U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
Notification Of Late Filing
of
Form 10-KSB for Fiscal Year Ended December 31, 1998
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
Commission File Number 1-11860
Part I. REGISTRANT INFORMATION.
FOCUS Enhancements, Inc.
(Name of Small Business Issuer in its Charter)
Delaware 04-3186320
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
600 Research Drive
Wilmington, Massachusetts 01887
(Address of Principal Executive Offices)
(978) 388-5888
(Issuer's Telephone Number, Including Area Code)
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Part II. RULES 12B-25(B) AND (C).
The registrant hereby seeks relief under Rule 12b-25(b) and in support thereof
states that:
(a) The reasons for the late filing of the subject report that are
described in Part III of this form could not be eliminated
without unreasonable effort or expense; and
(b) The subject Annual Report on Form 10-KSB will be filed on or
before the fifteenth calendar day following the due date.
Part III. NARRATIVE.
FOCUS Enhancements, Inc. (the "Company") is unable to meet its filing
requirement for the Form 10-KSB for the year ended December 31, 1998,
without unreasonable effort or expense. The Company has been informed
by its independent auditors that additional time is needed to complete
the audit, the results of which will form the basis for the Company's
Form 10-KSB and the financial disclosure to be contained therein.
Additional time is required for the auditors to obtain from the Company
and analyze additional financial data and information that are
necessary to confirm and support the Company's financial statements and
related financial disclosures as of and for the year ended December 31,
1998 and to review management's business plans for 1999. The additional
data and information relate principally to the Company's acquisition
and financing activities.
The Company experienced significant delays in providing its auditors
with certain data and information necessary for a timely completion of
its year-end audit principally as a result of disruption to its
business and operations caused by a relocation of the Company's
executive offices and related facilities in February 1999. The
relocation not only disrupted the Company's data processing systems and
hindered the Company in its ability to access data and information for
internal reporting and audit purposes, but also adversely affected the
Company's human resources. The Company lost key personnel who were
responsible for financial reporting functions in February, and other
personnel, who would otherwise have been available to assist in those
functions, were devoted to addressing the exigencies resulting from the
office and facilities relocation. The delays caused by the Company's
physical relocation were exacerbated by further delays resulting from
the Company's acquisition of PC Video Conversion, Inc. in July of 1998
and adverse developments affecting the Company's sales channels in the
fourth quarter of 1998. The consolidation and systems integration of PC
Video Conversion took longer than the Company has experienced
previously for similar types of acquisitions. This delayed the
Company's inclusion of PC Video Conversion and the results of the
acquisition in the Company's consolidated financial statements and
related information for 1998. The adverse developments affecting the
Company's sales channels, which will be described further in
Management's Discussion and Analysis to be included in the Company's
Form 10-KSB, resulted in the need for the Company to quantify and
record significant charges in the fourth quarter. These developments
and resultant charges delayed further the company's ability to finalize
its 1998 financial statements and related financial disclosures.
Part IV. OTHER INFORMATION.
(1) Name and telephone number of person to contact in regard to
this notification:
Gary M. Cebula (978) 988-5888
(Name) (Area Code)(Telephone Number)
(2) Have all other periodic reports required under Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months been filed?
(X) Yes ( ) No
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(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last year
will be reflected by the earnings statements to be included in
the subject report?
(X) Yes (see explanation below) ( ) No
If so, attach explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be
made:
The Company had revenues of approximately $21,026,000 for the
twelve-month period ended December 31, 1997, and had a net
loss of approximately $2,000,000 for such period. The
Company's financial statements for 1998 will reflect a
consolidation of operations of the Company's subsidiary PC
Video Conversion, Inc. and approximately nine months of
operations of the Company's InVideo product line, which was
acquired from Digital Video Conversion, Inc. Certain
consequences of these acquisitions, as well as adverse
developments in the Company's business activities during the
fourth quarter of 1998, are expected to cause a significant
adverse change in the Company's results of operations for the
twelve months ended December 31, 1998, as compared to the
prior year. Through the third quarter of 1998, the Company had
reported revenues of approximately $19,930,000, an operating
profit of approximately $1,615,000 and a net profit of
approximately $1,448,000. However, the fourth quarter of 1998
will show a significant loss, which will result in the loss of
approximately $13,100,000 for the year ended December 31,
1998. Until the audit is completed and all necessary
adjustments are made to the Company's financial statements,
revenue and net loss for the full year cannot be expressed
with certainty.
Focus Enhancements, Inc. has caused this notification to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: March 31, 1999 By /s/ GARY M. CEBULA
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Gary M. Cebula
Vice President of
Finance & Administration
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AUDITOR'S LETTER
Wolf & Company, P.C.
One International Place
Boston, MA 02109
March 31, 1999
Securities and Exchange Commission
450 Fifth Street, N.S.
Washington, D.C. 20549
Gentlemen:
This letter is written in response to the requirement of Rule 12b-25(c) under
the Securities and Exchange Act of 1934 and in satisfaction of item (c) of Part
II of Form 12b-25.
We are the independent auditors of Focus Enhancements, Inc. (the "Registrant").
The Registrant has stated in Part III of its filing on Form 12b-25 that it is
unable to timely file, without unreasonable effort or expense, its Annual Report
on Form 10-KSB for the year ended December 31, 1998 because our Firm has not yet
completed our audit of the financial statements of the Registrant for the year
ended December 31, 1998 and is therefore unable to furnish the required opinion
on such financial statements.
We hereby advise you that we have read the statements made by the Registrant in
Part III of its filing on Form 12b-25 and agree with the statements made
therein. We are unable to complete our audit of the Registrant's financial
statements and furnish the required opinion for a timely filing as we are still
in the process of obtaining and analyzing evidential matter pertaining to the
Registrant's acquisition and financing activities and management's business
plans for the fiscal year ending December 31, 1999. Therefore, we have not yet
had sufficient time to complete the auditing procedure which we consider
necessary in these circumstances.
Very truly yours,
/s/ Wolf & Company, P.C.
