Registration No. 333-108134
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FOCUS ENHANCEMENTS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 04-3144936
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
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1370 Dell Avenue
Campbell, California 95008
(408) 866-8300
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Gary L. Williams
Vice President of Finance and Chief Financial Officer
FOCUS Enhancements, Inc.
1370 Dell Avenue
Campbell, California 95008
(408) 866-8300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Jerrold F. Petruzzelli, Esq. and
Gregory A. Gehlmann, Esq.
Manatt Phelps & Phillips, LLP
1501 M Street, NW, Suite 700
Washington, DC 20005
(202) 463-4334
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Approximate date of commencement of proposed sale to the public: From time to
time or at one time after the effective date of the Registration Statement as
determined by market conditions.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Amount to Offering Price Aggregate Offering Amount of
Title of Each Class of Securities to be Registered Be Registered Per Share(1) Price Registration Fee
- ---------------------------------------------------- ----------------- ------------------ ---------------------- ------------------
Common Stock, par value $.01 per share, including
underlying warrants 2,667,500(2) $1.76(2) $4,694,800(2) $379.81(2)
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(1) The Common Stock being registered consists of 2,200,000 shares of common
stock and 467,500 shares issuable upon exercise of common stock purchase
warrants issued in connection with a private placement.
(2) Previously paid.
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The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell their securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Subject to Completion, Dated September 17, 2003
PROSPECTUS
FOCUS ENHANCEMENTS, INC.
2,667,500 Shares of Common Stock
This prospectus relates to the registration for resale of up to
2,667,500 shares of our common stock, $.01 par value per share, including
467,500 shares issuable upon the exercise of warrants. These shares were
originally issued in a private placement in July 2003 to two accredited
investors and a placement agent, who, for convenience, are generally referred to
as the selling shareholders. See below under the heading "Selling Shareholders."
Our filing of the registration statement, of which this prospectus is a part, is
intended to satisfy our obligations to the selling shareholders identified in
this prospectus to register for resale shares issued to them.
Pursuant to this prospectus, the selling shareholders may sell some or
all of the shares they hold through ordinary brokerage transactions, directly to
market makers of our shares, or through any of the other means described in the
"Plan of Distribution" section of this prospectus, beginning on page 9 of this
prospectus. Other than funds received upon the exercise of warrants, the selling
shareholders, and not us, will receive all of the proceeds from any sales of the
shares, less any brokerage or other expenses of the sale incurred by them.
We will pay all registration expenses including, without limitation,
all Securities and Exchange Commission and blue sky registration and filing
fees, printing expenses, transfer agents' and registrars' fees, and the fees and
disbursements of our outside counsel in connection with this offering, but the
selling shareholders will pay all selling expenses including, without
limitation, any underwriters' or brokers' fees or discounts relating to the
shares registered hereby, or the fees or expenses of separate counsel to the
selling shareholders.
Each selling shareholder may be deemed to be an "underwriter" as such
term is defined in the Securities Act of 1933, and any commissions paid or
discounts or concessions allowed to any such person and any profits received on
resale of the securities offered hereby may be deemed to be underwriting
compensation under the Securities Act.
Our common stock is listed on the NASDAQ SmallCap Market with the
ticker symbol: "FCSE." On September 9, 2003, the closing price of one share of
our common stock on the NASDAQ SmallCap Market was $2.34. Our principal
executive offices are located at 1370 Dell Avenue, Campbell, California 95008,
and our telephone number is (408) 866-8300.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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Investing in our common stock involves a high degree of risk. Please
carefully consider the "Risk Factors" beginning on page 2 of this prospectus.
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The date of this prospectus is __________, 2003.
RISK FACTORS
You should carefully consider the following risks relating to our
business and our common stock, together with the other information described
elsewhere in this prospectus. If any of the following risks actually occur, our
business, results of operations and financial condition could be materially
affected, the trading price of our common stock could decline, and you might
lose all or part of your investment.
Risks Related to Our Business
We have a long history of operating losses.
As of June 30, 2003, we had an accumulated deficit of $63,063,000. We
incurred net losses of $1,740,000, $5,597,000 and $6,658,000 for the six months
ended June 30, 2003 and the years ended December 31, 2002 and 2001,
respectively, and we may not become profitable. Additionally, our auditors have
included an explanatory paragraph in their report on our financial statements
for the year ended December 31, 2002 with respect to uncertainties about our
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of that uncertainty.
We may need to raise additional capital, which will result in further dilution
of existing and future stockholders.
Historically, we have met our short-and long-term cash needs through
debt and the sale of common stock in private placements because cash flow from
operations has been insufficient to fund our operations. Set forth below is
information regarding net proceeds received recently:
Private Offerings Of Issuance of Exercise of Stock
Common Stock Debt Options and Warrants
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First six months of 2003 -- -- $162,000
Fiscal 2002 $3,121,000 -- $625,000
Fiscal 2001 -- $2,650,000 $199,000
See also "The Transaction" on page 8 of this prospectus. Future capital
requirements will depend on many factors, including cash flow from operations,
continued progress in research and development programs, competing technological
and market developments, and our ability to market our products successfully. If
we require additional equity or debt financing in the future, there can be no
assurance that sufficient funds will be raised. Moreover, any equity financing
or convertible debt would result in dilution to our then-existing stockholders
and could have a negative effect on the market price of our common stock.
Furthermore, any additional debt financing may result in higher interest
expense.
In the event we are unable to raise additional capital, we may not be
able to fund our operations which could result in the inability to execute our
current business plan.
We have a significant amount of convertible securities that will dilute existing
stockholders upon conversion.
At September 9, 2003, we had 41,090,245 and 1,904 shares of common and
preferred shares issued and outstanding, respectively, and 1,584,040 warrants
and 5,447,963 options that are exercisable into shares of common stock. The
1,904 shares of preferred stock are convertible into 1,904,000 shares of our
common stock. Furthermore, we may grant 1,134,092 additional stock options to
our employees, officers, directors and consultants under our current stock
option plans. We also may issue additional shares in acquisitions. Any
additional grant of options under existing or future plans or issuance of shares
in connection with an acquisition, will further dilute existing stockholders.
See also "The Transaction" on page 8 of this prospectus.
