FOCUS ENHANCEMENTS INC, S-8, 1997-08-08

FOCUS ENHANCEMENTS INC
S-8, 1997-08-08
COMPUTER COMMUNICATIONS EQUIPMENT

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As filed with the Securities and Exchange Commission on August 8, 1997

Registration No. 333- _____

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------

FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Containing a Reoffer Prospectus on Form S-3
-----------------------

FOCUS ENHANCEMENTS, INC.
(Exact name of registrant as specified in its charter)

Delaware 04-3186320
(State or other jurisdiction of incorporation) (IRS Employer
Identification
Number)

142 North Road
Sudbury, Massachusetts 01776
(508) 371-2000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

1997 Director Stock Option Plan
Key Officer Non-Qualified Stock Option Agreements
(Full title of the plans)

Harry G. Mitchell
Chief Financial Officer
FOCUS Enhancements, Inc.
142 North Road
Sudbury, Massachusetts 01776
(508) 371-2000
(Name, address, including zip code, telephone number,
including area code, of agent for service)

Copy to:
John A. Piccione, Esq.
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 338-2800
---------------------

Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
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, check the following box. |X|

-----------------------
<PAGE>
<TABLE>
<CAPTION>

CALCULATION OF REGISTRATION FEE
Proposed
Maximum Proposed
Title of Each Class of Securities to Amount to Offering Price Maximum Amount of
be Registered be Registered Per Share Offering Price Registration Fee
-------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>

1997 Director Stock Option Plan
Common Stock, par value $.01 per
share 800,000(1) $1.88 $1,504,000 $455.75
200,000(2) $2.42 $ 484,000 $146.67

Key Officer Non-Qualified Stock
Option Agreements
Common Stock, par value $.01 per 250,000(1) $1.75 $ 437,500 $132.57
share 670,000(1) $1.88 $1,259,600 $381.51

<FN>
(1) All such shares are issuable upon exercise of outstanding options with
fixed exercise prices. Pursuant to Rule 457(h)(1) under the Securities
Act of 1933, as amended (the "Act"), the aggregate offering price and
the fee have been computed upon the basis of the price at which the
options may be exercised.

(2) Of the 1,000,000 shares of common stock reserved for issuance under the
1997 Director Stock Option Plan, options for 200,000 shares have not to
date been issued, and the price of $2.42, which is the average of the
high and low bid price reported on the Nasdaq Stock Market Small-Cap
Market System on August 5, 1997, is set forth solely for purposes of
calculating the filing fee pursuant to Rule 457(c) under the Act.

</FN>
</TABLE>

(ii)

<PAGE>

EXPLANATORY NOTE

This Registration Statement has been prepared in accordance with the
requirements of Form S-8 which relates to the Registrant's Common Stock offered
pursuant to the Company's 1997 Director Stock Option Plan and Key Officer
Non-Qualified Stock Option Agreements. This Registration Statement also includes
a Prospectus prepared in accordance with Part I of Form S-3 which relates to the
reoffer or resale by the Company of certain shares of the Registrant's Common
Stock covered by the Prospectus prepared in accordance with the requirements of
Form S-8.

(iii)

<PAGE>
Subject to Completion
Preliminary Prospectus Dated August 8, 1997

PROSPECTUS

FOCUS Enhancements, Inc.
1,920,000 Shares of Common Stock

This Prospectus relates to 1,920,000 shares of Common Stock, $.01 par
value per share ("Common Stock" or the "Shares"), of FOCUS Enhancements, Inc.
(the "Company", the "Registrant" or "FOCUS") consisting of (i) 920,000 Shares
which may be offered hereby from time to time by the Key Officers named herein
(the "Key Officers"), which Shares are issuable by the Company to such officers
upon exercise of options (the "Officer Options") pursuant to Key Officer
Non-Qualified Stock Option Agreements and which may be offered by the Key
Officers for their own benefit, and (ii) 1,000,000 Shares which are issuable by
the Company upon exercise of options (the "Director Options" and, together with
the Officer Options, the "Options") pursuant to the 1997 Director Stock Option
Plan (the "Director Plan") which may be offered from time to time by the
Director optionees named herein (the "Director Optionees" and, together with the
Key Officers, the "Optionees") for their own benefit. To the extent that the
Options are exercised, the Company will receive proceeds equal to the exercise
price of the Options.

All Shares to be registered hereby are to be offered by the selling
stockholders listed herein (the "Selling Stockholders"), and the Company will
receive no proceeds from the resale by the Selling Stockholders of the Shares.
The Company has agreed to indemnify certain of the Selling Stockholders against
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended (the "Act"), or to contribute to payments which such Selling
Stockholders may be required to make in respect thereof.

The Company's Common Stock is listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") and traded on the
NASDAQ SmallCap Market under the symbol "FCSE". The last reported bid price of
the Common Stock on the NASDAQ SmallCap Market on August 5, 1997 was $2.40625
per share.
----------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" AT PAGES 3 THROUGH 6.
----------------------

It is anticipated that usual and customary brokerage fees will be paid
by the Selling Stockholders on the sale of the Common Stock registered hereby.
The Company will pay the other expenses of this offering. See "PLAN OF
DISTRIBUTION". The offer of 1,920,000 shares of Common Stock by the Selling
Stockholders as described in this Prospectus is referred to as the "Offering".
----------------------

The date of this Prospectus is August 8, 1997.
<PAGE>

No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer contained in this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell or solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create an implication that there
has been no change in the affairs of the Company since the date hereof or the
information contained or incorporated by reference herein is correct at any time
subsequent to the date hereof.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The Registration
Statement, the exhibits and schedules forming a part thereof and the reports,
proxy statements and other information filed by the Company with the Commission
can be inspected and copies obtained at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and New York Regional Office, Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at its principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. Such materials may also be accessed electronically by means of the
Commission's home page at http://www.sec.gov. This prospectus, which constitutes
part of a Registration Statement filed by the Company with the Commission under
the Act omits certain information contained in the Registration Statement in
accordance with the rules and regulations of the Commission. Reference is hereby
made to the Registration Statement and the Exhibits relating thereto for further
information with respect to the Company and the Securities offered hereby. Any
statements contained herein concerning provisions of any documents are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an Exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.

The Company hereby undertakes to provide without charge to each person
to whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus (excluding exhibits unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Requests for such copies should be made to the Company at its
principal executive offices, 142 North Road, Sudbury, Massachusetts 01776,
Attention: Harry G. Mitchell, telephone (508) 371-2000.

THE COMPANY

The Company's principal executive offices are located at 142 North
Road, Sudbury, Massachusetts 01776, and the telephone number is (508) 371-2000.

-2-

<PAGE>

RISK FACTORS

An investment in the Securities offered hereby involves a high degree
of risk and should only be purchased by investors who can afford to lose their
entire investment. The following factors, in addition to those discussed
elsewhere in the Prospectus, should be considered carefully in evaluating the
Company and its business.

Future Capital Needs. At March 31, 1997, the Company had working
capital of $1,255,820, cash and cash equivalents of $1,300,717 and was fully
drawn on its $900,000 line of credit (approximately $800,000 at March 31, 1997)
with its bank and its $1.5 million term note with an unaffiliated lender.
Historically, the Company has been required to meet its short- and long-term
cash needs through debt and the sale of Common Stock in private placements in
that cash flow from operations has been insufficient. During 1996, the Company
received approximately $6,116,000 in net proceeds from the exercise of warrants,
stock options and the sale of Common Stock. During the three month period ended
March 31, 1997, the Company received approximately $1,997,000 in net proceeds
from the exercise of warrants, stock options and the sale of Common Stock.

The Company's future capital requirements will depend on many factors,
including cash flow from operations, continued progress in its research and
development programs, competing technological and market developments, and the
Company's ability to market its products successfully. During 1997, the Company
may be required to raise additional funds through equity or debt financing, of
which there can be no assurance. Any equity financing could result in dilution
to the Company's then-existing stockholders. Sources of debt financing may
result in higher interest expense. Any financing, if available, may be on terms
unfavorable to the Company. If adequate funds are not available, the Company may
be required to curtail its activities significantly.

Reliance on Major Customers. In the year ended December 31, 1996,
approximately 23% and 15% of the Company's revenues were derived from sales to
Zenith Electronics, Inc. ("Zenith") and Ingram Micro D ("Ingram"), a national
distributor, respectively. For the three months ended March 31, 1997,
approximately 29% of the Company's revenues were derived from sales to Ingram
and approximately 8% were derived from sales to Zenith. Management expects that
sales to Zenith and Ingram will continue to represent a significant percentage
of the Company's future revenues. In October 1996, the Company entered into a
two-year exclusive agreement with Zenith, under which Zenith must purchase at
least $12,000,000 of PC-to-TV conversion products in 1997 and at least
$30,000,000 of these products in 1998 in order to maintain exclusivity. There
can be no assurances, however, that Zenith will purchase the minimum quantities.
Further, if the contract were to be terminated by Zenith, there would be a
material adverse effect to the Company and its business.

In the year ended December 31, 1996, and for the three months ended
March 31, 1997, approximately 8% and 15%, respectively, of the Company's net
sales were derived from sales of the Company's L-TV product to Apple Computer,
Inc. ("Apple"). In August 1994, the Company entered into a two year Master
Purchase Agreement with Apple under which Apple agreed to bundle and distribute
the Company's L-TV product with Apple's "Presentation System" product offering.
This agreement expired in August 1996. In the first quarter of 1997, the Company
received significant additional volume orders from Apple for shipment in the
first and second quarters of 1997. The Company believes that in 1997, Apple will
be a major customer. Although the orders are irrevocable and non-cancelable, no
assurances can be given that Apple will take delivery on the products or
continue to order products from the Company.

