**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549 **

**AMENDMENT      NO. 1**

**On**

**FORM      10-K/A**

| ý    | ANNUAL                REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 For                the fiscal year ended December 31, 2005                          |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  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 No. 001-10013                                |
|-----------------------------------------------------------------------------|
|                                                                        |
| **VITALSTREAM                HOLDINGS, INC.**                               |
| (Exact                name of registrant as specified in charter)           |
|                                                                        |   |   |   |   |
| Nevada                                                                      |   |   |   | 87-0429944 |
| (State                or other jurisdictionof                incorporation) |   |   |   | (IRS                EmployerIdentification                No.) |
|                                                                        | One                Jenner, Suite 100Irvine,                California 92618(949)                743-2000 |   |
|                                                                        | (Address                of principal executive offices and telephone number) |   |

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**DOCUMENTS      INCORPORATED BY REFERENCE:**

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**EXPLANATORY      NOTE**

| **TABLE                OF CONTENTS**  |
|--------------------------------------------|
| **Page**                              |
| PART                III                    |
|                                       |   |   |
| 10.                                        | Directors                and Executive Officers of the Registrant | 1 |
|                                       |   |   |
| 11.                                        | Executive                Compensation | 5 |
|                                       |   |   |
| 12.                                        | Security                Ownership of Certain Beneficial Owners and Management And                Related Stockholder                Matters | 13 |
|                                       |   |   |
| 13.                                        | Certain                Relationships and Related Transactions | 16 |
|                                       |   |   |
| 14.                                        | Principal                Accountant Fees and Services | 16 |
|                                       |   |   |
| PART                IV                     |
|                                       |   |   |
| 15.                                        | Exhibits                and Financial Statement Schedules | 17 |

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**PART      III**

**ITEM      10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

**Directors      **

| **Name**                             |   | **Age****(1)** |   | **Positions**                                                  |   | **Director****Since**       |   | **Term                Expires at Annual****Meeting                in****(2)**** ** |
|--------------------------------------|--------|----------------|--------|----------------------------------------------------------------|--------|-----------------------------|--------|-----------------------------------------------------------------------------------------|
|                                 |   |           |   |                                                           |   |                        |   |                                                                                    |
| Jack                L. Waterman      |   | 47             |   | Director,                Chief Executive Officer               |   | June                2005    |   | 2007                                                                                    |
| Philip                N. Kaplan      |   | 39             |   | Director,                President and Chief Operating Officer |   | April                2002   |   | 2006                                                                                    |
| Melvin                A. Harris      |   | 63             |   | Director                                                       |   | January                2006 |   | 2008                                                                                    |
| Raymond                L. Ocampo Jr. |   | 53             |   | Director                                                       |   | April                2004   |   | 2007                                                                                    |
| Philip                Sanderson      |   | 38             |   | Director                                                       |   | June                2004    |   | 2007                                                                                    |
| Salvatore                Tirabassi   |   | 32             |   | Director                                                       |   | January                2003 |   | 2008                                                                                    |
| Leonard                Wanger        |   | 40             |   | Director                                                       |   | April                2002   |   | 2006                                                                                    |

*Jack      L Waterman *

----

*Philip      N. Kaplan *

*Raymond      L. Ocampo Jr.*
** **

*Philip      Sanderson has*

*Salvatore      Tirabassi*

*Leonard      Wanger*

----

*Melvin      A. Harris *

**Audit      Committee**

**Executive      Officers and Key Employees**

| **Name**                                                                                                                                            |   | **Age**(1)                             |   | **Position**                                                                                                                                                                                                     |   | **Officer                Since**                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|  Mark                Z. Belzowski Michael                F. Linos Arturo                Sida  Stephen                Smith |   |  47 46 51  38 |   |  Chief                Financial Officer Executive                Vice President of Sales & Marketing Chief                Legal Officer & SecretaryChief                Technical Officer |   |  May                2004 August                2003 April                2003  April                2002 |

