UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                 Amendment No. 1
                                   Form 10-K/A
[ ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

               For the Fiscal Year Ended ____________________, or

[X]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

       For the Transition period from October 1, 1998 to December 31, 1998

                         Commission file number: 0-26620

                                   ACCOM, INC.
             (Exact name of Registrant as specified in its charter)

                  Delaware                                  94-3055907
(State or other jurisdiction of incorporation or          (I.R.S. Employer
                organization)                            Identification No.)

                               1490 O'Brien Drive
                              Menlo Park, CA 94025
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (650) 328-3818

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

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, $0.001 par value per share

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


         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  than the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES   NO X
                                             ---  ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         The aggregate  market value of the voting stock held by  non-affiliates
of the Registrant was approximately  $3,541,444 as of April 20, 1999, based upon
the closing  prices on the  Over-the-Counter  (OTC)  Bulletin Board reported for
such date.  Shares of Common Stock held by each officer and director and by each
person who owns 5% of more of the outstanding Common Stock have been excluded in
that  such  persons  may be  deemed  to be  affiliates.  This  determination  of
affiliate  status  is not  necessarily  a  conclusive  determination  for  other
purposes.

         There were 10,123,247  shares of  Registrant's  Common Stock issued and
outstanding as of April 20, 1999.

<PAGE>

                                 AMENDMENT NO. 1

                                   FORM 10-K/A


         This  Amendment  No. 1 to Form  10-K/A  is being  filed by Accom,  Inc.
("Accom" or the "Company") to add the Items  comprising Part III information not
later  than 120 days after the end of the  transition  period  (the  "Transition
Period")  covered by the Form 10-K, as provided in General  Instruction  G(3) to
Form 10-K. The Transition  Period was from October 1, 1998 to December 31, 1998,
as a result in the change in the Company's  fiscal year end from September 30 to
December 31.


                                    PART III

Item 10. Directors and Executive Officers of the Registrant

         Information as to the Company's  executive  officers appears at the end
of Part I of the Company's Form 10-K.

                                    DIRECTORS

         The Company  currently has authorized five directors.  Each director is
elected for a period of one year at the Company's annual meeting of stockholders
and serves until the next annual  meeting or until his successor is duly elected
and qualified.  There are no family  relationships among any of the directors or
executive officers of the Company.

         Set forth  below is  information  regarding  the  directors,  including
information  furnished by them as to their  principal  occupation at present and
for the last five years,  certain other  directorships held by them, the year in
which each became a director of the Company and their ages as of April 20, 1999:

           Directors                  Position with the Company             Age
           ---------                  -------------------------             ---
           Junaid Sheikh              Chairman of the Board, President,      45
                                      and Chief Executive Officer
           Lionel M. Allan            Director                               55
           Thomas E. Fanella          Director                               52
           David A. Lahar             Director                               41
           Eugene M. Matalene, Jr.    Director                               51

Arrangements in Connection with the Election of a Director

         On  March  12,  1999,  the  Company   issued  6%  Senior   Subordinated
Convertible Notes due March 12, 2004 (the "Convertible  Notes") in the aggregate
principal  amount of  $3,500,000  to a group of six  investors  led by  American
Bankers Insurance Group, Inc. ("American  Bankers"),  including Mr. Matalene. So
long as American Bankers holds either shares or Convertible  Notes  representing
at least 50% of the Company's  Common Stock (the "Common  Stock")  issuable upon
conversion of the Convertible Notes,  American Bankers has the right to nominate
an  

                                       2
<PAGE>

individual as a member of the Company's  management slate of directors submitted
for election to the  Company's  Board of Directors  (the "Board of  Directors").
American Bankers nominated Mr. Matalene,  a director of American Bankers.  After
the Company  expanded its Board of Directors  from four to five  directors,  Mr.
Matalene was appointed as the Company's  fifth  director in accordance  with the
Company's Bylaws.

Business Experience of Board Directors

         Junaid  Sheikh has  served as the  Chairman  of the Board of  Directors
since June 1988 and as the Company's President and Chief Executive Officer since
November  1991.  Mr.  Sheikh was also the President and Chairman of the Board of
Directors of Axial Systems Corporation, a maker of on-line editing systems, from
May 1990 to October 1991.

         Lionel M. Allan has served on the Board of Directors  since April 1995.
For more  than the past  five  years,  Mr.  Allan  has been  President  of Allan
Advisors,  Inc., a board of directors and legal  consulting firm. Mr. Allan also
is a director and past Chairman of the Board of KTEH Public  Television  Channel
54 in San Jose,  California,  a director of Global  Motorsport  Group,  Inc.,  a
motorcycle products company, and a director of Catalyst  Semiconductor,  Inc., a
semiconductor company.

         Thomas E.  Fanella  has served on the Board of  Directors  since  March
1997.  Since August 1988,  Mr.  Fanella has been  President and Chief  Executive
Officer  of KTEH  Public  Television  Channel  54 in San Jose,  California.  Mr.
Fanella is also a director  of the  Catholic  Television  Network,  the  Pacific
Mountain Network and the Silicon Valley Forum.

   
         David A.  Lahar has  served on the Board of  Directors  since  February
1998.  Since  September  1992,  Mr.  Lahar has been a Managing  Director  of EOS
Capital, Inc., an investment,  venture capital and consulting firm. From 1992 to
June 1996, Mr. Lahar was the President of Aurora Electronics, Inc. ("Aurora"), a
company which he co-founded and which is a provider of spare parts  distribution
services  and   electronics   recycling   and  recovery   services  to  computer
manufacturers  and field service  providers.  From 1986 to 1992, Mr. Lahar was a
Managing   Director  in  the   Investment   Banking   Division  of   PaineWebber
Incorporated.

         Eugene M.  Matalene,  Jr.  has served on the Board of  Directors  since
March 1999.  Since 1997, Mr.  Matalene has served as President to Strata Capital
Management Corp., a merchant bank. He was a Managing Director of Furman Selz, an
investment  bank,  from  1996 to 1997 and a  Managing  Director  of  PaineWebber
Incorporated,  an investment  bank,  from 1987 to 1996. Mr.  Matalene has been a
director  of American  Bankers  Insurance  Group,  Inc.,  a specialty  insurance
products company, since 1990.
    

                                       3
<PAGE>

Compensation of Directors

         Of the Company's five directors, one director is a salaried employee of
the  Company.  Directors  who are  employees  of the  Company do not receive any
additional  compensation  or benefits for their service as  directors.  But, see
"Certain  Relationships  and Related  Transactions,"  below, for a discussion of
certain  transactions  between the  Company and certain  members of the board of
directors.

