Filed pursuant to Rule 424(b)(3)
Registration No. 333-133291
PROSPECTUS SUPPLEMENT NO. 1
(To Prospectus dated May 10, 2006)
FOCUS ENHANCEMENTS, INC.
11,443,718 SHARES OF COMMON STOCK
This document supplements the prospectus dated May 10, 2006 of Focus Enhancements, Inc., relating to the sale from time to time by certain of our securityholders of up to 11,443,718 shares of our common stock. You should read this prospectus supplement in conjunction with the prospectus, and this prospectus supplement is qualified by reference to the prospectus, except to the extent that the information in this prospectus supplement supersedes the information contained in the prospectus.
Before deciding whether to invest, you should read the “Risk Factors” beginning on page 2 of the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state securities commission or regulator has approved or disapproved of these securities or determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The following table sets forth: (i) the number of shares of Focus common stock beneficially owned by each selling stockholder as of July 20, 2006 (including shares issuable upon conversion of the notes) and (ii) the number of shares of Focus common stock to be offered hereby by each selling stockholder. Other than as disclosed in this prospectus supplement, no selling stockholder has had any position, office or other material relationship with us during the past three years. The information set forth below is based on information provided by each selling stockholder.
Unless otherwise indicated in the footnotes below, we believe that the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned. The information regarding shares beneficially owned after the offering assumes the sale of all shares offered by each of the selling stockholders. The percentage ownership data is based on 69,893,630 shares of our common stock outstanding as of July 20, 2006. The information below does not include shares of common stock that may be issued upon conversion of additional senior secured convertible notes that we may issue on December 31, 2006 and June 30, 2007 in lieu of interest on the original $10,000,000 of senior secured convertible notes and any interest paid thereon.
The shares of common stock covered by this prospectus may be sold by the selling stockholders, by those persons or entities to whom they transfer, donate, devise, pledge or distribute their shares or by other successors in interest. We are registering the shares of our common stock for resale by the selling stockholders defined below.
Name |
| Shares |
| Shares to be Sold in the |
| Shares Beneficially |
|
Barbara Shingleton Trust |
| 260,625 |
| 260,625 | (2) | — | * |
Brad Shingleton Trust |
| 260,625 |
| 260,625 | (3) | — | * |
CFG Trust #1 |
| 260,625 |
| 260,625 | (4) | — | * |
David Foote |
| 521,250 |
| 521,250 | (5) | — | * |
Donald L. Foote Trust #1 |
| 260,625 |
| 260,625 | (6) | — | * |
Heritage Mark Foundation, Inc. |
| 1,042,500 |
| 1,042,500 | (7) | — | * |
Ingalls & Snyder Value Partners, L.P. |
| 5,212,500 |
| 5,212,500 | (8) | — | * |
Kenneth Foote |
| 521,250 |
| 521,250 | (9) | — | * |
Rhonda Foote-Judy |
| 260,625 |
| 260,625 | (10) | — | * |
Ronald Altman |
| 521,250 |
| 521,250 | (11) | — | * |
Steven Foote |
| 521,250 |
| 521,250 | (12) | — | * |
Steven Foote IRA |
| 260,625 |
| 260,625 | (13) | — | * |
Theresa Foote |
| 521,250 |
| 521,250 | (14) | — | * |
Marketing By Design |
| 30,000 |
| 30,000 | (15) | — | * |
|
|
|
| 10,455,000 |
|
|
|
* Represents beneficial ownership of less than one percent
(1) This table has been prepared based solely upon information furnished to us as of July 20, 2006 by the selling stockholders listed above. The selling stockholders identified above may have sold, transferred or otherwise disposed shares of our common stock.
(2) Barbara Shingleton Trust. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Barbara Shingleton as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(3) Brad Shingleton Trust. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Brad Shingleton as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(4) CFG Trust #1. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Cheryl Groenendyke as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(5) David Foote. Includes 521,250 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. David Foote has voting and investment control. The selling stockholder has notified us that he is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(6) Don L. Foote Trust #1. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Kenneth Foote as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.” Mr. Kenneth Foote also has voting and investment control over the securities held by the Heritage Mark Foundation set forth in footnote 7 and footnote 9 for an aggregate of 1,750,000 shares in his voting and investment control.
(7) Heritage Mark Foundation. Includes 1,042,500 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Kenneth Foote as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.” See also footnote 6.
(8) Ingalls & Snyder Value Partners L.P. Includes 5,212,500 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. In accordance with rule 13d-3 under the Securities Exchange Act of 1934, as amended, Thomas Boucher Jr, Robert L. Gipson and Adam Janovic, General Partners share voting and investment control, of the shares owned by such
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entity. The selling stockholder has notified us that it is an affiliate of a broker-dealer but at the time they purchased our securities it did not have any agreement or understanding, directly or indirectly, with any person to distribute the securities being sold pursuant to this prospectus. See also “The Transactions.”
(9) Kenneth Foote. Includes 521,250 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Kenneth Foote has voting and investment control. The selling stockholder has notified us that he is not a broker-dealer or affiliates of a broker-dealer. See also “The Transactions.” See also footnote 6.
(10) Rhonda Foote-Judy. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Rhonda Foote-Judy has voting and investment control. The selling stockholder has notified us that she is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(11) Ronald Altman. Includes 521,250 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Ronald Altman has voting and investment control. The selling stockholder has notified us that he is not a broker-dealer or affiliates of a broker-dealer. See also “The Transactions.”
(12) Steven Foote. Includes 521,250 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Steven Foote has voting and investment control. The selling stockholder has notified us that he is an affiliate of a broker-dealer but at the time he purchased our securities he did not have any agreement or understanding, directly or indirectly, with any person to distribute the securities being sold pursuant to this prospectus. See also “The Transactions.” Mr. Steven Foote also has voting and investment control over the securities set forth in footnote 13 for an aggregate of 750,000 shares of common stock in his voting and investment control.
(13) Steven Foote IRA. Includes 260,625 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Steven Foote has voting and investment control. The selling stockholder has notified us that it is an affiliate of a broker-dealer but at the time they purchased our securities it did not have any agreement or understanding, directly or indirectly, with any person to distribute the securities being sold pursuant to this prospectus. See also “The Transactions.” See also footnote 12.
(14) Theresa Foote. Includes 521,250 shares of common stock issuable upon conversion of senior convertible notes, convertible within 60 days of July 20, 2006. Theresa Foote as Trustee has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(15) Marketing By Design. Includes 30,000 shares of common stock exercisable upon conversion of warrants. Such warrants vest in three equal installments of 10,000 shares each on May 1, 2006, December 31, 2006 and June 30, 2007. Susan McDonald has voting and investment control. The selling stockholder has notified us that it is not a broker-dealer or affiliate of a broker-dealer. See also “The Transactions.”
(16) Assumes all shares being offered by this prospectus are sold.
The date of this prospectus supplement is July 28, 2006.
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