*Mark      Z. Belzowski*

----

*Michael      F. Linos*

*Arturo      Sida*

*Stephen      Smith *

*Section      16(a) Beneficial Ownership Reporting Compliance*

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**Code      of Ethics**

**ITEM      11. EXECUTIVE COMPENSATION**

*Summary      Compensation Table*

|                                                                                                                                          |                     |                               |               |                           | Long                Term Compensation |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|------------------------------------|--------------------|--------------------------------|---------------------------------------|
|                                                                                                                                          |                     | Annual                Compensation | Awards             | Payouts                        |                                  |
| Name                andPrincipal                Position                                                                                      | Year                     | Salary($)                          | Bonus($)           | OtherAnnualCompen-sation(1)($) | RestrictedStockAward(s)($)            | SecuritiesUnderlyingOptions/SARs(#) | LTIPPayouts($) | All                OtherCompen-sation($) |
|                                                                                                                                          |                     |                               |               |                           |                                  |   |   |   |
| Jack                L. Waterman, Chairman,                CEO and Director                (2)                                                 | 12/31/0512/31/0412/31/03 | $189,786----                       | $130,000(6)----    | $10,500----                    | ------                                | 1,260,000---- | ------ | ------ |
|                                                                                                                                          |                     |                               |               |                           |                                  |   |   |   |
| Philip                N. Kaplan, President,                Director, Chief Operating                Officer                                   | 12/31/0512/31/0412/31/03 | $165,000151,969149,000             | $80,00069,983--    | $12,3879,9417,853              | ------                                | 52,50050,000-- | ------ | ------ |
|                                                                                                                                          |                     |                               |               |                           |                                  |   |   |   |
| Michael                Linos, Executive                Vice                President of                Sales and Marketing                (3) | 12/31/0512/31/0412/31/03 | $160,000136,77253,750              | $75,00060,000--    | $14,36312,0033,514             | ------                                | 53,75081,25062,500 | ------ | ------ |
|                                                                                                                                          |                     |                               |               |                           |                                  |   |   |   |
| Arturo                Sida, Chief                Legal Officer and                Secretary (4)                                               | 12/31/0512/31/0412/31/03 | $150,000136,77298,750              | $37,50027,0009,000 | $13,77911,2045,741             | ------                                | 18,75056,25081,250 | ------ | ------ |
|                                                                                                                                          |                     |                               |               |                           |                                  |   |   |   |
| Mark                Belzowski, Chief                Financial Officer and                Treasurer (5)                                        | 12/31/0512/31/0412/31/03 | $155,00093,646--                   | $50,00043,621--    | $14,3636,414--                 | ------                                | 12,500112,500-- | ------ | ------ |

----

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| (1) | These                amounts reflect the benefit to the named executive officer, on a                cost                basis, of amounts paid for health and dental                insurance. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                    Waterman commenced employment with the Company in June 2005. |
|-----|-------------------------------------------------------------------------------------|

| (3) | Mr.                Linos commenced employment with the Company in August                2003. |
|-----|-----------------------------------------------------------------------------------------------|

| (4) | Mr.                Sida commenced employment with the Company in April                2003. |
|-----|---------------------------------------------------------------------------------------------|

| (5) | Mr.                Belzowski commenced employment with the Company in May                2004. |
|-----|------------------------------------------------------------------------------------------------|

| (6) | The                    bonus amount reflects a bonus paid in the form of 24,074 shares                    of Common                    Stock of the Company at a price equal to the fair-market value                    of Common                    Stock. The shares were issued in January 2006 in respect of the                    executive’s service during the 2005 fiscal                    year. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Option      Grants in Last Fiscal Year*

