##### Table of Contents



United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission file number: 000-29020
 ViewCast.com, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    75-2528700(State or other jurisdiction
of incorporation or organization)
    
    (I.R.S. Employer Identification No.)3701 W. Plano Parkway, Suite 300, Plano, TX
    
    75075(Address of principal executive offices)
    
    (Zip Code)
 (972) 488-7200  (Registrants telephone number including area code)
 N/A  (Former name, former address and former fiscal year, if changed from last report)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ
  32,107,992 shares of common stock, par value $0.0001 per share, outstanding at July 31, 2008




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##### 



ViewCast.com, Inc. and Subsidiaries
Index to Form 10-Q
 PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets at December 31, 2007 and June 30, 2008
(Unaudited)
    
    
    2Condensed Consolidated Statements of Operations for the Three and Six Months
ended June 30, 2007 and 2008 (Unaudited)
    
    
    3Condensed Consolidated Statement of Stockholders Equity for the Six Months
ended June 30, 2008 (Unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the Six Months
ended June 30, 2007 and 2008 (Unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Result of
Operations.
    
    
    12Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    18Item 1A. Risk Factors
    
    
    18Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. Submission of Matters to a Vote of Security Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18SIGNATURES
    
    
    19Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) CEO CertificationExhibit 31.2 - Rule 13a-14(a)/15d-14(a) CFO CertificationExhibit 32.1 - Section 1350 CEO CertificationExhibit 32.2 - Section 1350 CFO Certification
   1




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##### Table of Contents



VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    June 30,2007
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,135,416
    
    
    $
    2,629,386Accounts receivable, less allowance for doubtful accounts of
$30,390 and
$57,304 at December 31, 2007 and June 30, 2008, respectively
    
    
    2,261,133
    
    
    
    1,988,755Inventories, net
    
    
    2,367,200
    
    
    
    1,920,557Prepaid expenses
    
    
    243,614
    
    
    
    245,460Total current assets
    
    
    6,007,363
    
    
    
    6,784,158Property and equipment, net
    
    
    721,413
    
    
    
    743,030Intangible assets, net
    
    
    323,367
    
    
    
    372,132Deposits
    
    
    45,566
    
    
    
    47,694Total assets
    
    $
    7,097,709
    
    
    $
    7,947,014LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    456,641
    
    
    $
    795,207Accrued expenses
    
    
    927,857
    
    
    
    984,911Current maturities of long-term debt
    
    
    21,345
    
    
    
    32,668Total current liabilities
    
    
    1,405,843
    
    
    
    1,812,786Long-term debt less current maturities
    
    
    28,157
    
    
    
    51,733Stockholder note payable
    
    
    5,141,361
    
    
    
    5,141,361Stockholder accrued interest
    
    
    192,994
    
    
    
    238,421Commitments and contingenciesStockholders equity:Preferred stock, $0.0001 par value, authorized 5,000,000 shares:Series B convertible  issued and outstanding shares -
800,000  liquidation value
of $15 per share as of December 31, 2007 and June 30, 2008
    
    
    80
    
    
    
    80Series C convertible  issued and outstanding shares -
200,000  liquidation value
of $31 per share as of December 31, 2007 and June 30, 2008
    
    
    20
    
    
    
    20Series E convertible  issued and outstanding shares -
80,000  liquidation value
of $102 per share as of December 31, 2007 and June 30, 2008
    
    
    8
    
    
    
    8Common stock, $.0001 par value, authorized 100,000,000 shares:Issued shares - 32,341,753 and 32,369,489 at December 31,
2007 and
June 30, 2008, respectively
    
    
    3,234
    
    
    
    3,237Additional paid-in capital
    
    
    69,990,960
    
    
    
    70,046,879Accumulated deficit
    
    
    (69,653,042
    )
    
    
    (69,335,605
    )Treasury stock, 261,497 shares at cost
    
    
    (11,906
    )
    
    
    (11,906
    )Total stockholders equity
    
    
    329,354
    
    
    
    702,713Total liabilities and stockholders equity
    
    $
    7,097,709
    
    
    $
    7,947,014
   2




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 For the three months ended
    
    
    For the six months endedJune 30,
    
    
    June 30,2007
    
    
    2008
    
    
    2007
    
    
    2008Net sales
    
    $
    3,926,394
    
    
    $
    4,205,085
    
    
    $
    7,408,856
    
    
    $
    8,321,551Cost of sales
    
    
    1,623,999
    
    
    
    1,279,645
    
    
    
    3,071,320
    
    
    