-3-

<PAGE>

History of Operating Losses. The Company has experienced limited
profitability since its inception. Although the Company reported net income of
$328,761 in the year ended December 31, 1995, the Company incurred net losses of
$3,726,606, $4,458,483 and $9,208,431 in the years ended December 31, 1993, 1994
and 1996, respectively. There can be no assurance that the Company will return
to profitability in 1997.

The Company's independent auditors have included an explanatory
paragraph in their report on the Company's financial statements for the year
ended December 31, 1996 to the effect that the Company's ability to continue as
a going concern is contingent upon its ability to secure financing and attain
profitable operations. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by its entrance into established markets and the
competitive environment in which the Company operates.

Limited Availability of Capital under Credit Arrangements with Lenders.
The Company maintains a $900,000 line of credit with Silicon Valley Bank. As of
March 31, 1997, approximately $800,000 is owed to the Bank under the line of
credit. Pursuant to its agreement with the Bank, the line of credit terminated
in April 1996, and was extended until March 7, 1997. At December 31, 1996, the
Company was in violation of certain debt covenants relating to the line of
credit with its commercial bank. In March 1997, the Company received a waiver of
the covenants from the commercial bank, a revision of the loan covenants and an
agreement to extend the line until March 1998.

In October 1994, the Company borrowed $2,500,000 from an unaffiliated
lender to help finance its inventory and accounts receivable under its Master
Purchase Agreement with Apple. The Company issued to this unaffiliated lender
its term note in the aggregate principal amount of $2,500,000. The term note
accrues interest at the revolving rate of prime plus 2%, is payable quarterly in
arrears at the end of December, March, June, and September, and was due February
1, 1996. The term note was originally secured by those specific assets financed
under the agreement with Apple, including accounts receivable, finished goods,
inventory, raw materials, work-in-process and contract rights arising under the
Apple agreement. The Company utilized the proceeds of this term note to finance
purchase orders received from Apple. In January 1996, the Company repaid
approximately $1 million of the amount owed under the term note. On June 28,
1996, the Company negotiated an amendment to the term note with the lender to
extend the due date of the term note to March 31, 1997. Pursuant to the
amendment, the Company granted the lender a second security interest in all the
assets of the Company. The Company is currently negotiating an additional
extension with the lender, however, there can be no assurances that the term
note will be extended on terms favorable to the Company.

Market Acceptance. The Company's sales and marketing strategy is
targeted to sales of its PC-to- TV videographics products to the Windows, Mac OS
markets, including computer manufacturers, VGA graphic card developers and VGA
chip developers, as well as to television manufacturers. Although the Company
has to date experienced success in penetrating these markets, there can be no
assurance that the Company's marketing strategy will continue to be effective
and that current customers will continue to buy the Company's products. Market
acceptance of the Company's current and proposed products will depend upon the
ability of the Company to demonstrate the advantages of its products over other
PC-to-TV videographics and connectivity products.

Reliance on Single Vendor. In the three months ended March 31, 1997,
approximately 60% of the components for the Company's products were secured and
manufactured on a turnkey basis by a single vendor, Pagg Corporation. In the
event that the vendor were to cease supplying the Company, management believes
there are alternative vendors for the components for the Company's products.
However, the Company would experience short term delays in the shipment of its
products.

-4-

<PAGE>

Adverse Effects of Reduced Apple Macintosh Sales. Although in the year
ended December 31, 1996, the Company increased the sales of Windows-based
products as a percentage of total sales, a substantial portion of the Company's
sales to date have been derived from products designed for use on Mac OS based
personal computers, and the Company expects that sales of products for use with
Macintosh computers may represent up to 35% (including direct sales to Apple) of
its net sales in 1997. Although sales of Macintosh computers have increased from
year to year, there can be no assurance that the Macintosh operating system will
continue to be accepted as a platform for personal computer applications.
Management believes that other computer platforms, such as Windows, have gained
greater acceptance in the Company's markets as these platforms have evolved to
support applications similar to those offered for the Macintosh. In addition,
there can be no assurance that the Company will be able to make timely and
successful introductions of products for other platforms.

Dependence on Timely Delivery of the FOCUS Scan 300 Chip. The Company
is currently completing development of an ASIC called the FOCUS Scan 300 Chip
which the Company expects to incorporate into all of its next generation
PC-to-TV videographics products. A significant portion of the Company's
anticipated revenues and gross margins for 1997 are dependent on the timely
completion and delivery of the FOCUS Scan 300 Chip. In the event that the Chip
is not available before the end of the third calendar quarter of 1997, the
Company's revenues and profitability for 1997 could be adversely effected.

Technological Obsolescence. The Windows and MAC OS markets are
characterized by extensive research and development and rapid technological
change resulting in product life cycles of nine to eighteen months. Development
by others of new or improved products, processes or technologies may make the
Company's products or proposed products obsolete or less competitive. The
Company will be required to devote substantial efforts and financial resources
to enhance its existing products and to develop new products. There can be no
assurance that the Company will succeed with these efforts.

Competition. The Windows and Mac OS markets are extremely competitive.
The Company currently competes with other developers of PC-to-TV conversion
products and expects to compete in the future with videographic integrated
circuit developers. Many of the Company's competitors have greater market
recognition and greater financial, technical, marketing and human resources than
the Company. Although the Company is not currently aware of any announcements by
its competitors that would have a material impact on the Company or its
operations, there can be no assurance that the Company will be able to compete
successfully against existing companies or new entrants to the marketplace.

Component Supply Problems. The Company purchases all of its parts from
outside suppliers and from time to time experiences difficulty in obtaining some
components or peripheral devices. The Company attempts to reduce the risk of
supply interruption by evaluating and obtaining alternative sources for various
components or peripheral devices. However, there can be no assurance that supply
shortages will not occur in the future which could significantly increase the
cost, or delay shipment of, the Company's products, which in turn could
adversely affect its results of operations.

Protection of Proprietary Information. Although the Company has filed
three patents with respect to its PC-to-TV videographics products, the Company
does not currently have any patents. The Company treats its technical data as
confidential and relies on internal nondisclosure safeguards, including
confidentiality agreements with employees, and on laws protecting trade secrets
to protect its proprietary information. There can be no assurance that these
measures will adequately protect the confidentiality of the Company's
proprietary information or that others will not independently develop products
or technology that are equivalent or superior to those of the Company. While it
may be necessary or desirable in the future to obtain

-5-

<PAGE>

licenses relating to one or more of its products or relating to current or
future technologies, there can be no assurance that the Company will be able to
do so on commercially reasonable terms.

Dependence upon Key Personnel. The Company's success depends, to a
significant extent, upon a number of key employees. The loss of services of one
or more of these employees, especially the Company's Chief Executive Officer,
Thomas L. Massie, could have a material adverse effect on the business of the
Company. The Company believes that its future success will also depend in part
upon its ability to attract, retain and motivate qualified personnel.
Competition for such personnel in the computer industry is intense. Although the
Company has not in the past experienced difficulty in attracting and retaining
qualified personnel, there can be no assurance that the Company will be
successful in attracting and retaining such personnel in the future.

USE OF PROCEEDS

The Company will receive no part of the proceeds from the resale by the
Selling Stockholders of the Shares. The gross proceeds to be received by the
Company from exercise of all of the Options (assuming that all of the Options
are exercised) are approximately $3,201,000 arising from the exercise of
1,470,000 Options with an exercise price of $1.88 per share and 250,000 Options
with an exercise price of $1.75 per share. Management intends to use such
proceeds for general working capital purposes including expenditures in
connection with the development, sales and marketing of future products for the
Company.

SELLING STOCKHOLDERS

This Prospectus relates to possible sales by Key Officers and Directors
of the Company of Shares issued pursuant to the exercise of options granted
under Key Officer Non-Qualified Stock Option Agreements and the 1997 Director
Stock Option Plan.

The following table shows the name of the Optionees, the number of
outstanding Shares of Common Stock of the Company beneficially owned by them as
of May 30, 1997, and the number of Shares available for resale hereunder.
Because each Key Officer and Optionee may sell all or part of his Shares
pursuant to this Prospectus, no estimate can be given as to the amount of Shares
that will be held by each Optionee upon termination of this Offering.

-6-

Number of Shares Number of Shares
Name of Selling Stockholder Beneficially Owned Available for Sale Hereunder
--------------------------- ------------------ ----------------------------
<S> <C> <C>

Key Officer Non-Qualified Stock
Options

Thomas L. Massie....................... 686,315(1) 500,000(2)
Brett A. Moyer......................... 6,885 250,000(3)
Harry G. Mitchell.................... 0 170,000(4)

1997 Director Stock Option Plan

John C. Cavalier....................... 119,204(5) 200,000(6)
U. Haskell Crocker..................... 184,595(7) 200,000(6)
J. Daniel Shaver....................... 50,000(8) 200,000(9)
William B. Coldrick.................... 326,809(10) 100,000(11)
Timothy E. Mahoney..................... 0 100,000(11)
Others (12)............................ 0 200,000