|                            |   | **Individual                Grants**                                |      | **Potential                Realizable Value at Assumed Annual Rates of Stock Price Appreciation                for                Option Term**(1) |   |
|---------------------------------|--------|---------------------------------------------------------------------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   **Name**            |   |  **#                of Securities Underlying Options Granted** |      | **%                of Total Options Granted to Employees in Fiscal                Year**                                                           |   | **Exercise                or Base Price ($/Sh)** |   | **Expiration                Date** |   | **5%                ($)** |   | **10%                ($)** |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jack                Waterman    |   |                                                                | 1,187,500 |                                                                                                                                               |   | 59.64% |   | $ | 2.24 |   |   | 05/20/15 |   | $ | 1,672,860 |   | $ | 4,239,355 |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jack                Waterman    |   |                                                                | 72,500    |                                                                                                                                               |   | 3.64% |   |   | 5.40 |   |   | 12/16/10 |   |   | 108,164 |   |   | 239,015 |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Philip                N. Kaplan |   |                                                                | 52,500    |                                                                                                                                               |   | 2.64% |   |   | 5.40 |   |   | 12/16/10 |   |   | 78,326 |   |   | 173,080 |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael                F. Linos |   |                                                                | 52,500    |                                                                                                                                               |   | 2.70% |   |   | 5.40 |   |   | 12/16/10 |   |   | 80,191 |   |   | 177,201 |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Arturo                Sida      |   |                                                                | 18,750    |                                                                                                                                               |   | 0.94% |   |   | 5.40 |   |   | 12/16/10 |   |   | 27,974 |   |   | 61,814 |   |
|                            |   |                                                                |      |                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark                Belzowski   |   |                                                                | 12,500    |                                                                                                                                               |   | 0.63% |   |   | 5.40 |   |   | 12/16/10 |   |   | 18,649 |   |   | 41,209 |   |

*Aggregate      Option Exercises in Last Fiscal Year and Fiscal Year-End Option      Values*

----

|                                                                                                                                                                      |                                                             |                                  | **Number                of Securities****Underlying                Unexercised****Options/SARs                at****December                31, 2005**(1)              | **Value                of Unexercised****In-the-Money                Options/SARs at****December                31, 2005**(1)                                                     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Name**                                                                                                                                                                  | **Shares****Acquired****on                Exercise****(number)** | **Value                Realized ($)** | **Exercisable/Unexercisable**                                                                                                                                          | **Exercisable/Unexercisable**                                                                                                                                                     |
| Jack                L. Waterman Philip                N. Kaplan Michael                Linos Arturo                Sida Mark                Belzowski | 0 0 0 0 0                                    | 0 0 0 0 0         | 593,750/4,446,250 66,667                / 343,333 297,918/                492,082 358,334                / 266,666 200,000/                300,000 | $765,938/$5,506,563 $88,667/                $282,333 $426,022                / $483,728 $548,001                / $299,499 $230,000                / $321,500 |

*Director      Compensation*

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*Executive      Employment Agreements, Termination of Employment and Change of Control      Arrangements*

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**Compensation      Committee Report on Executive Compensation**

*Compensation      Policy Applicable to Officers and Key Executives *

*Executive      Compensation Policies*

*Base      Salary*

*Bonuses*

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*Equity-Based      Compensation*

*Compensation      of Chief Executive Officer*

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*Submitted      by the Compensation Committee*

*The      information contained in this Compensation Committee Report on Executive      Compensation is not deemed to be soliciting material or to be filed with the      Securities and Exchange Commission, except to the extent that the Company      specifically incorporates it by reference into a document filed under the      Securities Act of 1933 or the Securities Exchange Act of 1934. Such information      is not incorporated by reference into any filing under the Securities Act of      1933 or the Securities Exchange Act of 1934, except to the extent that the      Company specifically incorporates it by reference.*

**Compensation      Committee Interlocks And Insider Participation In Compensation**
**Decisions**

**Company      Performance Graph**

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|                                  |   | Cumulative                Total Return |   |
|---------------------------------------|--------|----------------------------------------|--------|
|                                  |   | 12/00                                  |   | 12/01 |   | 4/02 |   | 12/02 |   | 12/03 |   | 12/04 |   | 12/05 |   |
|                                  |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| VITALSTREAM                HLDGS. INC |   |                                   | 100.00 |   |   | 102.86 |   |   | 132.57 |   |   | 52.57 |   |   | 150.86 |   |   | 189.71 |   |   | 422.86 |   |
| RUSSELL                2000           |   |                                   | 100.00 |   |   | 102.49 |   |   | 107.54 |   |   | 81.49 |   |   | 120.00 |   |   | 142.00 |   |   | 148.46 |   |
| PEER                GROUP             |   |                                   | 100.00 |   |   | 29.98 |   |   | 21.53 |   |   | 9.75 |   |   | 52.69 |   |   | 60.52 |   |   | 78.65 |   |