2
In addition, at June 30, 2003, the Company was obligated under certain
circumstances, to issue up to 1,963,138 shares of common stock and 1,421 shares
of preferred stock convertible into 1,421,000 shares of common stock upon the
conversion of $4.3 million in debt and accrued interest outstanding to Mr. Carl
Berg.
We are dependent upon a significant stockholder to meet our interim financing
needs.
We have relied upon the ability of Carl Berg, a director and
significant owner of our common stock for interim financing needs. As of June
30, 2003, we had an aggregate of approximately $4.3 million in debt and accrued
interest outstanding to Mr. Berg. Additionally, Mr. Berg has provided Samsung
Semiconductor Inc., the Company's contracted ASIC manufacturer, with a personal
guarantee to secure the Company's working capital requirements for ASIC purchase
order fulfillment. It is possible that Mr. Berg will not continue to provide
such interim financing or personal guarantees, should we need additional funds
or increased credit facilities with our vendors.
We rely on certain vendors for a significant portion of our manufacturing.
Over 40% of the components for our products are manufactured on a
turnkey basis by three vendors, Furthertech Company Ltd., Samsung Semiconductor
Inc., and Asemtec Corporation. In addition, certain of our products are
assembled by a single vendor in Mexico. If these vendors experience production
or shipping problems for any reason, we in turn could experience delays in the
production and shipping of our products, which would have an adverse effect on
our results of operations.
We are dependent on our suppliers.
We purchase all of our parts from outside suppliers and from time to
time experience delays in obtaining some components or peripheral devices.
Additionally, we are dependent on sole source suppliers for certain components.
There can be no assurance that labor problems, supply shortages or product
discontinuations will not occur in the future which could significantly increase
the cost, or delay shipment, of our products, which in turn could adversely
affect our results of operations.
We rely on sales to a few major customers for a large part of our revenues.
As of June 30, 2003, one distributor represented approximately 27% of
the Company's accounts receivable. We do not have long-term contracts requiring
any customer to purchase any minimum amount of products. There can be no
assurance that we will continue to receive orders of the same magnitude as in
the past from existing customers or we will be able to market our current or
proposed products to new customers. Loss of any major customer would have a
material adverse effect on our business as a whole. Furthermore, many of our
products are dependent upon the overall success of our customer's product, over
which we often have no control.
Our products may become obsolete very quickly.
The computer peripheral markets are characterized by extensive research
and development and rapid technological change resulting in short product life
cycles. Development by others of new or improved products, processes or
technologies may make our products or proposed products obsolete or less
competitive. We must devote substantial efforts and financial resources to
enhance our existing products and to develop new products. There can be no
assurance that we will succeed with these efforts.
We may not be able to protect our proprietary information.
As of June 30, 2003, we had been issued five patents and filed five
provisional patent applications in the United States. Certain of these patents
have also been filed and issued in countries outside the United States. We treat
our technical data as confidential and rely on internal non-disclosure
safeguards, including confidentiality agreements with employees, and on laws
protecting trade secrets, to protect our proprietary information. There can be
no assurance that these measures will adequately protect the confidentiality of
our proprietary information or prove valuable in light of future technological
developments.
3
Delays in product development could adversely affect our market position or
customer relationships.
We have experienced delays in product development in the past and may
experience similar delays in the future. Given the short product life cycles in
the markets for our products, any delay or unanticipated difficulty associated
with new product introductions or product enhancements could cause us to lose
customers and damage our competitive position. Prior delays have resulted from
numerous factors, such as:
o changing product specifications; difficulties in hiring and retaining
necessary personnel;
o difficulties in reallocating engineering resources and other resource
limitations;
o difficulties with independent contractors;
o changing market or competitive product requirements;
o unanticipated engineering complexity;
o undetected errors or failures in software and hardware; and
o delays in the acceptance or shipment of products by customers.
If we are unable to respond to rapid technological change in a timely manner,
then we may lose customers to our competitors.
To remain competitive, we must continue to enhance and improve the
responsiveness, functionality and features of our products. Our industry is
characterized by rapid technological change, changes in user and customer
requirements and preferences and frequent new product and service introductions.
If competitors introduce products and services embodying new technologies, or if
new industry standards and practices emerge, then our existing proprietary
technology and systems may become obsolete. Our future success will depend on
our ability to do the following:
o both license and internally develop leading technologies useful in our
business;
o enhance our existing technologies;
o develop new services and technology that address the increasingly
sophisticated and varied needs of our prospective customers; and
o respond to technological advances and emerging industry standards and
practices on a cost-effective and timely basis.
To develop our proprietary technology entails significant technical and
business risks. We may use new technologies ineffectively, or we may fail to
adapt our proprietary technology and transaction processing systems to customer
requirements or emerging industry standards. If we face material delays in
introducing new services, products and enhancements, then our customers may
forego the use of our services and use those of our competitors.
The substantial increase in our backlog in recent periods should not be
construed as indicative of future revenue or performance.
In the past we have experienced quarterly fluctuations in operating
results due to the contractual nature of our business and the consequent timing
of product orders. In addition, we have historically operated with a small
amount of backlog and accordingly our revenues in any quarter have been
substantially dependent upon orders booked in that quarter. However, as of June
30, 2003, our total backlog was approximately $6.8 million compared to $223,000
at December 31, 2002. There can be no assurance that the rate of growth in
backlog will continue. Furthermore, only a small portion of our backlog is
fully-funded and many of our customers have the ability to delay delivery or
cancel contracts, therefore, there can be no assurance that orders comprising
the backlog will be realized as revenue. In any event, quarterly sales and
operating results will be continue to be affected by the volume and timing of
contracts received and performed within the quarter, which are difficult to
forecast. Any significant deferral or cancellation of a contract could have a
material adverse effect on our operating results in any particular period.
Because of these factors, we believe that period-to-period comparisons of our
operating results are not necessarily indicative of future performances.
4
Our quarterly financial results are subject to significant fluctuations.
We have been unable in the past to accurately forecast our operating
expenses or revenues. Our revenues currently depend heavily on volatile customer
purchasing patterns. If actual revenues are less than projected revenues, we may
be unable to reduce expenses proportionately, and our operating results, cash
flows and liquidity would likely be adversely affected.
