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

                                   FORM 10-K/A
                         (Amendment No. 1 to Form 10-K)
(Mark One)

      [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934
              For the fiscal year ended December 31, 1998
                                                or
      [  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

              For the transition period from ____________ to ____________

                         Commission File Number 0-25036

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

          California                                             77-0118151
  (State or jurisdiction of                                   (I.R.S. Employer
incorporation or organization)                               Identification No.)

1370 Dell Ave., Campbell, California                                95008
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:             (408) 866-8300

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, without par value                    Nasdaq National Market System

         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  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         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 the  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. [X]

         At March 31, 1999,  the aggregate  market value of Common Stock held by
non-affiliates of the Registrant was approximately $2,537,707

         As of March 31, 1999,  there were 5,858,149  shares of the Registrant's
Common Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

         A portion  of Item 8 of Part II and Items 10, 11, 12 and 13 of Part III
of the Annual  Report on Form 10-K for the fiscal year ended  December 31, 1998,
of Videonics Inc. (the "Company" or the "Registrant")  previously filed with the
Securities  and Exchange  Commission  ("SEC") are hereby amended and restated to
read in their entirety as follows:


<PAGE>


                                     PART II

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The report of PricewaterhouseCoopers  LLP, independent accountants,  is
set forth on page 3.

                                       2
<PAGE>

                        Report of Independent Accountants


To the Board of Directors and Shareholders of
Videonics, Inc.:


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of operations, of shareholder's equity and of cash flows
present fairly, in all material  respects,  the financial position of Videonics,
Inc.  and its  subsidiaries  at December  31, 1998 and 1997,  and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1998,  in  conformity  with  generally  accepted  accounting
principles.  These financial  statements are the responsibility of the Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion  expressed
above.



                                                  /s/ PricewaterhouseCoopers LLP

San Jose, California
March 26, 1999

                                       3
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The executive  officers and directors of the Company as of December 31,
1998 are as follows:

                                                                      Director /
Name                           Age             Position            Officer Since
----                           ---             --------            -------------

Michael L. D'Addio             54        Chairman of the               1986
                                         Board, Chief
                                         Executive Officer
                                         & Director

Yeshwant Kamath                50        President &                   1997
                                         Director

Jeffrey A. Burt                45        V.P. Operations               1992


Mark C. Hahn                   49        V.P., Chief                   1986
                                         Technical Officer,
                                         Secretary & Director

James A. McNeill               53        V.P. of Finance,              1993
                                         CFO & Assistant
                                         Secretary

Stephen L. Peters              44        V.P. of Research              1996
                                         & Development

Carl E. Berg                   61        Director                      1987

N. William Jasper, Jr.         51        Director                      1993


         Michael L. D'Addio,  a co-founder  of the Company,  has served as Chief
Executive  Officer and  Chairman of the Board of Directors  since the  Company's
inception  in July  1986.  In  addition  Mr.  D'Addio  served  as the  Company's
President  from July 1986 until November  1997.  From May 1979 through  November
1985 Mr. D'Addio served as President,  Chief  Executive  Officer and Chairman of
the Board of Directors of Corvus Systems,  a manufacturer of small computers and
networking  systems.  Mr.  D'Addio  holds an A.B.  degree  in  Mathematics  from
Northeastern University.

         Dr.  Yeshwant  Kamath,  has served as  President  of the Company  since
November  1997.  From 1993 to 1996, Dr. Kamath was the CEO and co-founder of KUB
Systems, which was acquired by Videonics.  From 1982 to 1992, he was the CEO and
co-founder   of  Abekas   Video   Systems,   which  was   acquired   by  Carlton
Communications,  Plc. Dr. Kamath  received his MS in  Electronics  from

                                       4
<PAGE>

Syracuse  University in 1972 and his Ph.D. in Electronics from the University of
California  at Berkeley in 1975.  Dr.  Kamath  currently  serves on the Board of
Directors of two public  companies,  Elantec  Semiconductor,  Inc. and Euphonix,
Inc. and is on the Board of Directors of KTEH, the San Jose based PBS television
station.

         Jeffrey  A. Burt has  served as Vice  President  of  Operations  of the
Company  since April 1992.  From August 1991 to March 1992,  Mr. Burt served the
Company as its Materials  Manager.  Prior to that time,  from October 1990 until
July  1991,  Mr.  Burt  acted  as a  consultant  to the  Company  in the area of
materials  management.  From May 1989 to October  1990,  Mr.  Burt served as the
Director of  Manufacturing  of On Command Video. Mr. Burt holds a B.A. degree in
Economics from the University of Wisconsin at Whitewater.