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*The      information contained in this section is not deemed to be soliciting material      or      to be filed with the Securities and Exchange Commission, except to the extent      that the Company specifically incorporates it by reference into a document      filed      under the Securities Act of 1933 or the Securities Exchange Act of 1934. Such      information is not incorporated by reference into any filing under the      Securities Act of 1933 or the Securities Exchange Act of 1934, except to the      extent that the Company specifically incorporates it by      reference.*

**ITEM      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS **

**AND      MANAGEMENT AND RELATED STOCK HOLDER MATTERS**

**Securities      Authorized for Issuance Under Equity Compensation Plans**

**Equity      Compensation Plan Information**

| Plan                category                                                             | Number                of securities to be issued upon                exercise of outstanding options, warrants                and rights | Weighted-average                exercise price of                outstanding                options, warrants and rights | Number                of securities remaining available for future issuance under equity                compensation plans (excluding securities reflected in column                (a)) |
|------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                     |                                                                                                                                     |                                                                                                                     |                                                                                                                                                                                     |
|                                                                                     | (a)                                                                                                                                      | (b)                                                                                                                      | (c)                                                                                                                                                                                      |
| Equity                compensation plans approved by                security holders     | 2,758,016.75                (1)                                                                                                          | $2.64                                                                                                                    | None(2)                                                                                                                                                                                  |
|                                                                                     |                                                                                                                                     |                                                                                                                     |                                                                                                                                                                                     |
| Equity                compensation plans not approved                by security holders | None                                                                                                                                     | None                                                                                                                     | None                                                                                                                                                                                     |
|                                                                                     |                                                                                                                                     |                                                                                                                     |                                                                                                                                                                                     |

| Total | 2,758,016.75 | $2.64 | None |
|-------|--------------|-------|------|

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**Security      Ownership of Certain Beneficial Owners and Management **

|                                                                                               |  **Beneficial                Ownership of Common Stock**                                         |
|----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| **Name**                                                                                           |  **Ownership                Amount and Nature****of                Beneficial Ownership****(1)** | **Percentage                Ownership****(2)** |
|                                                                                               |                                                                                                  |   |
| **Executive                Officers and Directors**                                                |                                                                                                  |   |
| Jack                Waterman (3)                                                                   | 320,949(4)                                                                                            | 1.51% |
| Philip                N. Kaplan(3)                                                                 | 1,038,817(5)                                                                                          | 4.94% |
| Michael                F. Linos(3)                                                                 | 460,932(6)                                                                                            | 2.18% |
| Arturo                Sida(3)                                                                      | 156,114(7)                                                                                            | * |
| Mark                Z. Belzowski(3)                                                                | 132,944                (8)                                                                            | * |
| Leonard                Wanger(9)                                                                   | 100,863(9)                                                                                            | * |
| Salvatore                Tirabassi(10)                                                             | 20,832(10)                                                                                            | * |
| Melvin                A. Harris(11)                                                                | 3,906(11)                                                                                             | * |
| Raymond              Ocampo Jr. (12)                                                               | 48,958(12)                                                                                            | * |
| Philip                Sanderson(13)                                                                | 3,326,791(13)                                                                                         | 16.01% |
| All                Executive Officers and Directors as a Group (11 Persons)                        | 2,647,782(17)                                                                                         | 11.18% |
|                                                                                               |                                                                                                  |   |
| **5%                Shareholders****(Who                are not Executive Officers or Directors)** |                                                                                                  |   |
| Dolphin                Reporting Group(14)                                                         | 4,335,883(14)                                                                                         | 15.19% |
| Walden                Reporting Group(15)                                                          | 3,404,430(15)                                                                                         | 15.74% |
| Husic                Capital Management                                                            | 1,361,116(16)                                                                                         | 6.51% |

