SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-Q

(Mark One)

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

     For the quarterly period ended March 31, 2000

                                       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 other 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

     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 [ ]

     As of April 30,  2000,  there  were  5,898,974  shares of the  Registrant's
Common Stock, no par value, outstanding.



<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                 VIDEONICS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)

                                                              Quarter Ended
                                                                March 31,
                                                         ----------------------
                                                           2000          1999
                                                         -------        -------
Net revenues and other income                            $ 3,059        $ 3,665

Cost of revenues                                           1,882          2,207
                                                         -------        -------
            Gross profit                                   1,177          1,458
                                                         -------        -------

Operating expenses:
   Research and development                                  561            898
   Selling and marketing                                     698            996
   General and administrative                                217            374
                                                         -------        -------
                                                           1,476          2,268
                                                         -------        -------
               Operating loss                               (299)          (810)

Interest expense, net                                        (21)           (13)
                                                         -------        -------

               Net loss                                  $  (320)       $  (823)
                                                         =======        =======

Net loss per common share - basic
 and diluted                                             $ (0.05)       $ (0.14)
                                                         =======        =======

Shares used in computing net loss per
 common share - basic and diluted                          5,888          5,858
                                                         =======        =======

                     The accompanying notes are an integral
                       part of these financial statements.

                                       2

<PAGE>


<TABLE>
                                           VIDEONICS, INC.
                                      CONDENSED BALANCE SHEETS
                                           (in thousands)

<CAPTION>
                                                                           March 31,     December 31,
                           ASSETS                                            2000            1999
                                                                           --------        --------
                                                                         (unaudited)
<S>                                                                        <C>             <C>
Current assets:
   Cash and cash equivalents                                               $    359        $    715
   Accounts receivable, net                                                     862             886
   Inventories                                                                3,845           3,785
   Prepaid and other current assets                                             168             145
                                                                           --------        --------
            Total current assets                                              5,234           5,531

Property and equipment, net                                                     394             513
Other assets                                                                     45              45
                                                                           --------        --------
            Total assets                                                   $  5,673        $  6,089
                                                                           ========        ========

                        LIABILITIES

Current liabilities:
   Accounts payable                                                        $    985        $    974
   Accrued expenses                                                             605             734
                                                                           --------        --------
            Total current liabilities                                         1,590           1,708
                                                                           --------        --------

Long term liabilities:
   Note payable to shareholder                                                1,035           1,035
                                                                           --------        --------

            Total liabilities                                                 2,625           2,743
                                                                           --------        --------

   SHAREHOLDERS' EQUITY

Common stock, no par value:
   Authorized: 30,000 shares
   Issued and outstanding: 5,898 shares at
      March 31, 2000 and 5,874 shares at
      December 31, 1999                                                      20,722          20,700

Retained deficit                                                            (17,674)        (17,354)
                                                                           --------        --------
            Total shareholders' equity                                        3,048           3,346
                                                                           --------        --------
               Total liabilities and shareholders' equity                  $  5,673        $  6,089
                                                                           ========        ========

<FN>
                               The accompanying notes are an integral
                                 part of these financial statements.
</FN>
</TABLE>

                                                 3

<PAGE>


<TABLE>
                                           VIDEONICS, INC.
                                 CONDENSED STATEMENTS OF CASH FLOWS
                                           (in thousands)
                                             (unaudited)

<CAPTION>
                                                                                    Quarter Ended
                                                                                      March 31,
                                                                                 ------------------
                                                                                  2000         1999
                                                                                 -----        -----
<S>                                                                              <C>          <C>
Cash flows from operating activities:
          Net cash used in operating activities                                  $(321)       $(104)
                                                                                 -----        -----

Cash flows from investing activities:

      Cash received from sale of Nova Systems                                        -           52
Purchase of property and equipment                                                 (57)         (21)
                                                                                 -----        -----
          Net cash provided by (used in) investing activities                      (57)          31
                                                                                 -----        -----

Cash flows from financing activities:

      Proceeds from issuance of common stock                                        22           -
                                                                                 -----        -----
          Net cash provided by financing activities                                 22           -
                                                                                 -----        -----

Decrease in cash and cash equivalents                                             (356)         (73)

Cash and cash equivalents at beginning of year                                     715          837
                                                                                 -----        -----

Cash and cash equivalents at end of quarter                                      $ 359        $ 764
                                                                                 =====        =====

<FN>
                               The accompanying notes are an integral
                                 part of these financial statements.
</FN>
</TABLE>

