8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K

                             CURRENT REPORT Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


         Date of report (Date of earliest event reported) January 11, 2005

                              Neoware Systems, Inc.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


                                    Delaware
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                 (State or Other Jurisdiction of Incorporation)


                000-21240                       23-2705700
        ------------------------    ---------------------------------
        (Commission File Number)    (IRS Employer Identification No.)


             400 Feheley Drive, King of Prussia, Pennsylvania       19406
             ------------------------------------------------     ---------
                 (Address of Principal Executive Offices)         (Zip Code)


                                 (610) 277-8300
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)


         Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

         |_| Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)

         |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)

         |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

         |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))




Page 2



Item 1.01 Entry into a Material Definitive Agreement.

      On January 12, 2005, Neoware Systems, Inc. (the "Company") announced that
on January 11, 2005 it entered into an Asset Purchase Agreement ("Agreement")
with TeleVideo, Inc. to purchase TeleVideo's thin client business. The Agreement
contained customary representations and warranties. The business to be acquired
principally consists of customer lists, intellectual property, product brands,
contract rights and goodwill. As part of the transaction, the Company will also
acquire a license for the TeleVideo tradename and non-competition agreements
from TeleVideo and its principal shareholder. The Company intends to use the
business to be acquired for purposes similar to those of TeleVideo. The
consideration to be paid by the Company is $5,000,000 in cash, $500,000 of which
will be held in an escrow account for one year, $300,000 to be held for two
years and $150,000 to be held for three years for indemnification claims, plus a
potential cash earn-out based upon performance. The Company is not assuming any
of TeleVideo's debt. In addition, effective immediately, TeleVideo has retained
the Company as its exclusive distributor and sales agent. The foregoing
description of the Agreement and the transactions contemplated thereby are
qualified in their entirety by reference to the Agreement which will be filed
separately with the Securities and Exchange Commission. The boards of both
companies have approved the transaction, and the two majority stockholders of
TeleVideo owning approximately 62% of its common stock have executed a written
consent approving the transaction. Therefore, no further stockholder action will
be required to approve the transaction, and TeleVideo will not hold a
stockholders meeting in connection with the transaction. TeleVideo will file an
information statement with the Securities and Exchange Commission and, subject
to clearance by the SEC, will distribute it to its stockholders. The acquisition
is expected to close in March 2005.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits. The following documents are filed as exhibits to this report.

99.1 Press Release dated January 12, 2005



Page 3


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


Dated: January 18, 2005                        Neoware Systems, Inc.
                                               -------------------------------
                                               (Registrant)


                                               /s/ Keith D. Schneck
                                               -------------------------------
                                               Keith D. Schneck
                                               Executive Vice President and
                                               Chief Financial Officer

EX-99

[GRAPHIC OMITTED] neoware
                                                                   PRESS RELEASE


               NEOWARE TO ACQUIRE TELEVIDEO'S THIN CLIENT BUSINESS

       NEOWARE GROWS ITS LEADERSHIP POSITION IN THE THIN CLIENT MARKET BY
             ACQUIRING THE FOURTH LARGEST U.S. THIN CLIENT PROVIDER

KING OF PRUSSIA, PA. and SAN JOSE, CALIF., Jan. 12, 2005 -- Neoware Systems
(Nasdaq:NWRE) and TeleVideo, Inc. (Pink Sheets:TELV), today announced that the
companies have entered into a Definitive Agreement under which Neoware will
acquire TeleVideo's thin client business including all thin client assets,
certain contract obligations, a trademark license, product brands, customer
lists, customer contracts and non-competition agreements for $5 million in cash
plus a potential earn-out based upon performance. In addition, effective
immediately, TeleVideo has retained Neoware as its exclusive distributor and
sales agent. Starting today, all TeleVideo thin client products are available to
TeleVideo customers directly from Neoware. Subject to regulatory approval, the
acquisition is expected to close in March 2005.

TeleVideo, Inc. is a publicly held company specializing in the development and
manufacturing of Windows-based and network terminals. Founded in 1975, TeleVideo
established itself as a leading supplier in the video display terminal industry.
The company pioneered a new generation of computer terminals with the
introduction of its first "smart" terminals, based on the Intel microprocessor,
at a time when dumb terminals were the industry standard. Recently ranked by IDC
as the fourth largest thin client provider in the U.S., TeleVideo has developed
a niche as the leading provider of all-in-one, integrated, flat-panel, thin
clients, including one of the industry's only 17" flat panel thin client models.
Sales of TeleVideo thin clients were approximately $7 million in 2004.

The acquisition of TeleVideo's thin client business increases Neoware's market
share and distribution channels, and broadens Neoware's product offerings in the
thin client appliance market. Additionally, Neoware has agreed to retain
TeleVideo as its sales agent in Korea, opening a new geographic market for the
Company. TeleVideo thin client products will continue to be available through
the existing channel of TeleVideo authorized distributors and resellers.