         Mark C. Hahn, a co-founder of the Company,  has served as the Company's
Chief  Technical  Officer  since  February  1996,  and  Corporate  Secretary and
Director since the Company's inception in July 1986. Previously, Mr. Hahn served
as  the  Company's  Vice  President  of  Research  and  Development.   Prior  to
co-founding the Company, Mr. Hahn served as Vice President of Research and Chief
Technologist  of Corvus Systems from May 1979 to February 1986. Mr. Hahn holds a
B.S.  degree in Electrical  Engineering  from  Princeton  University  and a M.S.
degree in Electrical Engineering from Stanford University.

         James A.  McNeill  has served  the  Company  as its Vice  President  of
Finance and Chief Financial  Officer since November 1993. Mr. McNeill has served
as Assistant  Secretary since October 1994. From 1991 until joining the Company,
Mr.  McNeill  served as Vice  President,  Finance of JHK &  Associates,  Inc., a
professional  services firm.  From 1978 to 1991, he served  successively as Vice
President  of Finance and  President  of U.S.  Controls  Holding,  Inc.  and its
subsidiaries,  Reactor Controls, Inc. and Project Integration,  Inc. Mr. McNeill
holds a B.S. degree in Accounting from  Pennsylvania  State  University and is a
C.P.A. under the laws of California. Mr. McNeill was promoted to the position of
Senior Vice President of the Company on February 4, 1999.

         Stephen  L.  Peters has served  the  Company as its Vice  President  of
Research and  Development  since February 1996.  From 1994 to February 1996, Mr.
Peters acted as a consultant in the areas of international business planning and
product  development.  From 1976 to 1980 and from  1983 to 1994,  he served as a
Division  Manager,  R&D  Manager,  R&D Section  Manager,  Project  Manager,  and
development engineer at Hewlett-Packard.  From 1980 to 1983 he served as Project
Manager and Senior Engineer at Advanced  Technology  Labs. Mr. Peters holds B.S.
degrees from Oregon State  University in Engineering  Physics and  Pre-medicine.
Mr. Peters  resigned as the Company's Vice President of Research and Development
on March 5, 1999.

         Carl E. Berg, a co-founder of the Company,  has served on the Company's
Board of Directors since June 1987. Mr. Berg is currently,  and has for the last
nine years been, a private venture  capital  investor and industrial real estate
developer.  Mr. Berg is also a member of the Board of  Directors  of  Integrated
Device  Technology,  Inc.,  Valence  Technology,  Inc.  and  Systems  Integrated
Research.

         N. William Jasper,  Jr. joined the Board of Directors of the Company in
August 1993.  Since 1983, Mr. Jasper has been the President and Chief  Operating
Officer of Dolby Laboratories, Inc.

                                       5
<PAGE>

BOARD COMMITTEES AND MEETINGS

         During the year ending  December 31, 1998,  there were five meetings of
the Company's Board of Directors at which all members were present.

         The Audit  Committee was  established on December 15, 1994. The members
of the Audit  Committee  are  Messrs.  Berg and  Jasper,  neither  of whom is an
employee of the Company.  The functions of the Audit Committee are to define the
scope of the audit,  review the auditor's reports and comments,  and monitor the
internal  auditing  procedures of the Company.  The Audit Committee met one time
during 1998.

         The  Compensation  Committee was  established  on October 27, 1994. The
members of the Compensation  Committee are Messrs.  Berg and Jasper,  neither of
whom  is  employed   by  the   Company.   The   Compensation   Committee   makes
recommendations  with respect to compensation of senior officers and granting of
stock options and stock awards.  The Compensation  Committee did not meet during
1998.

         The Company does not presently have a Nominating Committee.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's directors,  executive officers,  and persons who own more
than ten percent of a registered  class of the Company's equity  securities,  to
file with the Commission  initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.  Officers,
directors and greater than ten percent  shareholders  are required by Commission
regulation  to furnish the Company  with copies of all Section  16(a) forms they
file.

