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 September 30, 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)

       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 October 31, 2000,  there were 5,902,550  shares of the Registrant's
Common Stock outstanding.


<PAGE>



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
                                   VIDEONICS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share amounts)
                                     (unaudited)

<CAPTION>
                                         Three Months Ended       Nine Months Ended
                                            September 30,           September 30,
                                        --------------------    --------------------
                                            2000        1999        2000        1999
                                        --------    --------    --------    --------
<S>                                     <C>         <C>         <C>         <C>
Net revenues                            $  3,096    $  3,842    $  9,087    $ 10,901

Cost of revenues                           1,885       2,196       5,538       6,333
                                        --------    --------    --------    --------
         Gross profit                      1,211       1,646       3,549       4,568
                                        --------    --------    --------    --------
Operating expenses:
   Research and development                  543         629       1,619       2,252
   Selling and marketing                     747       1,017       2,275       3,166
   General and administrative                261         245         758       1,011
                                        --------    --------    --------    --------
                                           1,551       1,891       4,652       6,429
                                        --------    --------    --------    --------
         Operating loss                     (340)       (245)     (1,103)     (1,861)
                                        --------    --------    --------    --------

Interest expense, net                        (38)        (16)        (91)        (44)
                                        --------    --------    --------    --------
         Net loss                       $   (378)   $   (261)   $ (1,194)   $ (1,905)
                                        ========    ========    ========    ========

Net loss per common share - basic
and  diluted                            $  (0.06)   $  (0.04)   $  (0.20)   $  (0.32)
                                        ========    ========    ========    ========


Shares used in computing net loss per
common share - basic and diluted           5,901       5,869       5,896       5,865
                                        ========    ========    ========    ========
<FN>
                        The accompanying notes are an integral
                         part of these financial statements.
</FN>
</TABLE>

                                          2
<PAGE>

<TABLE>
                                    VIDEONICS, INC.
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (in thousands)
<CAPTION>
                                                         September 30,      December  31,
                           ASSETS                             2000              1999
                                                          -----------         --------
                                                          (unaudited)
<S>                                                         <C>               <C>
Current assets:
   Cash and cash equivalents                                $    474          $    715
   Accounts receivable, net                                      975               886
   Inventories                                                 3,506             3,785
   Prepaids and other current assets                             176               145
                                                            --------          --------
            Total current assets                               5,131             5,531

Property and equipment, net                                      299               513
Other assets                                                      42                45
                                                            --------          --------

               Total assets                                 $  5,472          $  6,089
                                                            ========          ========

                        LIABILITIES

Current liabilities:
   Accounts payable                                         $  1,177          $    974
   Accrued expenses                                              683               734
   Notes Payable                                                 400              --
                                                            --------          --------
            Total current liabilities                          2,260             1,708
                                                            --------          --------

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

               Total liabilities                               3,295             2,743
                                                            --------          --------

   SHAREHOLDERS' EQUITY

Common stock, no par value:
   Authorized:  30,000 shares
   Issued and outstanding: 5,903 shares at
      September 30, 2000 and 5,874 shares at
      December 31, 1999                                       20,725            20,700

Accumulated deficit                                          (18,548)          (17,354)
                                                            --------          --------
            Total shareholders' equity                         2,177             3,346
                                                            --------          --------
               Total liabilities and shareholders' equity   $  5,472          $  6,089
                                                            ========          ========

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


                                           3
<PAGE>

                                 VIDEONICS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

                                                            Nine Months Ended
                                                               September 30,
                                                            -----------------
                                                             2000        1999
                                                            -----       -----
Cash flows from operating activities:

          Net cash used in operating activities              (499)       (198)
                                                            -----       -----

Cash flows from investing activities:

   Proceeds from disposition of Nova Systems                   --          52
   Purchase of property and equipment                        (167)        (92)
                                                            -----       -----
          Net cash used in investing activities              (167)        (40)
                                                            -----       -----

Cash flows from financing activities:

   Proceeds from short term borrowings                        400          --
   Proceeds from issuance of loans payable to shareholder      --          35
   Proceeds from issuance of common stock                      25           5
                                                            -----       -----
          Net cash provided by financing activities           425          40
                                                            -----       -----

Decrease in cash and cash equivalents                        (241)       (198)

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

Cash and cash equivalents at end of period                  $ 474       $ 639
                                                            =====       =====

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

                                        4
<PAGE>

                                 VIDEONICS, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1.   The condensed  financial  statements at September 30, 2000 and for the nine
     month period then ended for Videonics  Inc. (the  "Company")  are unaudited
     (except for the balance sheet information as of December 31, 1999, which is
     derived from the Company's  audited  financial  statements) 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.  The results of  operations  for this nine month period
     ended September 30, 2000 are not necessarily  indicative of the results for
     the year ending December 31, 2000, or any future interim period.