    2,617,254Gross profit
    
    
    2,302,395
    
    
    
    2,925,440
    
    
    
    4,337,536
    
    
    
    5,704,297Operating expenses:Selling, general and administrative
    
    
    1,666,275
    
    
    
    1,912,023
    
    
    
    3,113,852
    
    
    
    3,587,073Research and development
    
    
    518,743
    
    
    
    748,922
    
    
    
    976,501
    
    
    
    1,494,566Depreciation and amortization
    
    
    97,733
    
    
    
    114,782
    
    
    
    159,155
    
    
    
    227,035Total operating expenses
    
    
    2,282,751
    
    
    
    2,775,727
    
    
    
    4,249,508
    
    
    
    5,308,674Operating income
    
    
    19,644
    
    
    
    149,713
    
    
    
    88,028
    
    
    
    395,623Other (income) expense:Interest expense, net (including $73,480, $36,844, $146,988,
and $87,409 of expense to related parties, respectively)
    
    
    74,943
    
    
    
    40,421
    
    
    
    148,589
    
    
    
    93,082Interest (income)
    
    
    (14,161
    )
    
    
    (8,840
    )
    
    
    (24,063
    )
    
    
    (21,296
    )Other (income)
    
    
    
    
    
    
    
    
    
    
    (250,000
    )
    
    
    Total other (income) expense
    
    
    60,782
    
    
    
    31,581
    
    
    
    (125,474
    )
    
    
    71,786Income tax expense
    
    
    
    
    
    
    1,600
    
    
    
    
    
    
    
    6,400NET INCOME (LOSS)
    
    $
    (41,138
    )
    
    $
    116,532
    
    
    $
    213,502
    
    
    $
    317,437Preferred stock dividends
    
    
    (204,250
    )
    
    
    (205,000
    )
    
    
    (406,255
    )
    
    
    (410,029
    )Net loss applicable to common stockholders
    
    $
    (245,388
    )
    
    $
    (88,468
    )
    
    $
    (192,753
    )
    
    $
    (92,592
    )Net loss per shareBasic
    
    $
    (0.01
    )
    
    $
    (0.00
    )
    
    $
    (0.01
    )
    
    $
    (0.00
    )Diluted
    
    $
    (0.01
    )
    
    $
    (0.00
    )
    
    $
    (0.01
    )
    
    $
    (0.00
    )Weighted average number of common shares outstandingBasic
    
    
    32,048,553
    
    
    
    32,103,001
    
    
    
    31,349,864
    
    
    
    32,091,629Diluted
    
    
    32,048,553
    
    
    
    32,103,001
    
    
    
    31,349,864
    
    
    
    32,091,629
   3




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 FOR THE SIX MONTHS ENDED JUNE 30, 2008
 (UNAUDITED)
 Series B
    
    
    Series C
    
    
    Series EConvertible
    
    
    Convertible
    
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    TotalPreferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Treasury
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Shares
    
    
    Par Value
    
    
    Shares
    
    
    Par Value
    
    
    Shares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Stock
    
    
    EquityBalances, December 31, 2007
    
    
    800,000
    
    
    $
    80
    
    
    
    200,000
    
    
    $
    20
    
    
    
    80,000
    
    
    $
    8
    
    
    
    32,341,753
    
    
    $
    3,234
    
    
    $
    69,990,960
    
    
    $
    (69,653,042
    )
    
    $
    (11,906
    )
    
    $
    329,354Stock based compensation
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,039
    
    
    
    
    
    
    
    
    
    
    
    49,039Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,165
    
    
    
    2
    
    
    
    3,881
    
    
    
    
    
    
    
    
    
    
    
    3,883Employee stock issuance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,571
    
    
    
    1
    
    
    
    2,999
    
    
    
    
    
    
    
    
    
    
    
    3,000Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317,437
    
    
    
    
    
    
    
    317,437Balances, June 30, 2008
    
    
    800,000
    
    
    $
    80
    
    
    
    200,000
    
    
    $
    20
    
    
    
    80,000
    
    
    $
    8
    
    
    
    32,369,489
    
    
    $
    3,237
    
    
    $
    70,046,879
    
    
    $
    (69,335,605
    )
    
    $
    (11,906
    )
    
    $
    702,713
   4




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 For the six months endedJune 30,2007
    
    
    2008Operating activities:Net income
    
    $
    213,502
    
    
    $
    317,437Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Bad debt expense
    
    
    24,649
    
    
    
    26,914Depreciation of property and equipment
    
    
    137,521
    
    
    
    170,504Amortization of software development costs
    
    
    21,634
    
    
    