         The four remaining  non-employee  directors are  compensated  for their
services through the issuance of stock options.  When first elected or appointed
as directors,  non-employee directors are granted non-statutory stock options to
purchase 10,000 shares of Common Stock.  Then,  after each annual meeting,  each
non-employee  director receives options to purchase 2,500 share of Common Stock,
provided the non-employee  directors has served on the Board of Directors for at
least six months.  All such options expire 10 years from the date of grant, have
an exercise  price at the fair market  value of the Common  Stock on the date of
grant and are immediately exercisable.  However, any shares purchased under such
options are subject to repurchase by the Company. The Company's repurchase right
with  respect to the initial  grant of options  lapses in a series of four equal
annual  installments over the director's period of continued  service,  with the
first such  installment to lapse upon the  director's  completion of one year of
Board service  measured from the date of grant.  The Company's  repurchase right
with annual grants lapses one year from the date of grant.

         In accordance  with the Company's  standard  arrangements,  the Company
made the following  issuances in 1998 calendar year. Mr. Lahar was issued 10,000
options upon his first  becoming a director of the Company on February 17, 1998.
Messrs.  Fanella and Mr. Allan were issued 2,500  options  upon  re-election  as
directors of the Company on February 17, 1998.  Mr.  Matalene was issued  10,000
options upon his first becoming a director of the Company on March 12, 1999.

Board Meetings and Committees

         The  Board  of  Directors  held a  total  of  one  meeting  during  the
Transition Period.  Each incumbent director attended at the one meeting,  and no
committee  meetings were held during the Transition  Period. The Company's Audit
Committee is comprised of Messrs. Fanella and Lahar. The Audit Committee did not
meet during the Transition  Period.  The Company does not have a Compensation or
Nominating committee and did not during the Transition Period.

                                       4

<PAGE>

Item 11. Executive Compensation


Report of the Board of Directors

         The Board of Directors has general  responsibility for establishing the
compensation   payable  to  the  Company's  executive  officers  and  other  key
executives and has the sole and exclusive  authority to administer the Company's
1995 Stock  Option/Stock  Issuance  Plan (the "Stock  Option  Plan") under which
grants may be made to such individuals. Until September 15, 1996, such functions
were performed by the Compensation  Committee of the Board and are now performed
by the full Board of Directors.

         General  Compensation  Policy.  Under the  supervision  of the Board of
Directors,  the Company's  compensation policy is designed to attract and retain
qualified key executives critical to the Company's growth and long-term success.
It is the  objective  of the  Board  of  Directors  to  have a  portion  of each
executive's  compensation  contingent upon the Company's  performance as well as
upon  the  individual's  personal  performance.   Accordingly,   each  executive
officer's  compensation package is comprised of three elements:  (i) base salary
which reflects individual performance and expertise,  (ii) variable bonus awards
payable in cash and tied to the achievement of certain performance goals for the
Company or the executive and (iii) long-term,  stock-based incentive awards that
are designed to  strengthen  the  mutuality of interests  between the  executive
officers and the Company's  stockholders.  The summary  below  describes in more
detail the factors which the Board of Directors  considers in establishing  each
of the three primary  components  of the  compensation  package  provided to the
executive officers.

         Base Salary.  The level of base salary is established  primarily on the
basis of the individual's  qualifications and relevant experience, the strategic
goals for which he has responsibility, the compensation levels at companies that
compete with the Company for business and executive  talent,  and the incentives
necessary to attract and retain qualified management. Base salary is reevaluated
each year to take into account the  individual's  performance  and to maintain a
competitive  salary structure.  Company  performance does not play a significant
role in the determination of base salary.

         Cash-Based  Incentive  Compensation.  Cash  bonuses  are  awarded  on a
discretionary  basis to  executive  officers  on the basis of their  success  in
achieving  designated  individual  goals and the Company's  success in achieving
specific company-wide goals, such as customer  satisfaction,  revenue growth and
earnings growth.

         Long-Term  Incentive  Compensation.  The Company has utilized the Stock
Option Plan to provide  executives  and other key employees  with  incentives to
maximize long-term  stockholder  values.  Awards under this plan by the Board of
Directors  take the form of  stock  options  designed  to give the  recipient  a
significant  equity stake in the Company and thereby closely align his interests
with those of the  Company's  stockholders.  Factors  considered  in making such
awards include the  individual's  position in the Company,  his  performance and
responsibilities,  and internal comparability  considerations.  In addition, the
Board of  Directors  takes into  account  each  individual's  position  with the
Company and his existing holdings of unvested options.  Each

                                       5
<PAGE>

option grant allows the executive officer to acquire shares of Common Stock at a
fixed  price  per  share  (the fair  market  value on the date of grant)  over a
specified  period  of time  (up to 10  years).  The  options  typically  vest in
periodic  installments  over a four-year  period,  contingent upon the executive
officer's continued  employment with the Company.  Accordingly,  the option will
provide a return to the  executive  officer only if he remains in the  Company's
service,  and then only if the market price of the Common Stock appreciates over
the option term.

         CEO Compensation.  In setting the compensation  payable during the 1998
calendar year to the Company's Chief Executive Officer, Junaid Sheikh, the Board
of  Directors  used  the same  factors  as  described  above  for the  executive
officers.  The Board  established  a  combination  compensation  package for Mr.
Sheikh,  including  a base  salary  and stock  option  grants in line with those
received  by  other   executives  of   comparably-sized   companies  in  similar
industries.  In December  1998, the Board granted Mr. Sheikh options to purchase
250,000  shares of common  stock,  a portion of which were general  compensation
options commensurate with options granted to other officers and key employees of
the Company and a portion of which were in  consideration  of the  extraordinary
efforts  expended  by Mr.  Sheikh in the  negotiation  and  consummation  of the
Company's acquisition of Scitex Digital Video.

         Report on Repriced Stock  Options.  In May 1998, the Board of Directors
determined  that it was in the best  interest of the Company to offer to reprice
the then-existing stock options of the Company with exercise prices in excess of
the  then-current  fair market value of the Company's  Common Stock. The Company
also changed the vesting on such options from a five-year  period to a four-year
period, with 25% of the shares vesting at the end of the first year and the rest
vesting  equally  over the  following  three  years.  Included in the  repricing
actions  were  options  held by the  Company's  executive  officers  and certain
directors, but not any of the options that had been automatically granted to the
non-employee  directors pursuant to the Stock Option Plan. The objectives of the
Stock  Option Plan are to promote  the  interests  of the  Company by  providing
employees, certain directors, and certain consultants or independent contractors
an incentive to acquire a proprietary interest in the Company and to continue to
render  services to the Company.  It was the view of the Board of Directors that
stock options with exercise prices  substantially above the current market price
of the Company's  Common Stock were viewed  negatively by most  optionees of the
Company,  and provided little,  if any, equity  incentive to the optionees.  The
Board thus concluded that such option grants  seriously  undermined the specific
objectives of the Stock Option Plan and should  properly be repriced.  In making
this decision, the Board also considered the fairness of such a determination in
relation to other  stockholders.  In the opinion of the Board, the stockholders'
long-term  best interests were clearly served by the retention and motivation of
optionees.