                                                 4

<PAGE>


                                 VIDEONICS, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1.   The  condensed  financial  statements  at March 31,  2000 and for the three
     month  period  then  ended are  unaudited,  except  for the  balance  sheet
     information  as of December  31,  1999,  which is derived  from the audited
     financial  statements of Videonics Inc.  ("Videonics" or the "Company") and
     reflect all adjustments  (consisting only of normal recurring  adjustments)
     which are, in the opinion of management,  necessary for a fair presentation
     of the financial  position and operating  results for the interim  periods.
     The condensed  financial  statements should be read in conjunction with the
     financial   statements  and  notes  thereto,   together  with  management's
     discussion  and analysis of financial  condition and results of operations,
     contained in the  Company's  Annual  Report on Form 10-K for the year ended
     December  31,  1999,  as  amended.   The  results  of  operations  for  the
     three-month  period ended March 31, 2000 are not necessarily  indicative of
     the results for the year ending  December 31, 2000,  or any future  interim
     period.

2.   Inventories comprise (in thousands):

                                                      March 31,     December 31,
                                                        2000            1999
                                                       ------          ------
                                                    (unaudited)

Raw materials                                          $3,293          $3,179
Work in process                                           324             302
Finished goods                                            228             304
                                                       ------          ------
                                                       $3,845          $3,785
                                                       ======          ======

3.   Note Payable to Shareholder:

     On April 16, 1999, the Company replaced a $1,000,000 unsecured loan bearing
     interest at 8% per year and due on October 16, 1999,  with a new  unsecured
     loan in the amount of $1,035,000  bearing interest at a rate of 8% per year
     and due on January 16,  2001.  The new loan is from the same  director  and
     significant  shareholder  of the  Company  as the  previous  loan.  Accrued
     interest under the new loan is payable at maturity.  On March 22, 2000, the
     loan in the amount of  $1,035,000  was amended to change the maturity  date
     from January 16, 2001 to January 16, 2002.

                                       5

<PAGE>


                                 VIDEONICS, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

4.   Disposal of Subsidiary and Business

     Sale of Nova Systems

     On January 29, 1999,  the Company  completed the sale of certain assets and
     the  assumption  of  certain  liabilities  related  to the sale of its Nova
     Systems Division ("Nova") to a privately held company in Massachusetts. For
     the year ended  December 31, 1998,  Nova recorded  revenues of $1.9 million
     and a loss from  operations  of $248,000.  The sale of Nova may provide the
     Company  with  net  revenues   from   royalties  of  up  to  a  maximum  of
     approximately  $450,000,  contingent  upon future sales of Nova products by
     the acquiring  company.  Royalties  will be paid, to the extent due, by the
     acquiring  company on a monthly  basis  from  March  1999 until  receipt of
     approximately  $450,000. The sale of Nova resulted in a $48,000 loss to the
     Company. As of March 31, 2000, royalties of $250,000 have been received.

     Sale of the German Subsidiary

     On September  29, 1999,  the Company  sold its wholly owned  subsidiary  in
     Germany. The Company's German office was primarily a sales office. Revenue,
     net loss and assets employed by the Company's  foreign  subsidiary were not
     material to the consolidated  financial statements.  The Company recorded a
     loss of $65,000 in connection with the sale.

5.   Segment Information:

     In 1998,  the Company  adopted SFAS 131. At December  31,  1999,  Videonics
     presented two  reportable  segments - (1) Video  Production  and (2) Signal
     Processing.

     The  Company's  "Video  Production"  segment  manufactures  and sells video
     post-production equipment into broadcast, cable, industry and home producer
     markets. The Company's "Signal Processing"  segment,  which was represented
     by the Company's Nova Division, manufactured and sold signal conversion and
     processing  equipment  primarily  into  television  and cable  studios.  As
     described  in  Note  4,  the  Company's  Nova  System   Division   ("Signal
     Processing" segment) was sold on January 29, 1999.

                                       6

<PAGE>


                                 VIDEONICS, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

     The table  below  presents  information  about  reported  segments  for the
     quarters ending March 31, (in thousands):

                                                   2000               1999
                                                  -------            -------
     Video Production
       Sales                                      $ 3,059            $ 3,574
       Operating loss                                (299)              (774)

     Signal Processing
       Sales                                          -                   91 (1)
       Operating loss                                 -                  (36)(1)


     (1) Results  presented are through  January 29, 1999,  the date the Company
     completed its sale of Nova.


