Focus Enhancements 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

Focus Enhancements, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2006			June 30, 2005			June 30, 2006			June 30, 2005
Net revenue	$	8,457		$	6,133		$	15,590		$	11,588
Cost of revenue	4,670			3,744			9,138			7,444
Gross margin	3,787			2,389			6,452			4,144
Operating expenses:
Sales, marketing and support	2,548			1,751			4,622			3,175
General and administrative	1,065			994			1,980			1,995
Research and development	2,866			3,341			5,847			7,283
Amortization of intangible assets	127			127			254			276
	6,606			6,213			12,703			12,729
Loss from operations	(2,819		)	(3,824		)	(6,251		)	(8,585		)
Interest expense, net	(292		)	(68		)	(491		)	(81		)
Value of derivative security	—			—			(4,000		)	—
Change in value of derivative security	(1,761		)	—			(1,361		)	—
Other income (expense), net	(2		)	(40		)	68			(40		)
Loss before income tax expense	(4,874		)	(3,932		)	(12,035		)	(8,706		)
Income tax expense	—			7			9			11
Net loss	$	(4,874	)	$	(3,939	)	$	(12,044	)	$	(8,717	)
Net loss per share
Basic and diluted	$	(0.07	)	$	(0.07	)	$	(0.18	)	$	(0.15	)
Weighted average number of shares used in per share calculations:
Basic and diluted	68,755			59,893			68,455			59,487