2.   On August 30, 2000 the Company entered into an Agreement and Plan of Merger
     with Focus  Enhancements, Inc.,  Wilmington,  Massachusetts  and its wholly
     owned subsidiary PC Video Conversion (collectively, "Focus"), whereby Focus
     will acquire all of the  outstanding  stock of the Company (the  "Merger").
     The  agreement  is  subject  to,  among  other  things,   approval  by  the
     shareholders of the Company and Focus. Upon completion of the Merger,  each
     share of the  Company's  common stock would be exchanged  for .87 shares of
     Focus common stock.


3.   Inventories comprise (in thousands):

                                                Sept. 30,            Dec. 31,
                                                  2000                 1999
                                                ---------            --------
                                               (unaudited)

     Raw materials                               $ 2,651              $3,179
     Work in process                                 687                 302
     Finished goods                                  168                 304
                                                    ----               -----
                                                 $ 3,506              $3,785
                                                 =======              ======

4.   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 CONSOLIDATED FINANCIAL STATEMENTS

5.   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  September  30,  2000,  royalties  of  $387,000  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  subsidiary  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.

6.   Segment Information:

     In 1998,  Videonics  adopted  SFAS 131. At  December  31,  1998,  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  Systems  Division,  manufactured  and sold  signal
     conversion and  processing  equipment  primarily into  television and cable
     studios.  As  described  in Note 4, the  Company's  Nova  Systems  Division
     ("Signal Processing" segment) was sold on January 29, 1999.

                                       6
<PAGE>

                                 VIDEONICS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         The table below presents  information  about reported  segments for the
         nine months ending September 30, 2000 and 1999 (in thousands):

                                                     2000              1999
                                                    ------            ------
         Video Production

         Sales                                      $9,087           $10,810
         Operating loss                             (1,103)           (1,825)

         Signal Processing

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

         (1) Results  presented  are  through  January  29,  2000,  the date the
         Company completed its sale of Nova.

7.       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 line of
     credit,  the Company is required to maintain  certain  financial ratios and
     meet other covenants,  including those related to net worth,  profitability
     and  indebtedness.  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  fully-vested  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.  At September 30,
     2000 Videonics was in default respect to with a certain covenants under the
     line of credit  with  Venture  Banking  Group.  As of  November  13,  2000,
     Videonics and Pacific  Business  Funding,  an affiliate of Venture  Banking
     Group,  had signed an agreement to repay Venture  Banking Group and in turn
     loan  Videonics  $400,000  on a  fully  secured  basis.  Interest  will  be
     calculated  at a rate of 12%.  The  loan  will  be due and  payable  at the
     earlier of the completion of the proposed  merger with Focus  Enhancements,
     Inc.,  or February 5, 2001.  As of  November  13,  2000,  an  aggregate  of
     $400,000  is  outstanding  under the line of creidt  with  Venture  Banking
     Group.

8.       Comprehensive Loss

     There are no  differences  between  net loss for the three and nine  months
     ended September 30, 1999 and 2000 and the comprehensive  loss for the these
     periods.

                                       7
<PAGE>


                                 VIDEONICS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9.       Recent Accounting Pronouncement:

     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 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  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 in 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
     October 1, 2000,  however  earlier  adoption is permitted.  Management  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.

                                       8
<PAGE>

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 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.

Recent Events

       On August 30,  2000 the Company  entered  into an  Agreement  and Plan of
Merger with Focus Enhancements, Inc.,  Wilmington,  Massachusetts and its wholly
owned subsidiary PC Video Conversion (collectively, "Focus"), whereby Focus will
acquire  all  of the  outstanding  stock  of the  Company  (the  "Merger").  The
agreement is subject to, among other things, approval by the shareholders of the
Company and Focus.  Upon  completion of the Merger,  each share of the Company's
common stock would be exchanged for .87 shares of Focus common stock.

Results of Operations

       Net  Revenues.  Net  revenues  decreased  approximately  19% in the third
quarter of 2000  compared to the third quarter of 1999 and 17% in the first nine
months of 2000  compared  to the first  nine  months of 1999.  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  26% in the third
quarter of 2000  compared to the third quarter of 1999 and 22% in the first nine
months of 2000  compared to the first nine months of 1999.  Gross  profit,  as a
percentage of net revenues,  was  approximately 39% in the third quarter of 2000
compared to approximately 43% in the third quarter of 1999 and approximately 39%
in the first nine months of 2000 compared to approximately 42% in the first nine
months of 1999.  The decrease in gross profit as a percentage of revenues is due
primarily  to  lower  margins  on  some  of the  Company's  older  products  and
manufacturing costs spread over lower revenues.

       Research and Development. Research and development expenses decreased 14%
and 28%,  respectively,  between the quarterly and nine-month comparison periods
in fiscal years 1999 and 2000.  The  decrease is primarily  due to a decrease in
personnel.