    56,531Stock based compensation expense
    
    
    6,706
    
    
    
    49,039Common stock issued to employee
    
    
    
    
    
    
    3,000Changes in operating assets and liabilitiesAccounts receivable
    
    
    321,427
    
    
    
    245,464Inventories
    
    
    (1,572,775
    )
    
    
    446,643Prepaid expenses
    
    
    (69,257
    )
    
    
    (1,846
    )Deposits
    
    
    (12,097
    )
    
    
    (2,128
    )Accounts payable
    
    
    297,337
    
    
    
    338,566Accrued expenses and stockholder accrued interest
    
    
    (2,924
    )
    
    
    102,481Net cash provided by (used in) operating activities
    
    
    (634,277
    )
    
    
    1,752,605Investing activities:Capitalized software development costs
    
    
    (74,241
    )
    
    
    (105,296
    )Purchase of property and equipment
    
    
    (488,912
    )
    
    
    (143,759
    )Net cash used in investing activities
    
    
    (563,153
    )
    
    
    (249,055
    )Financing activities:Proceeds from exercise of stock options
    
    
    9,820
    
    
    
    3,883Net proceeds from exercise of warrants
    
    
    936,434
    
    
    
    Repayments of long-term debt
    
    
    (3,619
    )
    
    
    (13,463
    )Net cash provided by (used in) financing activities
    
    
    942,635
    
    
    
    (9,580
    )Net increase (decrease) in cash and cash equivalents
    
    
    (254,795
    )
    
    
    1,493,970Cash and cash equivalents, beginning of period
    
    
    567,509
    
    
    
    1,135,416Cash and cash equivalents, end of period
    
    $
    312,714
    
    
    $
    2,629,386Supplemental cash flow information:Cash paid for interest
    
    $
    58,781
    
    
    $
    47,656Non-cash items:Acquisition of property and equipment under capital leases
    
    $
    43,229
    
    
    $
    48,362
   5




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ViewCast.com, Inc. and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements
 1. Basis of Presentation
   2. Accounts Receivable
   For the three months ended
    
    
    For the six months endedJune 30,
    
    
    June 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Beginning balance
    
    $
    41,128
    
    
    $
    44,325
    
    
    $
    30,756
    
    
    $
    30,390Bad debt expense
    
    
    14,277
    
    
    
    12,979
    
    
    
    24,649
    
    
    
    26,914Ending balance
    
    $
    55,405
    
    
    $
    57,304
    
    
    $
    55,405
    
    
    $
    57,304
 3. Inventories
  December 31,
    
    
    June 30,2007
    
    
    2008(Unaudited)Purchased materials
    
    $
    1,351,377
    
    
    $
    926,947Finished goods
    
    
    1,015,823
    
    
    
    993,610$
    2,367,200
    
    
    $
    1,920,557
  6




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##### Table of Contents



4. Accrued Expenses
  December 31,
    
    
    June 30,2007
    
    
    2008(Unaudited)Accrued compensation
    
    $
    174,030
    
    
    $
    288,845Accrued warranty
    
    
    133,940
    
    
    
    168,849Accrued inventory purchases
    
    
    55,713
    
    
    
    51,523Customer deposits
    
    
    22,435
    
    
    
    46,619Deferred rent
    
    
    100,555
    
    
    
    87,096Deferred revenue
    
    
    174,084
    
    
    
    168,248Accrued taxes and other
    
    
    267,100
    
    
    
    173,731$
    927,857
    
    
    $
    984,911
 5. Warranty Reserves
   For the three months ended
    
    
    For the six months endedJune 30,
    
    
    June 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Beginning balance
    
    $
    100,786
    
    
    $
    164,156
    
    
    $
    117,636
    
    
    $
    133,940Charged to expense
    
    
    46,660
    
    
    
    28,748
    
    
    
    85,243
    
    
    
    62,575Usage
    
    
    (57,292
    )
    
    
    (24,055
    )
    
    
    (112,725
    )
    
    
    (27,666
    )Ending balance
    
    $
    90,154
    
    
    $
    168,849
    
    
    $
    90,154
    
    
    $
    168,849
 6. Property and Equipment
  EstimatedUseful Life
    
    
    December 31,
    
    
    June 30,(Years)
    
    
    2007
    
    
    2008(Unaudited)Service equipment
    
    
    3
    
    
    $
    242,362
    
    
    $
    242,362Computer equipment
    
    
    3
    
    
    
    309,112
    
    
    
    362,453Software
    
    
    3
    
    
    