<FN>

(1) Includes 72,821 shares of Common Stock held by Mr. Massie's wife and children. Also includes 250,000 shares issuable pursuant
to stock options exercisable at May 30, 1997 or within 60 days thereafter.
(2) Represents shares of Common Stock issuable pursuant to options granted pursuant to a Key Officer Non-Qualified Stock Option
Agreement, exercisable for Common Stock at $1.88 per share and vesting in accordance with the following schedule: 166,667
option shares vesting on March 19, 1998; 166,667 option shares vesting on March 19, 1999; and 166,666 option shares vesting on
March 19, 2000.
(3) Represents shares of Common Stock issuable pursuant to options granted pursuant to a Key Officer Non-Qualified Stock Option
Agreement, exercisable for Common Stock at $1.75 per share and vesting in accordance with the following schedule: 83,333 option
shares vesting on April 21, 1998; 83,333 option shares vesting on April 21, 1999; and 83,334 option shares vesting on April 21,
2000.
(4) Represents shares of Common Stock issuable pursuant to options granted pursuant to a Key Officer Non-Qualified Stock Option
Agreement, exercisable for Common Stock at $1.88 per share and vesting in accordance with the following schedule: 56,667 option
shares vesting on March 19, 1998; 56,667 option shares vesting on March 19, 1999; and 56,666 option shares vesting on March 19,
2000.
(5) Includes 6,438 shares of Common Stock held in trust with Mr. Cavalier's wife. Also includes 112,766 shares issuable pursuant to
stock options exercisable at May 30, 1997 or within 60 days thereafter.
(6) Represents shares of Common Stock issuable pursuant to an option granted pursuant to the 1997 Director Stock Option Plan,
exercisable for Common Stock at $1.88 per share, vesting in accordance with the following schedule: 75,000 option shares
currently vested; 58,333 option shares vesting on March 19, 1998; 33,333 option shares vesting on March 19, 1999; and 33,334
option shares vesting on March 19, 2000.
(7) Includes 58,410 shares of Common Stock held directly by Mr. Crocker. Also includes 13,419 shares issuable pursuant to
immediately exercisable warrants to purchase Common Stock and 112,766 shares issuable pursuant to stock options held directly
by Mr. Crocker exercisable at May 30, 1997 or within 60 days thereafter.
(8) Represents 50,000 shares issuable pursuant to stock options currently exercisable.

-7-

<PAGE>

(9) Represents shares of Common Stock issuable pursuant to an option granted pursuant to the 1997 Director Stock Option Plan,
exercisable for Common Stock at $1.88 per share, vesting in accordance with the following schedule: 50,000 option shares
currently vested; 58,333 option shares vesting on March 19, 1998; 58,333 option shares vesting on March 19, 1999; and 33,334
option shares vesting on March 19, 2000.
(10) Includes 41,450 shares of Common Stock held jointly with Mr. Coldrick's wife. Also includes 5,000 shares issuable pursuant to
immediately exercisable warrants, and 280,359 shares of Common Stock issuable pursuant to outstanding stock options exercisable
at May 30, 1997, or within 60 days thereafter.
(11) Represents shares of Common Stock issuable pursuant to an option granted pursuant to the 1997 Director Stock Option Plan,
exercisable for Common Stock at $1.88 per share, vesting in accordance with the following schedule: 33,333 option shares
vesting on March 19, 1998; 33,333 option shares vesting on March 19, 1999; and 33,334 option shares vesting on March 19, 2000.
(12) The identity and the stockholdings of the individuals to whom the remaining 200,000 options to purchase Shares may be granted
is unknown at this time. Pursuant to the terms of the 1997 Director Stock Option Plan, however, options under such plan shall
be granted only to members of the Company's Board of Directors.
</FN>
</TABLE>

PLAN OF DISTRIBUTION

Of the 1,920,000 Shares being registered herein for sale by the Selling
Stockholders, (i) 920,000 are issuable upon exercise of Options granted to
pursuant to Key Officer Non-Qualified Stock Option Agreements, and (ii)
1,000,000 Shares are issuable upon exercise of options granted under the 1997
Director Stock Option Plan. All Shares to be registered hereby are to be offered
by the Optionees, and, other than the exercise price of the Options, the Company
will receive no proceeds from the sale of Shares offered hereby.

The Selling Stockholders may sell the Common Stock registered in
connection with this Offering on the NASDAQ market system or otherwise. There
will be no charges or commissions paid to the Company by the Selling
Stockholders in connection with the issuance of the Shares. It is anticipated
that usual and customary brokerage fees will be paid by the Selling Stockholders
upon sale of the Common Stock offered hereby. The Company will pay the other
expenses of this Offering. The Shares may be sold from time to time by the
Selling Stockholders, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The Shares may be sold by one or more of the following: (a) a
block trade in which the broker 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; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
an exchange distribution in accordance with the rules of NASDAQ; and (d)
ordinary brokerage transactions. In effecting sales, brokers or dealers engaged
by the Selling Stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Stockholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Act in connection with such sales. In
addition, any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 of the Act may be sold under Rule 144 rather than pursuant
to this Prospectus.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Sullivan & Worcester LLP, One Post Office Square,
Boston, Massachusetts 02109. John A. Piccione, Esq., a partner at Sullivan &
Worcester LLP, holds options to purchase 30,000 shares of Common Stock and
warrants to purchase 20,000 shares of Common Stock.

-8-

<PAGE>

EXPERTS

The consolidated financial statements of the Company as of and for the
year ended December 31, 1996 appearing in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1996, have been audited by Wolf &
Company, P.C. independent accountants as set forth in their report thereon,
which report includes an explanatory paragraph regarding the Company's ability
to continue as a going concern, included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

The consolidated financial statements of FOCUS as of and for the year
ended December 31, 1995, included in the Annual Report on Form 10-KSB of the
Company for the fiscal year ended December 31, 1996 referred to below have been
audited by Coopers & Lybrand L.L.P., independent accountants, as set forth in
their report dated April 11, 1996, which included an explanatory paragraph
related to the Company's ability to continue as a going concern, accompanying
such financial statements, and are incorporated herein by reference in reliance
upon the report of such firm, which report is given upon their authority as
experts in accounting and auditing.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which have been filed with the Commission
pursuant to the Exchange Act, are hereby incorporated in this Prospectus and
specifically made a part hereof by reference: (i) the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1996; (ii) the Company's Current
Report on Form 8K/A-1 filed on January 6, 1997 relating to the Company's
acquisition of TView, Inc.; (iii) the Company's Current Report on Form 8-K filed
on January 16, 1997 relating to the sale of securities pursuant to Regulation S;
(iv) the Company's Current Report on Form 8-K filed on March 3, 1997 relating to
the sale of securities pursuant to Regulation S; (v) the Company's Quarterly
Report on Form 10-QSB for the quarter ended March 31, 1997; (vi) the definitive
Proxy Statement dated June 20, 1997 provided to stockholders in connection with
the Annual Meeting of Stockholders held on July 25, 1997; and (vii) the
description of the Company's Common Stock contained in the Registration
Statement on Form SB-2 File No. 33-60248-B filed with the Commission on March
29, 1993, as amended. All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Offering of the Shares shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents.

Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in the applicable Prospectus Supplement), or in any
subsequently filed document that also is or is deemed to be incorporated herein
by reference, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Delaware General Corporation Law and the Registrant's Certificate
of Incorporation and ByLaws provide for indemnification of the Registrant's
directors and officers for liabilities and expenses that they may incur in such
capacities. In general, directors and officers are indemnified with respect to
actions taken in good faith in a manner reasonably believed to be in, or not
opposed to, the best interests

-9-

<PAGE>

of the Registrant, and with respect to any criminal action or proceeding,
actions that the indemnitee had no reasonable cause to believe were unlawful.
Reference is made to the Registrant's Second Restated Certificate of
Incorporation and Restated By-laws filed as Exhibits 3.1(a) and 3.2(a),
respectively, to the Registrant's Registration Statement on Form SB-2 declared
effective on May 24, 1993 (Registration Statement No. 33-60248-B) and
incorporated herein by reference. The Registrant maintains directors and
officers liability insurance for the benefit of its directors and officers.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Shares being registered, the Registrant 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 whether such
indemnification by it is against public policy as expressed in such Act and will
be governed by the final adjudication of such issue.

-10-

<PAGE>

No dealer, salesperson or any other person has been authorized to give
any information or to make any representations not contained in this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to sell, any securities other than the registered securities to which it
relates, or an offer to or solicitation of any person in any jurisdiction where
such an offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.

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

TABLE OF CONTENTS
Page

Available Information ........................................... 2
The Company ..................................................... 2
Risk Factors .................................................... 3
Use of Proceeds ................................................. 6
Selling Stockholders............................................. 6
Plan of Distribution ............................................ 8
Legal Matters.................................................... 8
Experts.......................................................... 9
Incorporation of Certain Documents
by Reference .................................................. 9
Indemnification of Directors
and Officers................................................... 9

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

1,920,000 Shares

FOCUS Enhancements, Inc.

Common Stock

________________

PROSPECTUS
________________

August __, 1997

-11-

<PAGE>
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1. Plan Information.

The documents containing the information specified in this Item 1 will
be sent or given to the Optionees or others as specified by Rule 428(b)(1). In
accordance with the rules and regulations of the Commission and the instructions
to Form S-8, such documents are not being filed with the Commission either as
part of this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424.

Item 2. Registrant Information and Employee Plan Annual Information.

The documents containing the information specified in this Item 2 will
be sent or given to the Optionees as specified by Rule 428(b)(1). In accordance
with the rules and regulations of the Commission and the instructions to Form
S-8, such documents are not being filed with the Commission either as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

Item 4. Description of Securities.

The Shares of Common Stock offered hereby are registered under Section
12 of the Exchange Act.

II-1

<PAGE>

Item 5. Interests of Named Experts and Counsel.

John A. Piccione, Esq., a partner at Sullivan & Worcester LLP, holds
options to purchase 30,000 shares of Common Stock and warrants to purchase
20,000 shares of Common Stock.

Item 6. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify, subject to the standards therein prescribed, any
person in connection with any action, suit or proceeding brought or threatened
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or was serving as such with respect to another
corporation or other entity at the request of such corporation.