         In this  context,  the Board  decided that  effective May 15, 1998 (the
"Grant Date") all optionees holding stock options with exercise prices in excess
of the  fair  market  value of the  Company's  Common  Stock  should  receive  a
one-for-one  repricing of their  then-existing  unexercised stock options with a
new  exercise  price set at $1.03125  per share,  the fair  market  value of the
Company's  Common Stock on the Grant Date. The Company  completed this repricing
through a one-for-one  stock option exchange of  "underwater"  stock options for
all  optionees.  The vesting  schedule of the new options,  as well as all other
options,  was  changed  

                                       6
<PAGE>

from a vesting  schedule  over a five-year  period to a vesting  schedule over a
four-year  period (with 25% vesting after one year and the balance  vesting on a
equal monthly basis  thereafter).  The exchange was completed in May 1998. It is
the opinion of the Board of Directors  that this program  helped build  optionee
morale and provided new incentives for the Company's employees and management.

                                                The Board of Directors

                                                Junaid Sheikh
                                                Lionel M. Allan
                                                Thomas E. Fanella
                                                David A. Lahar
                                                Eugene M. Matalene, Jr.

Compensation Committee Interlocks and Insider Participation

         No executive  officer of the Company serves as a member of the board of
directors  or  compensation  committee  of any  entity  which  has  one or  more
executive  officers  serving as a member of the Board of Directors.  Mr. Sheikh,
Chairman  of the Board of  Directors,  is also  President  and  Chief  Executive
Officer of the Company. Mr. Sheikh participated in deliberations of the Board of
Directors concerning executive officer compensation.

Stock Performance Graph

         The following graph shows a comparison of cumulative total  stockholder
returns for the  Company,  the Nasdaq Total Return  Index,  and the  Hambrecht &
Quist Technology Index for the period commencing September 26, 1995, the date of
the initial public  offering of the Company's  Common Stock,  to the last day of
the Company's fiscal year on December 31, 1998.
   

<TABLE>

[The following descriptive data is supplied in accordance with Rule 304(d) of Regulation S-T.]
<CAPTION>

                                     9/26/95    9/30/95     9/30/96      9/30/97      9/30/98      12/31/98
                                     -------    -------     -------      -------      -------      --------
<S>                                   <C>       <C>         <C>          <C>          <C>          <C>    
Accom, Inc.                           $100      $ 97.22     $ 22.22      $ 29.17      $  4.17      $  6.94
NASDAQ Total Return Index             $100      $100.55     $119.31      $163.79      $164.19      $211.23
Hambrecht & Quist Technology Index    $100      $101.14     $111.02      $165.53      $153.80      $217.10
</TABLE>
    

         Notwithstanding  anything  to  the  contrary  set  forth  in any of the
Company's previous filings under the Securities Act of 1933, as amended,  or the
Securities  Exchange Act of 1934,  as amended,  which might  incorporate  future
filings made by the Company under those  statutes,  the preceding  Report of the
Board of Directors on Executive Compensation and Stock Performance Graph are not
to be incorporated by reference into any of those previous filings;  nor is such
report or graph to be  incorporated  by reference  into any future filings which
the Company may make under those statutes.

                                       7
<PAGE>

Summary of Cash and Certain Other Compensation

         The following  Summary  Compensation  Table sets forth the compensation
earned by the Company's Chief Executive Officer and the three other highest-paid
executive  officers  whose salary and bonus for the calendar year ended December
31,  1998 was in excess of $100,000  (collectively,  the "Named  Officers")  for
services rendered in all capacities to the Company for that calendar year.

<TABLE>
                                            SUMMARY COMPENSATION TABLE
<CAPTION>
                                                               Annual                   Long-Term
                                                            Compensation              Compensation
                                 Fiscal               --------------------------- --------------------   ------------
                                 Year                                                  Securities          All Other   
Name and Present Principal       Ended      Calendar                               Underlying Options    Compensation 
Position                        Sept. 30      Year    Salary ($)    Bonus ($) (1)        (#)*                ($)
--------                        --------      ----    ----------    ------------- --------------------   ------------
<S>                               <C>         <C>     <C>            <C>              <C>                 <C>

Junaid Sheikh..................               1998    $176,973           $0           397,286 (2)         $2,782 (5)
  President, Chief Executive     1998                 $170,528           $0           147,286 (2)         $2,722 (5)
  Officer and                    1997                 $149,220           $0            87,286 (3)           $866 (5)
  Chairman of the Board          1996                 $159,644           $0           137,286 (4)         $2,266 (5)


Ian Craven.....................               1998    $145,000       $2,000            98,125 (6)         $1,458 (5)
  Senior Vice President,         1998                 $141,596       $2,000            88,125 (6)         $1,449 (5)
  Engineering                    1997                 $130,000       $5,000            58,125 (7)           $351 (5)
                                 1996                 $129,000           $0            33,125 (8)         $1,203 (5)


Harris Rogers..................               1998    $128,199           $0            65,499 (9)           $554 (12)
  Vice President, Marketing      1998                 $118,199       $1,000            65,499 (9)           $492 (12)
                                 1997                 $101,439       $4,716            54,166 (10)          $351 (12)
                                 1996                 $ 84,251       $1,439            34,166 (11)          $369 (12)


Donald Petersen................               1998    $128,115           $0           117,916 (13)          $553 (12)
  Vice President, Manufacturing  1998                 $124,345           $0           107,916 (13)          $549 (12)
                                 1997                 $111,416       $5,000            75,833 (14)          $330 (12)
                                 1996                 $105,502           $0            50,833 (15)          $347 (12)

<FN>
-------------------------------

(*)  Includes options repriced in the fiscal years ending September 30, 1996 and
     1997.

(1)  Represents bonus compensation earned in such calendar year.

(2)  Includes  options to purchase  87,286 shares of the Company's  Common Stock
     that were canceled on May 15, 1998 and repriced to $1.03125 per share.  See
     "Option Grants in Last Calendar Year" below.

(3)  Represents  options to purchase 87,286 shares of the Company's Common Stock
     that were canceled on February 18, 1997 and repriced to $1.3125 per share.

(4)  Includes  options to purchase  54,166 shares of the Company's  Common Stock
     that were canceled on April 23, 1996 and repriced to $3.25 per share.