       Selling and  Marketing.  Selling and  marketing  expenses  decreased  27%
between the third  quarter of 1999 and the third  quarter of 2000 and  decreased
28% between the first nine months of 1999 and the first nine months of 2000. The
decrease is  primarily  due to a decrease in personnel  and reduced  advertising
expenses.

                                       9

<PAGE>

       General and Administrative. General and administrative expenses increased
7% between the third quarter of 1999 and the third quarter of 2000 and decreased
25% between the first nine months of 1999 and the first nine months of 2000. The
increase between  quarterly  periods is primarily due to a legal expense related
to the merger.  The decrease  between  nine month  period is primarily  due to a
decrease in personnel,  a delay in the timing of the annual shareholders meeting
partially offset by an increase in legal expenses.

       Other  Income/Expense,  net.  The Company  recorded  interest  expense of
$38,000 in the third quarter of 2000 compared to interest  expense of $16,000 in
the third quarter of 1999.  The increase in expense is primarily due to interest
expense calculated on higher borrowings during the period.

       Income Taxes.  During the first nine months 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.

       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. The Company may also
require  additional  financing  which may not be  available  at all or only upon
terms that are not acceptable to the Company.  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".

                                       10

<PAGE>


Liquidity and Capital Resources

         Net cash used by  operations  was  $499,000  for the nine months  ended
September  30, 2000  compared to net cash used in operations of $198,000 for the
same period in 1999. The use of cash from operating  activities during the first
nine months of 2000 is primarily due to a net loss before  depreciation,  offset
partially by a decrease in inventory  and an increase in accounts  payable.  The
use of cash from  operating  activities  during the first nine months of 1999 is
primarily  due to a net  loss  before  depreciation,  an  increase  in  accounts
receivable,  offset  partially  by a decrease  in  inventory  and an increase in
accounts  payable.  Net cash used by  investing  activities  for the first  nine
months ended  September  30, 2000 was  $167,000  due to property  and  equipment
expenditures,  primarily for computers,  software and engineering equipment used
in research and  development  and other  activities.  Net cash used by investing
activities  for the first nine months ended  September 30, 1999 was $40,000,  as
the Company  received  $52,000 in  connection  with the sale of Nova,  offset by
property and  equipment  expenditures,  primarily  for  computers,  software and
engineering equipment used in research and development and other activities. Net
cash  provided  by  financing  activities  during  the nine  months  of 2000 was
$425,000,  as the  Company  borrowed $ 400,000  from its bank line of credit and
received  cash of $25,000  from the exercise of stock  options  issued under the
Company's Stock Option Plans. Net cash provided by financing  activities  during
the nine months of 1999 was $40,000,  primarily  due to the receipt of cash from
the exercise of the stock options issued under the Company's  Stock Option Plans
and an increase in shareholder loans.

         Videonics has incurred  losses and negative cash flows from  operations
for each of the two years in the  period  ended June 30,  2000 and is  dependent
upon support from a  substantial  shareholder,  a line of credit from a bank and
upon  generating  sufficient  revenues  from  existing  and soon to be  released
products in order to fund  operations.  During  1999,  management  took 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.  Videonics is assessing its product lines to
identify how to enhance existing or create new distribution channels. During the
first quarter of 2000,  Videonics  introduced  three new products.  Two of those
products  began  shipping  late in the  first  quarter  with the  third  product
shipping in July.  Although there can be no  assurances,  Videonics is currently
developing  and expects to introduce two more products  during the first half of
2001.

         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.  At
September 30, 2000  Videonics  was in default with respect to certain  covenants
under the line of credit with Venture  Banking  Group.  As of November 13, 2000,
Videonics and Pacific Business  Funding,  an affiliate of Venture Banking Group,
had  signed  an  agreement  to repay  Venture  Banking  Group  and in turn  loan
Videonics  $400,000 on a fully secured  basis.  Interest will be calculated at a
rate of 12%.  The loan will be due and payable at the earlier of the  completion
of the proposed merger with Focus Enhancements, Inc., or February 5, 2001. As of
November 13, 2000,  an  aggregate of $400,000 is  outstanding  under the line of
creidt with Venture Banking Group.

         The Company  believes  that its current  cash,  borrowings  from both a
shareholder and its bank line of credit, 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.  However,  if the  Company  does
require  additional  financing  there can be no assurances  that such additional
financing  will be  available  at all or on  terms  that are  acceptable  to the
Company.

                                       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

          27.1 Financial Data Schedule

     (b)  Reports on Form 8-K

          The  Company  filed a report on Form 8-K dated  August  30,  2000 with
          respect to the  announcement  of  its signing an Agreement and Plan of
          Merger with Focus Enhancements, Inc., and its wholly-owned subsidiary,
          PC Video Conversion.

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<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.


    November 13, 2000                     VIDEONICS, INC.
    -----------------                     ---------------
          Date                               Registrant


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




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<PAGE>

                                INDEX OF EXHIBITS

Exhibits:

  27.1      Financial Data Schedule




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