The Delaware General Corporation Law, the Company's charter and by-laws
provide for indemnification of the Company's directors and officer for
liabilities and expenses that they may incur in such capacities. In general,
directors and officers are indemnified with respect to actions taken in good
faith in a manner reasonably believed to be in, or not opposed to, the best
interests of the Company, and with respect to any criminal action or proceeding,
actions that the indemnitee had no reasonable cause to believe were unlawful.
Reference is made to the Company's Second Restated Certificate of Incorporation,
as amended and Restated By-laws incorporated herein by reference.

The Underwriting Agreement executed in connection with the Company's
initial public offering provides that the underwriters are obligated, under
certain circumstances, to indemnify directors, officers and controlling persons
of the Company against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Act"). Reference is made to the form of
Underwriting Agreement previously filed as Exhibit 1.1 to the Company's
Registration Statement on Form SB-2, No. 33-60248-B.

The Company has obtained directors and officers liability insurance for
the benefit of its directors and certain of its officers.

Reference is made to the Underwriting Agreement described above,
pursuant to which the Registrant agreed to indemnify each underwriter and each
person, if any, who controls any underwriter within the meaning of the Act, or
the Securities Exchange Act of 1934, as amended, against certain types of civil
liabilities arising in connection with the aforementioned Registration Statement
or the prospectus contained therein.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. 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:

Exhibit No. Description

4.1 Specimen certificate representing the Common Stock of the
Registrant (filed as Exhibit 4.1 to the Company's Registration
Statement on Form SB-2 [File No. 33-60248-B] and incorporated
herein by reference).

II-2

<PAGE>

4.2 Second Restated Certificate of Incorporation, as amended,
(filed as Exhibit 3.1a to the Company's Registration Statement
on Form SB-2 [File No. 33-60248-B] and as an exhibit to the
Company's Form 10-QSB dated November 13, 1995 each of which is
incorporated herein by reference.
4.3 Restated By-laws of Registrant (filed as Exhibit 3.2a of the
Company's Registration Statement on Form SB-2 [File No.
33-60248-B] and incorporated herein by reference.
4.4* 1997 Director Stock Option Plan.
4.5* Form of Director Stock Option Agreement.
4.6* Key Officer Non-Qualified Stock Option Agreement for Thomas L.
Massie.
4.7* Key Officer Non-Qualified Stock Option Agreement for Brett A.
Moyer.
4.8* Key Officer Non-Qualified Stock Option Agreement for Harry G.
Mitchell.
5* Opinion of Sullivan & Worcester LLP regarding legality of
shares registered hereunder.
23.1* Consent of Wolf & Company, P.C., independent public
accountants.
23.2* Consent of Coopers & Lybrand L.L.P.
23.3* Consent of KPMG Peat Marwick LLP.
23.4* Consent of Sullivan & Worcester LLP (included in Exhibit 5).

Item 9. 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 of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
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
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) (Section 230.424(b) of 17 C.F.R.) 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;

provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act
of 1934 that are incorporated by reference in this registration statement.

(2) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the Securities offered herein,
and the offering of such Securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3

<PAGE>

(3) To remove from registration by means of a post-effective amendment any
of the Shares being registered which remain unsold at the termination
of the offering.

(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable.

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and

(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.

II-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Sudbury, Commonwealth of Massachusetts, on this 8th
day of August, 1997.

FOCUS ENHANCEMENTS, INC.

By: /s/ Thomas L. Massie
Thomas L. Massie
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Form S-8 relating to Common Shares has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

Signature Title Date
<S> <C> <C>

/s/ Thomas L. Massie Chairman and Chief Executive August 8, 1997
Thomas L. Massie Officer (Principal Executive
Officer)

/s/ Harry G. Mitchell Sr. Vice President, Chief Financial August 8, 1997
Harry G. Mitchell Officer and Treasurer (Principal
Financial and Accounting Officer)

/s/ John C. Cavalier Director August 8, 1997
John C. Cavalier

/s/ William B. Coldrick Director August 8, 1997
William B. Coldrick

/s/ U. Haskell Crocker II Director August 8, 1997
U. Haskell Crocker II

/s/ Timothy E. Mahoney Director August 8, 1997
Timothy E. Mahoney

/s/ J. Daniel Shaver Director August 8, 1997
J. Daniel Shaver

</TABLE>

II-5

EXHIBIT 4.4

FOCUS ENHANCEMENTS, INC.

1997 DIRECTOR STOCK OPTION PLAN

1. Purpose. This Non-Qualified Stock Option Plan, to be known as the
1997 Non- Employee Director Stock Option Plan (hereinafter, this "Plan") is
intended to promote the interests of FOCUS Enhancements, Inc. (hereinafter, the
"Company") by providing an inducement to obtain and retain the services of
qualified persons to serve as members of its Board of Directors (the "Board").

2. Available Shares. The total number of shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock") for which options may
be granted under this Plan shall not exceed 1,000,000 shares, subject to
adjustment in accordance with paragraph 9 of this Plan. Shares subject to this
Plan are authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Company. If any options granted under this Plan
are surrendered before exercise or lapse without exercise, in whole or in part,
the shares reserved therefor shall continue to be available under this Plan.

3. Administration. This Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adapt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.

Anything in this Plan to the contrary notwithstanding, the
effectiveness of this Plan and of the grant of all options hereunder is in all
respects subject to this Plan, and options granted under it shall be of no force
and effect unless and until the approval of this Plan in accordance with the
Company's by-laws by the vote of the holders of the Company's shares of Common
Stock present in person or by proxy and entitled to vote at a meeting of
shareholders at which this Plan is presented for approval.

4. Option Price. The purchase price of the stock covered by an option
granted pursuant to this Plan shall be at least 100% of the fair market value of
such shares on the day the option is granted. The option price will be subject
to adjustment in accordance with the provisions of paragraph 9 of this Plan. For
purposes of this Plan, if, at the time an option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such option is granted and
shall mean (i) the lower of the last sale price for the

<PAGE>

Company's Common Stock or the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the Nasdaq National Market, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the Nasdaq National Market List. However, if the Common Stock is not publicly
traded at the time an option is granted under the Plan, "fair market value"
shall be deemed to be the fair value of the Common Stock as determined by the
Board or by the Committee after taking into consideration all factors which it
deems appropriate, including, without limitation, recent sale and offer prices
of the Common Stock in private transactions negotiated at arm's length.

5. Period of Option. Unless sooner terminated in accordance with the
provisions of paragraph 7 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.

6. (a) Vesting of Shares and Non-Transferability of Options. Options
granted under this Plan shall not be exercisable until they become vested.
Options granted under this Plan shall vest in the optionee and thus become
exercisable in accordance with the vesting schedule determined by the Board or
by the Committee on a case by case basis.

The number of shares as to which options may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in this Plan.

(b) Meetings. Notwithstanding subsection (a) of this Section
7, if an optionee fails to attend less than 80% of the Board meetings held in
the twelve months prior to any vesting date, the number of shares vesting on
such vesting date shall be reduced proportionately based on the percentage of
Board meetings attended by such optionee.

(c) Non-transferability. Any option granted pursuant to this
Plan shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or her.

7. Termination of Option Rights.

(a) Except as otherwise specified in the agreement relating to
an option, in the event an optionee ceases to be a member of the Board for any
reason other than death or permanent disability, any then unexercised portion of
options granted to such optionee shall, to the extent not then vested,
immediately terminate and become void; any portion of an option which is then
vested but has not been exercised at the time of the optionee so ceases to be a
member of the Board may be exercised, to the extent it is then vested by the
optionee at any time prior to the scheduled expiration date of the option.

- 2 -

<PAGE>

(b) In the event that an optionee ceases to be a member of the
Board by reason of his or her death or permanent disability, any option granted
to such optionee shall be immediately and automatically accelerated and become
fully vested, and all unexercised options shall be exercisable by the optionee
(or by the optionee's personal representative, heir or legatee, in the event of
death) for a period of one year thereafter. Any options which are then
exercisable but have not been exercised at the time the Optionee so ceases to be
a member of the Board of Directors may be exercised, to the extent any portion
of such options are then exercisable, by the Optionee at any time prior to the
scheduled expiration date of the option. Notwithstanding the foregoing, in the
event any Optionee (i) ceases to be a member of the Board of Directors at the
request of the Company, (ii) is removed without cause, or (iii) otherwise does
not stand for nomination or re-election as a director of the Company at the
request of the Company, then any portion of any Option granted to such Optionee
which is not then exercisable shall be accelerated and such Option shall be
fully exercisable by the Optionee at any time prior to the scheduled expiration
date. No portion of such Option may be exercised if the Optionee is removed form
the Board of Directors for any one of the following reasons: (i) disloyalty,
gross negligence, dishonesty or breach of fiduciary duty to the Company; or (ii)
the commission of an act of embezzlement, fraud or deliberate disregard of the
rules or polices of the Company which results in loss, damage or injury to the
Company, whether directly or indirectly; or (iii) the unauthorized disclosure of
any trade secret or confidential information of the Company; or (iv) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer of the Company to break a contract with the Company;
or (v) the conduct of any activity on behalf of any organization or entity which
is a competitor of the Company (unless such conduct is approved by a majority of
the members of the Board of Directors).

8. Exercise of Option. Subject to the terms and conditions of this Plan
and the option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person addressed to FOCUS Enhancements, Inc., 142 North
Road, Sudbury Massachusetts 01776, at its principal executive offices, stating
the number of shares with respect to which the option is being exercised,
accompanied by payment in full for such shares. Payment may be (a) in United
States dollars in cash or by check, (b) in whole or in part in shares of the
Common Stock of the Company already owned by the person or persons exercising
the option or shares subject to the option being exercised (subject to such
restrictions and guidelines as the Board may adopt from time to time), valued at
fair market value determined in accordance with the provisions of paragraph 4 or
(c) consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise. There shall be no such exercise
at any one time as to fewer than one hundred (100) shares. The Company's
transfer agent shall, on behalf of the Company, prepare a certificate or
certificates representing such shares acquired pursuant to exercise of the
option, shall register the optionee as the owner of such shares on the books of
the Company and shall cause the fully executed certificate(s) representing such
shares to be delivered to the optionee as soon as practicable after payment of
the option price in full. The holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the option,

- 3 -

<PAGE>

except to the extent that one or more certificates for such shares shall be
delivered to him or her upon the due exercise of the option.