(5)  Represents  standard life insurance and key man insurance  premiums paid by
     the Company for the benefit of the named Officer.

                                       8
<PAGE>

(6)  Includes  options to purchase  58,125 shares of the Company's  Common Stock
     that were canceled on May 15, 1998 and repriced to $1.03125 per share.  See
     "Option Grants in Last Calendar Year" below.

(7)  Includes  options to purchase  18,125 shares of the Company's  Common Stock
     that were canceled on February 18, 1997 and repriced to $1.3125 per share.

(8)  Includes  options to purchase  18,125 shares of the Company's  Common Stock
     that were canceled on April 23, 1996 and repriced to $3.25 per share.

(9)  Includes  options to purchase  45,499 shares of the Company's  Common Stock
     that were canceled on May 15, 1998 and repriced to $1.03125 per share.  See
     "Option Grants in Last Calendar Year" below.

(10) Represents  options to purchase 34,166 shares of the Company's Common Stock
     that were canceled on February 18, 1997 and repriced to $1.3125 per share.

(11) Includes options to purchase 14,166 of the Company's Common Stock that were
     canceled on April 23, 1996 and repriced to $3.25 per share.

(12) Represents  standard  life  insurance  premiums paid by the Company for the
     benefit of the Named Officer.

(13) Includes  options to purchase  75,833 shares of the Company's  Common Stock
     that were canceled on May 15, 1998 and repriced to $1.03125 per share.  See
     "Option Grants in Last Calendar Year" below.

(14) Includes  options to purchase  35,833 shares of the Company's  Common Stock
     that were canceled on February 18, 1997 and repriced to $1.3125 per share.

(15) Includes  options to purchase  35,833 shares of the Company's  Common Stock
     that were canceled on April 23, 1996 and repriced to $3.25 per share.
</FN>
</TABLE>

Option Grants

         The  following  table  provides  information  with respect to the stock
option  grants made during the year ended  December 31, 1998 under the Company's
1995  Stock  Option/Stock   Issuance  Plan  to  the  Named  Officers.  No  stock
appreciation rights were granted to these individuals during such calendar year.

<TABLE>
                                        OPTION GRANTS IN LAST CALENDAR YEAR
<CAPTION>
                                                                                               Potential Realizable
                                                                                             Value at Assumed Annual
                                                                                                  Rate of Stock
                                                                                                Price Appreciation
                                              Individual Grants                                  for Option Term
                        ---------------------------------------------------------------     -------------------------
                                            % of Total
                                             Options
                                            Granted to       Exercise
                            Options        Employees in      Price (2)     Expiration
Name                        Granted      Calendar Year(1)    ($/share)        Date           5% ($)(3)     10% ($)(3)
----                        -------      ----------------    ---------        ----           ---------     ----------
<S>                       <C>                 <C>              <C>          <C>                <C>           <C>    
Junaid Sheikh             250,000(4)          23.7%            $0.6500      12/04/08           41,112        161,718
                           60,000(5)           5.7%            $0.8750       2/05/08           33,017         83,671
                            4,166(6)           N/A             $1.0313       1/19/05            1,656          3,826
                           50,000(6)           N/A             $1.0313       1/15/06           23,407         55,557
                           33,120(6)           N/A             $1.0313       9/03/06           17,062         41,212


                                       9
<PAGE>

Ian Craven                 10,000(4)           0.9%            $0.6500      12/04/08            1,644          6,469
                           30,000(5)           2.8%            $0.8750       2/05/08           16,508         41,836
                           40,000(6)           N/A             $1.0313       3/14/07           22,214         54,453
                            3,125(6)           N/A             $1.0313       1/15/05            1,240          2,864
                           15,000(6)           N/A             $1.0313       1/15/06            7,022         16,667

Harris Rogers              20,000(5)           1.9%            $0.8750       2/05/08           11,005         27,890
                           20,000(6)           N/A             $1.0313       3/14/07           11,007         27,227
                           15,000(6)           N/A             $1.0313       7/10/06            7,557         18,178
                            2,499(6)           N/A             $1.0313       7/01/05            1,072          2,507
                            8,000(6)           N/A             $1.0313       1/15/06            3,745          8,889

Donald W. Petersen         10,000(4)           0.9%            $0.6500      12/04/08            1,644          6,469
                           30,000(5)           2.8%            $0.8750       2/05/08           16,508         41,836
                           40,000(6)           N/A             $1.0313       3/14/07           22,214         54,453
                           20,833(6)           N/A             $1.0313      10/10/04            7,882         18,076
                           15,000(6)           N/A             $1.0313       1/15/06            7,022         16,667
<FN>

------------------
(1)      The  percentages  shown are based upon the options  granted in calendar
         year 1998, excluding repriced options.

(2)      The  exercise  price may be paid in cash,  in  shares  of Common  Stock
         valued at fair market value on the exercise  date or through a cashless
         exercise  procedure  involving a same-day sale of the purchased shares.
         The  Company  may also  finance  the option  exercise  by  loaning  the
         optionee  sufficient  funds to pay the exercise price for the purchased
         shares and the federal and state income tax  liability  incurred by the
         optionee in connection with such exercise.

(3)      Disclosure of the 5% and 10% assumed  annual rates of compounded  stock
         price   appreciation   is  mandated  by  the  Securities  and  Exchange
         Commission.  There is no assurance provided to any executive officer or
         any other  holder of the  Company's  securities  that the actual  stock
         price  appreciation over the 10-year option term will be at the assumed
         5% and 10%  levels or at any other  defined  level.  Unless  the market
         price of the Common Stock  appreciates  over the option term,  no value
         will be realized from the option grants made to the executive officers.

(4)      25% of these  options  vest on December  4, 1999,  and  thereafter  one
         1/36th of the remaining  unvested options vest each month. The Board of
         Directors  also has the authority to provide for the automatic  vesting
         of shares  subject to the  outstanding  option upon the  occurrence  of
         certain hostile takeovers.  Each option has a maximum term of 10 years,
         subject to earlier termination in the event of the optionee's cessation
         of employment with the Company.

(5)      25% of these  options  vest on February  5, 1999,  and  thereafter  one
         1/36th of the remaining  unvested options vest each month. The Board of
         Directors  also has the authority to provide for the automatic  vesting
         of shares  subject to the  outstanding  option upon the  occurrence  of
         certain hostile takeovers.  Each option has a maximum term of 10 years,
         subject to earlier termination in the event of the optionee's cessation
         of employment with the Company.

