Marketing expenses increased as a percentage of sales in fiscal 1997
from approximately 11.3% in fiscal 1996 to 15.1% in fiscal 1997, while actual   
expenses also increased from $2.4 million in fiscal 1996 to $3.0 million in     
1997, a 23.3% increase. The increase in marketing expenses was due primarily to 
the increase in advertising expenses incurred in connection with the launching  
of high-end PC and Mac compatible monitor introduced in fiscal 1997 and an      
increase in outside consulting. These increases were offset by reductions in    
other expense categories.                                                       

      Research and development expenses decreased as a percentage of sales
from approximately 5.1% in fiscal 1996 to 3.8% in fiscal 1997, while actual     
research and development expenses also decreased from $1.1 million in fiscal    
1996 to $0.8 million in fiscal 1997, a 30.5% decrease. The decrease in actual   
expenses was due mainly to the further reduction in employee headcount from 7 in
fiscal 1996 to 5 in fiscal 1997.                                                

        General and administrative expenses decreased as a percentage of sales
from approximately 9.6% in fiscal 1996 to approximately 7.8% in fiscal 1997,    
while actual expenses also decreased from $2.1 million in fiscal 1996 compared  
to $1.46 million in fiscal 1997, a 30% decrease. The decrease was due primarily 
to the reduction in the provision for doubtful accounts from $760,000 in 1996 to
$292,500 in 1997.                                                               

The loss from operations reported in fiscal 1997 decreased    
approximately $1.5 million or approximately 30.7%, from $4.6 million in fiscal  
1996 to $3.1 million in fiscal 1997. The decrease was due primarily to the      
decrease in cost of sales and to the decrease in operating expenses in research 
and development and general and administration, partially offset by the increase
in sales and marketing due to the increase in advertising expense.              

         The Company recognized a net gain from the sale of TeleVideo-RUS in the
amount of $100,000 in fiscal 1997. A loss of $390,000 is also recognized        
representing 30% equity interest in Advanced Photonics Technology, Inc. and     
$115,000 due to currency devaluation of the Korean won in the Company's         
investment with Koram.                                                          

  Interest income earned in fiscal 1997 decreased to $410,000 from
$697,000 in fiscal 1996, a 41.2% decrease. The decrease was primarily due to    
lower cash level in 1997 than in 1996.                                          

        Net loss for fiscal year 1997 was approximately $3.3 million, compared
with $2.9 million net loss for fiscal 1996. The loss in fiscal 1997 was a result
of the various factors noted above.                                             

 Net loss per share in fiscal 1997 was $0.29 based on 11,374,810
weighted average shares outstanding, compared to a net loss per share in        
fiscal 1996 of $0.26 based on 11,351,000 weighted average shares outstanding.   

      No income tax expense or credit was provided for in fiscal 1997. The
Company has approximately $89.9 million in federal net operating loss and credit
carryovers and approximately $27.4 million in state net operating loss          
carryovers to offset future federal and state corporate income tax liabilities. 
No net deferred tax asset has been recognized by the Company for any future tax 
benefit to be provided from the loss carry forwards since realization of any    
such benefit is not assured.                                                    

  Inflation had no significant impact on the Company's business or
results of operations.                                                          

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LIQUIDITY AND CAPITAL RESOURCES                                                 

  Cash and cash equivalents totaled approximately $1.64 million at
October 31, 1998, down $1.96 million (approximately 54.5%) from fiscal 1997     
year-end levels of $3.6 million. The decrease in the cash and cash              
equivalents resulted primarily from the net cash used in operating activities   
of approximately $2.2 million and the cash used for investments and advance     
to affiliate aggregating $2.7 million offset by the net cash provided by        
notes payable of approximately $2.5 million.                                    

       Approximately $1.0 million in certificates of deposit were pledged as
collateral for comparable amounts of stand-by and sight letters of credit under 
the letter of credit agreements as of the end of fiscal 1998. At October 31,    
1998, the Company had approximately $230,000 in outstanding letters of credit   
which were secured by the pledged deposits under this agreement.                

   Net account receivables of $2.4 million at the end of fiscal 1998
were down $1.77 million (approximately 42.3%) from the 1997 year-end level of   
$4.2 million. The decrease in net account receivables was primarily due to      
having written off account receivable of approximately $865,000 from one of     
the Company's major customers. In addition, there was a decrease in net         
sales, combined with increase in collection of account receivables. Days        
sales outstanding in accounts receivables decreased from 72 days in fiscal      
1997 to 60 days in fiscal 1998.                                                 

     Net inventories of approximately $2.27 million at the end of fiscal
1998 were down approximately 22% from the 1997 year-end level of $2.92 million. 

  Working capital at the end of fiscal 1998 was approximately $2.5
million, down approximately 70% from the fiscal 1997 year-end level of          
approximately $9.2 million.                                                     

At the current consumption rate, the Company's cash balance of
approximately $1.64 million at October 31, 1998 (which includes $1.0 million    
pledged as security for stand-by and sight letters of credit) with additional   
fund proceeds from building sale, subsequent to year end, was anticipated       
to be adequate to fund the Company's fiscal 1999 operations at projected levels.

IMPACT OF YEAR 2000 ISSUES                                                      

      The Year 2000 ("Y2K") issue is the result of computer programs being
written using two digits rather than four to define the applicable year.        
Following December 31, 1999, the Company's computer equipment and software that 
is time sensitive, including equipment with embedded technology such as         
telephone systems and facsimile machines, may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or   
miscalculations causing disruptions of operations, including among other things,
a temporary inability to engage in normal business activities.                  

  The Company is in the process of assessing its computer systems,
software and operations infrastructure, including systems being developed to    
improve business functionality, to identify computer hardware, software and     
process control systems that are not Y2K compliant. The Company is internally   
evaluating the Y2K compliance of its existing computer systems, software and    
operations infrastructure and any Y2K issues of third parties of business       
importance to the Company. The Company is trying to minimize any disruptions    
to the Company's business which could result from the Y2K problem and to        
minimize liabilities which the Company might incur as a result of such          
disruptions. The Company currently anticipates that its Y2K assessment          
efforts will be completed by the end of second quarter of fiscal 1999.          