         To the Company's  knowledge,  based solely on a review of the copies of
such  reports  and  amendments  thereto  furnished  to the  Company  and written
representations  from the reporting persons that no other reports were required,
the Company  believes that all Section 16(a) filing  requirements  applicable to
its  officers,  directors  and greater than ten percent  beneficial  owners were
complied with during the year ended December 31, 1998.

                                       6
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

         The  following  table sets forth the total  compensation  earned by the
Chief Executive Officer and each of the four most highly  compensated  executive
officers of the  Company  whose  salary and bonus for fiscal year 1998  exceeded
$100,000 for services  rendered in all  capacities  for the years ended December
31, 1998, 1997, and 1996.

<TABLE>
                                   Summary Compensation Table
<CAPTION>
                                                                Annual                    Long-Term
                                                             Compensation(2)            Compensation
                                                         ------------------------       ------------           All Other
Name and                                                 Salary             Bonus          Option/           Compensation
Principal Position                        Year             ($)               ($)          SARs (#)               ($) 
------------------                        ----             ---               ---          --------               ----
<S>                                       <C>          <C>                <C>              <C>                <C>
Michael L. D'Addio                        1998         $150,000                 0                0                  0
   Chief Executive Officer                1997         $130,667                 0                0                  0
                                          1996          $92,000            $2,704                0                  0


Yeshwant Kamath                           1998         $150,000           $42,500          680,008(5)               0
   President                              1997         $100,500(3)         $5,000(3)        40,008(4)               0
                                                                                                        
                                                                                                        
Jeffrey A. Burt                           1998         $122,693                 0           30,000(6)               0
   Vice President of                      1997         $110,000                 0           30,000(6)         $30,200(1)
   Operations                             1996          $92,000            $3,362           30,000            $70,517(1)
                                                                                                        
                                                                                                        
James A. McNeill                          1998         $150,000                 0           30,000(7)               0
   Vice President of                      1997         $121,667           $11,667           30,000(7)               0
   Finance, CFO &                         1996          $92,000            $2,704           30,000                  0
   Assistant Secretary                                                                                  
                                                                                                        
Stephen L. Peters                         1998          $98,000           $42,000           50,008(10)              0
   Vice President of                      1997          $98,000           $42,000           60,010(10)        $10,000(9)
   Research and Development               1996          $85,750(8)        $36,750(8)        50,004                  0
<FN>
----------

(1)  Amounts represent gain recognized on exercise of nonstatutory stock options
     issued under the Company's 1987 Stock Option Plan.

(2)  Except for annual  compensation  reported  below,  there is no other annual
     compensation to report.


                                        7
<PAGE>
(3)  Dr.  Kamath  was  appointed  President  of the  Company in  November  1997.
     According to his employment  agreement,  Dr. Kamath was guaranteed a $5,000
     bonus for the year 1997.

(4)  Includes repriced options to purchase 40,008 shares of Common Stock.

(5)  Includes repriced options to purchase 360,008 shares of Common Stock.

(6)  Includes repriced options to purchase 30,000 shares of Common Stock.

(7)  Includes repriced options to purchase 30,000 shares of Common Stock.

(8)  Mr. Peters joined the Company in February 1996. Mr. Peters was guaranteed a
     bonus of $3,500 per month during his first year of employment. Accordingly,
     the  Summary  Compensation  Table  information  for  1996 set  forth  above
     includes only that compensation earned by Mr. Peters from February 19, 1996
     through December 31, 1996.

(9)  Represents relocation bonus.

(10) Includes repriced options to purchase 50,008 shares of Common Stock.
</FN>
</TABLE>

                                       8
<PAGE>

      The following tables set forth as to the Chief Executive  Officer and each
of the other executive officers named in the Summary Compensation Table, certain
information  with  respect to options to purchase  shares of Common Stock of the
Company as of and for the year ended December 31, 1998.