(6)      Represents  option  granted  on May 15,  1998 in  connection  with  the
         cancellation of an existing  outstanding  option with an exercise price
         in excess of $1.0313 per share.  Concomitant  with the repricing on May
         15, 1998,  the vesting  schedule for these options  changed.  Under the
         previous method,  options vested in five equal annual installments with
         20% of the option  shares  vesting on a cliff  basis after each year of
         service.  Under the new method,  options  will vest and be  exercisable
         with respect to 25% of the option shares after one year of service, and
         1/36th per month for each month of service  thereafter.  See  "Ten-Year
         Option/SAR Repricings" below.
</FN>
</TABLE>

                                       10
<PAGE>


Option Exercises and Holdings

         The table  below sets forth  information  concerning  the  exercise  of
options during the calendar year ended December 31, 1998 and unexercised options
held as of the end of such year by the  Named  Officers.  No stock  appreciation
rights were exercised  during such calendar year or outstanding as of the end of
that calendar year.
<TABLE>

                                 AGGREGATED OPTION EXERCISES IN LAST CALENDAR YEAR
                                        AND CALENDAR YEAR-END OPTION VALUES

<CAPTION>
                                                                          Number of
                                                                    Securities Underlying            Value of Unexercised
                             Shares            Aggregate           Unexercised Options at           In-the-Money Options at
                          Acquired On       Value Realized            Calendar Year End              Calendar Year End (1)
Name                        Exercise             ($)              Exercisable/Unexercisable        Exercisable/Unexercisable
----                   -----------------  ------------------   ------------------------------   ------------------------------
<S>                            <C>                <C>                 <C>                                 <C>  
Junaid Sheikh                  0                  $0                  73,657 / 323,629                      $0 / $0

Ian Craven                     0                  $0                  31,496 /  66,629                      $0 / $0

Harris Rogers                  0                  $0                  24,994 /  40,505                      $0 / $0

Donald W. Petersen             0                  $0                  51,353 /  66,563                    $302 / $0
<FN>

---------------
(1)      Market price at calendar  year end ($0.625) less  exercise  price.  For
         purposes of this calculation, the calendar year end market price of the
         shares is deemed to be the closing sale price of the  Company's  Common
         Stock as reported on the  Over-the-Counter  Bulletin  Board on December
         31, 1998.
</FN>
</TABLE>


Ten-Year Option/SAR Repricings

         The following  table sets forth certain  information as of December 31,
1998  with  respect  to the  repricing  of  certain  stock  options  held by the
Company's executive officers.

                                       11
<PAGE>
<TABLE>
<CAPTION>

------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------
                                                  Number Of                                              Length Of
                                                 Securities      Market                                   Original
                                                 Underlying     Price Of      Exercise                  Option Term
                                                   Options      Stock At      Price At                   Remaining
                Name                    Date      Repriced      Time Of       Time Of         New        At Date Of
                                                 Or Amended    Repricing     Repricing      Exercise     Repricing
                                                     (#)           Or            Or        Price ($)    Or Amendment
                                                               Amendment     Amendment
                                                                  ($)           ($)
------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------
<S>                                   <C>          <C>           <C>            <C>          <C>        <C>      
Junaid Sheikh (1)................     5/15/98       4,166        $1.03125       $1.3125      $1.03125   6.7 years
                                      5/15/98      50,000        $1.03125       $1.3125      $1.03125   7.7 years
   President, Chief Executive         5/15/98      33,120        $1.03125       $1.3125      $1.03125   8.3 years
   Officer and Chairman of the Board  2/18/97       4,166        $1.3125        $3.25        $1.3125    7.9 years
                                      2/18/97      50,000        $1.3125        $3.25        $1.3125    8.9 years
                                      2/18/97      33,120        $1.3125        $1.88        $1.3125    9.5 years
                                      4/23/96       4,166        $3.25          $4.80        $3.25      8.7 years
                                      4/23/96      50,000        $3.25          $5.75        $3.25      9.7 years
------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------

Ian Craven (1)...................     5/15/98       3,125        $1.03125       $1.3125      $1.03125   6.7 years
                                      5/15/98      15,000        $1.03125       $1.3125      $1.03125   7.7 years
   Senior Vice President,             5/15/98      40,000        $1.03125       $1.3125      $1.03125   8.8 years
   Engineering                        2/18/97       3,125        $1.3125        $3.25        $1.3125    7.9 years
                                      2/18/97      15,000        $1.3125        $3.25        $1.3125    8.9 years
                                      4/23/96       3,125        $3.25          $4.80        $3.25      8.7 years
                                      4/23/96      15,000        $3.25          $5.75        $3.25      9.7 years
------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------

Harris Rogers (1)................     5/15/98      15,000        $1.03125       $1.3125      $1.03125   8.2 years
                                      5/15/98       2,499        $1.03125       $1.3125      $1.03125   7.1 years
   Vice President, Marketing          5/15/98       8,000        $1.03125       $1.3125      $1.03125   7.7 years
                                      5/15/98      20,000        $1.03125       $1.25        $1.03125   8.8 years
                                      2/18/97      15,000        $1.3125        $3.25        $1.3125    9.4 years
                                      2/18/97       4,166        $1.3125        $3.25        $1.3125    8.4 years
                                      2/18/97      10,000        $1.3125        $3.25        $1.3125    8.9 years
                                      2/18/97       5,000        $1.3125        $3.25        $1.3125    9.4 years
                                      4/23/96       4,166        $3.25          $6.00        $3.25      9.2 years
                                      4/23/96      10,000        $3.25          $5.75        $3.25      9.7 years
------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------

Donald W. Petersen (1)...........     5/15/98      20,833        $1.03125       $1.31        $1.03125   6.4 years
                                      5/15/98      15,000        $1.03125       $1.31        $1.03125   7.7 years
   Vice President, Manufacturing      5/15/98      40,000        $1.03125       $1.31        $1.03125   8.8 years
                                      2/18/97      20,833        $1.3125        $3.25        $1.3125    7.9 years
                                      2/18/97      15,000        $1.3125        $3.25        $1.3125    8.9 years
                                      4/23/96      20,833        $3.25          $4.80        $3.25      8.7 years
                                      4/23/96      15,000        $3.25          $5.75        $3.25      9.7 years
------------------------------------- ---------- ------------ ------------- ------------- ------------- -------------
<FN>
------------------------------------------

(1)    The Company repriced certain options in April 1996, February 1997 and May
       1998.  In  each  instance,  in  order  to  reincentivize  certain  of its
       employees,  the  Compensation  Committee of the Board of Directors or the
       Board of Directors  itself  approved an option exchange for all employees
       holding options with an exercise price in excess of the then current fair
       market value (which is the price set forth in the column entitled "Market
       Price Of Stock At Time of Repricing Or Amendment" above); such repricings
       entitled  each such  employee  to cancel  their  outstanding  options  in
       exchange for new options with an exercise price equal to the then current
       fair  market  value  of the  Company's  Common  Stock  on the date of the
       approval by the Board of  Directors  or  Compensation  Committee.  In the
       April 1996 and February 1997 repricings,  the new options were subject to
       the same vesting  schedule as the canceled  options,  including  the same
       original vesting  commencement  date. In the May 1998 repricing,  the new
       options were  amended to vest as follows:  25% of each grant vests on the
       original  vesting  commencement  date, and thereafter,  one 1/36th of the
       remaining  unvested  options  of each  grant vest each month for the next
       three years.