Recently, our common stock did not meet the minimum bid price requirement to
remain listed on the Nasdaq SmallCap Market. If we were to be delisted, it could
make trading in our stock more difficult.
Our common stock is traded on the Nasdaq SmallCap Market. There are
various quantitative listing requirements for a company to remain listed on the
Nasdaq SmallCap Market.
o We are required to maintain a minimum bid price of $1.00 per share for
our common stock. Between January 1, 2003 and June 30, 2003, our stock
closed below $1.00 a share on 64 of 124 trading days. On March 18,
2003, we were notified by the Nasdaq that our common stock did not meet
the minimum bid price requirement to remain listed on the Nasdaq
SmallCap Market. However, on May 21, 2003, we received notification
from Nasdaq that the Company had regained compliance and the matter was
now closed.
o We must maintain stockholders' equity of $2,500,000. At June 30, 2003,
we had total stockholders' equity of $2,666,000 million. To the extent
we continue to incur net losses and do not raise additional capital,
our stockholders' equity will be reduced. See also "The Transaction" on
page 8 of this prospectus.
If we fail these Nasdaq SmallCap requirements, our common stock could be
delisted, eliminating the only established trading market for shares of our
common stock. Any sales of our common stock at a discount to market may reduce
the trading price of our common stock to a level below the Nasdaq minimum bid
price requirement.
In the event we are delisted from Nasdaq, we would be forced to list
our shares on the OTC Electronic Bulletin Board or some other quotation medium,
such as pink sheets, depending on our ability to meet the specific listing
requirements of those quotation systems. As a result an investor might find it
more difficult to dispose of, or to obtain accurate price quotations for, our
shares. Delisting might also reduce the visibility, liquidity, and price of our
common stock.
Our common stock price is volatile.
The market price for our common stock is volatile and has fluctuated
significantly to date. For example, between July 1, 2002 and June 30, 2003, the
per share price of our stock has fluctuated between $0.45 and $2.20 per share,
closing at $2.34 at September 9, 2003. The trading price of our common stock is
likely to continue to be highly volatile and subject to wide fluctuations in
response to factors including the following:
o actual or anticipated variations in our quarterly operating results;
o announcements of technological innovations, new sales formats or new
products or services by us or our competitors;
o changes in financial estimates by the Company or securities analysts;
o changes in the economic performance and/or market valuations of other
multi-media, video scan companies;
o announcements by us of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
o additions or departures of key personnel; and
5
o sales of common stock or issuance of other dilutive securities.
In addition, the securities markets have experienced extreme price and
volume fluctuations, and the market prices of the securities of technology
companies have been especially volatile. These broad market and industry factors
may adversely affect the market price of our common stock, regardless of our
actual operating performance. In the past, following periods of volatility in
the market price of stock, many companies have been the object of securities
class action litigation, including us. If we are sued in a securities class
action, then it could result in additional substantial costs and a diversion of
management's attention and resources.
Risks Related to Our Industry
International sales are subject to significant risk.
Our revenues from outside the United States are subject to inherent
risks related thereto, including currency rate fluctuations, the general
economic and political conditions in each country. There can be no assurance
that the economic crisis and currency issues currently being experienced in
certain parts of the world will not reduce demand for our products and therefore
have a material adverse effect on our revenue or operating results.
Our business is very competitive.
The computer peripheral markets are extremely competitive and are
characterized by significant price erosion over the life of a product. We
currently compete with other developers of video conversion products and with
video-graphic integrated circuit developers. Many of our competitors have
greater market recognition and greater financial, technical, marketing and human
resources. Although we are not currently aware of any announcements by our
competitors that would have a material impact on its operations, there can be no
assurance that we will be able to compete successfully against existing
companies or new entrants to the marketplace.
The video production equipment market is highly competitive and is
characterized by rapid technological change, new product development and
obsolescence, evolving industry standards and significant price erosion over the
life of a product. Competition is fragmented with several hundred manufacturers
supplying a variety of products to this market. We anticipate increased
competition in the video post-production equipment market from both existing
manufacturers and new market entrants. Increased competition could result in
price reductions, reduced margins and loss of market share, any of which could
materially and adversely affect our business, financial condition and results of
operations. There can be no assurance that we will be able to compete
successfully against current and future competitors in this market.
Often our competitors have greater financial, technical, marketing,
sales and customer support resources, greater name recognition and larger
installed customer bases than we possess. In addition, some of our competitors
also offer a wide variety of video equipment, including professional video tape
recorders, video cameras and other related equipment. In some cases, these
competitors may have a competitive advantage based upon their ability to bundle
their equipment in certain large system sales.
We are exposed to general economic conditions that have resulted in
significantly reduced sales levels. If such adverse economic conditions were to
continue or worsen, our business, financial condition and operating results
could be adversely impacted.
If the adverse economic conditions in the State of California, the
United States and throughout the world economy continue or worsen, we may
experience a material adverse impact on our business, operating results, and
financial condition. We continue to take actions and charges to reduce our cost
of sales and operating expenses in order to address these adverse conditions. A
prolonged continuation or worsening of sales trends may require additional
actions and charges to reduce cost of sales and operating expenses in subsequent
quarters. We may be unable to reduce cost of sales and operating expenses at a
rate and to a level consistent with such a future adverse sales environment. If
we must undertake further expense reductions, we may incur significant
incremental special charges associated with such expense reductions that are
disproportionate to sales, thereby adversely affecting our business, financial
condition and operating results. Continuing weakness in the economy could
decrease demand for our products, increase delinquencies in payments and
otherwise have an adverse impact on our business.
6
Recent corporate bankruptcies, accounting irregularities, and alleged insider
wrong doings have negatively affected general confidence in the stock markets
and the economy, further depressing the stock market and causing the U.S.
Congress to enact sweeping legislation.
In an effort to address these growing investor concerns, the U.S.