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    The Company has also initiated communications with its significant
suppliers and service providers and certain strategic customers to determine    
the extent to which such suppliers, providers or customers will be affected     
by any significant Y2K issues. Although, as of February 1, 1999, the Company    
has not received a significant number of responses to its inquiries, the        
Company believes that these communications will permit the Company to           
determine the extent to which the Company may be affected by the failure of     
these third parties to address their own Y2K issues and may facilitate the      
coordination of Y2K solutions between the Company and these third parties.      
There can be no guarantee, however, that third parties of business importance   
to the Company will successfully and timely evaluate and address their own      
Y2K issues. The failure of any of these third parties to achieve Y2K            
compliance in a timely fashion could have a material adverse effect on the      
Company's business, financial position, results of operations or cash flows.    
The Company does not expect that the costs of replacing or modifying the        
computer equipment and software will be substantially different, in the         
aggregate, from the normal, recurring costs incurred by the Company for         
systems development, implementation and maintenance in the ordinary course of   
business. In this regard, in the ordinary course of replacing computer          
equipment and software, the Company attempts to obtain replacements that are    
Y2K compliant.                                                                  

     The Company does not presently believe that the Y2K issue will pose
significant operational problems for the Company. However, if all Y2K issues    
are not properly identified, or assessment, replacement or modification and     
testing are not effected in a timely fashion with respect to Y2K problems       
that are identified, there can be no assurance that the Y2K issue will not      
have a material adverse effect on the Company's business, financial position,   
results of operations or cash flows or adversely affect the Company's           
relationships with customers, suppliers or others.                              

  The Company has not yet developed a contingency plan for dealing
with the operational problems and costs, including loss of revenues, that       
would be reasonably likely to result from failure by the Company and certain    
third parties to achieve Y2K compliance on a timely basis. The Company does     
have a plan to perform its analysis of the problems and costs associated with   
the failure to achieve Y2K compliance and to establish a contingency plan in    
the event of such failure by December 31, 1999.                                 

  The foregoing assessment of the impact of the Y2K problem on the
Company is based on management's best estimates as of the date of this Annual   
Report, which are based on numerous assumptions as to future events. There      
can be no assurance that these estimates will prove accurate, and actual        
results could differ materially from those estimated if these assumptions       
prove inaccurate or inadequate.                                                 

FACTORS THAT MAY AFFECT FUTURE RESULTS                                          

    The terminal, monitor and multimedia product 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. 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 Company will be    
able to continue to compete effectively.                                        

  The Company markets 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. Accordingly, the Company's    
future results could be adversely affected by a variety of factors, including   
without limitation, 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.                               

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     The computer market, particularly the multimedia product market, is
characterized by rapid technological change and product obsolescence, often     
resulting in short product life cycles and rapid price declines. The Company's  
success will continue to depend primarily on its ability to continue to reduce  
costs through manufacturing efficiencies and price negotiation with suppliers,  
the continued market acceptance of its existing products and its ability to     
develop and introduce new products. There can be no assurance that TeleVideo    
will successfully develop new products or that the new products it develops 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 to minimize inventory levels and product obsolescence of discontinued     
products. The Company's operating results could be adversely affected if        
TeleVideo is unable to manage all aspects of product transitions successfully.  

        The Company 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.                                                                      

The Company 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.                   

  The market 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.                                                        

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                          

                                                                [Download Table]

                                                                      PAGE NO.
                                                                      IN 10-K 
                                                                      --------
                                                                              
Report of Independent Certified Public Accountants..................     21   

Consolidated Balance Sheets - October 31, 1998 and 1997 ............     22   

Consolidated Statements of Operations for the Years Ended                     
October 31, 1998, 1997 and 1996.....................................     23   

Consolidated Statement of Stockholders' Equity for the Years Ended            
October 31, 1998, 1997 and 1996.....................................     24   

Consolidated Statements of Cash Flows for the Years Ended                     
October 31, 1998, 1997 and 199......................................     25   

Notes to Consolidated Financial Statements .........................     26   


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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors                                                              
TeleVideo, Inc.                                                                 

We have audited the accompanying consolidated balance sheets of TeleVideo, Inc. 
and Subsidiaries as of October 31, 1998 and 1997, and the related consolidated  
statements of operations, stockholders' equity, and cash flows for each of the  
three years in the period ended October 31, 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.                   

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the consolidated financial position of TeleVideo, Inc.   
and Subsidiaries as of October 31, 1998 and 1997, and the consolidated results  
of their operations and their consolidated cash flows for each of the three     
years in the period ended October 31, 1998, in conformity with generally        
accepted accounting principles.                                                 

/s/ GRANT THORNTON LLP                                                          
-----------------------                                                         
Grant Thornton LLP                                                      

San Jose, California                                                            
December 18, 1998                                                               
(except for note 14, as to which the                                            
date is December 28, 1998 and note 4, as                                        
to which the date is February 16, 1999)                                         

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                                                        [Enlarge/Download Table]

                                 TELEVIDEO, INC.                                                          

                           CONSOLIDATED BALANCE SHEETS                                                    
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                                              


                                                                                      October 31,         
                                                                              ----------------------------
                                                    ASSETS                        1998            1997    
                                                                              -----------    -------------
                                                                                                          
CURRENT ASSETS:                                                                                           
    Cash and cash equivalents (including restricted cash of                                               
       $1,000 in 1998 and $3,000 in 1997)                                     $     1,640    $     3,604  
    Accounts receivable, less allowance of $1,352 in 1998 and $438 in 1997          2,420          4,191  
    Inventories                                                                     2,275          2,923  
    Prepayments and other                                                             420            220  
    Loan receivable from major customer, less allowance of $313 in 1997                 -            900  
                                                                              -----------    -----------  
              Total current assets                                                  6,755         11,838  
                                                                              -----------    -----------  
PROPERTY, PLANT AND EQUIPMENT:                                                                            
    Land                                                                              890            890  
    Building                                                                        1,035          1,035  
    Production equipment                                                              530            524  
    Office furniture and equipment                                                  1,146          1,140  
    Building improvements                                                           1,105          1,105  
                                                                              -----------    -----------  
                                                                                    4,706          4,694  
    Less accumulated depreciation and amortization                                  2,138          1,934  
                                                                              -----------    -----------  
              Property, plant and equipment, net                                    2,568          2,760  

Long term receivable from major customer, less allowance of $292 in 1997                -            608  

INVESTMENTS IN AFFILIATES                                                           1,336          2,712  
                                                                              -----------    -----------  
              Total assets                                                    $    10,659    $    17,918  
                                                                              ===========    ===========  

                      LIABILITIES AND STOCKHOLDERS' EQUITY                                                
CURRENT LIABILITIES:                                                                                      
    Accounts payable                                                          $       541    $     1,539  
    Notes payable                                                                   2,500              -  
    Accrued liabilities                                                               820            730  
    Income taxes                                                                      361            361  
                                                                              -----------    -----------  
              Total current liabilities                                             4,222          2,630  
                                                                              -----------    -----------  

STOCKHOLDERS' EQUITY:                                                                                     
    Common stock, $.01 par value;                                                                         
       Authorized--75,000,000 shares                                                                      
       Outstanding--11,391,085 shares in 1998 and 11,374,810                                              
          shares in 1997                                                              458            455  
    Additional paid-in capital                                                     95,698         95,671  
    Accumulated deficit                                                           (89,719)       (80,838) 
                                                                              -----------    -----------  
              Total stockholders' equity                                            6,437         15,288  
                                                                              -----------    -----------  
              Total liabilities and stockholders' equity                      $    10,659    $    17,918  
                                                                              ===========    ===========  

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


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 TELEVIDEO, INC.

 CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                                       Year Ended October 31,       
                                                               ------------------------------------ 
                                                                 1998          1997          1996   
                                                               --------      --------      -------- 
                                                                                                    

NET SALES                                                      $ 14,751      $ 19,884      $ 21,576 

COST OF SALES                                                    13,381        17,785        20,627 
                                                               --------      --------      -------- 
GROSS PROFIT                                                      1,370         2,099           949 

OPERATING EXPENSES:                                                                                 
    Sales and Marketing                                           2,438         2,995         2,428 
    Research and Development                                        370           762         1,097 
    General and Administrative                                    3,289         1,457         2,062 
                                                               --------      --------      -------- 
              Total Operating Expenses                            6,097         5,214         5,587 
                                                               --------      --------      -------- 
              Loss from Operations                               (4,727)       (3,115)       (4,638)

GAIN ON SALES OF INVESTMENTS IN                                                                     
    UNCONSOLIDATED AFFILIATES                                         -             -         1,369 

EQUITY IN LOSS OF AFFILIATE                                      (4,077)         (738)          (33)

INTEREST AND OTHER INCOME (EXPENSE), net                            (77)          559           385 
                                                               --------      --------      -------- 

              Net loss                                         $ (8,881)     $ (3,294)     $ (2,917)
                                                               ========      ========      ======== 

Net loss per share, Basic and diluted                          $  (.078)     $  (0.29)     $  (0.26)
                                                               ========      ========      ======== 

Shares used in computing basic and diluted net loss per share    11,388        11,375        11,351 
                                                               ========      ========      ======== 

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

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 TELEVIDEO, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

 THREE YEARS ENDED
OCTOBER 31, 1998, OCTOBER 31, 1997, OCTOBER 31, 1996

                                                        [Enlarge/Download Table]


                                                    Common Stock     Additional                                 Total     
                                                -------------------   Paid in       Other     (Accumulated   Stockholders'
                                                 Shares     Amount    Capital     Adjustment    Deficit)        Equity    
                                                --------   --------  ----------  -----------  ------------  --------------
                                                                                                                          
Balance - October 31, 1995                       11,287      $451     $95,560       $(39)       $(74,627)      $21,345    

    Unrealized loss from marketable securities        -         -           -         39               -            39    

    Exercise of employee stock options               63         3          74          -               -            77    

    Net loss                                          -         -           -          -          (2,917)       (2,917)   
                                                --------   --------   -------       -----      ----------      --------   

Balance - October 31, 1996                       11,350       454      95,634          -         (77,544)       18,544    

    Exercise of employee stock options               25         1          37          -               -            38    

    Net loss                                          -         -           -          -          (3,294)       (3,294)   
                                                --------   --------  --------       -----      ----------      --------   

Balance - October 31, 1997                       11,375       455      95,671          -         (80,838)       15,288    

    Exercise of employee stock options               16         3          27          -               -            30    

    Net loss                                          -         -           -          -          (8,881)       (8,881)   
                                                --------   --------  --------       -----      ----------      --------   
Balance - October 31, 1998                       11,391      $458     $95,698       $  -        $(89,719)      $ 6,437    
                                                --------   --------  --------       -----      ----------      --------   
                                                --------   --------  --------       -----      ----------      --------   


The accompanying notes are an integral part of this financial statement.

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 TELEVIDEO, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

                                                        [Enlarge/Download Table]


                                                                            Year Ended October 31,       
                                                                        ------------------------------   
                                                                        1998         1997         1996   
                                                                       ------       ------       ------- 
                                                                                                         
INCREASE (DECREASE) IN CASH:                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                    
    Net Loss                                                          $(8,881)     $(3,294)      $(2,917)
       Charges (credits) to operations not affecting cash:                                               
          Provision (recovery) for bad debts on receivables             2,300         (293)          410 
          Provision for excess and obsolete inventories                   123         (379)           50 
          Net loss on sales of property and investment                      -           12            44 
          Loss on investment in unconsolidated affiliates               4,077          738            33 
          Depreciation and amortization                                   204          362           275 
          Loss on write off of foreign investments and loans                -            -            97 
          Income tax settlement                                             -         (250)            - 
       Changes in operating assets and liabilities:                                                      
          Accounts receivable                                             564         (111)       (1,211)
          Inventories                                                     524        3,290          (149)
          Prepayment and other                                           (200)        (159)          274 
          Accounts payable                                               (998)      (1,540)        1,418 
          Accrued liabilities                                              90         (126)         (126)
                                                                      -------      -------       ------- 
              Net cash used in operating activities                    (2,197)      (1,750)       (1,802)
                                                                      -------      -------       ------- 

CASH FLOWS FROM INVESTING ACTIVITIES:                                                                    
    Additions to property, plant and equipment                            (12)         (55)          (98)
    Loans to affiliate and other                                       (1,700)      (2,300)            - 
    Increase in investments in affiliates                              (1,000)      (3,225)         (205)
    Payments received on notes receivable from affiliate and other        415        6,400           513 
    Proceeds from sales of property and investment                          -            -           866 
                                                                      -------      -------       ------- 
                 Net cash (used in) provided by investing activities   (2,297)         820         1,076 
                                                                      -------      -------       ------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                    
    Proceeds from issuance of common stock                                 30           38            77 
    Proceeds from note payable - affiliate                                500            -             - 
    Proceeds from note payable - other                                  2,000            -             - 
                                                                      -------      -------       ------- 
              Net cash provided by financing activities                 2,530           38            77 
                                                                      -------      -------       ------- 
DECREASE IN CASH AND CASH EQUIVALENTS                                  (1,964)        (892)         (649)

CASH AND CASH EQUIVALENTS AT THE BEGINNING                                                               
    OF THE YEAR                                                         3,604        4,496         5,145 
                                                                      -------      -------       ------- 

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR                      $ 1,640      $ 3,604       $ 4,496 
                                                                      -------      -------       ------- 
                                                                      -------      -------       ------- 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                                        
   Cash paid during the year for:                                                                        
       Income taxes                                                   $     -      $     -       $    -  
       Interest                                                       $    98      $     -       $    -  


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

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 TELEVIDEO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 OCTOBER 31, 1998, 1997 AND 1996

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                 

PRINCIPLES OF CONSOLIDATION                                             

 The consolidated financial statements include the accounts of the Company
and certain of its majority owned subsidiaries, after elimination of    
inter-company accounts and transactions.                                

INVESTMENTS IN AFFILIATES                                               

All of the Company's unconsolidated affiliates, except for Applied      
Photonic Technology ("APT") which uses the equity method, are accounted 
for using a cost method. The Company's investments in joint ventures in 
the Commonwealth of Independent States, some of which represent a       
majority interest in the joint venture, are not consolidated due to the 
lack of reliable financial information from the entity. Such investments
are also carried at cost. (See "Joint Ventures.")                       