<TABLE>
                                    Option/SAR Grants in 1998
<CAPTION>
                       Number of      % of Total                                      Potential Realizable
                      Securities       Options/                                      Value at Assumed Annual
                      Underlying         SARs         Exercise                        Rates of Stock Price
                        Option/       Granted to       or Base                          Appreciation for
                         SARs          Employees        Price                            Option Term(5) 
                        Granted           In           ($/per        Exp.         --------------------------------
Name                    (#)(1)          1998(2)        Share)        Date         0% ($)     5% ($)       10% ($)
---------------------  --------         -------        ------        ----         ------     ------       -------
<S>                       <C>              <C>         <C>          <C>             <C>     <C>            <C>    
Jeffrey A. Burt           30,000(3)        2.0%        $1.50        6/24/08         0       $28,300        $71,718
Yeshwant Kamath          360,008(3)       24.0%        $1.50        6/24/08         0      $339,611       $860,640
                         320,000(4)       21.3%        $2.10        3/23/08         0      $427,648     $1,083,745
James A. McNeill          30,000(3)        2.0%        $1.50        6/24/08         0       $28,300        $71,718
Stephen L. Peters         50,008(3)        3.3%        $1.50        6/24/08         0       $47,175       $119,550

<FN>
----------------------
(1)  Options granted in this table have exercise prices equal to the fair market
     value of the Company's  Common Stock on the date of grant. All such options
     typically  become  exercisable  at a rate of 1/8 after  the first  full six
     months of employment,  and 1/8 every six months thereafter for a total four
     year vesting period following the date of grant.

(2)  The  Company  granted  options to purchase a total of  1,503,246  shares of
     Common Stock to employees  and  Directors in 1998.  Included in the options
     granted are  989,222 of options  that were  issued in  connection  with the
     Company's repricing on June 24, 1998.

(3)  Options  were  issued  in  connection  with the  Company's  June  24,  1998
     repricing. Repriced options will follow the vesting of the original vesting
     schedule for the options they replaced, except options will remain unvested
     until  June  24,  1999 at which  time  vesting  of new  options  will  vest
     according to the original option vesting schedule.

(4)  Mr.  Kamath's  grant of 320,000  shares were issued in accordance  with his
     employment agreement.

(5)  Potential  realizable value assumes that the stock price increases from the
     date of grant  until the end of the  option  term (10  years) at the annual
     rate  specified  (0%,  5%,  10%).  Annual  compounding   results  in  total
     appreciation of 63% (at 5% per year) and 159% (at 10% per year). The 5% and
     10% assumed rates of appreciation (over the deemed fair market value at the
     grant  date) are  mandated  by the  rules of the  Securities  and  Exchange
     Commission and do not represent the Company's estimate or projection of the
     future growth of the price of the Company's Common Stock.
</FN>
</TABLE>

                                       9
<PAGE>

<TABLE>
                             Aggregated Option/SAR Exercises in 1998
                              and Fiscal Year-End Option/SAR Values
<CAPTION>
                         Shares                       Number of Securities                 Value of Unexercised
                      Acquired on     Value          Underlying Unexercised              In-the-Money Options/SARs
                        Exercise    Realized        Options/SARs at Year-End                  at Year-End(1)
Name                       #           $          Exercisable      Unexercisable        Exercisable      Unexercisable
--------------------   --------- -----------      -----------      -------------        -----------      -------------
<S>                       <C>         <C>            <C>              <C>                  <C>                 <C>
Michael L. D'Addio        --          --                 --                --                  --              --
Yeshwant Kamath           --          --                 --           360,008                  --              --
Jeffrey A. Burt           --          --             27,000            30,000              $4,410              --
James A. McNeill          --          --                 --            30,000                  --              --
Stephen L. Peters         --          --              5,001            55,009                  --              --
<FN>
----------
(1)  Calculated on the basis of the closing price of $0.63 on December 31, 1998,
     minus the exercise price.
</FN>
</TABLE>

<TABLE>
                                  Ten-Year Option/SAR Repricing
<CAPTION>
                                                        Market                                       Length of
                                      Number of        Price of         Exercise                     Original
                                     Securities        Stock at         Price at                    Option Term
                                     Underlying         Time of          Time of                   Remaining at
                                     Option/SARs       Repricing        Repricing       New           Date of
                                     Repriced or          or               or        Exercise      Repricing or
Name                        Date       Amended         Amendment        Amendment      Price         Amendment
----------------------      ----       -------         ---------        ---------      -----         ---------
<S>                        <C>          <C>              <C>             <C>           <C>       <C>
Jeffrey A. Burt            6/24/98       30,000          $1.50           $5.00         $1.50     9 years  56 days 
                           8/19/97       30,000          $5.00           $7.50         $5.00     8 years 177 days
Yeshwant Kamath            6/24/98       40,008          $1.50           $5.00         $1.50     9 years  56 days
                           6/24/98      320,000          $1.50           $2.13         $1.50     9 years 273 days
                           8/19/97       40,008          $5.00           $9.00         $5.00     8 years 285 days
James A. McNeill           6/24/98       30,000          $1.50           $5.00         $1.50     9 years  56 days
                           8/19/97       30,000          $5.00           $7.50         $5.00     8 years 177 days
Stephen L. Peters          6/24/98       50,008          $1.50           $5.00         $1.50     9 years  56 days
                           8/19/97       50,008          $5.00           $7.50         $5.00     8 years 177 days
</TABLE>