Congress passed, and on July 30, 2002, President Bush signed into law, the
Sarbanes-Oxley Act of 2002. This sweeping legislation primarily impacts
investors, the public accounting profession, public companies, including
corporate duties and responsibilities, and securities analysts. Some highlights
include establishment of a new independent oversight board for public accounting
firms, enhanced disclosure requirements for public companies and their insiders,
required certification by CEO's and CFO's of SEC financial filings, prohibitions
on certain loans to offices and directors, efforts to curb potential securities
analysts' conflicts of interest, forfeiture of profits by certain insiders in
the event financial statements are restated, enhanced board audit committee
requirements, whistleblower protections, and enhanced civil and criminal
penalties for violations of securities laws. Such legislation and subsequent
regulations will increase the costs of securities law compliance for publicly
traded companies such as us.
Continued terrorism threats and hostilities in the Middle East have had a
negative impact on the U.S. economy.
The adverse consequences of war and the effects of terrorism have had a
negative affect on the U.S. economy. Further conflicts in the Middle East could
negatively impact our ability to raise additional funds if needed and our
revenues will be adversely affected if consumers and businesses continue to cut
back spending.
The spread of severe acute respiratory syndrome may have a negative impact on
our business and results of operations.
The recent outbreak of severe acute respiratory syndrome, or SARS,
which has had particular impact in China, Hong Kong, and Singapore, could
continue to have a negative effect on our operations. Our operations may be
impacted by a number of SARS-related factors, including, among other things,
disrupting operations at our turnkey manufacturer and certain of our
distributors and customers located in those areas. If the number of SARS cases
continues to spread to other areas, our international and domestic sales and
operations could be harmed.
NOTE ON FORWARD LOOKING STATEMENTS
From time to time, information provided by Focus Enhancements Inc.
("Focus") or statements made by its employees may contain "forward looking"
information within the meaning of the Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), and as such, may involve risks and uncertainties.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies, and expectations, are generally identifiable by the
use of words or phrases such as "believe", "plan", "expect", "intend",
"anticipate", "estimate", "project", "forecast", "may increase", "may
fluctuate", "may improve" and similar expressions or future or conditional verbs
such as "will", "should", "would", and "could". These forward-looking statements
relate to, among other things, expectations of the business environment in which
we operate, opportunities and expectations regarding technologies, anticipated
performance or contributions from new and existing employees, projections of
future performance, possible changes in laws and regulations, potential risks
and benefits arising from the implementation of our strategic and tactical
plans, perceived opportunities in the market, potential actions of significant
stockholders and investment banking firms, and statements regarding our mission
and vision. Our actual results, performance, and achievements may differ
materially from the results, performance, and achievements expressed or implied
in such forward-looking statements due to a wide range of factors. Factors that
may cause such differences include, without limitation, the availability of
capital to fund our future cash needs, reliance on major customers, history of
operating losses, market acceptance of our products, technological obsolescence,
competition, component supply problems and protection of proprietary
information, as well as the accuracy of our internal estimates of revenue and
operating expense levels. Each forward looking statement should be read in
conjunction with the "Risk Factors" included in this prospectus and the
consolidated financial statements and notes thereto, together with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in our periodic reports filed with the SEC. We do not
undertake, and specifically disclaim any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements.
7
Focus Enhancements, INC.
Founded in 1991, FOCUS Enhancements, Inc. is a designer of solutions in
advanced, proprietary video technology. Headquartered in Campbell, CA, we
design, develop, and market video solutions in two distinct markets: advanced,
proprietary video conversion ICs (Integrated Circuits) and affordable, high
quality, digital-video conversion and video production equipment. Semiconductor
(Integrated Circuit) products include designs for PCs, Game Cards, Internet TV,
set-top boxes, Internet appliances, and interactive TV applications, and they
are sold directly to Original Equipment Manufacturers (OEMs). Our complete line
of video presentation and video production devices are sold globally through
resellers and distributors to the broadcast, education, cable, business,
industrial, presentation, Internet, gaming, home video production and Home
Theater markets.
Our main address is 1370 Dell Avenue, Campbell, California 95008 and
our telephone number is (408) 866-8300. Our Web site is located at
http://www.Focusinfo.com. Information contained in our Web site is not part of
this prospectus.
THE TRANSACTION
We entered into a Common Stock and Warrant Purchase Agreement with the
selling shareholders on July 1, 2003. This agreement is referred to in this
prospectus as the "purchase agreement." Pursuant to the purchase agreement, the
selling shareholders severally in the aggregate invested $2,200,000 in Focus
Enhancement in return for 2,200,000 shares of our common stock and warrants to
acquire 440,000 shares of our common stock at an exercise price of $1.44 per
share and expire on July 1, 2006. The shares were sold at an approximate 20%
discount to the 5-day average closing bid prices of our common stock prior to
the date of the transaction. No general solicitation or advertising was utilized
by TN Capital Equities, vFinance Investments, Inc. or us in the private
placement. These common stock shares and the warrants were issued in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended.
TN Capital Equities, Ltd. acted as placement agent in connection with
the sale of our stock to SF Capital Partners Ltd. TN Capital's duties as
placement agent were undertaken on a reasonable best efforts basis only. It made
no commitment to purchase shares from us and did not ensure us of the successful
placement of any securities. In connection with the private placement, TN
Capital Equities received $55,000 and was issued warrants to purchase 27,500
shares of our common stock. The warrants are exercisable at $1.44 per share and
expire on July 1, 2006.
vFinance Investments, Inc. acted as placement agent in connection with
the sale of our stock to White Investments Ltd. vFinance received $137,500 and
out-of-pocket expenses, including legal fees, of $27,500. vFinance's duties as
placement agent were undertaken on a reasonable best efforts basis only. It made
no commitment to purchase shares from us and did not ensure us of the successful
placement of any securities. Tim Mahoney, a member of our Board of Directors is
the Chairman and COO of vFinance, Inc., the parent company to vFinance
Investments, Inc. Mr. Mahoney owns approximately 20% of the shares of vFinance,
Inc.
In connection with the purchase agreement, we entered into a
Registration Rights Agreement, dated July 1, 2003, with the selling shareholder.
Under the registration rights agreement, we agreed to prepare and file, within
five business days of the date of the filing of our Form 10-Q for the quarter
ended June 30, 2003, a registration statement (of which this prospectus is a
part), for the resale of the shares of common stock and the shares of common
stock issuable upon the exercise of the warrants.
