EXHIBIT 99
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EXHIBIT 99
FOCUS ENHANCEMENTS TO ACQUIRE VIDEONICS
- Annual Combined Pro forma Sales of over $28,000,000
- Video Mixing, video editing, internet streaming technology
- Videonics CEO to become FOCUS CEO
- Videonics CFO to become FOCUS CFO
- Double FOCUS engineering resource
- Purchase price of approximately $7,500,000
WILMINGTON, MA. and CAMPBELL, CA. August 31, 2000 -FOCUS Enhancements, Inc.
(NASDAQ: FCSE) announced today that the Company has entered into a definitive
agreement to merge with Videonics, Inc. (NASDAQ: VDNX). The agreement provides
for each share of Videonics common stock to be converted into 0.87 shares of
FOCUS Enhancements common stock. Completion of the merger requires, among other
things, the approval of the stockholders of Videonics and FOCUS. The merger is
expected to be completed in December of this year.
Upon completion of the Merger, each share of Videonics common stock would be
exchanged for .87 shares of FOCUS common stock. Based on pro forma shares
outstanding at June 30, 2000, the existing FOCUS stockholders would own 83.7% of
the combined company and the existing Videonics stockholders would own 16.3%. In
addition, Videonics option holders will exchange their options for options in
FOCUS pursuant to the same exchange ratio. The combined entity had total
revenues of over $28 million for the twelve months ended June 30, 2000, on a pro
forma basis. The merger is expected to be accounted for as a purchase and FOCUS
expects a non-recurring restructuring charge to be taken in connection with the
merger.
Upon completing the merger Michael D'Addio, Videonics Chairman & Chief Executive
Officer, will become President, Chief Executive Officer, and a Director of FOCUS
Enhancements. Gary Williams, Videonics Chief Financial Officer, will become
FOCUS Enhancements Chief Financial Officer. Thomas Massie, FOCUS' Chairman of
the Board, will remain in that position. Brett Moyer, FOCUS Executive Vice
President and Chief Operating Officer, will also remain in that position. The
Board of Directors after the transaction will initially consist of seven
members, three from Videonics and four from FOCUS.
FOCUS Chairman, Thomas L. Massie stated, "We are excited to have Michael
D'Addio's leadership as the Company's new Chief Executive Officer. He has over
21 years of experience as a CEO of technology companies, with 14 of those years
in the video market place. Michael is an experienced executive with an
outstanding track record."
Massie continued, "In the advent of interactive television, we believe video
mixing and video switching capabilities will become very important. Certain new
ASICS currently under development by the FOCUS engineering team have integrated
video mixing and switching technology. We plan to launch these ASICS later this
year. We believe that the Videonics engineering team can capitalize on this chip
technology to build attractively priced digital video solutions for an expanded
customer base."
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"We anticipate that merging the two companies will create a much stronger
company, from both a business and a technology perspective," stated Michael
D'Addio, Chairman and CEO of Videonics. "The new company will benefit from many
synergies, as both companies are leaders in video products and technologies."
Mr. D'Addio added, "The merger presents opportunities for more efficient and
profitable operations. We look forward to revenue growth in future quarters as a
result of the increased selling efficiencies and expanded distribution of the
combined companies. When combined with reduced expenses gained from the
consolidation of operations, we believe that we have the opportunity to be
profitable and cash flow positive following a brief transitional period. We are
very excited about the Company's future."
FOCUS Enhancements, Inc. develops and markets advanced, proprietary video
conversion ASICS for the converging, multi-billion dollar Internet, computer,
and television industries. The Company's technology, which is sold globally
through Original Equipment Manufacturers (OEMs) and resellers, merges
computer-generated graphics and television displays for Internet viewing,
presentations, training, education, video teleconferencing, and home gaming
markets. Its stock is traded on the NASDAQ SmallCap Market under the symbol
FCSE. More information on FOCUS may be obtained from the Company's SEC filings,
or by visiting the FOCUS home page at http://www.focusinfo.com
Videonics is a leading designer of affordable, high quality, digital-video,
equipment for the broadcast, cable, business, industrial, presentation,
Internet, and home video production markets. Videonics products include
application controllers, edit controllers, mixers, character generators, and
video editing software solutions. Its stock is traded on the NASDAQ SmallCap
Market under the symbol VDNX. More information on Videonics may be obtained from
the Company's SEC filings, or by visiting the Videonics home page at
http://www.videonics.com.
For More Information
CONTACT: Gary Williams
V.P. Finance & CFO
(408) 866-8300
Forward-looking statements in this release are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. The
statements contained in this release, which are not historical facts, are
forward-looking statements. Investors are cautioned that such forward-looking
statements involve risks and uncertainties including, without limitation,
continued acceptance of the companies' products, increased levels of competition
for the companies; new products and technological changes, the companies'
dependence upon third-party suppliers, intellectual property rights and other
risks detailed from time to time in the companies' periodic reports filed with
the Securities and Exchange Commission. Readers are cautioned not to put undue
reliance on any forward-looking statements contained herein, which speak only as
of the date hereof. The companies undertake no obligation to release publicly
any revisions to forward- looking statements that may be made to reflect events
after the date hereof or to reflect the occurrence of unanticipated events. In
addition, the forward-looking statements contained herein are subject to risks
and uncertainties, including the successful integration of Videonics into FOCUS,
fluctuations in operating results, the timely development and acceptance of new
products, product availability from suppliers, the impact of competitive
products and pricing, changing TV
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standards and other risks set forth under the caption "Certain Factors That May
Affect Future Results" in Focus' Annual Report on Form 10-K for the year ended
December 31, 1999, in its quarterly report on Form 10-Q for the quarter ended
June 30, 2000 and other filings with the SEC by both FOCUS and Videonics..
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