REVENUE RECOGNITION                                                     

The Company recognizes revenue when products are shipped. The Company   
performs periodic evaluations of its customers' financial condition and 
generally, no collateral is required under normal sales terms. TeleVideo
maintains a reserve for potential credit losses and adjusts the reserve 
periodically to reflect both actual and potential credit losses. Product
  warranties are based on the ongoing assessment of actual warranty expenses
incurred.                                                               

BASIC AND DILUTED NET LOSS PER SHARE                                    

   The Company adopted SFAS No. 128 "Earnings per Share" during the year ended
 October 31, 1998. Basic earnings per share is computed using the weighted
average number of common shares outstanding during the period. Diluted  
  earnings per share is computed using the weighted average number of common
and common equivalent shares outstanding during the period. Common      
equivalent shares consist of the incremental common shares issuable upon
conversion of convertible securities (using the if-converted method) and
  shares issuable upon the exercise of stock options and warrants (using the
treasury stock method). Common equivalent shares are excluded from the  
computation if their effect is anti-dilutive.                           

CASH AND CASH EQUIVALENTS                                               

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

USE OF ESTIMATES                                                        

In preparing financial statements in conformity with generally accepted 
accounting principles, 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.               

ADVERTISING COSTS                                                       

  Advertising costs are expensed as incurred. The Company does not incur any
    direct-response advertising costs. Advertising expense totaled approximately
   $1.07 million for 1998, approximately $1.3 million in 1997 and $0.5 million
in 1996.                                                                

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RESEARCH AND DEVELOPMENT COSTS                                          

Costs incurred for the development and enhancement of new products and  
services are charged to expense as incurred.                            

FAIR VALUE OF FINANCIAL INSTRUMENTS                                     

The fair value of cash and cash equivalents, accounts receivable, trade 
payables and notes payable approximates carrying value due to the short 
term nature of such instruments.                                        

INVENTORIES                                                             

    Inventories are stated at the lower of cost or market. Cost is computed on a
    currently adjusted standard basis (which approximates average cost) for 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 $646,000 and $523,000 in 1998 and 1997, respectively:   

                                                                [Download Table]

                                          October 31,   
                                     -------------------
                                      1998         1997 
                                     ------       ------
                                                        
Purchased parts and subassemblies    $1,196       $1,075
Work-in-process                          91          459
Finished goods                          988        1,389
                                     ------       ------
                                     $2,275       $2,923
                                     ------       ------
                                     ------       ------


PROPERTY, PLANT AND EQUIPMENT                                           

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

                                                                [Download Table]
                                                     
Building                                   40 years  
Production equipment                       1-10 years
Office furniture                           1-10 years


RECLASSIFICATIONS                                                       

Certain reclassifications have been made to conform to the 1998         
presentation, including changes which effect comparability of the annual
financial information to previously filed quarterly information. None of
  such reclassifications are material to the financial statements taken as a
whole.                                                                  

ADOPTIONS OR RECENT PRONOUNCEMENTS                                      

In June 1997, the Financial Accounting Standards Board ("the FASB")     
issued SFAS No. 130, Reporting Comprehensive Income" ("SFAS No. 130").  
SFAS No. 130 establishes standards for reporting and display of         
 comprehensive income and its components in the financial statements. SFAS
No. 130 is effective for fiscal years beginning after December 15, 1997.
 Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The adoption of SFAS No. 130 is not   
expected to have any impact on the Company's consolidated results of    
operations, financial position or cash flows.                           

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In June 1997, The FASB issued SFAS No. 131, "Disclosures about Segments 
of an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131
 establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and 
requires that those enterprises report selected information about       
operating segments in interim financial reports issued to shareholders. 
It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. SFAS No. 131 is        
effective for financial statements for fiscal years beginning after     
December 15, 1997. Financial statement disclosures for prior periods are
required to be restated. The adoption of SFAS No. 131 is not expected to
have any impact on the Company's consolidated results of operations,    
financial position or cash flows.                                       

In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative       
 Instruments and Hedging Activities" (SFAS No. 133) which is effective for
 fiscal years commencing after June 15, 1999. The adoption of SFAS No. 133
is not expected to have any impact on the Company's consolidated results
of operations, financial position or cash flows.                        

2.  ACQUISITIONS AND DIVESTITURES:                                              

MYSIMON, INC.                                                           

In September, 1998, the Company invested in the online comparison       
shopping Internet company, mySimon, inc. The total investment was $1.0  
million, and is accounted for on the cost method.                       

    Using proprietary intelligent agent technology called Virtual Learning Agent
(VLA), mySimon, inc. assists online shoppers by scouring the Internet to
instantly find the best prices on products from thousands of online     
merchants.                                                              

ADMOS TECHNOLOGIES INC.                                                 

During fiscal 1991, the Company acquired through its wholly owned       
    subsidiary, Silicon Logic, Inc., a 20% equity interest in a chip engineering
   firm (AdMOS Technologies Inc.) in exchange for certain assets and a nominal
    cash payment, the total value of which was $145,000. The acquisition of this
interest had been accounted for on the cost method. This investment was 
written off in fiscal 1992 due to the continued economic difficulties   
experienced by AdMOS.                                                   

    In fiscal 1991 and 1992, the Company loaned AdMOS a total of $470,000, which
  has been partially repaid. The outstanding balance at October 31, 1996 was
  $104,000. The repayment of a portion of this loan is personally guaranteed
   by the President and controlling shareholders of AdMOS. Due to the economic
difficulties AdMOS is currently experiencing, the principal and interest
balances due on this note have been fully reserved.                     

  In February 1995, the Company further loaned AdMOS $384,000 at an interest
  rate of 10% per annum. Approximately $104,000 was repaid to the Company in
 August 1995. In November 1995, the Company received another $100,000 from
 AdMOS. The Company has fully reserved the unpaid balance of $184,000 plus
accrued interest as of October 31, 1998.                                

TLK, INC.                                                               

In November 1996, the Company invested $150,000 in exchange for a 20%   
    ownership in TLK, Inc. for the China Power Plant projects in Lin Zhang, Quin
  Yuan and Henan Provinces in China. The Company expects to have a return on
investment during fiscal 1999. The investment is accounted for using the
cost method.                                                            

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KORAM, INC.                                                             

  On March 3, 1997, the Company deposited $224,820 in escrow in Korea, which
   amount is to be used to purchase a 50% ownership in a restaurant venture in
   Seoul, Korea. The amount deposited has been written down to $109,820 due to
the devaluation of the Korean won.                                      

APPLIED PHOTONICS TECHNOLOGY, INC.                                      

On April 16, 1997, the Company entered into a Common Stock Purchase     
agreement with Applied Photonics Technology, Inc. (APT), a California   
 corporation, whereby the Company purchased a 30% interest in APT for $3.0
million.                                                                

Founded in October 1996, APT is a developmental stage enterprise        
specializing in the development of electronics display technology. The  
anticipated markets for APT's outdoor media display system include the  
high end of billboard and illuminated sign markets, sports stadiums and 
arenas, transportation terminals, volume retailers and malls, and       
safety/public information displays. APT has not recorded any sales to   
date. The Company has been advised by APT that APT estimates its first  
sales will commence in fiscal 1999.                                     