                                       10
<PAGE>

EMPLOYMENT AGREEMENTS

         In February 1996, the Company entered into an employment agreement with
Mr. Peters, pursuant to which he presently receives a base salary of $98,000 per
year, plus a guaranteed  bonus of $42,000 the first year,  $38,000 in the second
year,  and $34,000 in the third year.  In  addition,  Mr.  Peters is eligible to
receive an incentive  bonus, in his second and third years of employment,  based
on  performance.  Pursuant to this  agreement,  Mr. Peters received an option to
purchase 50,004 shares of the Company's Common Stock under the Stock Option Plan
at an  exercise  price of $7.50 per share  which  vests  over three  years.  The
agreement  provides  that if Mr.  Peters is  terminated  within one year after a
merger or buyout,  his shares will be fully vested and he will receive one years
severance  pay. Mr. Peters  resigned as the Company's Vice President of Research
and Development on March 5, 1999.

         In November 1997, the Company entered into an employment agreement with
Dr.  Kamath,  pursuant to which he presently  receives a base salary of $150,000
per year, with a guaranteed bonus of $5,000 for 1997. In addition, Dr. Kamath is
eligible to receive an incentive bonus in 1998 based on performance. Pursuant to
this agreement,  Dr. Kamath received  options to purchase  320,000 shares of the
Company's  Common Stock.  These  options were granted by the Company's  Board of
Directors  on March 23,  1998,  at fair  market  value,  and will vest over four
years. The agreement  provides that if Dr. Kamath is terminated  within one year
after a merger or buyout,  his shares will be fully  vested and he will  receive
one years severance pay.


REMUNERATION OF NON-EMPLOYEE DIRECTORS

         The Company does not  compensate  non-employee  directors  who are also
major  shareholders,  such as Mr. Berg, for their services.  Other  non-employee
directors,  such as Mr. Jasper, receive $500 for each board meeting attended. In
addition, non-employee directors (other than non-employee directors who are also
major shareholders),  serving on the Company's Board of Directors on August 31st
of each year will be granted nonstatutory stock options to purchase 4,504 shares
of the Company's  Common Stock.  During 1998,  Mr.  Jasper  received  options to
purchase  9,008 shares of the  Company's  Common Stock  representing  director's
options for 1997 and 1998.


REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO EXECUTIVE COMPENSATION

         The Compensation  Committee of the Board of Directors (the "Committee")
was  established on October 27, 1994. The functions of the Committee are to make
recommendations to the Board concerning salaries and incentive  compensation for
the Company's executive officers.

         The Company's executive  compensation  program has been designed to (i)
attract  and  retain  executives  capable  of  leading  the  Company to meet its
business objectives and to motivate them to enhance long-term  shareholder value
through compensation that is comparable to the levels offered by other companies
in similar industries; (ii) motivate key executive officers to achieve strategic
business initiatives and reward them for their achievement;  and (iii) align the
interests  of  executives   with  the  long-term   interests  of  the  Company's
shareholders  through  award  opportunities  resulting  in the  ownership of the
Company's Common Stock. Annual compensation for the Company's

                                       11
<PAGE>

executive  officers may consist of three elements:  cash salary,  cash incentive
bonus,  and stock option grants.  Stock option grants provide an incentive which
focuses the  executive's  attention on managing the Company from the perspective
of an owner with an equity  stake in the  business.  These  stock  options  will
generally  provide value to the  recipient  only when the price of the Company's
stock increases above the option grant price.

         The  Committee  recognizes  that the salary  paid to Mr.  D'Addio,  the
Company's Chief Executive Officer, is substantially below that paid to others in
comparable  positions of similar companies.  The Committee  increased the annual
salary of Mr. D'Addio,  the Company's CEO to $150,000 in 1997 from $92,000.  Mr.
D'Addio had declined salary  increases  recommended by the Committee since 1994.
The  Committee   recognizes   that  Mr.   D'Addio's   current  salary  is  still
significantly below the salary of CEO's in comparable public companies, however,
Mr. D'Addio declined any additional increase.