    182,110
    
    
    
    184,038Leasehold improvements
    
    
    1 to 6
    
    
    
    130,409
    
    
    
    161,644Office furniture and equipment
    
    
    5
    
    
    
    890,300
    
    
    
    995,9161,754,293
    
    
    
    1,946,413Less accumulated depreciation
and amortization
    
    
    
    
    
    
    (1,032,880
    )
    
    
    (1,203,383
    )$
    721,413
    
    
    $
    743,030
  7




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7. Stockholder Term Note
   December 31,
    
    
    June 30,2007
    
    
    2008Outstanding Principal (Primary Principal
Amount), with interest due at a rate per annum
equal to prime plus 1.0% (8.25% and 6.00% at
December 31, 2007 and June 30, 2008,
respectively), due December 31, 2009
    
    $
    1,250,000
    
    
    $
    1,250,000Outstanding Principal (Secondary Principal
Amount), with interest due at a rate per annum
equal to the Applicable Federal Rate (3.88% and
2.08% at December 31, 2007 and June 30, 2008,
respectively), due December 31, 2009
    
    
    3,891,361
    
    
    
    3,891,361Other long-term debt
    
    
    49,502
    
    
    
    84,401Total long-term debt
    
    
    5,190,863
    
    
    
    5,225,762Less current maturities
    
    
    (21,345
    )
    
    
    (32,668
    )Total long-term debt less current maturities
    
    $
    5,169,518
    
    
    $
    5,193,094
 8. Warrants
  WarrantsWeighted-Number
    
    
    Exercise
    
    
    Averageof Warrants
    
    
    Price
    
    
    Exercise PriceOutstanding and exercisable
at December 31, 2007
    
    
    2,500,000
    
    
    
    0.48
    
    
    $
    0.48Granted
    
    
    Exercised
    
    
    Cancelled
    
    
    Outstanding and exercisable
at June 30, 2008
    
    
    2,500,000
    
    
    
    0.48
    
    
    $
    0.48
   8




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##### Table of Contents



9. Net loss Per Share Data
   For the Three Months Ended June 30,
    
    
    For the Six Months Ended June 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Stock options
    
    
    2,426,225
    
    
    
    3,995,184
    
    
    
    2,462,350
    
    
    
    3,550,406Warrants
    
    
    2,825,485
    
    
    
    2,500,000
    
    
    
    3,465,817
    
    
    
    2,500,000Convertible preferred stock  Series B
    
    
    2,206,896
    
    
    
    2,206,896
    
    
    
    2,206,896
    
    
    
    2,206,896Convertible preferred stock  Series C
    
    
    3,333,333
    
    
    
    3,333,333
    
    
    
    3,333,333
    
    
    
    3,333,333Convertible preferred stock  Series E
    
    
    15,686,274
    
    
    
    15,686,274
    
    
    
    15,686,274
    
    
    
    15,686,27426,478,213
    
    
    
    27,721,687
    
    
    
    27,154,670
    
    
    
    27,276,909
 10. Stock-Based Compensation
      9




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##### Table of Contents



Stock OptionsWeighted-AverageNumber
    
    
    Price Per
    
    
    Exercise Priceof Shares
    
    
    Share
    
    
    Per ShareOutstanding at January 1, 2008
    
    
    2,660,850
    
    
    $
    0.20 - $7.14
    
    
    $
    1.99Granted
    
    
    1,377,500
    
    
    
    0.30 - 0.48
    
    
    
    0.38Exercised
    
    
    (19,165
    )
    
    
    0.20 - 0.22
    
    
    
    0.20Canceled/forfeited
    
    
    (20,500
    )
    
    
    0.22 - 3.56
    
    
    
    1.92Outstanding at June 30, 2008
    
    
    3,998,685
    
    
    $
    0.20 - $7.14
    
    
    $
    1.45
  Weighted-Average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Outstanding at
    
    
    Remaining
    
    
    Average
    
    
    Exercisable at
    
    
    AverageExercise
    
    June 30,
    
    
    Contractual
    
    
    Exercise
    
    
    June 30,
    
    
    ExercisePrices
    
    2008
    
    
    Life
    
    
    Price
    
    
    2008
    
    
    Price$0.20 - 1.00
    
    
    2,749,335
    
    
    
    6.4
    
    
    $
    0.39
    
    
    
    923,051
    
    
    $
    0.401.01 - 2.00
    
    
    541,350
    
    
    
    2.7
    
    
    
    1.12
    
    
    
    541,350
    
    
    