----

|  (1)  | Ownership                    numbers include shares of our Common Stock subject to options                    and warrants                    that are exercisable within 60 days of April 5, 2006. Shares                    of our Common                    Stock subject to options and warrants that are not exercisable                    within such                    60-day period are not included. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The                    percentages shown are based on the sum of (a) the 21,007,281                    shares of our                    Common Stock issued and outstanding on April 5, 2006, and (b)                    the shares                    of our Common Stock subject to all options and warrants held                    by the person                    with respect to whom the calculation is being made (but not any                    other                    person) that are exercisable within 60 days of April 5,                    2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Business                    Address is One Jenner, Suite 100, Irvine, CA                    92618. |
|-----|----------------------------------------------------------------------------------------------------|

| (4) | Represents                    24,074 shares of our Common Stock and an option to purchase 296,875                    shares                    of our Common Stock, all owned by Jack                    Waterman. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Represents                    991,803 shares of our Common Stock, an option to purchase 24,999                    shares of                    our Common Stock, a warrant to purchase 10,416 shares of our                    Common Stock,                    all owned by Philip N. Kaplan and 11,599 shares of our Common                    Stock owned                    by Stacy Kaplan, the wife of Philip N. Kaplan. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Represents                    320,830 shares of our Common Stock, an option to purchase 98,436                    shares of                    our Common Stock, and a warrant to purchase 41,666 shares of                    our Common                    Stock, all owned by Michael F.                    Linos. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Represents                    39,970 shares of our Common Stock, an option to purchase 110,936                    shares of                    our Common Stock, and a warrant to purchase 5,208 shares of our                    Common                    Stock, all owned by Arturo Sida. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Represents                    64,196 shares of our Common Stock and an option to purchase 68,748                    shares                    of our Common Stock, all owned by Mark                    Belzowski. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Represents                    30,931 shares of our Common Stock and an option to purchase 58,333                    shares                    of our Common Stock owned by Mr. Wanger, and 11,599 shares of                    our Common                    Stock held in a trust that is beneficially owned by Mr. Wanger.                    The                    address of Mr. Wanger is 2 North LaSalle, #400, Chicago, Il,                    60602. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Represents                    an option to purchase 20,832 shares of our Common Stock owned                    by Mr.                    Tirabassi. The business address of Mr. Tirabassi is c/o Dolphin                    Equity                    Partners, 750 Lexington Avenue, 16th                    Floor, New York, NY, 11201. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11) | Represents                    an option to purchase 3,906 shares of our Common Stock owned                    by Mr.                    Harris. The business address of Mr. Harris is c/o VitalStream                    Holdings,                    Inc., One Jenner, Suite 100, Irvine, CA                    92618. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Represents                    an option to purchase 48,958 shares of our Common Stock. The                    address of                    Mr. Ocampo is P.O. Box 1688, San Mateo, CA                    94401. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13) | Represents                    an option to purchase 20,832 shares of our Common Stock owned                    by Mr.                    Sanderson and 3,305,959 shares of Common Stock owned of record                    by Walden                    VC II, LP., of which Mr. Sanderson is a principal. The address                    of Mr.                    Sanderson is 750 Battery St. 7th                    Floor, San Francisco, CA 94110. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (14) | Information                    regarding the Dolphin Reporting Group is based upon the Schedule                    13D/A                    filed by such group on March 14, 2006. According to such report,                    the group                    is comprised of Dolphin Communications I, LLC, Dolphin Communications,                    LP,                    Dolphin Communications II, LP, Dolphin Communications Fund, LP,                    Dolphin                    Communications Fund II, LP, Dolphin Communications Parallel Fund,                    LP,                    Dolphin Communications Parallel Fund II Netherlands, LP, and                    Richard                    Brekka. The address for the Dolphin Reporting Group is 750 Lexington                    Avenue, New York, NY 10022. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15) | Information                    regarding the Walden Reporting Group is based upon the Schedule                    13D/A                    filed by such group on February 14, 2006. According to such report,                    the                    group is comprised of Walden VC II, LP, Walden VC, LLC and various                    individual managers of such fund. The address for the Walden                    Reporting                    Group is 750 Battery St. 7th                    Floor, San Francisco, CA 94110. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16) | Information                    regarding Husic Capital Management is based upon information                    provided to                    us by Husic Capital Management. Husic Capital Management is controlled                    by                    Frank J. Husic. The address for Husic Capital Management is 555                    California                    Street, Suite 1800, San Francisco, CA 94104. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17) | Total                    excludes 3,305,959 shares of Common Stock held by Walden VC II,                    LP. and                    included in Mr. Sanderson’s balance as noted above. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**ITEM      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