The terms of the common stock and warrants are described in this
prospectus under the heading "Description of Capital Stock." Copies of the
purchase agreement, the registration rights agreement and the form of warrant,
have been filed as exhibits to the registration statement (of which this
prospectus is a part), which are incorporated by reference in this prospectus.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholders. However, we will receive funds from the exercise of
warrants held by selling stockholders who pay the exercise price in cash. The
warrants entitle the selling shareholders to purchase up to an aggregate of
467,500 shares of our common stock.
8
The conversion price of the warrants is $1.44 per share and they expire on July
1, 2006. We will receive the proceeds of any exercise of the warrants, which we
will use for general corporate purposes. If all warrants are exercised, we will
receive gross proceeds of $673,200. The warrants may never be exercised.
We are paying the expenses of registration of the shares being offered
under this prospectus.
DILUTION
If all of the shares being offered pursuant to this prospectus are sold
after the exercise of warrants, our shareholders will be diluted by
approximately 1.1 percent. The 2,200,000 shares issued in the private placement
are already outstanding.
SELLING SHAREHOLDERS
The following table sets forth: (i) the number of shares of Focus
common stock beneficially owned by each selling shareholder as of September 9,
2003 and (ii) the number of shares of Focus common stock to be offered hereby by
each selling shareholder. Other than disclosed in this prospectus, no selling
shareholder 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 shareholder.
Common Stock Beneficially Owned as of
-------------------------------------
September 9, 2003 Number of Shares
----------------- ----------------
Name of Selling Shareholder (1) Number Percent (2) Offered
- ------------------------------- ------ ----------- -------
White Investments Ltd. (3) 1,320,000 3.2% 1,320,000
SF Capital Partners Ltd. (4) 1,320,000 3.2% 1,320,000
TN Capital Equities, Ltd. (5) 27,500 * 27,500
---------
2,667,500
=========
- -------------------------------
* Less than one percent.
(1) Such persons have sole voting and investment power with respect to all
shares of common stock shown as being beneficially owned by them,
subject to community property laws, where applicable, and the
information contained in the footnotes to this table. See "The
Transaction" on page 8 for a description of the amount of warrants and
common stock purchased or paid to each selling shareholder.
(2) Based on 41,090,245 total shares outstanding as of September 9, 2003.
(3) White Investments, Ltd., a Turks and Caicos corporation, is
headquartered at POB 65, Grand Turk, Turks & Caicos, BWI. White
Investments is engaged in the business of securities investments.
Investment decisions for White Investments are made by International
First Secretarial Group, Ltd., its sole director. Ms. C.B. Williams, an
individual, exercises voting and investment control for White
Investments.
(4) SF Capital Partners, Ltd., is a British Virgin Islands company. Staro
Asset Management, L.L.C., a Wisconsin limited liability company, acts
as investment manager of SF Capital. Staro is located at 3600 South
Lake Drive, St. Francis, Wisconsin 53235. As the managing members of
Staro, Michael A. Roth and Brian J. Stark possess sole voting and
dispositive power over all of the foregoing shares. Therefore, Messrs.
Roth and Stark may be deemed the beneficial owner of the shares of our
common stock reported in
9
the table for this selling stockholder as a result of possessing such
powers.
(5) TN Capital Equities, Ltd., a registered broker-dealer, is engaged in
the business of investment banking. It is located at 14 East 60th
Street, Suite 701, New York, NY. Investment decisions are made by John
F. Steinmetz, the sole controlling member.
PLAN OF DISTRIBUTION
We are registering the shares of stock being offered by this prospectus
for resale in accordance with certain registration rights granted the selling
shareholders, including their pledgees, donees, transferees or other
successors-in-interest, who may sell the shares from time to time, or who may
also decide not to sell any or all of the shares that may be sold under this
prospectus. We will pay all registration expenses including, without limitation,
all the SEC and blue sky registration and filing fees, printing expenses,
transfer agents' and registrars' fees, and the fees and disbursements of our
outside counsel in connection with this offering, but the selling shareholders
will pay all selling expenses including, without limitation, any underwriters'
or brokers' fees or discounts relating to the shares registered hereby, or the
fees or expenses of separate counsel to the selling shareholders.
The selling shareholders may sell any or all of the shares, subject to
federal and state securities law, but are under no obligation do so. The selling
shareholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale of the common stock covered here. The
shares may be offered on the Nasdaq SmallCap Market or in privately negotiated
transactions. The selling shareholders may sell the shares registered here in
one or more of the following methods:
o cross trades or block trades in which the broker or dealer so engaged
will attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;
o purchases by a broker, dealer or underwriter as principal and resale by
such broker, dealer or underwriter for its own account pursuant to this
prospectus;
o "at the market" to or through market makers or into an existing market
for the shares;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers, which may include long sales or short sales
effected after the effective date of the registration statement of
which this prospectus is a part;
o in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through
agents;
o through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or
o any combination of the foregoing methods; or
o by any other legally available means.
The selling shareholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices. The selling shareholders may
use broker-dealers to sell their shares. If this happens, broker-dealers will
either receive discounts or commissions from the selling shareholders, or they
will receive commissions from purchasers of shares for whom they acted as
agents.
The selling shareholders may also pledge shares to broker-dealers or
other financial institutions, and, upon a default relative to any selling
shareholder who has so pledged any such shares, the broker-dealer or other
financial institution holding the pledged shares may effect sales of the pledged
shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction). In addition, any shares that qualify for sale pursuant to Rule 144
may be sold under Rule 144 rather than pursuant to this prospectus.
10
In effecting sales, brokers, dealers or agents engaged by any selling
shareholder may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholder in amounts to be negotiated prior to the sale. Any such
selling shareholder and such brokers or dealers and any other participating
brokers or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales, and any such commissions,
discounts or concessions may be deemed to be underwriting discounts or
commissions under the Securities Act of 1933. One or more of the selling
shareholders may indemnify broker-dealers that participate in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act of 1933.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling shareholders that the anti-manipulation
rules of Regulation M under the Exchange Act of 1934 may apply to sales of
common stock in the market and to the activities of the selling shareholders and
their affiliates. In addition, we will make copies of this prospectus available
to the selling shareholders and have informed each of them of the need for
delivery of copies of this prospectus to purchasers at or prior to the time of
any sale of the shares offered hereby.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, and
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or re-allowed or paid to any dealer, and the
proposed selling price to the public.
