Item 1.01 Entry
into a Material Definitive Agreement.
On September 24, 2007, Focus Enhancements Inc.
(the “Company”) entered into a transaction with certain investors pursuant to a
securities purchase agreement (“Purchase Agreement”) between the Company and
the investor signatories thereto that relate to the issuance and sale by the
Company of up to 3,863,637 shares of common stock of the Company, par value
$0.01, (“Common Stock”) at a purchase price of $0.88 per share, and warrants
(“Warrants,” and with the Common Stock, “Securities”) to purchase up to 965,910
shares of Common Stock at an initial exercise price of $1.05 per share. As of September 26, 2007, the Company
completed the sale of 3,863,635 shares of Common Stock and Warrants to purchase
965,910 shares of Common Stock.
The Securities were registered with the Securities
and Exchange Commission (the “Commission”) in a shelf registration statement on
Form S-3, Registration Statement No. 333-139224, which was declared effective
December 20, 2006. The terms of this
offering and the Common Stock and Warrants are described in the Company’s
Prospectus dated December 20, 2006 and supplemented by a Prospectus Supplement dated
September 24, 2007 filed with the Commission on September 26, 2007, pursuant to
Rule 424(b) under the Securities Act of 1933, as amended. The form of Purchase Agreement for the
offering is attached hereto as Exhibit 10.1 to this report and is incorporated
herein by reference. A copy of the form
of Warrant is attached hereto as Exhibit 4.1 to this report and is incorporated
herein by reference.
The Company recognized net proceeds from the sale of
the Common Stock under the Purchase Agreement, after deducting estimated
offering expenses, in the amount of $3,108,000.
First Montauk Securities Corp. acted as a placement
agent in the offering. As compensation
for its services, First Montauk Securities Corp. will receive a cash fee of
$272,000. Attached as an exhibit to this
report is a copy of the selling agent agreement entered into with First Montauk
Securities Corp. with respect to the services it provided as placement agent.
Copies of the (1) form of Purchase Agreement, (2)
form of Warrant and (3) the selling agent agreement, are attached as Exhibits
10.1, 4.1 and 10.2, respectively, to this Current Report on Form 8-K, and are
incorporated by reference herein.
A copy of the press release for the offering, publicly
released on September 27, 2007 is attached as Exhibit 99.1.
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