*Grant      of Options to Officers and Directors*

*February      2006 Private Offering *

** **

*Employment      Agreement With New CEO*

**ITEM      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

**Audit      Fees**

** **

**Audit      Related Fees**

**Tax      Fees**

**All      Other Fees**

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**Audit      Committee Pre-Approval Policies**

**PART      IV**

**ITEM      15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

**Financial      Statements And Schedules**

**Exhibits**

| **Exhibit                No.** |   | **Exhibit**                                                                                                                                             |   | **Incorporated                by Reference/ Filed Herewith**                                                                                                                                                         |
|--------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 2.1                            |   | Agreement                and Plan of Merger dated February 13, 2002 among the Company, VitalStream                and VitalStream Operating Corporation |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on April 30, 2002, File No. 001-10013                                          |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 2.2                            |   | Amended                and Restated Asset Purchase Agreement dated January 15,                2003                                                      |   | Incorporated                by reference to the Amendment No. 1 to Current Report on Form 8-K/A                filed                with the SEC on January 31, 2003, File No. 0-17020                               |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 3.1                            |   | Articles                of Incorporation, as amended to date                                                                                            |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on                October 14, 2003, File No. 0-17020                                                    |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 3.2                            |   | Bylaws                                                                                                                                                  |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2002, filed with the SEC on March 31, 2003, File No.                0-17020 |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.1                            |   | Form                of Certificate representing shares of VitalStream Holdings Common                Stock                                              |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2002, filed with the SEC on March 31, 2003, File No.                0-17020 |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.2                            |   | Form                of Warrant (PIPE Investor)                                                                                                          |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                       |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.3                            |   | Form                of Warrant (PIPE Placement Agent)                                                                                                   |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                       |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.4                            |   | Form                of Amendment to Common Stock Purchase Warrant (Additional                Warrant)                                                   |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                       |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.5                            |   | Form                of Amendment to Common Stock Purchase Warrant (Amended and Restated                Warrant)                                         |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                       |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.6                            |   | Form                of Warrant (Amended and Restated)                                                                                                   |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on                October 14, 2003, File No. 0-17020                                                    |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.7                            |   | Form                of Warrant (Additional Warrant)                                                                                                     |   | Form                of Warrant (Additional Warrant)                                                                                                                                                                  |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.8                            |   | Form                of Amended and Restated Convertible Promissory Note                                                                                 |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on                October 14, 2003, File No. 0-17020                                                    |
|                           |   |                                                                                                                                                    |   |                                                                                                                                                                                                                 |
| 4.9                            |   | Form                of Consulting Warrant (25,000 Shares)                                                                                               |   | Incorporated                by reference to the Amendment No. 2 to Annual Report on Form 10-K/A                filed                with the SEC on June 8, 2004, File No.                0-17020                    |