</FN>
</TABLE>
                                       12

<PAGE>

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         The members of the Board of Directors,  the  executive  officers of the
Company  and  persons  who hold more  than ten  percent  (10%) of the  Company's
outstanding  Common Stock are subject to the reporting  requirements  of Section
16(a) of the Securities Exchange Act of 1934, which requires such individuals to
file  reports  with  respect  to  their  ownership  of and  transactions  in the
Company's  securities.  Officers,  directors  and greater than ten percent (10%)
stockholders are required to furnish the Company with copies of all such reports
they file.  Based  solely on its review of the copies of such forms  received by
it, or written  representations  from certain  reporting persons that no Forms 5
were  required  for  those  persons,  the  Company  believes  that,  during  the
Transition Period ended December 31, 1998 all filing requirements  applicable to
its officers,  directors,  and greater than ten-percent  beneficial  owners were
complied with except that a Form 3 for Mr. Donald McCauley was filed late.

Item 12. Security Ownership of Certain Beneficial Owners and Management

                            COMMON STOCK OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>

         The following table sets forth certain information known to the Company
with respect to the  beneficial  ownership of the  Company's  Common Stock as of
March 31, 1999 by (i) all persons who are  beneficial  owners of five percent or
more of the Company's  Common Stock,  (ii) each  director,  (iii) each executive
officer of the Company, and (iv) all current directors and executive officers as
a group.
<CAPTION>
                     Name and Address,
                      if Required, of                                      Shares                        Percent of Shares
                      Beneficial Owner                            Beneficially Owned (1)(2)          Beneficially Owned (1)(2)
                      ----------------                            -------------------------          -------------------------
<S>                                                                     <C>                                  <C>  
Michael Luckwell .........................................              3,418,750                            33.8%
    26 Catherine Place
    London SW1E 6HF

American Bankers Insurance Group, Inc. (3)................              2,307,692                            18.6%
    11222 Quail Roost Drive
    Miami, FL 33157

El Dorado Ventures and affiliated entities (4)............                988,782                             9.8%
    20300 Stevens Creek Boulevard
    Suite 395
    Cupertino, CA 95014

Scitex Digital Video, Inc. (5)............................              1,000,000                             9.0%
    c/o Scitex Corporation Ltd.
    P.O. Box 330
    Herzilya B 46103 Israel

AWM Investment Company and affiliates (6).................                534,400                             5.3%
    153 East 53 rd Street, 51st Floor
    New York, NY 10022

Junaid Sheikh (7).........................................              1,010,376                             9.9%

Phillip Bennett (8).......................................                750,000                             7.4%

Ian Craven (9)............................................                122,322                             1.2%

Donald W. Petersen (10)...................................                 66,457                             *

Harris Rogers (11)........................................                 36,366                             *

   
Donald K. McCauley (12) ..................................                      0                             *
    

                                       13
<PAGE>

William Ludwig (12).......................................                      0                             *

Lionel M. Allan (13)......................................                157,472                             1.5%

Thomas E. Fanella (14)....................................                 12,500                             *

David A. Lahar (15).......................................                110,000                             1.1%

Eugene M. Matalene, Jr.(16)...............................                 86,923                             *

All executive officers and directors as a group
    (11 persons) (17).....................................              2,352,416                            22.3%
<FN>
----------

*    Less than one percent (1%).

(1)  Except  as  indicated  in the  footnotes  to this  table  and  pursuant  to
     applicable community property laws, the Company believes that persons named
     in the table have sole  voting  and  investment  power with  respect to all
     shares of Common Stock held by such person.

(2)  The number of shares of Common Stock beneficially owned includes the shares
     issuable  pursuant to stock options  which may be exercised  within 60 days
     after March 31, 1999.  Shares issuable  pursuant to such options are deemed
     outstanding for computing the percentage of the person holding such options
     but are not outstanding for computing the percentage of any other person.

(3)  Includes the shares issuable upon conversion of the 6% Senior  Subordinated
     Convertible  Note due  March  12,  2004 (the  "Convertible  Notes")  in the
     aggregate principal amount of $3,000,000 held by American Bankers Insurance
     Group,  Inc. The  Convertible  Notes  convert into that number of shares as
     calculated by dividing the outstanding principal amount of such Convertible
     Notes by a conversion  price of $1.30,  subject to adjustment.  As of March
     31,  1999,  the  $3,000,000  Convertible  Note  held  by  American  Bankers
     Insurance Group, Inc. converts into 2,307,692 shares.

(4)  Reflects  share  ownership as of December 31, 1998,  based on the Company's
     records.  Includes  10,334  shares of Common  Stock  owned by El Dorado C&L
     Fund, L.P.; 5,765 shares of Common Stock owned by El Dorado  Technology IV,
     L.P.;  452,326  shares of Common  Stock  owned by El Dorado  Ventures;  and
     520,357  shares of Common Stock owned by El Dorado  Ventures III, L.P. Such
     information is based upon the Company's knowledge after investigation,  but
     without independent confirmation from such entities.

(5)  Includes a currently  exercisable warrant to purchase 250,000 shares of the
     Company's  Common  Stock at $1.00  per share  and a  currently  exercisable
     warrant to purchase  750,000 shares of the Company's  Common Stock at $3.00
     per  share.  Both  warrants  terminate  upon  the  earlier  to occur of (a)
     December  10,  2008 or (b) an  acquisition  or  change  in  control  of the
     Company.

(6)  Reflects  share  ownership as of December 31, 1998,  based on the Company's
     records.  Such shares are beneficially owned by (i) Special Situations Fund
     III, L.P., a Delaware limited  partnership (the "Fund"),  (ii) MGP Advisers
     Limited  Partnership,  a Delaware Limited  Partnership  ("MGP"),  (iii) AWM
     Investment Company, Inc., a Delaware corporation ("AWM") and (iv) Austin W.
     Marxe. MGP is a general partner of and investment  adviser to the Fund. MGP
     is registered as an investment adviser under the Investment Advisers Act of
     1940, as amended.  AWM, a Delaware  corporation  primarily  owned by Austin
     Marxe,  serves as the sole  general  partner  of MGP.  AWM is a  registered
     investment  adviser under the  Investment  Advisers Act of 1940.  Austin W.
     Marxe is also the principal limited partner of MGP and is the President and
     Chief  Executive  Officer of AWM. Mr. Marxe is principally  responsible for
     the selection,  acquisition and disposition of the portfolio  securities by
     AWM on behalf  of MGP and the  Fund.  Such  information  is based  upon the
     Company's   knowledge   after   investigation,   but  without   independent
     confirmation from such entities.