One or more of the selling shareholders identified above may choose to
donate or transfer as gifts some or all of the shares that may otherwise be sold
directly by the selling shareholder or the selling shareholder may choose to
transfer some or all of these shares for no value to one or more affiliated
persons. If any of the shares are so transferred by any of the selling
shareholders listed above, then the persons who receive the shares would
constitute additional selling shareholders under this prospectus.
Except for the exercise of warrants, we will not receive any of the
proceeds from the selling shareholders' sale of our common stock. This
registration statement will remain effective until the earlier of (a) the date
when all of the shares registered by this registration statement have been
distributed to the public, (b) the date when the selling shareholders may sell
all of the shares registered by this registration statement in any three month
period pursuant to Rule 144 of the Securities Act (or such successor rule as may
be adopted by the SEC) or (c) two years after the effective date of this
registration statement.
DESCRIPTION OF CAPITAL STOCK
General
We are authorized to issue up to 60,000,000 shares of common stock,
$.01 par value per share, and 3,000,000 shares of preferred stock, $.01 par
value per share. As of September 9, 2003, 41,090,245 shares of common stock and
1,904 shares of convertible preferred stock were issued and outstanding. All of
the outstanding capital stock is, and will be, fully paid and non-assessable.
Common Stock
Holders of common stock are entitled to one vote per share. All actions
submitted to a vote of stockholders are voted on by holders of common stock
voting together as a single class. Holders of common stock are not entitled to
cumulative voting in the election of directors.
Holders of common stock are entitled to receive dividends in cash or in
property on an equal basis, if and when dividends are declared on the common
stock by our board of directors, subject to any preference in favor of
11
outstanding shares of preferred stock, if there are any.
In the event of liquidation of our company, all holders of common stock
will participate on an equal basis with each other in our net assets available
for distribution after payment of our liabilities and payment of any liquidation
preferences in favor of outstanding shares of preferred stock.
Holders of common stock are not entitled to preemptive rights and the
common stock is not subject to redemption.
The rights of holders of common stock are subject to the rights of
holders of any preferred stock that we designate or have designated. The rights
of preferred stockholders may adversely affect the rights of the common
stockholders.
Preferred Stock
Our board of directors has the ability to issue up to 3,000,000 shares
of preferred stock in one or more series, without stockholder approval. The
board of directors may designate for the series:
o the number of shares and name of the series,
o the voting powers of the series, including the right to elect
directors, if any,
o the dividend rights and preferences, if any,
o redemption terms, if any,
o liquidation preferences and the amounts payable on liquidation or
dissolution, and
o the terms upon which such series may be converted into any other series
or class of our stock, including the common stock and any other terms
that are not prohibited by law.
It is impossible for us to state the actual effect it will have on
common stock holders if the board of directors designates a new series of
preferred stock. The effects of such a designation will not be determinable
until the rights accompanying the series have been designated. The issuance of
preferred stock could adversely affect the voting power, liquidation rights or
other rights held by owners of common stock or other series of preferred stock.
The board of directors' authority to issue preferred stock without stockholder
approval could make it more difficult for a third party to acquire control of
our company, and could discourage any such attempt. We have no present plans to
issue any additional shares of preferred stock.
Series B Preferred Stock
On April 24, 2001, the board of directors of Focus adopted a
Certificate of Designation whereby a total of 2,000 shares of Series B Preferred
Stock, $0.01 par value per share were authorized for issuance. Each share has a
liquidation preferred in the amount of $1,190.48 plus all accrued or declared
but unpaid dividends. Cash dividends on the stock are non-cumulative and are
paid at the option of the board of directors. If paid, the rate shall be seven
percent per annum. The board does not presently intend to pay dividends on the
stock. At the option of the holder, each share is convertible into 1,000 shares
of our common stock.
On May 1, 2001, Carl Berg converted approximately $2.3 million of debt
and accrued interest currently owed by Focus to Mr. Berg into approximately
1,904 shares of Series B convertible preferred stock based on the estimated fair
value of the preferred stock as of May 1, 2001, the date on which the related
subscription agreement was executed.
12
Options and Warrants
As of September 9, 2003, 5,447,963 options for shares were outstanding
under our approved stock option plans and 392,401 shares were available for
future grants under our stock option plans. We have also issued or are required
to issue warrants totaling 1,584,040 common stock shares. Of that number of
warrants, 467,500 are covered by this prospectus and are described elsewhere
herein.
Holders of options and warrants do not have any of the rights or
privileges of our stockholders, including voting rights, prior to exercise of
the options and warrants. The number of shares of common stock for which these
options and warrants are exercisable and the exercise price of these options and
warrants are subject to proportional adjustment for stock splits and similar
changes affecting our common stock. We have reserved sufficient shares of
authorized common stock to cover the issuance of common stock subject to the
options and warrants.
LEGAL MATTERS
Manatt, Phelps & Phillips L.L.P., Los Angeles, California, will pass
upon the validity of our securities and certain other legal matters in
connection with our offering of our securities.
EXPERTS
The financial statements as of December 31, 2002 and 2001 and for the
years then ended incorporated in this prospectus by reference from the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2002 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report (which report expresses an unqualified opinion and includes an
explanatory paragraph regarding (a) the uncertainty of the Company's ability to
continue as a going concern and (b) a change in the method of accounting for
goodwill), which is incorporated by reference herein , and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual and quarterly reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Copies of these materials can be obtained at
prescribed rates from the Public Reference Section of the SEC at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Our SEC filings are
also available to the public from the SEC's Website at "http://www.sec.gov."
This prospectus provides you with a general description of the common
stock being registered. This prospectus is part of a registration statement that
we have filed with the SEC. To see more detail, you should read the exhibits and
schedules filed with our registration statement. You may obtain copies of the
registration statement and the exhibits and schedules to the registration
statement as described above.