"We are pleased to partner with Neoware to provide our customers with superior
quality and service," said Dr. K. Philip Hwang, Chairman and Chief Executive
Officer of TeleVideo, Inc. "TeleVideo's products and customers will benefit
greatly as a result of our partnership with Neoware."

"With this acquisition, Neoware further enhances our market share, while taking
advantage of economies of scale and synergies between the two organizations to
enhance operating margins. Simultaneously, we continue to broaden our product
line with innovative new products," stated Michael Kantrowitz, Chairman and CEO
of Neoware. "TeleVideo and Neoware customers are assured of continued
development, quality products and superior service from a financially strong
company that is committed to leadership in thin client appliance computing."

About Neoware

Neoware's software, services, and thin client appliances make computing more
secure, manageable, reliable and affordable by enabling global enterprises to
fully leverage server-based computing. By incorporating open, standards-based
technologies and eliminating the obsolescence that is built into standard PC
architectures, Neoware provides enterprises with increased flexibility and
choice, as well as lower up-front and total costs.

Neoware's software products enable enterprises to gain control of their
desktops, and to integrate mainframe, midrange, UNIX and Linux applications with
Windows(r) and the web. Neoware's thin client appliances enable enterprises to
run applications on servers, and display them across wired or wireless networks
on secure, managed, reliable appliances that cost as little as one fourth the
price of today's typical business PC. Neoware services enable corporations to
benefit from server-based computing with training and end-to-end support.

Neoware's products are available worldwide from IBM, as well as from select,
knowledgeable resellers. More information about Neoware can be found on the Web
at http://www.neoware.com or via email at invest@neoware.com. Neoware is based
in King of Prussia, PA.

About TeleVideo

A pioneering Silicon Valley company, TeleVideo, Inc. began in 1975 as the
innovator and market leader of smart text terminals. Today, TeleVideo continues
to innovate by developing and manufacturing Windows-Based Thin Client hardware
and software solutions. Designed for corporate and vertical IT professionals and
end-users, TeleVideo's family of TeleCLIENT products allows for secured,
manageable and cost-effective network computing in healthcare, business,
government and more. For more information, please visit www.televideo.com.

Neoware is a registered trademark of Neoware Systems, Inc. All other names
products and services are trademarks or registered trademarks of their
respective holders.

Neoware Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements regarding: the consummation of the acquisition of TeleVideo's thin
client business; the increase in our market share and distribution channels;
anticipated economies of scale, synergies and enhanced operating margins as a
result of the acquisition; our broadened product offerings and geographic
market; our financial strength; our continued development and support of quality
products; our commitment to hold a leadership position in the thin client
segment of the PC market. These forward-looking statements involve risks and
uncertainties. Factors that could cause actual results to differ materially from
those predicted in any such forward-looking statement include: our ability to
consummate the acquisition and successfully integrate the TeleVideo thin client
business; our timely development and customers' acceptance of our products,
including the former TeleVideo products; our ability to continue to lower our
costs; pricing pressures; rapid technological changes in the industry; growth of
the thin client computing segment of the PC market; growth of the host access
software market; increased competition; our ability to attract and retain
qualified personnel; our ability to identify and successfully consummate and
integrate future acquisitions; adverse changes in customer order patterns;
adverse changes in general economic conditions in the U.S. and internationally,
risks associated with foreign operations and political and economic
uncertainties associated with current world events. These and other risks are
detailed from time to time in Neoware's periodic reports filed with the
Securities and Exchange Commission, including, but not limited to, its report on
Form 10-K for its fiscal year ended June 30, 2004 and Form 10-Q for the quarter
ended September 30, 2004.



TeleVideo Forward-Looking Statements

This press release includes forward-looking statements, which are made pursuant
to the safe-harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically indicated by the presence of
words such as "expect," "anticipate," "believe," "intend," "may," "predict,"
"will be," and other similar expressions. These forward-looking statements
cover, among other items, statements regarding the consummation of any
transaction. Any forward-looking statements are not guarantees of future
performance and actual results could differ materially from those anticipated as
a result of certain risks and uncertainties, some of which are beyond the
control of the Company. A description of the risk factors affecting the
Company's business can be found in TeleVideo, Inc.'s Safe Harbor Compliance
Statement included as Exhibit 99.1 to its Annual Report on Form 10-K for the
fiscal year ended October 31, 2003.


CONTACT:  Neoware Systems, Inc.
          Keith Schneck
          Chief Financial Officer
          (610) 277-8300, ext. 1072
          kschneck@neoware.com

          TeleVideo, Inc.
          John Lee
          Product Marketing Manager
          (408) 955-7406
          jlee@televideo.com