(7)  Includes 97,702 shares issuable upon currently  exercisable options held by
     Mr. Sheikh. Also includes 912,674 shares owned indirectly by Mr. Sheikh and
     Mr. Sheikh's wife as Trustees of the Sheikh Revocable Trust.

(8)  Includes  650,000 shares subject to a repurchase  right of the Company,  at
     the issuance price,  which lapses in equal monthly increments over a period
     of three years, beginning December 1998.

(9)  Includes 46,666 shares issuable upon currently  exercisable options held by
     Mr. Craven.

(10) Represents 66,457 shares issuable upon currently  exercisable  options held
     by Mr. Petersen.

(11) Includes 36,366 shares issuable upon currently  exercisable options held by
     Mr. Rogers.

(12) Messrs. McCauley and Ludwig joined the Company in December, 1998.

                                       14
<PAGE>

(13) Includes 54,600 shares issuable upon currently  exercisable options held by
     Mr. Allan.  Also includes 2,456 shares owned indirectly by Mr. Allan as the
     beneficiary of the Allan  Advisors,  Inc. Profit Sharing Plan FBO Lionel M.
     Allan. Also includes 100,000 shares which are subject to a repurchase right
     of the  Company,  at the  issuance  price,  which  lapses  with  respect to
     one-third  of the  shares  after  one  year and then  with  respect  to the
     remaining shares in equal monthly increments over the two years thereafter,
     beginning in December 1998.

(14) Represents shares issuable upon currently  exercisable  options held by Mr.
     Fanella,  5,000 of which shares are currently subject to a repurchase right
     of the Company.

(15) Includes 10,000 shares issuable upon currently  exercisable options held by
     Mr.  Lahar,  7,500 of which  shares are  currently  subject to a repurchase
     right of the Company.  Also includes  100,000 shares which are subject to a
     repurchase right of the Company,  at the issuance price,  which lapses with
     respect to  one-third of the shares after one year and then with respect to
     the  remaining  shares  in equal  monthly  increments  over  the two  years
     thereafter, beginning in December, 1998.

(16) Includes 10,000 shares issuable upon currently  exercisable options held by
     Mr.  Matalene,  all of which shares are  currently  subject to a repurchase
     right of the Company.  Also includes the shares issuable upon conversion of
     the Convertible Notes in the aggregate principal amount of $100,000 held by
     Mr. Matalene.  The Convertible  Notes convert into that number of shares as
     calculated by dividing the outstanding principal amount of such Convertible
     Notes by a conversion  price of $1.30,  subject to adjustment.  As of March
     31, 1999, the $100,000  Convertible Note held by Mr. Matalene converts into
     76,923 shares. Mr. Matalene disclaims  beneficial  ownership of such 76,923
     shares.

(17) Includes 334,291 shares issuable upon currently  exercisable  options.  See
     Footnotes above.
</FN>
</TABLE>

Item 13. Certain Relationships and Related Transactions


         On December 4, 1998, the Company entered into an agreement with Phillip
Bennett,  as an inducement to Mr.  Bennett to join the Company as Executive Vice
President,  Technology  and  Engineering,  which  provided  for the  sale by the
Company to Mr.  Bennett  of  750,000  shares of Common  Stock.  Of such  shares,
100,000  shares were sold at $0.50 per share for cash,  300,000 shares were sold
at  $0.50  per  share in  consideration  of the  delivery  by Mr.  Bennett  of a
non-recourse promissory note, and 350,000 shares were sold at $1.00 per share in
consideration of the delivery by Mr. Bennett of a non-recourse  promissory note.
The 650,000  shares issued in  consideration  of the delivery of the  promissory
note are subject to a repurchase  right of the Company,  at the issuance  price,
which lapses in equal monthly increments over a period of three years.

         On December 7, 1998, the Company  entered into  agreements with each of
Messrs. Allan and Lahar, directors of the Company, pursuant to which the Company
issued 100,000 shares of Common Stock to each of them. The shares were issued at
a price of $0.65 per shares. In consideration of his shares, Mr. Allan delivered
a  non-recourse  promissory  note in the amount of $65,000.  In exchange for his
shares,  Mr. Lahar has delivered a recourse  promissory  note,  as amended,  due
September 1, 1999 in the amount of $65,000.  The shares  issued are subject to a
repurchase  right of the  Company,  at the  issuance  price,  which  lapses with
respect to  one-third  of the shares after one year and then with respect to the
remaining shares in equal monthly increments over the two years thereafter.  The
Company approved the sale of such shares to Messrs. Allan and Lahar primarily in
recognition  of their  significant  efforts  related to the  acquisition  by the
Company  of  substantially  all of the  assets of  Scitex  Digital  Video,  Inc.
("Scitex") which was consummated on December 10, 1998.

         On December 10, 1998, the Company sold and issued  2,500,000  shares of
unregistered Common Stock, at a price of $0.60 per share, to Michael Luckwell, a
major  stockholder of the Company,  in a private  placement.  The purpose of the
sale of shares to Mr.  Luckwell  was to  provide  the  Company  with  additional
capital in connection with the purchase by the Company of  substantially  all of
the assets of Scitex.  The 

                                       15
<PAGE>

Company purchased the assets of Scitex  concurrently with the sale of the shares
to Mr. Luckwell.  In connection with such  transaction,  the Company granted Mr.
Luckwell  the right to be  nominated to the Board of Directors of the Company so
long as he holds more than 15% of the outstanding  shares of Common Stock of the
Company,  and the Company  agreed to use its best  efforts to take all  required
steps  to  effect  the  nomination,  including  any  required  amendment  of the
Company's  charter  documents.  The Company also granted to Mr. Luckwell certain
demand and  piggyback  registration  rights with respect to all of the shares of
Common Stock held by Mr. Luckwell. In addition, Mr. Luckwell agreed that, for so
long as Junaid Sheikh is the Chief  Executive  Officer of the Company,  he would
not,  directly or  indirectly,  acquire  beneficial  ownership of any additional
stock of the  Company.  Mr.  Luckwell  also agreed  that he would not  initiate,
commence or propose any proxy contest or other  solicitation  to vote or seek to
influence  any  other  person  with  respect  to the  voting of any stock of the
Company with respect to the election or removal of the Board of  Directors,  nor
become a member of a "group"  within the meaning of Section 13 of the Securities
Exchange  Act of 1934,  as amended.  The Company and Mr.  Luckwell  additionally
agreed upon certain restrictions on transfers of the Company's stock held by Mr.
Luckwell.  Prior to the sale of shares to Mr. Luckwell,  the Company amended its
Preferred Shares Rights Agreement, dated as of September 13, 1996, to permit Mr.
Luckwell to acquire up to 3,425,000  shares of Common Stock (as adjusted for any
stock splits, stock dividends, recapitalizations or the like).