Statements contained herein as to the contents of any contract or any
other document referred to are not necessarily complete, and where such contract
or other document is an exhibit to a document we have filed with the SEC, each
such statement is qualified in all respects by the provisions of such exhibit,
to which reference is now made.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
13
Our SEC Filings (File No. 1-11860) Date of Filing
---------------------------------- --------------
Annual Report on Form 10-KSB for the year ended December
31, 2002 March 31, 2003
Quarterly Report on Form 10-QSB for the three months ended
March 31, 2003 May 9, 2003
Quarterly Report on Form 10-Q/A for the three months ended
March 31, 2003 August 21, 2003
Quarterly Report on Form 10-Q for the six months ended
June 30, 2003 August 14, 2003
All subsequent documents filed by us under Sections 13(a), After the date
13(c), 14 or 15(d) of the Exchange Act of 1934, until such of this
date as this registration statement is no longer prospectus.
effective, pursuant to the terms hereof.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Focus Enhancements, Inc.
1370 Dell Avenue
Campbell, California 95008
Attention: Investor Relations
Phone: (408) 866-8300
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Delaware General Corporation Law and our certificate of
incorporation and bylaws provide for indemnification of our directors and
officers for liabilities and expenses that they may incur in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of Focus
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. We have not authorized anyone
else to provide you with different or additional information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of this prospectus or any
supplement that may have a later date. The selling shareholders are not making
an offer of the common stock in any state where the offer is not permitted.
14
TABLE OF CONTENTS FOCUS ENHANCEMENTS, INC.
Page
Risk Factors 2
Note on Forward Looking Statements 7
Focus Enhancements, Inc. 8 2,667,500 Shares of
The Transaction 8 Common Stock
Use of Proceeds 8
Dilution 9
Selling Shareholders 9
Plan of Distribution 10
Description of Capital Stock 11
Legal Matters 13
Experts 13
Where You Can Find More Information 13
Incorporation of Certain Information
by Reference 13 ____________________
Disclosure of Commission Position on
Indemnification for Securities Act PROSPECTUS
Liabilities 14 ____________________
__________, 2003
1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated amounts of expenses to
be borne by the Company in connection with the offering described in this
Registration Statement:
Registration Fee Under Securities Act $ 380
Blue Sky Fees and Expenses $ 0
Legal Fees and Expenses $ 7,000*
Accounting Fees and Expenses $ 7,000*
Printing and Mailing Costs $ 500
Miscellaneous Fees and Expenses $ 120*
--------
Total Expenses $ 15,000
- ---------------
* Estimated
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or permits a Delaware corporation to grant, indemnity to present or
former directors and officers, as well as certain other persons serving at the
request of the corporation in related capacities. This permitted indemnity is
sufficiently broad to permit indemnification for liabilities arising under the
Securities Act of 1933, including reimbursement for expenses incurred.
The indemnification authorized under Delaware law is not exclusive and
is in addition to any other rights granted to officers and directors under the
Certificate of Incorporation or Bylaws of the corporation or any agreement
between officers and directors and the corporation. The registrant's Bylaws
provide for the indemnification of directors, former directors and officer to
the maximum extent permitted by Delaware law. The registrant's Bylaws also
provide that it may purchase and maintain insurance on behalf of a director or
officer against liability asserted against the director or officer in such
capacity.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
Item 16. Exhibits.
The following documents have been previously filed as Exhibits and are
incorporated herein by reference except those exhibits indicated with an
asterisk which are filed herewith:
1
Exhibit No. Description
2.1 Agreement and Plan of Merger dated as of August 30, 2000 among
Focus, Videonics, and PC Video Conversion (1)
3.1 Second Restated Certificate of Incorporation of Focus (2)
3.2 Certificate of Amendment to Second Restated Certificate of
Incorporation of Focus (3)
3.3 Certificate of Amendment to Second Restated Certificate of
Incorporation of Focus dated July 25, 1997 (4)
3.4 Restated Bylaws of Focus (2)
3.5 Certificate of Designation - Series B Preferred Stock (5)
3.6 Certificate of Amendment to Second Restated Certificate of
Incorporation of Focus dated January 16, 2001 (19)
3.7 Certificate of Amendment to Second Amended and Restated
Certificate of Incorporation of Focus dated January 8, 2003 (19)
4.1 Specimen certificate for Common Stock of Focus (2)
4.2 Specimen certificate for Redeemable Common Stock Purchase Warrant
(2)
4.3 Form of Warrant issued to various investors pursuant to Amendment
No. 1 to Stock Subscription Agreement dated April 1996 (6)
4.4 Form of Warrant issued to the placement agent in the March 1997
Offering (6)
4.5 Form of Warrant dated September 10, 1997 issued to designees of
the placement agent (7)