----

|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.10   |   | Form                of Consulting Warrant (50,000 Shares)                                                                                                                                                                             |   | Incorporated                by reference to the Amendment No. 2 to Annual Report on Form 10-K/A                filed                with the SEC on June 8, 2004, File No. 0-17020                                   |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 4.11   |   | Stock                Purchase Warrant dated April 23, 2002 issued to Brookstreet Securities                Corporation                                                                                                                |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on April 30, 2002                                                              |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 4.12   |   | Stock                Purchase Warrant dated April 23, 2002 issued to Gary T.                Madrid                                                                                                                                    |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on April 30, 2002                                                              |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 4.13   |   | Amendment                to Stock Purchase Warrant issued to Brookstreet Securities Corporation                dated October 23, 2003                                                                                                 |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013.                                         |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 4.14   |   | Amendment                to Stock Purchase Warrant issued to Gary Madrid dated October 23,                2003                                                                                                                        |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013.                                         |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 4.15   |   | Stock                Purchase Warrant dated April 23, 2002 issued to Joe Kowal                                                                                                                                                        |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on April 30, 2002                                                              |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.1   |   | Sublease                dated as of November 15, 1999, by and between Charter Holdings, Inc.                and                VitalStream Broadcasting Corporation (as successor to Epoch Networks,                Inc.), as amended |   | Incorporated                by reference to the Amendment No. 1 to Current Report on Form 8-K/A                filed                with the SEC on January 31, 2003, File No. 0-17020                               |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.2   |   | Industrial                Lease Between The Irvine Company and ReceiveTV, Inc., as                amended                                                                                                                             |   | Incorporated                by reference to the Amendment No. 1 to Current Report on Form 8-K/A                filed                with the SEC on May 16, 2002, File No. 0-17020                                   |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.3   |   | Third                Amendment to Industrial Lease Between The Irvine Company and Receive                TV,                Inc.                                                                                                      |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on November 14, 2003                                                        |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.4   |   | Master                Access Agreement dated as of January 1, 2003                                                                                                                                                                    |   | Incorporated                by reference to the Amendment No. 1 to Current Report on Form 8-K/A                filed                with the SEC on January 31, 2003, File No. 0-17020                               |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.5   |   | 2001                Stock Incentive Plan (Second Amended and Restated)                                                                                                                                                                |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No. 0-17020                 |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.6   |   | Employment                Agreement dated October 18, 2002 between the Company and Philip N.                Kaplan                                                                                                                    |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2002, filed with the SEC on March 31, 2003, File No.                0-17020 |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.7   |   | Employment                Agreement dated October 18, 2002 between the Company and Steve                Smith                                                                                                                         |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2002, filed with the SEC on March 31, 2003, File No.                0-17020 |
|   |   |                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                 |
| 10.8   |   | Employment                Agreement dated October 18, 2002 between the Company and David                Williams                                                                                                                      |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2002, filed with the SEC on March 31, 2003, File No.                0-17020 |

----

|   |   |                                                                                                                             |   |                                                                                                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.9   |   | Master                Access Agreement dated as of January 1, 2003                                                               |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on May 15, 2003                     |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.10  |   | Master                Equipment Lease dated March 6, 2003                                                                        |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on May 15, 2003                     |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.11  |   | Letter                agreement dated January 27, 2003                                                                           |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on May 15, 2003                     |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.12  |   | Factoring                and Security Agreement dated June 30, 2003 with Alliance                Bank                            |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on August 12, 2003                  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.13  |   | Letter                agreement dated May 13, 2003 with Netifice Communications                Inc.                              |   | Incorporated                by reference to the Company's Quarterly Report on Form 10-Q filed                with the                SEC on August 12, 2003                  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.14  |   | Securities                Exchange and Purchase Agreement dated as of September 30,                2003                          |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on October 14, 2003, File No. 0-17020  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.15  |   | Amended                and Restated Investor Rights Agreement                                                                    |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on October 14, 2003, File No. 0-17020  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.16  |   | Amended                and Restated Registration Agreement                                                                       |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on October 14, 2003, File No. 0-17020  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.17  |   | Amended                and Restated Security Agreement                                                                           |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on October 14, 2003, File No. 0-17020  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.18  |   | Amended                and Restated Guaranty                                                                                     |   | Incorporated                by reference to the Company's Current Report on Form 8-K filed with                the                SEC on October 14, 2003, File No. 0-17020  |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.19  |   | Bandwidth                Redundancy and Cooperative Purchasing Agreement dated December 23,                2003                  |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013. |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.20  |   | Amendment                No. 1 to Revolving Equipment Lease dated October 21, 2003                                               |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013. |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.21  |   | Second                Lease Line Agreement with Boston Financial & Equity Corporation dated                December 11, 2003 |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013. |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.22  |   | Purchase                Agreement dated June 14, 2004                                                                            |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020               |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.23  |   | Registration                Rights Agreement dated as of June 14, 2004                                                           |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020               |
|   |   |                                                                                                                             |   |                                                                                                                                                                         |
| 10.24  |   | Investor                Rights Agreement dated as of June 14, 2004                                                               |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020               |