The Company accounted for its investment in APT using the equity method 
of accounting during previous fiscal years. For the year ended October  
31, 1998, the Company has written off its equity investment, related    
 goodwill, and note receivable aggregating approximately $4.1 million. The
total loss from APT is as follows:                                      

                                                                [Download Table]
                                    
Equity Investment         $  556,000
Goodwill                  $1,821,000
Note Receivable           $1,700,000
                          ----------
                          $4,077,000
                          ----------
                          ----------

The Company currently expects that APT's existing capital and internally
generated funds would not be adequate for APT capital requirements      
through fiscal 1999. Substantial additional funds will be required from 
external sources to support APT's operation during fiscal 1999 and      
beyond. The Company has been advised that APT expects to receive such   
substantial additional funds through equity investment during early     
fiscal 1999, which may be adequate for its capital requirements through 
fiscal 1999 and beyond. However, there can be no assurance that         
additional funds will be available, or, if available, that such funds   
will be available on acceptable terms.                                  

Condensed financial information of APT follows:                         

BALANCE SHEET:                                                          

                                                                [Download Table]

                                                 October 31         
                                          --------------------------
                                             1998            1997   
                                          -----------     ----------
                                          (Unaudited)      (Audited)
                                                                    

Current Assets                              $  54           $ 1,632 
Other Assets                                  506               669 
                                            ------          ------- 
          Total Assets                        560             2,301 
                                            ------          ------- 
                                            ------          ------- 
Liabilities                                  2,828              321 
Common Stock                                 3,626            3,626 
Accumulated Deficit                         (5,894)          (1,646)
                                            ------          ------- 

          Total Liabilities and Equity      $  560          $ 2,301 
                                            ------          ------- 
                                            ------          ------- 

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STATEMENT OF OPERATIONS:                                                

                                                                [Download Table]
                                                                    
Operating Expenses                         ($4,455)        ($ 1,515)
Interest  & Misc. Income                        39               37 
                                           -------         -------- 
Net Loss                                   ($4,416)        ($ 1,478)
                                           -------         -------- 
                                           -------         -------- 

RUSSIAN JOINT VENTURES                                                  

In fiscal 1994, 1995 and 1996, the Company acquired interests in various
  joint ventures, primarily in the Commonwealth of Independent States. These
investments are accounted for on the cost method.                       

INTERTERMINAL                                                           

In April 1994, the Company acquired a 51% ownership of the              
"InterTerminal" joint venture in exchange for a $5,100 cash investment  
and a commitment to fund a $3.65 million loan, 20% interest rate,       
 interest free for one year, to the venture. The main purpose of the joint
venture was the construction of a truck terminal, completed in early    
1995, approximately 25 miles outside of Moscow. TeleVideo sold its      
51% ownership in May 1995. The $3.65 million loan was repaid to the     
Company in fiscal 1995. An additional $1,369,500 was received and       
recognized as a gain in fiscal 1996.                                    

TELEVIDEO-RUS                                                           

 In January 1996, TeleVideo set up a company called "TeleVideo-RUS" in the
  Commonwealth of Independent States with an initial investment of $150,000.
 The main purpose of this company is to act as a liaison between TeleVideo
and the authorities in the CIS.                                         

In October 1997, the Company received $250,000 from the sale of         
   Televideo-RUS. The Company recognized a $100,000 profit during fiscal 1997.

3.  LETTER OF CREDIT AGREEMENT:                                                 

The Company has one letter of credit agreement with the bank whereby the
  bank will issue up to a total of $1.0 million of standby and sight letters
    of credit. These agreements are contingent upon the Company maintaining time
 deposits (CD's) at the banks as collateral in a total amount no less than
   the outstanding borrowings. At October 31, 1998, the Company had letters of
credit outstanding of approximately $230,000 which were secured by CD's 
of $1.0 million.                                                        

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4.  RELATED PARTY TRANSACTIONS:                                                 

During 1998, 1997, and 1996 the Company has had transactions with its   
affiliates as follows (in thousands):                                           

                                                                [Download Table]

                                                1998         1997         1996  
                                             ---------    ---------    ---------
                                                                                
Note receivable at October 31:                                                  
    AdMOS  (1)                                 $  4         $  4         $104   
    AdMOS  (1)                                  180          180          180   

Interest receivable at October 31:                                              
    AdMOS  (1)                                   69           68           65   
    AdMOS  (1)                                   77           60           42   


The Company also borrowed $500,000 from Gem Management, Inc., a company 
owned by the majority shareholder's spouse, on September 15, 1998.      
The unsecured loan bears annual interest at a prime rate with principal 
and interest due on demand. On February 16, 1999, the outstanding loan  
principal and interest has been paid in full.                           

(1)      Amounts are fully reserved.                                            

5.  TRANSACTIONS WITH MAJOR CUSTOMERS                                           

The Company has entered into the following transactions with one        
of its major customers, Applied Computer Technology, Inc., (ACT).       

1) In June 1997, the Company loaned ACT $2,300,000. Interest on the loan
       accrues at 2% per month. All interest income accrued on the loan is being
       deferred by the Company until the amounts are received. As of October 31,
    1997, the loan principal balance was $900,000. Since then the loan has
   been paid down to $485,000, which was the loan balance at October 31,
1998 prior to the write-off discussed below.                      

   2) At October 31, 1997, ACT had owed the Company approximately $2.1 million
    in trade receivables, which represented approximately 41% of net trade
   receivables. Subsequently, the Company agreed to exchange $900,000 of
outstanding trade receivables for $900,000 of Series A convertible
       preferred stock of ACT. The preferred shares were convertible into common
       stock at the option of the holder, based on the 5 day average closing bid
  price of ACT common stock prior to conversion, subject to a floor of
       $2.50 per share and a ceiling of $4.25 per share. The conversion rate was
    subsequently changed. ACT had the obligation to register the shares by
filing a registration statement with the Securities and Exchange  
     Commission (SEC) and the preferred shares would have been automatically
      converted once the registration statement became effective. However, ACT
failed to register the shares with SEC.                           

   The preferred shares were issued in December, 1997. As of October 31,
    1997, the Company had reflected the $900,000 as a long term receivable
    and had further provided a reserve of $292,500 against the $900,000 to
      reflect the fair value of the preferred shares ultimately issued, taking
into consideration the lack of liquidity of the securities.       

      Additionally, $864,620 was outstanding as trade receivables due from ACT
at October 31, 1998.                                              

ACT has experienced a significant downturn in its business and the
   Company has written off a total amount of $1,957,120 as uncollectible
receivables, which include $864,620 trade receivables, $607,500   
long term note receivable and $485,000 note receivable.           