6.   Line of Credit

     In August 1999,  the Company  obtained a $1.0  million  asset based line of
     credit from Venture  Banking Group, a division of Cupertino  National Bank,
     secured  by  the  Company's  assets.  Interest  on  any  advances  will  be
     calculated  at a rate of 1.5%  above  prime.  Under the terms of the credit
     agreement, the Company is required to maintain certain financial ratios and
     meet other covenants,  including those related to net worth,  profitability
     and  indebtedness.  The  Company  obtained  a waiver  of the  profitability
     covenant for the quarter  ending March 31, 2000.  The maturity  date of the
     line of credit is August 25, 2001.  In connection  with this  agreement the
     Company  issued to the Venture  Banking Group a warrant to purchase  95,000
     shares of the Company's  common stock at an exercise  price of $0.65.  This
     warrant expires on September 15, 2002. The Company  recognized $45,000 (the
     fair value of the warrant issued using the Black-Scholes  model) as prepaid
     financing  costs during the quarter ended  September  1999.  This amount is
     being amortized to interest  expense over the term of the loan. As of March
     31, 2000, the Company had not borrowed under the line of credit.  As of May
     10, 2000, an aggregate of $100,000 is outstanding under the line of credit.

7.   Comprehensive Loss

     There are no differences  between net loss for the three months ended March
     31, 1999 and 2000 and the comprehensive loss for such periods.

                                       7

<PAGE>


                                 VIDEONICS, INC.
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

8.   Recent Accounting Pronouncements:

     In June of 1998, the Financial  Accounting Standards Board issued Statement
     No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities",
     (SFAS  133)  which  establishes  accounting  and  reporting  standards  for
     derivative  instruments,  and for hedging  activities.  It requires that an
     entity  recognize all  derivatives  as either assets or  liabilities in the
     statement  of  financial  position and measure  those  instruments  at fair
     value. Management of the Company has evaluated the effects of this standard
     and believes  there will be no material  impact on the Company's  financial
     position  or  results of  operations.  The  Company  will adopt SFAS 133 as
     required for its first quarterly filing of the year 2001.

     In March  2000,  the FASB issued  Interpretation  No. 44,  "Accounting  for
     Certain  Transactions  Involving Stock  Compensation," an interpretation of
     APB  Opinion  No.  25  ("FIN  44").  FIN 44  establishes  guidance  for the
     accounting  for stock  option  grants or  modifications  to existing  stock
     options awards and is effective for option grants made after June 30, 2000.
     FIN 44 also  establishes  guidance for the  repricing of stock  options and
     determining  whether a grantee is an  employee,  for which the guidance was
     effective  after  December  15, 1998 and  modifying a fixed option to add a
     reload  feature,  for which the guidance was  effective  after  January 12,
     2000.  The  Company  does not expect  that the  adoption  of the  remaining
     provisions will have a material effect on the financial statements.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
     Accounting  Bulletin  No. 101 ("SAB  101"),  "Revenue  Recognition,"  which
     provides  guidance  on the  recognition,  presentation  and  disclosure  of
     revenue in  financial  statements  filed with the  Securities  and Exchange
     Commission.  SAB  101  outlines  the  basic  criteria  that  must be met to
     recognize revenue and provides guidance for disclosures  related to revenue
     recognition policies. SAB 101 is effective for the fiscal quarter beginning
     April 1, 2000,  however earlier adoption is permitted.  The Company has not
     yet  determined  the  impact,  if  any,  that  adoption  will  have  on the
     consolidated financial statements.


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

     The  following  discussion  in this section  "Management's  Discussion  and
Analysis  of   Financial   Condition   and  Results  of   Operations"   contains
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform  Act  of  1995,   particularly  statements  regarding  market
opportunities,   market   share   growth,   competitive   growth,   new  product
introductions, success of research and development expenses, customer acceptance
of new products,  gross margin and selling, general and administrative expenses.
These  forward-looking  statements  involve  risks  and  uncertainties,  and the
cautionary statements set forth below,  specifically those contained in "Factors
That May Affect Future Results of Operations,"  identify  important factors that
could cause actual results to differ materially from those predicted in any such
forward-looking  statements.  Such

                                       8

<PAGE>


factors  include,  but are not limited to, adverse  changes in general  economic
conditions,  including adverse changes in the specific markets for the Company's
products, adverse business conditions, decreased or lack of growth in the market
for video post-production equipment, adverse changes in customer order patterns,
increased  competition,  lack of acceptance of new products,  pricing pressures,
lack of success in  technological  advancements,  risks  associated with foreign
operations, and other factors.

Results of Operations

     Net Revenues. Net revenues decreased approximately 17% from $3.7 million in
the first  quarter  of 1999 to $3.1  million in the first  quarter of 2000.  The
decrease in revenue was due  primarily  to a decrease in sales of the  Company's
older  videographer  products  offset  slightly by shipments of CommandPost  and
StudioSketch, which began shipping during the last days of March 2000.