         In connection with the acquisition of  substantially  all of the assets
of Scitex, the Company retained EOS Capital, Inc. to provide investment banking,
capital raising and financial consulting  services,  including seeking necessary
debt  financing,  obtaining  a  commitment  from a lender  and  negotiating  the
financial  and  other  terms of the  financing,  as well as  financial  analysis
concerning the acquisition.  Mr. Lahar, a director of the Company, is a managing
director  and the sole equity  owner of EOS Capital.  Upon  consummation  of the
acquisition of the assets of Scitex,  EOS Capital earned a $300,000 payment from
the Company for its  services.  Such amount was  negotiated  on an arm's  length
basis and the Company  believes  that such amount and the terms of the agreement
with EOS Capital are at least as  favorable as the Company  could have  obtained
from third parties.

         In  connection  with  the  issuance  of the  Convertible  Notes  in the
aggregate principal amount of $3,500,000, the Company retained EOS Capital, Inc.
to provide  further  financial  consulting  services.  Upon  consummation of the
issuance of the Notes, EOS Capital earned a $87,000 consulting fee to be paid by
the  Company  for its  services.  Upon the  consummation  of the  issuance,  Mr.
Matalene also earned a $87,000  consulting fee to be paid by the Company for his
financial  consulting  services.  Mr.  Matalene,  who became a  director  of the
Company  upon the  issuance  of the Notes,  is a  director  and  shareholder  of
American  Bankers.  Both such financial  consulting  fees were  negotiated on an
arm's length basis,  and the Company  believes that such amount and the terms of
the agreement with EOS Capital and Mr. Matalene are at least as favorable as the
Company could have obtained from third parties.

         Each of El Dorado  Ventures,  Michael Luckwell and American Bankers are
entitled to certain  registration  rights with respect to the  Company's  Common
Stock  owned  by such  stockholder.  See  "Common  Stock  Ownership  of  Certain
Beneficial  Owners and Management."  The Company's  Certificate of Incorporation
limits the  liability  of  directors  to the  maximum  extent  permitted  by the
Delaware  General  Corporation  Law. The Company's  Bylaws also provide that the
Company shall  indemnify its directors,  officers,  employees and agents in such
circumstances.  In  addition,  the  Company  has  entered  into  indemnification
agreements with its officers and directors.

                                       16
<PAGE>

         The Company has retained Lionel Allan, a director of the Company,  as a
consultant for legal and other business related  matters.  These services are in
addition  to his  services as a director of the  Company.  The Company  pays Mr.
Allan $4,000 per month for such consulting services.  Such amount was negotiated
on an arm's length basis and the Company believes that such amount and the terms
of the  agreement  with Mr. Allan are at least as favorable as the Company could
have obtained from third parties.


Item 14. Exhibits


         (a)(3) The  following  exhibit  shall be added to the list of  Exhibits
previously  filed with the Company's Form 10-K (numbered in accordance with Item
601 of Regulation S-K).

  Number                             Description
  ------                             -----------

  10.8.1       Amended and Restated Secured Promissory Note, dated April 8, 1999
               by David A. Lahar in favor of the Company.


                        ADDITIONAL INFORMATION AVAILABLE

THE COMPANY WILL PROVIDE WITHOUT  CHARGE,  UPON WRITTEN  REQUEST,  A COPY OF THE
COMPANY'S  TRANSITION  REPORT ON FORM 10-K/A,  INCLUDING  FINANCIAL  STATEMENTS,
SCHEDULES  AND A LIST OF EXHIBITS.  REQUESTS  SHOULD BE SENT TO THE ATTENTION OF
DONALD K. MCCAULEY, SENIOR VICE PRESIDENT,  FINANCE, AND CHIEF FINANCIAL OFFICER
AT ACCOM, INC., 1490 O'BRIEN DRIVE, MENLO PARK,  CALIFORNIA 94025, OR TELEPHONED
TO (650) 328-3818.

                                       17
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Company has duly caused this  Amendment  No. 1 to the
Report on Form 10-K to be signed  on its  behalf by the  undersigned,  thereunto
duly authorized in the City of Menlo Park, California on this 29th day of April,
1999.

                                      ACCOM, INC.

                                      By: /s/       JUNAID SHEIKH
                                         -------------------------------------
                                                    Junaid Sheikh
                                          Chairman of the Board of Directors,
                                         President and Chief Executive Officer

                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature
appears below  constitutes  and appoints  Junaid Sheikh and Donald K.  McCauley,
jointly  and  severally,   his   attorneys-in-fact,   each  with  the  power  of
substitution,  for him in any and all capacities, to sign any amendments to this
Report on Form  10-K,  and to file the same,  with  exhibits  thereto  and other
documents in connection  therewith with the Securities and Exchange  Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact,  or his
substitute or substitutes may do or cause to be done by virtue hereof.
<TABLE>

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Amendment  No. 1 to Report on Form  10-K/A  has been  signed  below by the
following persons in the capacities and on the dates indicated.
<CAPTION>
         Signature                                    Title                           Date
         ---------                                    -----                           ----
<S>                                  <C>                                         <C> 
     /s/ JUNAID SHEIKH               Chairman of the Board of Directors,         April 29, 1999
     -----------------               President and Chief Executive Officer 
      (Junaid Sheikh)                (Principal Executive Officer)         
                                     

   /s/ DONALD K. MCCAULEY            Senior Vice President, Finance and          April 29, 1999
   ----------------------            Chief Financial Officer (Principal
     (Donald K. McCauley)            Financial Officer and Principal
                                     Accounting Officer)

    /s/ LIONEL M. ALLAN              Director                                    April 29, 1999
    -------------------
     (Lionel M. Allan)

   /s/ THOMAS E. FANELLA             Director                                    April 29, 1999
   ---------------------
    (Thomas E. Fanella)

     /s/ DAVID A. LAHAR              Director                                    April 29, 1999
     ------------------
      (David A. Lahar)

/s/ EUGENE M. MATALENE, JR.          Director                                    April 29, 1999
---------------------------
 (Eugene M. Matalene, Jr.)
</TABLE>

                                       18