                                                                            31

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6.  CAPITAL STOCK:                                                              

The Company effected a 4-for-1 reverse stock split of its outstanding   
  common stock on April 23, 1998. All shares and per share amounts have been
retroactively adjusted for such reverse stock split.                    

PREFERRED STOCK                                                         

    The Company has authorized 3,000,000 shares of preferred stock. No preferred
stock has been issued to date.                                          

STOCK OPTION PLANS                                                      

The Company has three stock option plans, the 1991 ISO Plan ("1991 ISO  
  Plan"), the 1981 ISO Plan ("1981 ISO Plan") and the 1981 Supplemental Plan
    (the "Supplemental Plan") accounted for under the APB Opinion 25 and related
 interpretations. The 1991 ISO Plan provides for the granting of incentive
    and non- statutory options to employees including officers and directors who
   are employees for up to 4,000,000 shares. The options, which have a term of
ten years when issued, vest over five years. The exercise price of each 
  option equals to market price of the Company's stock on the date of grant.
    Both the 1981 ISO Plan and the Supplemental Plan expired in October 1991 and
 the exercise price for options granted under those plans was re-priced at
  $0.22 per share in November 1991, the market price of the Company's common
 stock at that date. Accordingly, no compensation cost has been recognized
 for any of the plans. Had compensation cost for the plans been determined
 based on the fair value of the options at the grant dates consistent with
 the method of Statement of Financial Accounting Standards 123, Accounting
  for Stock-Based Compensation ("SFAS 123"), the Company's net loss and loss
   per share would have been changed to the pro forma amounts indicated below.
  Pro forma results for 1998 and 1997 may not be indicative of the pro forma
  results in the future periods because the pro forma amounts do not include
  pro forma compensation cost for options granted prior to November 1, 1995.

                                                                [Download Table]


                                          OCTOBER 31,      
                                    ---------------------- 
                                      1998           1997  
                                    -------        ------- 
                                                           
Net loss (in thousands)                                    
    As reported                     ($8,881)       ($3,294)
    Pro forma                       ($8,987)       ($3,394)

Loss per share, basic and diluted                          
    As reported                      ($0.78)        ($0.29)
    Pro forma                        ($0.79)        ($0.29)


   The fair value of each option grant is estimated on the date of grant using
   the Black-Scholes options-pricing model with the following weighted-average
assumptions used for grants in 1998 and 1997 respectively: no expected  
dividends; weighted average risk-free interest rate of 6.69% and 6.05%; 
stock volatility 164% in 1998 and 139% in 1997; and expected lives of 10
years. The weighted average fair value of options granted were $1.49,   
$1.24 and $2.44 in 1998, 1997 and 1996, respectively.                   

                                                                            32

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 A summary of the status of the Company's stock option plans as of October
31, 1998, and changes during the three years ending October 31, 1998 is 
presented below:                                                        

                                             OPTIONS OUTSTANDING
                                            OCTOBER 31, 1998

                                                        [Enlarge/Download Table]

                                   OUTSTANDING                       EXERCISABLE          
                     ---------------------------------------  --------------------------- 
                                     WTD AVG.                 WTD AVG.           WTD AVG. 
RANGE OF             NUMBER          REMAINING      EXERCISE  NUMBER             EXERCISE 
EXERCISE PRICES      OUTSTANDING     CONT. LIFE     PRICE     EXERCISABLE        PRICE    
---------------      -----------     ----------     --------  -----------        -------- 
                                                                                          
1991 ISO PLAN                                                                             

$0.88 - $1.32          125,062           7.97          $0.97      56,812             $1.02
$1.52 - $2.12           51,188           7.57          $1.73      27,562             $1.69
$2.64 - $2.88            5,250           6.41          $2.73       3,625             $2.73
$4.12                    2,500           6.87          $4.12       1,875             $4.12

Totals                 184,000           7.80          $1.27      89,874             $1.36
                       -------           ----          -----      ------             -----
                       -------           ----          -----      ------             -----

1981 SUPPLEMENTAL PLAN                                                                    

$0.88                   37,500           3.06         $ 0.88      37,500           $ 0.88 

1981 ISO PLAN                                                                             

$0.88                      750           3.06         $ 0.88         750           $ 0.88 


Summary of Changes:                                                             

1981 ISO PLAN                                                                   

                                                                [Download Table]

                                                      WEIGHTED    
                                                       AVERAGE    
                                  OUTSTANDING       EXERCISE PRICE
                                 ------------       --------------
                                                                  
Balance, October 31, 1995            5,406              $0.88     
    Granted                              -                  -     
    Exercised                       (2,250)             $0.88     
    Canceled                             -                  -     
                                    ------                        
Balance, October 31, 1996            3,156              $0.88     
    Granted                              -                 -      
    Exercised                         (844)             $0.88     
    Canceled                        (1,083)             $0.88     
                                    ------                        
Balance, October 31, 1997            1,250              $0.88     
    Granted                              -                 -      
    Exercised                         (500)             $0.88     
    Canceled                             -                 -      
                                    ------                        
Balance, October 31, 1998           $  750              $0.88     
                                    ------                        
                                    ------                        

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1981 SUPPLEMENTAL PLAN                                                          

                                                                [Download Table]

                                           WEIGHTED   
                                            AVERAGE   
                           OUTSTANDING  EXERCISE PRICE
                           -----------  --------------
                                                      
Balance, October 31, 1995     37,500        $0.88     
    Exercised                      -            -     
    Canceled                       -            -     
                              ------                  

Balance, October 31, 1996     37,500        $0.88     
    Exercised                      -            -     
    Canceled                       -            -     
                              ------                  
Balance, October 31, 1997     37,500        $0.88     
    Exercised                      -            -     
    Canceled                       -            -     
                              ------                  
Balance, October 31, 1998     37,500        $0.88     
                              ------                  
                              ------                  


1991 ISO PLAN                                                                   

                                                                [Download Table]

                                                                  WEIGHTED   
                                                                   AVERAGE   
                                   AVAILABLE     OUTSTANDING   EXERCISE PRICE
                                   ---------     -----------   --------------
                                                                             

Balance, October 31, 1995           303,469       665,781           $2.24    
    Granted                        (207,250)      207,250           $2.48    
    Exercised                             -       (61,281)          $1.24    
    Terminated/Canceled             479,000      (479,000)          $2.60    
                                   --------      --------                    
Balance, October 31, 1996           575,219       332,750           $2.08    
    Granted                         (12,250)       12,250           $1.24    
    Exercised                             -       (23,688)          $1.58    
    Terminated/Canceled             110,125      (110,125)          $2.20    
                                   --------      --------                    
Balance, October 31, 1997           673,094       211,187           $1.96    
    Granted                        (111,875)      111,875           $1.37    
    Exercised                             -       (10,775)          $1.64    
    Terminated/Canceled             128,288      (128,288)          $2.43    
                                   --------      --------                    
Balance, October 31, 1998           688,507       184,000           $1.27    
                                   --------      --------                    
                                   --------      --------                    

7.  INCOME TAXES:                                                               

At October 31, 1998, the Company had tax loss carry forwards of         
approximately $98 million for federal income tax and approximately $32  
million for state income tax reporting purposes, respectively. The net  
    operating loss carry forwards expire through fiscal 2013. The Tax Reform Act
of 1986 contains provisions which may limit the net operating loss carry
forwards to be used in any given year upon occurrence of certain events,
including significant changes in ownership interests.                   