         During 1999, it is  anticipated  that the Committee will conduct annual
performance  reviews  comparing  actual Company  progress  against annual plans.
Elements of such plans,  including  progress on product  development,  sales and
marketing, expense control and organizational development, may be considered.

         Carl E. Berg
         N. William Jasper Jr.

COMPENSATION  COMMITTEE  INTERLOCKS AND INSIDER  PARTICIPATION  IN  COMPENSATION
DECISIONS

         The Compensation Committee consists of Messrs. Berg and Jasper, neither
of  whom  is  employed  by the  Company.  There  are no  Compensation  Committee
interlocks  between the  Company  and other  entities  involving  the  Company's
executive  officers and Board  members who serve as  executive  officers of such
entities.

                                       12
<PAGE>

PERFORMANCE MEASUREMENT COMPARISON

         The  following  graph  compares  the  annual  percentage  change in the
cumulative  shareholder  return of the Common  Stock of the  Company,  with CRSP
Total Return Index for the Nasdaq Stock Market (Domestic Companies) and the CRSP
Total Return Index for the Nasdaq Electronic Component Companies, for the period
beginning December 15, 1994 and ending December 31, 1998. The graph assumes that
$100.00 was invested on December 15, 1994,  the effective  date of the Company's
initial public offering of Common Stock.

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

<CAPTION>
                                                   Cumulative Total Return
                         --------------------------------------------------------------------------
                         12/15/94      12/31/94     12/31/95     12/31/96     12/31/97     12/31/98

<S>                         <C>           <C>          <C>          <C>         <C>           <C>
Videonics, Inc.             100           116          107           81           38            6
Nasdaq (Domestic)           100           103          149          183          225          316
Electronic Component
 Companies                  100           106          175          303          317          491
</TABLE>

         The  Company's  stock was  publicly  traded for sixteen  calendar  days
during the Company's year ended December 31, 1994.  These indices are calculated
on a dividend  reinvested basis. The Company  emphasizes that the performance of
the Company's stock over the period shown is not  necessarily  indicative of the
future performance of the Company's stock.

                                       13
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

BENEFICIAL OWNERS

         The  following  table  sets  forth,  as  of  March  31,  1999,  certain
information  with respect to each person known by the Company to be a beneficial
owner, as defined in Rule 13d-3 ("Rule 13d-3") promulgated by the Securities and
Exchange  Commission under the Securities  Exchange Act of 1934, as amended (the
"1934 Act"), of more than 5% of the outstanding Common Stock of the Company.

                                                                  Percentage of
                                                                   Outstanding
Name and Address                 Number of Shares                    Common
of Beneficial Owner             Beneficially Owned                    Stock     
-------------------             ------------------                    -----     
Carl E. Berg
10050 Bandley Drive
Cupertino, CA 95014                  1,142,305                         19%

Michael L. D'Addio
1370 Dell Avenue
Campbell, CA 95008(1)                  918,762 (1)                     16%

Mark C. Hahn
1370 Dell Avenue
Campbell, CA 95008                     557,831                         9%

State of Wisconsin
  Investment Board
P.O. Box 7842
Madison, WI  53707                     535,000                         9%

(1)  Includes 6,000 shares subject to stock options  exercisable as of March 31,
     1999 or within 60 days thereafter held by Mr.  D'Addio's  spouse, a Company
     employee.

                                       14
<PAGE>

MANAGEMENT

<TABLE>
         The  following  table sets forth certain  information,  as of March 31,
1999  concerning  each  director and each  executive  officer,  including  their
beneficial  ownership  as defined in Rule 13d-3,  of shares of Common  Stock and
beneficial ownership of Common Stock by all officers and directors as a group.