9. Adjustments Upon Changes in Capitalization and Other Events. Upon
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:

(a) Stock Dividends and Stock Splits. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivisions, combination or stock dividend.

(b) Recapitalization Adjustments. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise, each option granted
under this Plan which is outstanding but unvested as of the effective date of
such event shall become exercisable in full twenty (20) days prior to the
effective date of such event. In the event of a reorganization,
recapitalization, merger, consolidation, or any other change in the corporate
structure or shares of the Company, to the extent permitted by Rule 16b-3 of the
Securities Exchange Act of 1934, adjustments in the number and kind of shares
authorized by this Plan and in the number and kind of shares covered by and in
the option price or outstanding options under this Plan necessary to maintain
the proportionate interest of the optionee and preserve, without exceeding, the
value of such option, shall be made. Notwithstanding the foregoing, no such
adjustment shall be made which would, within the meaning of any applicable
provisions of the Internal Revenue Code of 1986, as amended, constitute a
modification, extension or renewal of any Option or a grant of additional
benefits to the holder of an Option.

(c) Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to options. No adjustments shall be made for dividends paid in
cash or in property other than securities of the Company.

(d) Adjustments. Upon the happening of any of the foregoing
events, the class and aggregate number of shares set forth in paragraph 2 of
this Plan that are subject to options which previously have been or subsequently
may be granted under this Plan shall also be appropriately adjusted to reflect
such events. The Board shall determine the specific adjustments to be made under
this paragraph 9, and its determination shall be conclusive.

10. Restrictions on Issuance of Shares. Notwithstanding the provision
of paragraph 11 of this Plan, the Company shall have no obligation to deliver
any certificate or certificates upon exercise of an option until one of the
following conditions shall be satisfied:

- 4 -

<PAGE>

(i) The shares with respect to which the option has been
exercised are at the time of the issue of such shares effectively
registered under applicable Federal and state securities laws as now in
force or hereafter amended; or

(ii) Counsel for the Company shall have given an opinion that
such shares are exempt from registration under federal and state
securities laws as now in force or hereafter amended; and the Company
has complied with all applicable laws and regulations with respect
thereto, including without limitation all regulations required by any
stock exchange upon which the Company's outstanding Common Stock is
then listed.

11. Legend on Certificates. The certificates representing shares issued
pursuant to the exercise of an option granted hereunder shall carry such
appropriate legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of the Securities Act of
1933 or any state securities laws.

12. Representation of Optionee. If requested by the Company, the
optionee shall deliver to the Company written representations and warranties
upon exercise of the option that are necessary to show compliance with Federal
and state securities laws, including representations and warranties to the
effect that a purchase of shares under the option is made for investment and not
with a view to their distribution (as that term is used in the Securities Act of
1933).

13. Option Agreement. Each option granted under the provisions of this
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with this Plan as may be determined by the officer
executing it.

14. Termination and Amendment of Plan. Options may no longer be granted
under this Plan after March 19, 2007, and this Plan shall terminate when all
options granted or to be granted hereunder are no longer outstanding. The Board
may at any time terminate this Plan or make such modification or amendment
thereof as it deems advisable; provided, however, that the Board may not,
without approval by the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or by proxy and voting on such matter
at a meeting, (a) increase the maximum number of shares for which options may be
granted under this Plan (except by adjustment pursuant to Section 9), (b)
materially modify the requirements as to eligibility to participate in this
Plan, (c) materially increase benefits accruing to option holders under this
Plan or (d) amend this Plan in any manner which would cause Rule 16b-3 under the
Securities Exchange Act (or any successor or amended provision thereof) to
become inapplicable to this Plan; and provided further that the provisions of
this Plan specified in Rule 16b-3(c)(2)(ii)(A) (or any successor or amended
provision thereof) under the Securities Exchange Act of 1934 (including without
limitation, provisions as to eligibility, amount, price and timing of awards)
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder. Termination or any modification or

- 5 -

<PAGE>

amendment of this Plan shall not, without consent of a participant, affect his
or her rights under an option previously granted to him or her.

15. Withholding of Income Taxes. Upon the exercise of an option, the
Company, in accordance with Section 3402(a) of the Internal Revenue Code, may
require the optionee to pay withholding taxes in respect of amounts considered
to be compensation includible in the optionee's gross income.

16. Compliance with Regulations. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended provision thereof) and any applicable
Securities and Exchange Commission interpretations thereof. If any provision of
this Plan is deemed not to be in compliance with Rule 16b-3, the provision shall
be null and void.

17. Governing Law. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof.

18. Acceleration and Vesting of Option for Business Combinations. Upon
any merger, consolidation, sale of all (or substantially all) of the assets of
the Company, or other business combination involving the sale or transfer of all
(or substantially all) of the capital stock or assets of the Company in which
the Company is not the surviving entity, or, if it is the surviving entity, does
not survive as an operating going concern in substantially the same line of
business, then any options granted hereunder shall, immediately prior to the
consummation of any of the foregoing events, become fully vested and immediately
exercisable by the Optionee.

19. Eligibility and Limitations. Options may be granted pursuant to the
Plan only to individuals who are members of the Board of Directors of the
Company at the time of the initial grant and who must hold the options (and the
shares of Common Stock issuable upon exercise thereof) individually in their own
names.

Approved by Board of Directors of the Company: March 19, 1997

- 6 -

EXHIBIT 4.5

FOCUS ENHANCEMENTS, INC.

DIRECTOR STOCK OPTION AGREEMENT

1. Grant of Option.

FOCUS Enhancements, Inc., a Delaware corporation (the "Company"),
hereby grants to ________________ (the "Director") an option to purchase _______
shares of Common Stock, $.01 par value per share (the "Common Stock"), of the
Company as hereinafter set forth, pursuant and subject to the terms and
provisions of the Company's 1997 Director Stock Option Plan (the "Director
Plan").

All capitalized terms which are not otherwise defined herein shall have
the meanings as those assigned thereto in the Director Plan.

2. Vesting of Option.

This Option shall be exercisable in cumulative installments as follows:

Number of Option Shares for which
Option Will be Exercisable Date of Vesting

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

3. Sale of Assets. If while the Director is a director of the Company,
or if at any time after the Director has ceased to be a member of the Board as a
result of the termination of his directorship by the Company without Cause, all
or substantially all of the stock or assets of Company and its subsidiaries
shall be sold in a transaction or related series of transactions (other than to
an entity or entities in which the group consisting of the stockholders of the
Company, their affiliates and family members immediately prior to such sale
beneficially own directly or indirectly stock representing at least fifty
percent (50%) of combined voting power of the voting capital stock of such
entity or entities) then all of the options to purchase Common Stock granted
hereunder shall become vested immediately prior to the effectiveness of such
sale and shall not be subject to forfeiture. As used herein the term "Cause"
shall mean conduct, as determined by the Board, involving one or more of the
following: (i) gross misconduct by the Director which is materially injurious to
the Company; or (ii) the commission of an act of embezzlement, fraud or
deliberate disregard of rules or policies of the Company which results in
material economic loss, damage or injury to the Company; or (iii) the
unauthorized

<PAGE>

disclosure of any trade secret or confidential information of the Company or any
third party who has a business relationship with the Company or a violation of
any noncompetition covenant or assignment of inventions obligation with the
Company; or (iv) the commission of an act which induces any customer or
prospective customer of the Company to break a contract with the Company or to
decline to do business with the Company; or (v) the conviction of the Director
of a felony involving any financial impropriety or which would materially
interfere with the Director's ability to perform his or her services or
otherwise be injurious to the Company; or (vi) the failure of the Director to
perform in a material respect his or her employment or engagement obligations
without proper cause. In making such determination, the Board shall act fairly
and in utmost good faith.

4. Term of Option.

This Option shall terminate in ten (10) years on ______________.

5. Exercise Price.

The exercise price of this Option shall be $____ per share.

6. Exercise and Payment.

Method of Payment. This Option shall be exercisable by delivery to the
Company of written notice of exercise, specifying the number of shares for which
this Option is being exercised (subject to Section 2 hereof), together with
payment to the Company for the total exercise price thereof in cash or by check;
provided, however, that there shall be no such exercise at any one time as to
fewer than one hundred (100) shares or all of the remaining shares then
purchasable by the person or persons exercising the option, if fewer than one
hundred (100) shares.

7. Non-transferability.

This option shall not be assignable or transferable other than by will
or the laws of descent and distribution or pursuant to a domestic relations
order and shall be exercisable during the holder's lifetime only by him or her.

8. Effect of Termination or Death.

In the event the Director ceases to be a member of the Board for any
reason other than death or permanent disability, any then unexercised portion of
this Option shall, to the extent not then vested, immediately terminate and
become void; any portion of this Option which is then vested but has not been
exercised at the time the Director so ceases to be a member of the Board may be
exercised, to the extent it is then vested, by the holder (or by the holder's
personal representative, heir or legatee, in the event of the holder's death)
within 90 days of the date the

-2-

<PAGE>

Director ceased to be a member of the Board; and this Option shall terminate
after such 90 days have expired.

In the event the Director ceases to be a member of the Board by reason
of his death or permanent disability, this Option shall be immediately and
automatically accelerated and become fully vested and any unexercised portion or
portions of this Option shall be exercisable by the holder (or by the holder's
personal representative, heir or legatee, in the event of death) until the
scheduled expiration date of this Option.