    1.122.01 - 3.00
    
    
    110,000
    
    
    
    1.6
    
    
    
    2.51
    
    
    
    110,000
    
    
    
    2.513.01 - 4.00
    
    
    57,500
    
    
    
    0.6
    
    
    
    3.49
    
    
    
    57,500
    
    
    
    3.494.01 - 5.00
    
    
    12,500
    
    
    
    1.3
    
    
    
    4.53
    
    
    
    12,500
    
    
    
    4.535.01 - 6.00
    
    
    116,000
    
    
    
    1.5
    
    
    
    5.50
    
    
    
    116,000
    
    
    
    5.506.01 - 7.00
    
    
    2,000
    
    
    
    0.8
    
    
    
    7.00
    
    
    
    2,000
    
    
    
    7.007.01 - 7.14
    
    
    410,000
    
    
    
    1.2
    
    
    
    7.10
    
    
    
    260,000
    
    
    
    7.103,998,685
    
    
    
    4.9
    
    
    $
    1.44
    
    
    
    2,022,401
    
    
    $
    1.98
 11. Income Taxes
    10




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##### Table of Contents



12. Related Party Transactions
  13. Accounts Receivable Loan Facility
  14. Preferred Stock Dividends
   11




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    Overview
 ® ®
   12




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##### Table of Contents



Critical Accounting Policies
  
    
    Revenue Recognition We apply provisions of Securities and Exchange Commission
Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements as
revised by SAB 104, Revenue Recognition, SOP 97-2, Software Revenue Recognition, as
amended by SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, with
Respect to Certain Transactions and EITF 00-21, Revenue Arrangements with Multiple
Deliverables to transactions involving sales of our hardware and software products.
Under these guidelines, we recognize revenue on transactions where persuasive evidence
of an arrangement exists, title has transferred, product payment is not contingent upon
performance of installation or service obligations, the price is fixed or determinable
and payment is reasonably assured. We accrue warranty costs and sales allowances for
promotional activities at time of shipment based on historical experience. In
addition, we defer revenue associated with maintenance and support contracts and
recognize revenue ratably over the contract term.
    
    Allowance for Doubtful Accounts We maintain allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make required
payments. If the financial condition of our customers or distribution partners were to
deteriorate, resulting in an impairment of their ability to make payments, additional
allowances may be required.
    
    Excess and Obsolete Inventories We write down our inventories for estimated
obsolescence and unmarketable inventory equal to the difference between the cost of the
inventory and the estimated market value based upon assumptions about future demand and
market conditions. If actual market conditions are less than those projected by
management, additional write-downs may be required.
    
    Deferred Taxes We record a valuation allowance to reduce our deferred tax assets
to an amount that we believe is more likely than not to be realized. In our opinion,
realization of our net operating loss carryforward is not reasonably assured, and a
valuation allowance has been provided against deferred tax assets in excess of deferred
tax liabilities in the accompanying consolidated financial statements. However, should
we in the future determine that realization of deferred tax assets in excess of
recorded amounts is likely, an adjustment to the deferred tax assets would increase
income in the period such determination was made.
  13




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##### Table of Contents



Results of Operations
 Three and Six Months Ended June 30, 2008 compared to
Three and Six Months Ended June 30, 2007.
 Net Sales .
 ViewCast Niagara® Streaming/Encoding System Sales. ®
 Osprey Product Sales .
 Other Revenues .
 Cost of Sales and Gross Profit .
   Selling, General and Administrative Expense .
  14




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##### Table of Contents



Research and Development Expense.
 Depreciation and Amortization Expense.
 Other (Income) Expense
 Liquidity and Capital Resources
       15




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##### Table of Contents



Off-Balance Sheet Arrangements
   16




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
 Item 4. Controls and Procedures
    17




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##### Table of Contents



PART II: OTHER INFORMATION
 
   
   
   
   
   
    
    18




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SIGNATURES
  ViewCast.com, Inc.(Registrant)Date: August 14, 2008
    BY:
    /s/ David T. StonerDavid T. StonerChief Executive Officer
Principal Executive Officer/s/ Laurie L. LathamLaurie L. LathamChief Financial Officer
Principal Financial and Accounting Officer  19




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EXHIBIT INDEX
 ExhibitPage No.
    
    Description of Exhibit31.1
    
    
    Rule 13a-14(a)/15d-14(a) CEO Certification31.2
    
    
    Rule 13a-14(a)/15d-14(a) CFO Certification32.1
    
    
    Section 1350 CEO Certification32.2
    
    
    Section 1350 CFO Certification
  20