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 June 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 July 31,  2000,  there were  5,899,299  shares of the  Registrant's
Common Stock outstanding.


<PAGE>


<TABLE>
                                                    PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                                           VIDEONICS, INC.

                                           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (in thousands, except per share amounts)
                                                             (unaudited)


<CAPTION>
                                                                       Three Months Ended                     Six Months Ended
                                                                             June 30,                             June 30,
                                                                   --------------------------            --------------------------
                                                                     2000               1999               2000               1999
                                                                   -------            -------            -------            -------
<S>                                                                <C>                <C>                <C>                <C>
Net revenues & other income                                        $ 2,932            $ 3,394            $ 5,991            $ 7,059

Cost of revenues                                                     1,770              1,930              3,652              4,137
                                                                   -------            -------            -------            -------
         Gross profit                                                1,162              1,464              2,339              2,922
                                                                   -------            -------            -------            -------

Operating expenses:
   Research and development                                            515                725              1,076              1,623
   Selling and marketing                                               831              1,153              1,529              2,149
   General and administrative                                          280                392                497                766
                                                                   -------            -------            -------            -------
                                                                     1,626              2,270              3,102              4,538
                                                                   -------            -------            -------            -------
         Operating loss                                               (464)              (806)              (763)            (1,616)

Interest expense, net                                                  (32)               (15)               (53)               (28)
                                                                   -------            -------            -------            -------
         Loss before income taxes                                     (496)              (821)              (816)            (1,644)

Benefit from income taxes                                               --                 --                 --                 --
                                                                   -------            -------            -------            -------

         Net loss                                                  $  (496)           $  (821)           $  (816)           $(1,644)
                                                                   =======            =======            =======            =======

Net loss per common share - basic and diluted                      $ (0.08)           $ (0.14)           $ (0.14)           $ (0.28)
                                                                   =======            =======            =======            =======

Shares used in computing net loss per
  common share - basic and diluted                                   5,899              5,867              5,893              5,862
                                                                   =======            =======            =======            =======

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

                                                                 2

<PAGE>


<TABLE>
                                                           VIDEONICS, INC.

                                                CONDENSED CONSOLIDATED BALANCE SHEETS
                                                           (in thousands)


<CAPTION>
                                                                                                    June 30,           December  31,
                                            ASSETS                                                    2000                   1999
                                                                                                    --------               --------
                                                                                                  (unaudited)

<S>                                                                                                 <C>                    <C>
Current assets:
   Cash and cash equivalents                                                                        $    330               $    715
   Accounts receivable, net                                                                            1,018                    886
   Inventories                                                                                         3,787                  3,785
   Prepaids and other current assets                                                                      85                    145
                                                                                                    --------               --------
            Total current assets                                                                       5,220                  5,531

Property and equipment, net                                                                              372                    513
Other assets                                                                                              45                     45
                                                                                                    --------               --------

               Total assets                                                                         $  5,637               $  6,089
                                                                                                    ========               ========

                                         LIABILITIES

Current liabilities:

   Notes payable                                                                                    $    250                   --
   Accounts payable                                                                                    1,097               $    974
   Accrued expenses                                                                                      703                    734
                                                                                                    --------               --------
            Total current liabilities                                                                  2,050                  1,708
                                                                                                    --------               --------

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

            Total liabilities                                                                          3,085                  2,743
                                                                                                    --------               --------

   SHAREHOLDERS' EQUITY

Common stock, no par value:
   Authorized:  30,000 shares
   Issued and outstanding: 5,899 shares at
      June 30, 2000 and 5,874 shares at
      December 31, 1999                                                                               20,722                 20,700

Accumulated deficit                                                                                  (18,170)               (17,354)
                                                                                                    --------               --------
            Total shareholders' equity                                                                 2,552                  3,346
                                                                                                    --------               --------

               Total liabilities and shareholders' equity                                           $  5,637               $  6,089
                                                                                                    ========               ========

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

                                                                 3

<PAGE>


<TABLE>
                                                           VIDEONICS, INC.

                                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (in thousands)
                                                             (unaudited)

<CAPTION>
                                                                                                             Six Months Ended
                                                                                                                  June 30,
                                                                                                          -------------------------
                                                                                                           2000                1999
                                                                                                          -----               -----
<S>                                                                                                        <C>                 <C>
Cash flows from operating activities:

          Net cash used in operating activities                                                            (499)               (216)
                                                                                                          -----               -----

Cash flows from investing activities:

   Proceeds from disposition                                                                               --                    52
   Purchase of property and equipment                                                                      (159)                (50)
                                                                                                          -----               -----
          Net cash provided by (used in) investing activities                                              (159)                  2
                                                                                                          -----               -----

Cash flows from financing activities:

   Proceeds from short term borrowings                                                                      250                --
   Proceeds from issuance of loans payable to shareholder                                                  --                    35
   Proceeds from issuance of common stock                                                                    23                   5
                                                                                                          -----               -----
          Net cash provided by financing activities                                                         273                  40
                                                                                                          -----               -----

Decrease in cash and cash equivalents                                                                      (385)               (174)

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

Cash and cash equivalents at end of period                                                                $ 330               $ 663
                                                                                                          =====               =====

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

                                                                 4

<PAGE>


                                 VIDEONICS, INC.