9. Withholding Taxes.

The Director acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Director any federal,
state or local taxes of any kind required by law to be withheld with respect to
exercise of this Option.

10. Plan Provisions.

This Option and the rights of the Director hereunder shall be subject
to and governed by the terms and provisions of the Director Plan, including
without limitation the provisions of Section 6 thereof, and any terms stated
herein that are not inconsistent with the terms of the Director Plan.

11. Director Representation.

The Director hereby represents that he has read the Director Plan,
attached hereto as Exhibit A.

12. Stock Certificate Legend.

Because the Director is an "affiliate" of the Company (as defined in
Rule 144 promulgated under the Securities Act of 1933), all stock certificates
representing shares of Common Stock issued pursuant to the Option shall have
affixed thereto legends substantially in the following form:

"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and may not
be sold, transferred or assigned unless such shares are registered
under the Act or an opinion of counsel, satisfactory to the
corporation, is obtained to the effect that such sale, transfer or
assignment is exempt from the registration requirements of the Act."

13. Notice.

Any notice required to be given under the terms of this Option shall be
properly addressed to the Company at its principal executive offices, and to the
Director at his address set

-3-

<PAGE>

forth below, or at such other address as either of such parties may hereafter
designate in writing to the other.

14. Enforceability.

This Option shall be binding upon the Director, any direct or indirect
transferee, and the estates, personal representatives and beneficiaries of the
Director and any direct or indirect transferee.

15. Effective Date.

The effective date of this Option is ______________.

IN WITNESS WHEREOF, this Option has been executed by a duly authorized
officer of the Company as of the effective date.

FOCUS ENHANCEMENTS, INC.

By:
Name:
Title:

DIRECTOR'S ACCEPTANCE:

The undersigned hereby accepts this Option and agrees to the terms and
provisions set forth in this Option and in the Director Plan (a copy of which
has been delivered to him).

Name

Address

Date:

-4-

Exhibit 4.6

FOCUS ENHANCEMENTS, INC.

Key Officer Non-Qualified Stock Option Agreement

FOCUS ENHANCEMENTS, INC., a Delaware Corporation (the "Company") hereby
grants to Thomas L. Massie (the "Optionee") a Key Officer Non-Qualified Stock
Option to purchase 500,000 shares (the"Option Shares") of Common Stock, $0.01
par value (the "Common Stock"), at the price of $1.88 per share.

1. Grant as Non-Qualified Option; Other Options. This Option is intended to be a
Non- Qualified Option (rather than an incentive stock option), and the Board of
Directors intends to take appropriate action, if necessary, to achieve this
result. This Option is in addition to any other options heretofore or hereafter
granted to the Optionee by the Company, but a duplicate original of this
instrument shall not affect the grant on another option.

2. Extent of Option if Business Relationship Continues. If the Optionee has
continued to serve the Company in the capacity of any employee, officer,
director, agent, advisor or consultant, including services as a member of the
board of Advisors of the Company (such service is described herein as
maintaining or being involved in a "Business Relationship" with the Company), on
the following dates, the Optionee may exercise this Option for the number of
Option Shares set opposite the applicable date:

Number of Option Shares
for which Option will
Period be exercisable
- ------ -----------------------
One year but less than 166,667
two years from March 19, 1997

Two years but less than 166,667
three years from March 19, 1997

Three years from March 19, 1997 166,666
thru the term of the Option

The foregoing notwithstanding, this Option shall become immediately
exercisable with respect to all the Option Shares purchasable hereunder if while
the Optionee continues to maintain a Business Relationship with the Company any
one or more of the following events occurs: (i) the death or disability of the
Optionee as that term is defined in Section 4 hereof; (ii) the Optionee's
employment with the Company is terminated by the Company without "Cause" as that
term is defined in Section 15 hereof; or (iii) a change in control of the
Company. For purposes of this Agreement a "change in control" shall mean: (x) a
merger or consolidation of the Company with or into, or the acquisition of the
Company by, another entity or (y) the sale of all or substantially all of the
stock or assets of the Company in a transaction or series of related
transactions such that the stockholders of the Company immediately prior to such
event do not immediately after giving effect to such event beneficially own
voting securities representing in the aggregate more than 75% of the combined
voting power of the voting securities of the surviving entity or the entity
purchasing such stock or assets (the "Surviving Entity") or the members of the
Board of Directors of the Company immediately prior to such event do not
immediately after giving effect to such event constitute a majority of the Board
of Directors of the Surviving Entity.

<PAGE>

The foregoing rights are cumulative and, while the Optionee continues
to maintain a Business Relationship with the Company, may be exercised up to and
including the date which is ten years from the date this Option is granted. All
of the foregoing rights are subject to Sections 3, 4 and 15 as appropriate, if
the Optionee ceases to maintain a Business Relationship with the Company, or
dies or becomes disabled while involved in a Business Relationship with the
Company.

3. Termination of Business Relationship. If the Optionee ceases to maintain a
Business Relationship with the Company (or any affiliated corporation) for any
reason other than death or disability, termination without Cause or termination
due to a change in control of the Company, no further installments of this
Option shall become exercisable and this Option shall terminate 90 days after
the date the Business Relationship ceases, but in no event later than the
scheduled expiration date. In such a case, the Optionee's only rights to
exercise options hereunder shall be those which are properly exercisable before
the termination of this Option, and the Optionee may exercise this Option for
the number of Option Shares which have vested and become exercisable prior to
the date of termination.

4. Death: Disability. If the Optionee dies while involved in a Business
Relationship with the Company (or any affiliated corporation), this Option may
be exercised, to the extent of the number of Option Shares with respect to which
the Optionee could have exercised it on the date of his or her death, by his or
her estate, personal representative or beneficiary to whom this Option has been
assigned pursuant to Section 9, at any time within 180 days after the date of
death, but not later than the scheduled expiration date. If the Optionee's
Business Relationship with the Company is terminated by reason of his
disability, this Option may be exercised, to the extent of the number of Option
Shares with respect to which the Optionee could have exercised it on the date
the Business Relationship was terminated, at any time within 180 days after the
date of such termination, but not later than the scheduled expiration date. At
the expiration of such 180-day period or the scheduled expiration date,
whichever is the earlier, this Option shall terminate and the only rights
hereunder shall be those as to which the Option was properly exercised before
such termination. For the purposes of this Option, the term "disability" shall
mean "permanent and total disability" as defined in Section 22(e)(3) of the
Internal Revenue Code or successor statute.

5. Partial Exercise. Exercise of this Option up to the extent above stated may
be made in part at any time and from time to time within the above limits,
except that this Option may not be exercised for a fraction of a share unless
such exercise is with respect to the final installment of Option Shares subject
to this Option and a fractional share (or cash in lieu thereof) must be issued
to permit the Optionee to exercise completely such final installment. Any
fractional share with respect to which an installment of this Option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this Option and shall be available for later purchase by the
Optionee in accordance with the terms hereof.

6. Payment of Price. The Option price is payable in United States dollars only
and must be paid:

a. in cash or by personal check, or any combination of the foregoing,
equal in amount to the Option price; or

<PAGE>

b. in the discretion of the Board of Directors, in cash, by personal
check, by delivery of shares of the Company's Common Stock having a fair market
value (as determined by the Board of Directors) equal as of the date of exercise
to the Option price, by delivery of a personal recourse promissory note, through
the delivery of an assignment to the Company of a sufficient amount of the
proceeds from the sale of the Common Stock acquired upon exercise of the Option
and an authorization to the broker or selling agent to pay that amount to the
Company, which sale shall be at the Optionee's direction at the time of
exercise, or by any combination of the foregoing, equal in amount to the Option
Price.

If the Optionee delivers shares of Common Stock held by the Optionee
(the "Old Stock") to the Company in full or partial payment of the option price,
and the Old Stock so delivered is subject to restrictions or limitations imposed
by agreement between the Optionee and the Company, the Common Stock received by
the Optionee on the exercise of this Option shall be subject to all restrictions
and limitations applicable to the Old Stock to the extent that the Optionee paid
for such Commons Stock or Preferred Stock by delivery of Old Stock, in addition
to any restrictions or limitations imposed by this Agreement.

7. Agreement to Purchase for Investment. By acceptance of this Option, the
Optionee agrees that a purchase of Option Shares under this Option will not be
made with a view to their distribution, as that term is used in the Securities
Act of 1933, as amended (the "Securities Act"), unless in the opinion of counsel
to the Company such distribution is in compliance with or exempt from the
registration and prospectus requirements of the Securities Act and applicable
state securities laws, and the Optionee agrees to sign a certificate to such
effect at the time of exercising this Option and agrees that the certificate for
the Option Shares so purchased may be inscribed with a legend to ensure
compliance with the Securities Act and applicable state securities laws.

8. Method of Exercising Option. Subject to the terms and conditions of this
Agreement, this Option may be exercised by written notice to the address of the
Company, at its Sudbury, Massachusetts office, in the form attached hereto as
Exhibit A. Such notice shall state the election to exercise this Option and the
number of Option Shares in respect of which it is being exercised and shall be
signed by the person or persons so exercising this Option. Such notice shall be
accompanied by payment of the full purchase price of such Option Shares, and the
Company or its transfer agent shall deliver a certificate or certificates
representing such Option Shares as soon as practicable after the notice shall be
received. The certificate or certificates for the Option shares as to which this
Option shall have been so exercised shall be registered in the name of the
person or persons so exercising this Option (or, if this Option shall be
exercised by the Optionee and if the Optionee shall so request in the notice
exercising this Option, shall be registered in the name of the Optionee and
another person jointly, with right of survivorship) and shall be delivered as
provided above to or upon the written order of the person or persons exercising
this Option. In the event this Option shall be exercised, pursuant to Section 4
hereof, by any person or persons other than the Optionee, such notice shall be
accompanied by appropriate proof of the right of such person or persons to
exercise this Option. All Option Shares that shall be purchased upon the
exercise of this Option as provided herein shall be fully paid and
nonassessable.

