Focus Enhancements Enters Agreement to Purchase Wireless Audio IP

(Business News & Technology News, 3 Jul 2008)

Focus Enhancements Inc. has entered into an agreement to purchase certain intellectual property (IP) rights for a prototype wireless audio product chipset developed by AudioMojo Inc. and owned by Hallo Development Co. The digital wireless audio (DWA) technology provides highly sought-after features including 2ms latency, which reduces lip-syncing concerns, and scalability up to 16 channels.

"Blending superior DWA technology with our video expertise strengthens our UWB strategy and creates a unique capability for Focus Enhancements to deliver wireless media throughout the home," says Brett Moyer, President and CEO of Focus Enhancements. "DWA is an exciting, growing market in its own right. RH Associates projects the total available market for DWA to reach approximately $53 million by 2009 growing to approximately $136 million in 2011. Since we have developed significant long-standing relationships with large consumer electronics companies with our video conversion technology, we intend to leverage these for distribution. In addition to this impressive technology, the rapid time-to-revenue and relatively low cash requirements were important factors in our acquisition decision. With an additional engineering investment of approximately $1.5 million, we expect to sample DWA chips in the first quarter of 2009 and begin production volume mid-2009 in time for the holiday season. Our ultimate goal is to deliver high quality audio and video via UWB using a single radio, thereby lowering the system cost for the large consumer electronics manufacturers."

The new digital wireless audio capabilities include:
- high speed: provides 2ms latency to avoid noticeable lip-sync errors, which occur above 10ms;
- very scalable: enables up to 16 channels.
- high quality: delivers independent 24-bit, 48kHz audio to each channel.
- unique simplicity: offers SpeakerFinder, which identifies within inches where each speaker is relative to the rest of the room, and myZone, which identifies and adjusts each speaker to make the listener the center of the surround sound, regardless of the listener's location.

The asset purchase includes two patent applications originally filed by AudioMojo and the rights to intellectual property allowing Focus Enhancements to file four provisional patents. The closing of the purchase of the DWA intellectual property rights is subject to the satisfaction of certain closing conditions and is expected to be complete by July 18th. In connection with the purchase, Focus Enhancements will issue 1.8 million shares of its common stock and provide a decreasing revenue share of future sales of the DWA chipset over three years from the date of first commercial shipment.

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