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       The  condensed  financial  statements  at June 30, 2000 and for the six
         month  period then ended 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
         six month period ended June 30, 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):

                                                 June 30,     December 31,
                                                   2000           1999
                                                  ------         ------
                                               (unaudited)

         Raw materials                            $3,101         $3,179
         Work in process                             420            302
         Finished goods                              266            304
                                                  ------         ------
                                                  $3,787         $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 CONSOLIDATED 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 June 30, 2000,
         royalties of $360,000 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.

5.       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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


         The table below presents  information  about reported  segments for six
         months ending June 30, (in thousands):

                                               2000          1999
                                             -------        -------
         Video Production
           Sales                             $ 5,991        $ 6,968
           Operating loss                       (763)        (1,580)

         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 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 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.  The Company was in  violation of the  profitability  covenant at
         June 30,  2000 and was  required  to obtain a waiver.  As of August 10,
         2000, an aggregate of $250,000 is outstanding under the line of credit.

7.       Comprehensive Loss

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

                                       7

<PAGE>


                                 VIDEONICS, INC.

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


8.       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.  The Company has not yet determined the impact, if any, that
         adoption will have on the consolidated financial statements.

                                       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.

Results of Operations

         Net Revenues.  Net revenues  decreased  approximately 14% in the second
quarter of 2000 compared to the second  quarter of 1999 and 15% in the first six
months of 2000 compared to the first six 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  21% in the second
quarter of 2000 compared to the second  quarter of 1999 and 20% in the first six
months of 2000  compared  to the first six months of 1999.  Gross  profit,  as a
percentage of net revenues,  was approximately 40% in the second quarter of 2000
compared to  approximately  43% in the second quarter of 1999 and  approximately
39% in the first six months of 2000 compared to  approximately  41% in the first
six 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
29% and 33%,  respectively,  between  the  quarterly  and  six-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 28%
between the second  quarter of 1999 and the second quarter of 2000 and decreased
29% between  the first six months of 1999 and the first six 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
decreased 29% between the second  quarter of 1999 and the second quarter of 2000
and  decreased 35% between the first six months of 1999 and the first six months
of 2000.  The decrease is primarily  due to a decrease in  personnel,  partially
offset by an increase in legal expenses.

         Other  Income/Expense,  net. The Company  recorded  interest expense of
$32,000 in the second quarter of 2000 compared to interest expense of $15,000 in
the second quarter of 1999. The increase in expense is primarily due to interest
expense calculated on higher borrowings during the period.

         Benefit  from  Income  Taxes.  During  the first six 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.  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 Form 10-K for
the period ended  December 31, 1999  section  entitled  "Business - Research and
Development".

Liquidity and Capital Resources

         Net cash used by  operations  was  $499,000  in the first six months of
2000  compared to $216,000  for the same period last year.  The use of cash from
operating  activities  during  the first six months of 2000 is due to a net loss
before  depreciation  and an  increase  in  accounts  receivable,  offset  by an
increase in accounts payable.  The use of cash from operating  activities during
the first six  months of 1999 is due to a net loss  before  depreciation  and an
increase  in  accounts  receivable,   substantially  offset  by  a  decrease  in
inventories  and an  increase in accounts  payable.  Net cash used by  investing
activities  in the first six months of 2000 was  $159,000,  due to property  and
equipment  expenditures  primarily  for  computers,   software  and  engineering
equipment  used in  research  and  development  and other  activities.  Net cash
provided by investing

                                       10

<PAGE>


activities in the first six months of 1999 was $2,000,  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  by  financing  activities  during  the  first  six  months of 2000 was
$273,000,  as the  Company  borrowed  $250,000  from its bank line of credit and
received cash of $23,000 from the exercise of the stock options issued under the
Company's Stock Option Plans. Net cash provided by financing  activities  during
the first six  months  of 1999 was  $40,000,  primarily  due to an  increase  in
shareholder loans and the receipt of cash from the exercise of the stock options
issued under the Company's Stock Option Plans.

         The Company 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  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 those
products  began  shipping late in the first  quarter with the third  shipping in
July.  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
June 30, 2000. The maturity date of the line of credit is August 25, 2001. As of
August 10,  2000,  an  aggregate  of $250,000 is  outstanding  under the line of
credit.

         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.

                                       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
           -----------           -----------------------
             4.01A               Warrant to Purchase Stock

            27.1                 Financial Data Schedule

(b)        No reports on Form 8-K were filed  during the quarter  ended June 30,
           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.

      August 14, 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)

                                       13