<CAPTION>
                                           Director/                                 Shares            Percent
                                            Officer                               Beneficially       Beneficially
Name                             Age         Since        Positions                  Owned               Owned
----                             ---         -----        ---------                  -----               -----

<S>                              <C>         <C>          <C>                      <C>                   <C>
Carl E. Berg                     61          1987         Director                 1,142,305             19%
                                             
Michael L. D'Addio               54          1986         Chairman, CEO,             918,762(1)          16 
                                                          & Director
                                             
Mark C. Hahn                     49          1986         V.P., Chief                557,831              9 
                                                          Technical Officer,
                                                          Secretary & Director
                                             
N. William Jasper, Jr.           51          1993         Director                    37,282(2)          * 
                                             
Yeshwant Kamath                  50          1997         President & Director             0             * 
                                             
Jeffrey A. Burt                  46          1992         V.P. of Operations          27,000(3)          * 
                                             
James A. McNeill                 53          1993         V.P. of Finance,            80,000              1 
                                                          CFO & Assistant
                                                          Secretary
                                             
Stephen L. Peters                44          1996         V.P. of Research and         6,001(4)          * 
                                                          Development

All executive officers and directors as a group (8 persons) (5)                    2,769,181             47%

<FN>
------------------------
*    Represents less than 1%

(1)  Includes 6,000 shares subject to stock options  exercisable as of March 31,
     1999 or within 60 days thereafter held by Mr.  D'Addio's  spouse, a Company
     employee.

(2)  Includes 6,002 shares subject to stock options  exercisable as of March 31,
     1999 or within 60 days thereafter.

                                       15
<PAGE>

(3)  Includes 27,000 shares subject to stock options exercisable as of March 31,
     1999 or within 60 days thereafter.

(4)  Includes 5,001 shares subject to stock options  exercisable as of March 31,
     1999 or within 60 days  thereafter.  Mr.  Peters  resigned as the Company's
     Vice President of Research and Development on March 5, 1999

(5)  Includes an aggregate  of 44,003  shares  included  pursuant to notes (1) -
     (4).
</FN>
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         There is no pending  litigation  or  proceeding  involving  a director,
officer, employee or other agent of the Company as to which indemnification from
the  Company  is  being  sought  nor is the  Company  aware  of any  pending  or
threatened  litigation  that may  result in claims  for  indemnification  by any
director, officer, employee or other agents.

         On January 24, 1997, the Company loaned $250,000 to Steve Peters,  Vice
President of Research and  Development of the Company.  The loan had an interest
rate of 6% per  annum,  and was due and  payable  in one lump sum on  January 4,
2000.  The loan was secured by a deed of trust on Mr.  Peters' home in Saratoga,
California.  As of December 31,  1998,  the loan had been repaid in full and the
security interest in Mr. Peters' home was released.

         At December 31, 1998, the Company has an unsecured loan from Carl Berg,
a  director  and  shareholder  of the  Company.  This  loan,  in the  amount  of
$1,000,000,  bears  interest  at 8% per year,  and is due on October  16,  1999.
Accrued  interest is payable on a quarterly  basis. Mr. Berg has agreed that, at
the Company's  option,  the loan's  maturity date may be extended  until January
2000.

                                       16
<PAGE>

                                     PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)        1.        Financial Statements

The following financial statement is filed as part of this report:

                    --        Report of Independent Accountants

                                       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 Form
10-K to be signed on its behalf by the  undersigned,  thereunto duly authorized,
on this 27th day of April, 1999.

                                      VIDEONICS, INC.

                                      By: /s/ Michael L. D'Addio
                                          Michael L. D'Addio
                                          Chief Executive Officer


<TABLE>
      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
Report has been signed below by the  following  persons on behalf of the Company
and in the capacities and on the dates indicated.

<CAPTION>
Name and Signature                         Title                                   Date
------------------                         -----                                   ----

<S>                                        <C>                                     <C> 
/s/ Michael L. D'Addio                     Chairman of the Board                   April 27, 1999
------------------------------             and Chief Executive Officer
Michael L. D'Addio                         (Principal Executive Officer)


/s/ B. Yeshwant Kamath                     President and Director                  April 27, 1999
------------------------------
B. Yeshwant Kamath


/s/ Gary L. Williams                       Vice President of Finance,              April 27, 1999
------------------------------             and Chief Financial Officer
Gary L. Williams                           (Principal Financial Officer
                                           and Principal Accounting
                                           Officer)


/s/ Mark C. Hahn                           Vice President and Chief                April 27, 1999
------------------------------             Technical Officer and
Mark C. Hahn                               Director


/s/ Carl E. Berg                           Director                                April 27, 1999
------------------------------
Carl E. Berg


/s/ N. William Jasper, Jr.                 Director                                April 27, 1999
------------------------------
N. William Jasper, Jr.
</TABLE>

                                       18