4.6 Form of Stock Purchase Warrant issued to AMRO International, S.A.
(included as Exhibit A to the Common Stock and Warrants Purchase
Agreement - see Exhibit 10.2) (8)
4.7 Stock Purchase Warrant issued to Union Atlantic, L.C. (9)
4.8 Form of Common Stock Purchase Warrant dated January 11, 2002
issued by Focus to five Investors (10)
4.9 Common Stock Purchase Warrant dated December 27, 2001 issued by
Focus to vFinance (10)
4.10 Warrant issued to vFinance dated November 25, 2002 (19)
4.11 Form of Warrant to Investors dated July 1, 2003 (21)
5.1 Opinion of Manatt, Phelps & Phillips, LLP (21)
10.1 1997 Director Stock Option Plan (11)
10.2 Common Stock and Warrants Purchase Agreement with AMRO
International, S.A. (8)
10.3 Common Stock and Warrant Purchase Agreement, as amended, with BNC
Bach International Ltd., Inc. (9)
10.4 Form of Registration Rights Agreement with BNC Bach International
Ltd., Inc. (included as Exhibit B to the Common Stock and Warrant
Purchase Agreement (9)
10.5 Agreement between Union Atlantic, L.C. and FOCUS Enhancements,
Inc. confirming agreement to issue warrant in exchange for fee
reduction (9)
10.6 Common Stock Warrant and Purchase Agreement with AMRO
International, S.A. dated June 9, 2000 (8)
10.7 Promissory Note, dated October 26, 2000, from Focus Enhancements,
Inc. to Carl Berg (12)
10.8 Security Agreement dated October 26, 2000, between Focus
Enhancements, Inc. and Carl Berg (12)
10.9 2000 Non-Qualified Stock Option Plan (13)
10.10 Amendment No. 1 to Secured Promissory Note dated April 24, 2001
issue by Focus to Carl Berg (excludes exhibits B and C) (5)
2
Exhibit No. Description
10.11 Registration Rights Agreement dated May 1, 2001 between Focus and
Carl Berg (5)
10.12 Promissory note issued to Carl Berg dated June 29, 2001 (14)
10.13 Termination Agreement between Focus and Euston dated January 11,
2002 (10)
10.14 Form of Common Stock and Warrant Purchase Agreement with four
investors dated January 11, 2002 (10)
10.15 Form of Registration Rights Agreement with four investors dated
January 11, 2002 (10)
10.16 1998 Non-Qualified Stock Option Plan (15)
10.17 Third Addendum to Lease Dated July 6, 1994, by and between H-K
Associates (Lessor) and Focus Enhancements, Inc. (Lessee) for
premises At 1370 Dell Ave, Campbell, California (16)
10.18 Employment agreement between Focus Enhancements and Brett Moyer
(17)
10.19 2002 Non-Qualified Stock Option Plan (18)
10.20 Common Stock Purchase Agreement with two investors dated November
25, 2002 (excludes annexes) (19)
10.21 Registration Rights Agreement with two investors dated November
25, 2002 (19)
10.22 Extension of Notes Payable between the Company and Carl Berg dated
April 28, 2003 (20)
10.23 Common Stock and Warrant Purchase Agreement (excluding exhibits)
with two investors dated July 1, 2003 (21)
10.24 Registration Rights Agreement with two investors dated July 1,
2003 (21)
23.1 Consent of Deloitte & Touche, LLP, Independent Accountants *
24.1 Power of Attorney (included with signature page - previously
filed)
- -------------------
* Included.
1. Filed as an exhibit to Focus' Current Report on Form 8-K dated
September 8, 2000, and incorporated herein by reference.
2. Filed as an exhibit to Focus' Registration Statement on Form SB-2
(No. 33-60248-B) and incorporated herein by reference.
3. Filed as an exhibit to Focus' Form 10-QSB for the period ended
September 30, 1995, and incorporated herein by reference.
4. Filed as an exhibit to Focus' Form 10-QSB dated August 14, 1997,
and incorporated herein by reference.
5. Filed as an exhibit to Focus' Amended Registration Statement on
Form SB-2 (No. 333-55178) filed on August 9, 2001 as amended,
incorporated herein by reference.
6. Filed as an exhibit to Focus' Registration Statement on Form S-3
(No. 333-26911) filed with the Commission on May 12, 1997, and
incorporated herein by reference.
7. Filed as an exhibit to Focus' Form 8-K dated September 10, 1997,
and incorporated herein by reference.
8. Filed as an exhibit to Focus' Registration Statements on Form S-3
(No. 333-81177) filed with the Commission on June 21, 1999, and
incorporated herein by reference.
9. Filed as an exhibit to Focus' Registration Statement on Form S-3
(No. 333-94621) filed with the Commission on January 13, 2000, and
incorporated herein by reference.
10. Filed as an exhibit to Focus' Amendment No. 3 to Registration
Statement on Form SB-2 (No. 333-55178) filed on January 23, 2002,
and incorporated herein by reference.
3
11. Filed as an exhibit to Focus' Registration Statement on Form S-8
(No. 333-33243) filed with the Commission on August 8, 1997, and
incorporated herein by reference.
12. Filed as an exhibit to Focus' Current Report on Form 8-K dated
October 31, 2000, as amended by Focus' Current Report on Form
8-K/A dated November 2, 2000, and incorporated herein by
reference.
13. Filed as an exhibit to Focus' Form S-8 (No. 333-57762) filed with
the Commission on March 28, 2001, and incorporated herein by
reference.
14. Filed as an exhibit to Focus' Amendment No. 4 to Registration
Statement on Form SB-2 (No. 333-55178) filed on February 11, 2002,
and incorporated herein by reference.
15. Filed as an exhibit to Focus' Form S-8 (No. 333-89770) filed with
the Commission on June 4, 2002, and incorporated herein by
reference.
16. Filed as an exhibit to Focus' Form l0-QSB dated August 14, 2002,
and incorporated herein by reference.
17. Filed as an exhibit to Focus' Form l0-QSB dated November 14, 2002,
and incorporated herein by reference.
18. Filed as Appendix B to Focus' Definitive Proxy Statement filed
with the Commission on November 13, 2002, and incorporated herein
by reference.
19. Filed as an exhibit to Focus' Form 10-KSB dated March 31, 2003,
and incorporated herein by reference.
20. Filed as an exhibit to Focus' Form 10-QSB filed with the SEC on
May 9, 2003, and incorporated herein by reference.
21. Filed as exhibit to Focus' Form S-3 (Registration No. 333-108134)
filed with the SEC on August 21, 2003 and incorporated herein by
reference.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a) (3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range maybe reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any additional or changed material information on the
plan of distribution not previously disclosed in the registration
statement as any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-amendment by those paragraphs is
contained in periodic reports filed with or furnished to the SEC by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
4
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement related to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small business
issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the small business issuer will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
to whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Campbell, State of California, on September 12, 2003.
FOCUS ENHANCEMENTS, INC.
By: /s/ Brett A. Moyer
------------------
Brett A. Moyer
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Brett A. Moyer President, Chief Executive September 12, 2003
- --------------------------- Officer and Director
Brett A. Moyer
/s/ Gary L. Williams Vice President of Finance September 12, 2003
- --------------------------- & Chief Financial Officer
Gary L. Williams (Principal Accounting Officer)
/s/ N William Jasper, Jr.* Chairman of the Board September 12, 2003
- ---------------------------
N William Jasper, Jr.
/s/ Carl E. Berg* Director September 12, 2003
- ---------------------------
Carl E. Berg
/s/ William B. Coldrick* Director September 12, 2003
- ---------------------------
William B. Coldrick
/s/ Michael L. D'Addio* Director September 12, 2003
- ---------------------------
Michael L. D'Addio
Director September 12, 2003
- ---------------------------
Timothy E. Mahoney
- --------------
* Pursuant to power of attorney.