     Gross Profit. Gross profit decreased approximately 19% from $1.5 million in
the first  quarter of 1999 to $1.2 million in the first  quarter of 2000.  Gross
profit,  as a percentage of net revenues,  decreased to approximately 38% in the
first quarter of 2000 from  approximately 40% for the first quarter of 1999. The
decrease in gross  profit as a  percentage  of revenues  is due  primarily  to a
change in product mix, and manufacturing costs spread over lower revenues.

     Research and  Development.  Research  and  development  expenses  decreased
approximately  38% to  $561,000  during the first  quarter of 2000  compared  to
$898,000  in the first  quarter of 1999.  The  decrease  is  primarily  due to a
decrease in personnel.

     Selling  and   Marketing.   Selling  and   marketing   expenses   decreased
approximately  30% to $698,000 in the first quarter of 2000 compared to $996,000
in the first quarter of 1999. As a percentage  of net revenues,  these  expenses
decreased  to 23% in the  first  quarter  of 2000  compared  to 27% in the first
quarter of 1999.  The decrease is primarily  due to a decrease in personnel  and
reduced advertising expenses.

     General and Administrative.  General and administrative  expenses decreased
approximately  42% to $217,000 in the first quarter of 2000 compared to $374,000
in the first quarter of 1999. As a percentage  of net revenues,  these  expenses
decreased  to 7% in the  first  quarter  of 2000  compared  to 10% in the  first
quarter of 1999. The decrease is primarily due to a decrease in personnel.

     Interest  Expense,  net. Interest expense increased to $21,000 in the first
quarter of 2000 compared to $13,000 in the first  quarter of 1999.  The increase
in interest expense  primarily  relates to the amortization of prepaid financing
costs associated with a warrant issued to the Venture Banking Group in September
of 1999 (see Note 6 of the "Notes to the  Condensed  Financial  Statements"  for
further detail).  Additionally,  interest is calculated on the $1.0 million note
payable to a director and significant shareholder of the Company, only partially
offset by interest income on outstanding cash balances available for investment.

     Benefit from Income Taxes.  During the first quarter of 2000 and 1999,  the
Company  maintained a 100% valuation  allowance  against its deferred tax assets
due to the  uncertainty  surrounding  the  realization of such assets.  If it is
determined  that it is more  likely  than not that the  deferred  tax assets are
realizable, the valuation allowance will be reduced.

                                       9

<PAGE>


     Factors That May Affect Future Results of Operations:  The Company believes
that in the future its results of  operations  could be impacted by factors such
as delays in  development  and shipment of the  Company's new products and major
new  versions  of existing  products,  market  acceptance  of new  products  and
upgrades,  growth in the marketplace in which it operates,  competitive  product
offerings,  and adverse  changes in general  economic  conditions  in any of the
countries in which the Company does  business.  The  Company's  results in prior
years  have  been  affected  by these  factors,  particularly  with  respect  to
developing  and  introducing  new  products  such as MXPro,  Effetto  Pronto and
MXProDV in 1997, 1998 and 1999.

     Due  primarily  to the factors  noted  above,  the Company has  experienced
substantial  volatility in its  operations.  The Company's  future  earnings and
stock price may continue to be subject to significant  volatility,  particularly
on a quarterly  basis. Any shortfall in revenue or earnings from levels expected
by  securities  analysts  or  anticipated  by the  Company  based  upon  product
development and  introduction  schedules could have an immediate and significant
adverse  effect on the trading price of the Company's  common stock in any given
period. Additionally, the Company may not learn of such shortfalls until late in
the fiscal  quarter,  which could result in an even more  immediate  and adverse
effect on the trading price of the Company's common stock.  Finally, the Company
participates  in a highly dynamic  industry,  which often results in significant
volatility of the Company's common stock price. See the Company's 1999 Form 10-K
section entitled "Business - Research and Development".

Year 2000 Update

     We  believe  that we  have  successfully  rendered  our  product,  internal
management and other  administrative  systems and external  information  systems
year 2000 compliant.  Since January 1, 2000, we have  experienced no disruptions
in our  business  operations  as a result of year 2000  compliance  problems  or
otherwise,  and have  received no reports of any year 2000  compliance  problems
with our products.  To date,  the total cost of our efforts to address year 2000
compliance has not been material. Nonetheless, some problems related to the year
2000 risks may not appear until several months after January 1, 2000.  Year 2000
issues could include problems with our own products or with third-party products
or technology  that we use. Any problems that are not  identified  and corrected
successfully and completely could adversely affect our business.