The Company adopted, effective November 1, 1993, Statement of Financial 
  Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," issued
    in February 1992. Under the liability method specified by SFAS 109, deferred
 tax assets and liabilities are determined based on the difference between
   the financial statement and tax bases of assets and liabilities as measured
by the enacted tax rates which will be in effect when these differences 
reverse. Deferred tax expense is the result of changes in deferred tax  
assets and liabilities.                                                 

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 No deferred tax asset or benefit was recorded at October 31, 1998, as all
amounts have been fully reserved. The valuation allowance increased by  
$3,823 in fiscal 1998 and increased by $2,997 in fiscal 1997. The       
components are as follows (in thousands):                               

                                                                [Download Table]

                                   1998         1997   
                                 --------     -------- 
                                                       
Net operating loss               $ 35,168     $ 31,844 
Other                               1,328          829 
                                 --------     -------- 
                                   36,496       32,673 
Less valuation allowance          (36,496)     (32,673)
                                  --------     --------
       Net benefit               $      -     $      - 
                                 --------     -------- 
                                 --------     -------- 

The following is a reconciliation of expected tax expense (benefit) to  
actual for each of the years ended October 31 (in thousands):           

                                                                [Download Table]

                                   1998          1997          1996   
                                 ---------    ---------      ---------
                                                                      
Book income (loss)                $(8,881)     $(3,294)       $(2,917)
                                  -------      -------        ------- 
Expected tax expense (benefit)     (3,020)      (1,120)        (1,160)
                                  -------      -------        ------- 
Adjustments to reconcile                                              
  expected to actual expense                                          
  (benefit):                                                          
     Effect of change in                                              
     valuation allowance (net)      3,020        1,120          1,160 
                                  -------      -------        ------- 
    Actual tax expense (benefit)  $     -      $     -        $     - 
                                  -------      -------        ------- 
                                  -------      -------        ------- 


  As of October 31, 1998, the Company has pending a California Franchise Tax
   exposure resulting from the previous Federal Income Tax audits. The Company
   believes that a resolution of this audit could occur in fiscal 1999 and its
    maximum exposure will not exceed $350,000. The Company has accrued this full
amount at October 31, 1998.                                             

8.  LITIGATION AND OTHER:                                                       

The Company has been named, along with dozens of other manufacturers,   
    designers, and distributors of computer equipment, as a defendant in several
lawsuits regarding product liability in connection with the alleged     
    defective design of computer terminal keyboards and the size of the computer
 monitor screens. The first issue alleges that the various plaintiffs have
 suffered some form of severe wrist injury from the use of said keyboards.
    The second issue alleges that there was false advertising which claimed that
   the video screens were 17 inches in size, when in reality they were only 15
   inches. The Company's attorneys have prepared a defense for these cases and
    the Company's insurance carriers are informed of the plaintiff's claims. The
    Company intends to vigorously defend against the allegations of these suits.
Management believes that the ultimate outcome of these lawsuits will not
have a material adverse effect on the Company's financial position.     

                                                                            35

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9.  CONCENTRATIONS:                                                             

   The Company, which operates in a single industry segment, designs, produces
and markets video display terminals, computer monitors and multimedia   
products designed for office and home automation both domestically and  
   internationally. The Company had export sales primarily to Europe, Asia and
 Latin America of approximately 14.0% ($2.1 million), 13.7% ($2.7 million)
 and 15.8% ($3.4 million) of net sales during fiscal 1998, 1997, and 1996,
respectively.                                                           

    For the fiscal year ended October 31, 1998, one customer accounted for 12.3%
   and another customer accounted for 11.2%. For the fiscal year ended October
 31, 1997, one customer accounted for 16.6% and another customer accounted
for 16.1% of net sales. For the fiscal year ended October 31, 1996, one 
   customer accounted for 10.2% and another customer accounted for 8.8% of net
sales.                                                                  

10. SIGNIFICANT FOURTH QUARTER ADJUSTMENTS:                                     

Included in the equity in loss of affiliate of $4.077 million           
is the Company's 30% share of APT's net loss of $1.32 million           
based on the unaudited financial statements of as of October            
31, 1998. The Company's proportionate share of such losses were not     
reflected in the quarterly information as such information was not      
available. The remaining equity in loss of affiliate of approximately   
$2.76 million resulted from an impairment of value determination made at
year end.                                                               

11. NOTE PAYABLE:                                                               

 In June 1998, the Company has borrowed $2.0 million from Redwood Mortgage
    Corp. collateralized by the real property. The loan is due in 24 months from
the date of funding and bore an annual interest at a fixed rate of 12%. 
Subsequent to year end, the loan was repaid.                            

12. ACCRUED LIABILITIES:                                                        

   Accrued liabilities consist of the following at October 31:  (In thousands)

                                                                [Download Table]


                                                1998         1997  
                                              --------     --------
                                                                   
Employee compensation and benefits              $173         $212  
Warranty                                         169          169  
Legal reserve                                    200          200  
Accrued sales and use tax                          1            -  
Professional fees                                 60           57  
Other                                            217           92  
                                                ----         ----  
                                                $820         $730  
                                                ----         ----  
                                                ----         ----  


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13. VALUATION AND QUALIFYING ACCOUNTS:                                          

The Company's reserves for doubtful accounts receivable and inventory   
obsolescence consist of the following: (In thousands)                   

                                                        [Enlarge/Download Table]

                                                                    CHARGED                            
                                                      BALANCE AT   (CREDITED)                BALANCE AT
                                                       BEGINNING   TO COSTS &                  END OF  
                                                       OF PERIOD     EXPENSE   DEDUCTIONS      PERIOD  
                                                      ----------   ----------  ----------    ----------
                                                                                                       
   YEAR ENDED OCTOBER 31, 1996:                                                                        
      Reserve for doubtful accounts                     $  841      $  760        $(321)(1)      $1,280
      Reserve for inventory obsolescence                $  613      $  918        $(868)(2)      $  663

   YEAR ENDED OCTOBER 31, 1997:                                                                        
      Reserve for doubtful accounts                     $1,280      $  292        $(529)(1)      $1,043
      Reserve for inventory obsolescence                $  663      $  379        $(519)(2)      $  523

   YEAR ENDED OCTOBER 31, 1998:                                                                        
      Reserve for doubtful accounts                     $1,043      $2,300      $(1,991)(1)      $1,352
      Reserve for inventory obsolescence                $  523      $  813        $(690)(2)      $  646

(1) Deductions represent write-offs of fully reserved receivables.                                     
(2) Reductions due to sales or scrap of fully reserved inventory.                                      


14.      SUBSEQUENT EVENTS:                                                     

In December 1998, the Company sold its 69,630 sq. ft. building, including       
land and improvements, located at 2345 Harris Way, San Jose, California 95131   
("Harris Building") to TVCA, LLC., an unaffiliated Delaware limited liability   
company ("TVCA") for $ 11.0 million. The nature of the consideration is         
$ 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 shall be 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 shall be due and payable to TeleVideo,       
Inc. on December 1, 2013. The purchase price was determined by negotiations     
between the parties based on an independent third party real estate appraisal.  