----

|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.25  |   | Second                Amended and Restated Registration Rights Agreement dated as of June                14,                2004                                                        |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                      |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.26  |   | Conversion                Agreement dated as of June 14, 2004                                                                                                                           |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                      |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.27  |   | Amendment                to Amended and Restated Investor Rights Agreement dated as of June                14,                2004                                                      |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on June                30, 2004, File No. 0-17020                                                      |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.28  |   | Master                Services Agreement dated 2004 with Level 3 Communications,                LLC                                                                                     |   | Incorporated                by reference to the Current Report on Form 10-Q filed with the SEC                on                August 16, 2004, File No. 0-17020                                                   |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.29  |   | Confidential                Termination Agreement and General Release dated April 29, 2004 with                Kevin                Herzog                                              |   | Incorporated                by reference to the Current Report on Form 10-Q filed with the SEC                on                August 16, 2004, File No. 0-17020                                                   |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.30  |   | Loan                and Security Agreement dated October 7, 2004 with Comerica                Bank                                                                                      |   | Incorporated                by reference to the Current Report on Form 8-K filed with the SEC                on                October 13, 2004, File No. 0-17020                                                   |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.31  |   | Separation                Agreement dated November 19, 2004 with Paul Summers                                                                                                           |   | Incorporated                by reference to the Current Report on Form 10-Q filed with the SEC                on                November 24, 2004, File No. 0-17020                                                 |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.32  |   | Macromedia                Flash Communications Server License Agreement dated November 17,                2003 with                Macromedia, Inc. (including amendments 1 through 4)* |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No.                0-17020 |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.33  |   | 2001                Stock Incentive Plan (Second Amended and Restated as of February                28,                2005), as amended                                                |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No. 0-17020                |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.34  |   | Purchase                Agreement dated as of February 3, 2006                                                                                                                          |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No.                0-17020 |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 10.35  |   | Registration                Rights Agreement dated as of February 3, 2006                                                                                                               |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No.                0-17020 |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 21     |   | Subsidiaries                of the Company                                                                                                                                              |   | Incorporated                by reference to the Company's Annual Report on Form 10-K filed with                the                SEC on March 30, 2004, File No. 001-10013.                                        |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 23.1   |   | Consent                of Rose, Snyder & Jacobs                                                                                                                                     |   | Incorporated                by reference to the Annual Report on Form 10-K for the year ended                December                31, 2005, filed with the SEC on April 3, 2006, File No.                0-17020 |
|   |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                |
| 31.1   |   | Rule                13a-14(a)/15d-14(a) Certification of Principal Executive                Officer                                                                                     |   | Filed                herewith                                                                                                                                                                                       |

----

|   |   |                                                                                                |   |                          |
|--------|--------|-----------------------------------------------------------------------------------------------------|--------|-------------------------------|
| 31.2   |   | Rule                13a-14(a)/15d-14(a) Certification of Principal Financial                Officer |   | Filed                herewith |
|   |   |                                                                                                |   |                          |
| 32.1   |   | Section                1350 Certification of Principal Executive Officer                            |   | Filed                herewith |
|   |   |                                                                                                |   |                          |
| 32.2   |   | Section                1350 Certification of Principal Financial Officer                            |   | Filed                herewith |

----

**SIGNATURES**

|                          |   | **VitalStream                Holdings, Inc.**                            |
|-------------------------------|--------|--------------------------------------------------------------------------|
|                          |   |                                                                     |   |
| April                28, 2006 |   | By:                /s/                Jack L. Waterman                   |
|                          |   | Jack                L. Waterman, Chief Executive Officer and Chairman    |
|                          |   |                                                                     |
| April                28, 2006 |   | By:                /s/ Philip N. Kaplan                                  |
|                          |   | Philip                N. Kaplan, Chief Operating Officer and Director    |
|                          |   |                                                                     |
| April                28, 2006 |   | By:                /s/ Mark Z. Belzowski                                 |
|                          |   | Mark                Z. Belzowski, Chief Financial                Officer |