<PAGE>

9. Option Not Transferable.

a. This Option is not transferable or assignable except by will or by
the laws of descent and distribution. During the Optionee's lifetime only the
Optionee can exercise this Option.

b. In the event the Option Shares shall be community property, and in
the event of a divorce between the Optionee and said Optionee's spouse, then any
transfer of the Option Shares (whether to said Optionee's spouse or otherwise),
shall be a prohibited transfer.

10. No Obligation to Exercise Option. The grant and acceptance of this Option
imposes no obligation on the Optionee to exercise it.

11. No Obligation to Continue Business Relationship. The Company and any
affiliated corporations are not, as a result of the grant and acceptance of this
Option, obligated in any manner to continue to maintain a Business Relationship
with the Optionee.

12. No Rights as Stockholder until Exercise. The Optionee shall have no rights
as a stockholder with respect to the Option Shares subject to this Agreement
until a stock certificate therefor has been issued to the Optionee and is fully
paid for by the Optionee. No adjustment shall be made, except adjustments for
changes in capitalization pursuant to Section 13 hereof, for dividends (whether
in cash, securities or other property) or distributions or other similar rights
for which the record date is prior this date such stock certificate is issued.

13. Capital Changes and Business Successions. It is the purpose of this Option
to encourage the Optionee to work for the best interests of the Company and its
stockholders. Because, for example, that might require the issuance of a stock
dividend or a merger with another corporation, the purpose of this Option would
not be served if such a stock dividend, stock split, merger or similar
occurrence would cause the Optionee's rights hereunder to be diluted or
terminated and thus be contrary to the Optionee's interest. Therefore, if the
Company is to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company's assets or otherwise (an
"Acquisition"), the Board or the board of directors of any entity assuming the
obligations of the Company hereunder (the "Successor Board"), may, as to
outstanding Options, take one or more of the following actions: (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition; or (ii) make appropriate provision for the continuation of
such Options by substituting on an equitable basis for the shares then subject
to such Options any equity securities of the successor corporation; or (iii)
upon written notice to the Optionee, provide that all Options must be exercised,
to the extent than exercisable, within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (iv)
terminate all Options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such Options (to the extent then
exercisable) over the exercise price thereof; or (v) terminate all Options in
exchange for the right to participate in any stock option or other employee
benefit plan

<PAGE>

of any successor corporation (giving proper credit to any Optionee for that
portion of any Option which has otherwise vested and become exercisable prior to
the Acquisition).

14. Withholding Taxes. The Optionee hereby agrees that the Company may withhold
from the Optionee's wages or other remuneration the appropriate amount of
federal, state and local taxes attributable to the Optionee's exercise of any
installment of this Option. At the Company's discretion, the amount required to
be withheld may be withheld in cash from such wages or other remuneration, or in
kind from the Common Stock otherwise deliverable to the Optionee on exercise of
this Option. The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's wages or other remuneration sufficient to satisfy
the Company's withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount underwithheld.

15. No Exercise of Option if Engagement or Employment Terminated for Cause. If
the employment or engagement of the Optionee is terminated for "Cause," this
Option shall terminate on the date of such termination and this Option shall
thereupon not be exercisable to any extent whatsoever. "Cause" is conduct, as
determined by the Board of Directors, involving one or more of the following:
(i) gross misconduct by the Optionee which is materially injurious to the
Company; or (ii) the commission of an act of embezzlement, fraud or deliberate
disregard of the rules or polices of the Company which results in material
economic loss, damage or injury to the Company; or (iii) the unauthorized
disclosure of any trade secret or confidential information of the Company or any
third party who has a business relationship with the Company or a violation of
any noncompetition covenant or assignment of inventions obligation with the
Company; or (iv) the commission of an act which induces any customer or
prospective customer of the Company to break a contract with the Company or to
decline to do business with the Company; or (v) the conviction of the Optionee
of a felony involving any financial impropriety or which would materially
interfere with the Optionee's ability to perform his or her services or
otherwise be injurious to the Company; or (vi) the failure of the Optionee to
perform in a material respect his or her employment of engagement obligations
without proper cause. In making such determination, the Board of Directors shall
act fairly and in good faith.

16. Stock Certificate Legend. Because the Optionee is an "affiliate" of the
Company (as defined in Rule 144 promulgated under the Securities Act of 1933),
all stock certificates representing shares of Common Stock issued pursuant to
the Option shall have affixed thereto legends substantially in the following
form:

"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be sold, transferred or assigned unless
such shares are registered under the Act or an opinion of
counsel, satisfactory to the corporation, is obtained to the
effect that such sale, transfer or assignment is exempt from
the registration requirements of the Act."

17. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.

<PAGE>

18. Miscellaneous.

a. Notices. Any notices or communication provided for herein shall be
given in writing by first class mail, electronic facsimile transmission, or
overnight courier service, which shall be in the case of the Optionee to his or
her residence, or to such other address as may be designated by such Optionee.

b. Amendment of Agreement. The provisions of this Agreement may be
waived, altered, amended, or repealed, in whole or in part, only on the written
consent of all parties to this Agreement.

c. Severability. In the event that any provisions of this Agreement
shall be held to be invalid, the remaining Paragraphs shall remain in full force
and effect.

d. Attorney's Fees. In the event of any dispute, claim, arbitration or
legal proceeding arising out of this Agreement, the successful or prevailing
party shall be entitled to reimbursement from the other of all costs, expenses
and attorney's fees.

e. Necessary Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be reasonably necessary to carry out
provisions of this Agreement.

f. Persons Bound. This Agreement shall be binding upon the parties
hereto, their respective spouses, heirs, legatees, executors, administrators,
permitted transferees and legal successors. This Agreement shall also be binding
upon the distribution of any estate or trust which may be a Optionee. At the
request of the Company, any such transferees, distributees, assignees, or
successors in interest who shall be personally bound by this Agreement shall
execute a counterpart of this Agreement.

IN WITNESS WHEREOF the Company and the Optionee have caused this
instrument to be executed, as of March 19, 1997, and the Optionee whose
signature appears below acknowledges receipt of a copy of the 10A Prospectus and
acceptance of an original copy of this Agreement.

/s/ Thomas L. Massie FOCUS ENHANCEMENT, INC.
Thomas L. Massie

____________________________ By: /s/ Brett A. Moyer
Name Brett A. Moyer
President
- ----------------------------
Street Address

- -----------------------------
City, State Zip Code

<PAGE>

Exhibit A to Key Officer
Nonqualified Stock
Option Agreement

FOCUS Enhancements, Inc.
142 North Road
Sudbury , Massachusetts 01776

RE: Exercise of Non-Qualified Option Pursuant to Key Officer Non-Qualified
Stock Option Agreement

Gentlemen:

The undersigned hereby elects to exercise the stock option granted to
Thomas L. Massie on March 19, 1997 by and to the extent of purchasing shares of
the Common Stock of FOCUS Enhancements, Inc. for the price of $1.88 per share,
subject to the terms and conditions of the Key Officer Nonqualified Stock Option
Agreement between Thomas L. Massie and FOCUS Enhancements, Inc. dated as of
March 19, 1997 (the "Agreement").

The undersigned encloses herewith payment, in cash or in such other
property as is permitted under the Agreement, of the purchase price for said
shares. If the undersigned is making payment of any part of the purchase price
by delivery of shares of stock of FOCUS Enhancements, Inc., he hereby confirms
that he has investigated and considered the possible income tax consequences to
him of making such payments in that form.

The undersigned hereby agrees to provide to FOCUS Enhancements, Inc. an
amount sufficient to satisfy any obligation to withhold taxes, in accordance
with the Agreement.

The undersigned hereby specifically confirms to FOCUS Enhancements, Inc.
that he is acquiring the shares for investment and not with a view to their sale
or distribution, and that the shares shall be held subject to all of the terms
and conditions of the Agreement.

Very truly yours,

Date (Signed by
or other party duly exercising
option)

Exhibit 4.7

FOCUS ENHANCEMENTS, INC.

Key Officer Non-Qualified Stock Option Agreement

FOCUS ENHANCEMENTS, INC., a Delaware Corporation (the "Company") hereby
grants to Brett A. Moyer (the "Optionee") a Key Officer Non-Qualified Stock
Option to purchase 250,000 shares (the"Option Shares") of Common Stock, $0.01
par value (the "Common Stock"), at the price of $1.75 per share.

Number of Option Shares
for which Option will
Period be exercisable
- ------ -----------------------
One year but less than 83,333
two years from April 21, 1997

Two years but less than 83,333
three years from April 21, 1997

Three years from April 21, 1997 83,334
thru the term of the Option

<PAGE>

6. Payment of Price. The Option price is payable in United States dollars only
and must be paid:

a. in cash or by personal check, or any combination of the foregoing,
equal in amount to the Option price; or

<PAGE>

9. Option Not Transferable.

a. This Option is not transferable or assignable except by will or by
the laws of descent and distribution. During the Optionee's lifetime only the
Optionee can exercise this Option.

10. No Obligation to Exercise Option. The grant and acceptance of this Option
imposes no obligation on the Optionee to exercise it.

<PAGE>

of any successor corporation (giving proper credit to any Optionee for that
portion of any Option which has otherwise vested and become exercisable prior to
the Acquisition).

"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be sold, transferred or assigned unless
such shares are registered under the Act or an opinion of
counsel, satisfactory to the corporation, is obtained to the
effect that such sale, transfer or assignment is exempt from
the registration requirements of the Act."

17. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.

<PAGE>

18. Miscellaneous.

b. Amendment of Agreement. The provisions of this Agreement may be
waived, altered, amended, or repealed, in whole or in part, only on the written
consent of all parties to this Agreement.

c. Severability. In the event that any provisions of this Agreement
shall be held to be invalid, the remaining Paragraphs shall remain in full force
and effect.

e. Necessary Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be reasonably necessary to carry out
provisions of this Agreement.

IN WITNESS WHEREOF the Company and the Optionee have caused this
instrument to be executed, as of April 21, 1997, and the Optionee whose
signature appears below acknowledges receipt of a copy of the 10A Prospectus and
acceptance of an original copy of this Agreement.

/s/ Brett A. Moyer FOCUS ENHANCEMENT, INC.
Brett A. Moyer

____________________________ By: /s/ Thomas L. Massie
Name Thomas L. Massie
Chief Executive Officer
- ----------------------------
Street Address

- -----------------------------
City, State Zip Code

<PAGE>

Exhibit A to Key Officer
Nonqualified Stock
Option Agreement

FOCUS Enhancements, Inc.
142 North Road
Sudbury , Massachusetts 01776

RE: Exercise of Non-Qualified Option Pursuant to Key Officer Non-Qualified
Stock Option Agreement

Gentlemen:

The undersigned hereby elects to exercise the stock option granted to
Brett A. Moyer on April 21, 1997 by and to the extent of purchasing shares of
the Common Stock of FOCUS Enhancements, Inc. for the price of $1.75 per share,
subject to the terms and conditions of the Key Officer Nonqualified Stock Option
Agreement between Brett A. Moyer and FOCUS Enhancements, Inc. dated as of April
21, 1997 (the "Agreement").

The undersigned hereby agrees to provide to FOCUS Enhancements, Inc. an
amount sufficient to satisfy any obligation to withhold taxes, in accordance
with the Agreement.

Very truly yours,

Date (Signed by
or other party duly exercising
option)

Exhibit 4.8

FOCUS ENHANCEMENTS, INC.

Key Officer Non-Qualified Stock Option Agreement

FOCUS ENHANCEMENTS, INC., a Delaware Corporation (the "Company") hereby
grants to Harry G. Mitchell (the "Optionee") a Key Officer Non-Qualified Stock
Option to purchase 170,000 shares (the"Option Shares") of Common Stock, $0.01
par value (the "Common Stock"), at the price of $1.88 per share.

Number of Option Shares
for which Option will
Period be exercisable
- ------ -----------------------
One year but less than 56,667
two years from March 19, 1997

Two years but less than 56,667
three years from March 19, 1997

Three years from March 19, 1997 56,666
thru the term of the Option

<PAGE>

6. Payment of Price. The Option price is payable in United States dollars only
and must be paid:

a. in cash or by personal check, or any combination of the foregoing,
equal in amount to the Option price; or

<PAGE>

9. Option Not Transferable.

a. This Option is not transferable or assignable except by will or by
the laws of descent and distribution. During the Optionee's lifetime only the
Optionee can exercise this Option.

10. No Obligation to Exercise Option. The grant and acceptance of this Option
imposes no obligation on the Optionee to exercise it.

<PAGE>

of any successor corporation (giving proper credit to any Optionee for that
portion of any Option which has otherwise vested and become exercisable prior to
the Acquisition).

"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be sold, transferred or assigned unless
such shares are registered under the Act or an opinion of
counsel, satisfactory to the corporation, is obtained to the
effect that such sale, transfer or assignment is exempt from
the registration requirements of the Act."

17. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.

<PAGE>

18. Miscellaneous.

b. Amendment of Agreement. The provisions of this Agreement may be
waived, altered, amended, or repealed, in whole or in part, only on the written
consent of all parties to this Agreement.

c. Severability. In the event that any provisions of this Agreement
shall be held to be invalid, the remaining Paragraphs shall remain in full force
and effect.

e. Necessary Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be reasonably necessary to carry out
provisions of this Agreement.

/s/ Harry G. Mitchell FOCUS ENHANCEMENT, INC.
Harry G. Mitchell

____________________________ By: /s/ Brett A. Moyer
Name Brett A. Moyer
President
- ----------------------------
Street Address

- -----------------------------
City, State Zip Code

<PAGE>

Exhibit A to Key Officer
Nonqualified Stock
Option Agreement

FOCUS Enhancements, Inc.
142 North Road
Sudbury , Massachusetts 01776

RE: Exercise of Non-Qualified Option Pursuant to Key Officer Non-Qualified
Stock Option Agreement

Gentlemen:

The undersigned hereby elects to exercise the stock option granted to
Harry G. Mitchell on March 19, 1997 by and to the extent of purchasing shares of
the Common Stock of FOCUS Enhancements, Inc. for the price of $1.88 per share,
subject to the terms and conditions of the Key Officer Nonqualified Stock Option
Agreement between Harry G. Mitchell and FOCUS Enhancements, Inc. dated as of
March 19, 1997 (the "Agreement").

The undersigned hereby agrees to provide to FOCUS Enhancements, Inc. an
amount sufficient to satisfy any obligation to withhold taxes, in accordance
with the Agreement.

Very truly yours,

Date (Signed by
or other party duly exercising
option)

EXHIBIT 5

SULLIVAN & WORCESTER LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 338-2800
FAX NO. 617-338-2880
IN WASHINGTON, D.C. IN NEW YORK CITY
1025 CONNECTICUT AVENUE, N.W. 767 THIRD AVENUE
WASHINGTON, D.C. 20036 NEW YORK, NEW YORK 10017
(202) 775-8190 (212) 486-8200
FAX NO. 202-293-2275 FAX NO. 212-758-2151

May 12, 1997

FOCUS Enhancements, Inc.
142 North Road
Sudbury, Massachusetts 01776

Gentlemen:

We are familiar with the Registration Statement on Form S-8 containing
a Reoffer Prospectus on Form S-3 (the "S-8 Registration Statement") to which
this opinion is an exhibit, to be filed by FOCUS Enhancements, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended. The S-8 Registration Statement relates
to the proposed public offering by certain securityholders of the Company of a
total of 1,920,000 shares (the "Shares") of the Company's Common Stock, $.01 par
value per share ("Common Stock"), consisting of (i) 920,000 Shares which may be
offered from time to time by certain Key Officers of the Company, which Shares
are issuable by the Company to such officers upon exercise of options (the
"Officer Options") pursuant to Key Officer Non-Qualified Stock Option
Agreements, and (ii) 1,000,000 Shares issuable upon exercise of options (the
"Director Options") pursuant to the 1997 Director Stock Option Plan which may be
offered from time to time by the Directors of the Company for their own benefit.
The Officer Options and the Director Options are hereinafter referred to as the
"Options".

We have acted as counsel to the Company in connection with the
preparation of the S-8 Registration Statement, and we have examined and relied
on the originals or copies, certified or otherwise identified to our
satisfaction of all such corporate records of the Company and such other
instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinion
expressed below. In making such examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals and the conformity to the originals of

<PAGE>

FOCUS Enahncements, Inc.
May 12, 1997
Page 2

all documents submitted to us as copies, which facts we have not independently
verified. As to various facts material to the opinions set forth herein, we have
relied without independent verification upon certificates of public officials
and upon facts certified to us by officers of the Company. We express no opinion
herein as to any laws other than the General Corporation Law of the State of
Delaware.

Based upon the foregoing, we are of the opinion that the Company has
corporate power adequate for the issuance of the Shares issuable in the manner
set forth in the S-8 Registration Statement and offered pursuant to the S-8
Registration Statement. The Shares issuable upon the exercise of the Options,
assuming exercise on the date hereof have been duly authorized and reserved for
issuance. Upon the exercise of the Options and delivery of the Shares in
accordance with the terms of the Options, the Shares so issued will be validly
issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the
S-8 Registration Statement.

Very truly yours,

SULLIVAN & WORCESTER LLP

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this registration statement of
FOCUS Enhancements, Inc. on Form S-8 of our report, which included an
explanatory paragraph about the Company's ability to continue as a going
concern, dated March 14, 1997, except for Notes 7 and 15 as to which the date is
March 31, 1997, on the consolidated financial statements of FOCUS Enhancements,
Inc. as of and for the year ended December 31, 1996, appearing in the Annual
Report on Form 10-KSB of FOCUS Enhancements, Inc. for the year ended December
31, 1996. We also consent to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.

WOLF & COMPANY, P.C.

Boston, Massachusetts
August 7, 1997

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this registration statement of
FOCUS Enhancements, Inc. on Form S-8 of our report, which included an
explanatory paragraph about the Company's ability to continue as a going
concern, dated April 11, 1996, on our audit of the consolidated financial
statements of FOCUS Enhancements, Inc. as of December 31, 1995 and for the year
then ended, which report is included in the Annual Report on Form 10-KSB of
FOCUS Enhancements, Inc. for the year ended December 31, 1996. We also consent
to the reference to our firm under the caption "Experts".

/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.

Boston, Massachusetts
August 5, 1997

Exhibit 23.3

Consent of Independent Certified Public Accountants

The Board of Directors
T.View, Inc.:

We consent to the incorporation by reference in the registration statement on
Form S-8 to be filed by FOCUS Enhancements, Inc.of our report, dated September
13, 1996, with respect to the balance sheets of T. View, Inc. as of December 31,
1995 and 1994, and the related statements of operations, stockholders' equity,
and cash flows for the years ended December 31, 1995 and 1994, which report
appears in the Form 8-K/A-1 of FOCUS Enhancements, Inc., dated January 6, 1997.

/s/ KPMG Peat Marwick LLP

Portland, Oregon
August 6, 1997