Liquidity and Capital Resources

     From the Company's  inception until its initial public offering in December
1994,  which  resulted  in net  proceeds to the  Company of $15.8  million,  the
Company  financed its operations  through  private sales of equity,  shareholder
loans,  cash flow from operations,  and bank borrowings.  At March 31, 2000, the
Company's  principal  source of  liquidity  is cash of  approximately  $359,000.
Additionally,  at March 31, 2000, the Company had borrowings from a director and
significant  shareholder  totaling  $1.0 million at an interest rate of 8.0% per
year, due January 16, 2002.

     Net cash used by  operations  was  $321,000  for the first  quarter of 2000
compared  to  $104,000  for the same  period  last  year.  The use of cash  from
operating  activities  during  the  first  quarter  of 2000 is due to a net loss
before  depreciation  and a decrease in accrued  expenses.  The use of cash from
operating  activities  during  the  first  quarter  of 1999 is due to a net loss
before depreciation and a decrease in accrued expenses,  substantially offset by
a decrease in inventories.  Net cash used in investing  activities for the first
quarter  of  2000  was  $57,000,  due to  property  and  equipment

                                       10

<PAGE>


expenditures primarily for computers, software and engineering equipment used in
research and  development and other  activities.  Net cash provided by investing
activities  for the first quarter of 1999 was $31,000,  as the Company  received
$52,000 in connection  with the sale of Nova,  offset  partially by property and
equipment  expenditures  primarily  for  computers,   software  and  engineering
equipment  used in  research  and  development  and other  activities.  Net cash
provided in financing  activities  during the first  quarter of 2000 was $22,000
primarily from the receipt of cash from the exercise of the stock options issued
under the Company's stock option plans.  Financing  activities  during the first
quarter of 1999 did not provide cash.

     The Company has incurred losses and negative cash flows from operations for
each of the two years in the period ended March 31, 2000 and is  dependent  upon
support from a substantial  shareholder and upon generating  sufficient revenues
from  existing  and soon to be released  products  in order to fund  operations.
During 1999, Management of the Company continued to take steps to further reduce
costs,  including  the  sale  of its  Nova  Systems  Division,  and  its  German
subsidiary,  both of which had  incurred  losses  in the two  years  immediately
preceding their sale. The Company is assessing its product lines to identify how
to  enhance  existing  or create  new  distribution  channels.  During the first
quarter of 2000, the Company  introduced three new products,  two of which began
shipping late in the quarter with the third  expected to begin  shipping  within
the next four  months.  The  Company  is  currently  developing  and  expects to
introduce two more products during 2000.

     As described in the notes to the  consolidated  financial  statements,  the
Company has  obtained a $1.0  million  asset  based line of credit from  Venture
Banking Group, a division of Cupertino  National Bank,  secured by substantially
all of the  Company's  assets.  Interest on any advances will be calculated at a
rate of 1.5% above prime.  Under the terms of the credit agreement,  the Company
is required  to  maintain  certain  financial  ratios and meet other  covenants,
including  those  related  to net worth,  profitability  and  indebtedness.  The
Company obtained a waiver of the  profitability  covenant for the quarter ending
March 31, 2000.  The maturity  date of the line of credit is August 25, 2001. As
of May 10,  2000,  an  aggregate  of $100,000 is  outstanding  under the line of
credit.

     The Company believes that its current cash,  borrowings from a shareholder,
together with its operating cash flows, will be sufficient to meet the Company's
requirements for working capital,  and capital  expenditures  through the end of
2000.

                                       11

<PAGE>


Item 3. Quantitative and Qualitative Disclosure about Market Risk

     The Company's market risk  disclosures  pursuant to Item 3 are not material
and are therefore not required.


                           PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

       (a) Exhibits

       Exhibit No.       Description of Document
       -----------       -----------------------
          4.03           First  Amendment  to Holder  Rights  Agreement  between
                         Venture  Bank and  Videonics  Inc.  dated  February 24,
                         2000.

         10.19           Amendment to Loan between Carl Berg and Videonics  Inc.
                         dated March 22, 2000.

         27.0            Financial  Data Schedule for the Period ended March 31,
                         2000.

(b) No reports on Form 8-K were filed during the quarter ended March 31, 2000.

                                       12

<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


     May 10, 2000                                  VIDEONICS, INC.
        Date                                         Registrant


                                                  By: /s/ Gary L. Williams
                                                      --------------------
                                                      Gary L. Williams
                                                      Vice President of Finance,
                                                      Chief Financial Officer
                                                      (Chief Accounting Officer
                                                       and Authorized Signer)

                                       13