CAMPBELL, CALIF.: Focus Enhancements said its second amended reorganization plan took affect yesterday, allowing the company to emerge from bankruptcy status. Focus, which makes audio/video products and designs semiconductors, took voluntary Chapter 11 last Sept. 16. The reorg involves $2.5 million of debtor in possession financing that will be converted to equity. Carl E. Berg and Ingalls & Snyder LLC, as agent for an investor group, will own 100 percent of Focus Enhancements outstanding stock.
Focus (OTC: FCSEQ) was delisted from the NASDAQ the day before it filed for bankruptcy. It subsequently traded over-the-counter for less than a penny a share. Under the reorg, all outstanding common and preferred stock, options and warrants dated before May 11 are cancelled. Left with fewer than 300 stockholders, Focus will seek immediate removal from Securities and Exchange reporting requirements, and go private.
The company shed about 45 people from its workforce upon filing for bankruptcy, according to Silicon Beat, leaving it with around 100 people. Six of the company’s seven board members exited after voting for Chapter 11, including Berg, a Bay area real estate investor who guaranteed a $6.5 million line of credit for the company, SB reported last March. At the time, Focus had 16 straight quarterly net losses and was working out a salary-swap in which executive officers took a 15 percent pay cut in exchange for fully vested stock. Only Brett Moyer, also president and CEO, remained after the board exodus. He continues to run the company. -- Deborah D. McAdams