In connection with the sale, the Company entered into a lease agreement with    
TVCA for the period of 15 years commencing on December 28, 1998 through         
December 31, 2013. Pursuant to the lease agreement, an initial monthly          
payment of $ 109,973 is required. Monthly lease payments increase during the    
lease term as stipulated in the lease agreement.                                

The accounting for this sale-leaseback transaction involving real estate will   
result in a deferred gain to be amortized over the lease term.                  

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE.                                           

NONE.                                                                           

PART III

The following items included in the Company's Definitive Proxy
Statement dated on and about March 1, 1999 to be used in connection with the    
Company's Annual Meeting of Stockholders to be held on April 6, 1999 are        
incorporated herein by reference:                                               

                                                        [Enlarge/Download Table]

                                                                             PAGES IN   
                                                                         PROXY STATEMENT
                                                                         ---------------
                                                                                        
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                      4      

ITEM 11. EXECUTIVE COMPENSATION                                                  9      

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT          5      

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         10      


(The remainder of this page was left blank intentionally.)    

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 PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.  

(a)      The following documents are filed as part of this Report.              

1.       FINANCIAL STATEMENTS.                                

        The Consolidated Financial Statements, Notes thereto and the Report of
Grant Thornton LLP, Independent Public Accountants, thereon are included in Part
II of this Report on Form 10-K.                                                 

2.       FINANCIAL STATEMENT SCHEDULES.                       

       All schedules have been omitted since the required information is not
present in amounts sufficient to require submission of the schedule, or because 
the information required is included in the accompanying Consolidated Financial 
Statements.                                                                     

3.       EXHIBITS.  See Exhibit Index, below.                 

(b)      Reports on Form 8-K.       No report on Form 8-K was filed by the      
                                 Company with respect to the quarter ended
         October 31, 1998.

      (The remainder of this page was left blank intentionally.)

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 EXHIBIT INDEX

                                                        [Enlarge/Download Table]


  EXHIBIT                                                                                 
  NUMBER                                                                          FOOTNOTE
  -------                                                                         --------
                                                                                          

    3.1    Restated Certificate of Incorporation of the Company...............      (1)   

    3.2    Bylaws of the Company..............................................      (1)   

   10.1    TeleVideo, Inc. 1991 Incentive Stock Option Plan...................      (2)   

   10.2    Form of Stock Option Agreement for TeleVideo, Inc.                             
           1991 Incentive Stock Option Plan...................................      (2)   

   10.3    TeleVideo, Inc. 1992 Outside Directors' Stock Option Plan..........      (2)   

   10.4    Management Bonus Plan effective fiscal 1984........................      (3)   

   10.5    Form Distributor and Licensing Agreement...........................      (2)   

   10.6    Form Original Equipment Manufacturer Agreement.....................      (2)   

   10.9    InterTerminal Agreements and Promissory Notes......................      (5)   

   21.0    Subsidiaries                                                                   

   23.0    Consent of Grant Thornton LLP, Independent Certified Public Accountants        

   27.0    Financial Data Schedule                                                        
---------------------------                                                               


FOOTNOTES TO EXHIBIT INDEX                                                      

(1)      Incorporated by reference from the corresponding exhibit description in
    the Company's annual report on Form 10-K for the fiscal year ended
October 31, 1987, filed January 29, 1988.                     

(2)      Incorporated by reference from the corresponding exhibit description in
    the Company's annual report on Form 10-K for the fiscal year ended
October 31, 1991, filed January 27, 1992.                     

(3)      Incorporated by reference from the corresponding exhibit description in
       the Company's annual reports on Form 10-K, filed January 29, 1985 and
January 28, 1986, respectively.                               

(5)      Incorporated by reference from the corresponding exhibit description in
    the Company's annual report on Form 10-K for the fiscal year ended
October 31, 1994, filed February 10, 1995.                    

                                                                            40

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SIGNATURES

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

                                         TELEVIDEO, INC.
                                      ------------------------------------------
                                        (REGISTRANT)

DATE:  FEBRUARY 16, 1999         BY:               /S/ K. PHILIP HWANG          
                                      ------------------------------------------
                                         K. PHILIP HWANG
                                         CHAIRMAN OF THE BOARD AND
                                         CHIEF EXECUTIVE OFFICER AND
                                          ACTING CHIEF FINANCIAL OFFICER

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the     
Registrant and in the capacities on the dates indicated.                        

                                                                [Download Table]


            SIGNATURE                      TITLE                      DATE          
-------------------------------  -------------------------        ----------------  
                                                                                    

/S/    K. PHILIP HWANG                                                              
-------------------------------  CHAIRMAN OF THE BOARD,            FEBRUARY 16, 1999
       K. Philip Hwang           CHIEF EXECUTIVE OFFICER AND                        
                                 ACTING CHIEF FINANCIAL OFFICER                     

/S/    ROBERT E. LARSON          DIRECTOR                        FEBRUARY 16, 1999  
-------------------------------                                                     
       Robert E. Larson                                                             

/S/    WOO K. KIM                DIRECTOR                        FEBRUARY 16, 1999  
-------------------------------                                                     
       Woo K. Kim                                                                   

/S/    PHILLIP A. ANNEN          DIRECTOR                        FEBRUARY 16, 1999  
-------------------------------                                                     
       Phillip A. Annen                                                             


                                                                            41

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 TELEVIDEO, INC.

EXHIBITS

TO

 REPORT ON FORM 10-K

 FOR

FISCAL YEAR ENDED OCTOBER 31, 1998

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		12/31/13		11		37
		12/1/13		37
		12/31/99		17		18
		6/15/99		28
		4/6/99		2		38
		3/1/99		38					DEF 14A
Filed on:		2/16/99		21		41
		2/8/99		2		12
		2/1/99		18
		1/19/99		6		10
		1/1/99		37
		12/28/98		11		37			8-K
		12/18/98		21
For Period End:		10/31/98		1		42			10-K/A,  NT 10-K
		9/15/98		31
		4/23/98		12		32
		12/15/97		27		28
		10/31/97		7		37			10-K,  10-K/A,  DEF 14C,  NT 10-K,  PRE 14C
		7/14/97		11
		4/16/97		29					8-K
		3/3/97		9		29			DEF 14A
		10/31/96		7		37			10-K405
		11/1/95		32
		2/10/95		40
		10/31/94		40
		11/1/93		34
		1/27/92		40
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