UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





Form
10-K




x
            Annual
      Report pursuant to Section 13 or 15(d)
              of
      the Securities Exchange Act of 1934




For the
fiscal year ended December 31, 2009.




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:  0-29020




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





Securities
registered under Section 12(b) of the Exchange Act:  None


Securities
registered under Section 12(g) of the Exchange Act:





Common Stock, $.0001 par
    value(Title
      of class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes  o   No   x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes   o   No   x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes   x   No   o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such period that the registrant
was required to submit and post such
files).  Yes   o   No   o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
      accelerated filer o
              Accelerated
      filer oNon-accelerated
      filer o
              Smaller
      reporting company   x




Indicate
by check mark whether registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).  Yes o    No
x.





The
aggregate market value of the common stock held by non-affiliates of the
registrant as of June 30, 2009 was $7,277,238.


As of
March 15, 2010, there were 35,864,809 shares of the registrant’s common stock
(par value $0.0001) outstanding.




Documents
incorporated by reference: None.









TABLE
OF CONTENTS





Item
              No.
            
            
            Page
              No.Part
      I1.
            Business
            
            32.
            Properties
            
            113.
            Legal
      Proceedings
            
            114.
            Submission
      of Matters to a Vote of Security Holders
            
            11Part
      II5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
            
            126.
            Selected
      Financial Data
            
            127.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
            
            137A.
            Quantitative
      and Qualitative Disclosures About Market Risk
            
            198.
            Financial
      Statements and Supplementary Data
            
            209.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
            
            419A(T).
            Controls
      and Procedures
            
            419B.
            Other
      Information
            
            41Part
      III10.
            Directors,
      Executive Officers and Corporate Governance
            
            4211.
            Executive
      Compensation
            
            4212.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            
            4213.
            Certain
      Relationships and Related Transactions, and Director Independence
            
            4214.
            Principal
      Accountant Fees and Services
            
            4215.
            Exhibits
      and Financial Statement Schedules
            
            43









PART
I





SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





Some of
the statements in this Annual Report on Form 10-K included under “Business”,
“Management’s Discussion and Analysis of Financial Condition and Result of
Operation”, and elsewhere in the Report constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended.  Forward-looking statements include statements regarding
ViewCast’s expectations, beliefs, hopes, intentions or strategies regarding the
future.  These statements involve known and unknown risks,
uncertainties, and other factors that may cause our or our industry’s actual
results, levels of activity, performance, or achievements expressed or implied
by such forward-looking statements to differ from expected
results.  Such factors include, but are not limited to, product demand
and market acceptance risks, the impact of competitive products and pricing,
product development, commercialization and technological difficulties, capacity
and supply constraints or difficulties, general business and economic
conditions, the availability of sufficient working capital, the ability to
service our debt, the effect of our accounting polices and other risks detailed
in this Annual Report on Form 10-K and our other filings with the Securities and
Exchange Commission.





In some
cases, you can identify forward-looking statements by terminology such as “may”,
“will”, “expects”, “should”, “anticipates”, “believes”, “estimates”, “predicts”,
“plans”, “potential”, “intends” or “continue” or the negative of such terms or
other comparable terminology.





Although
we believe the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance,
or achievements.  We are under no duty to update any of the
forward-looking statements after the date of this report to conform such
statements to actual results.





References
in this Report to “ViewCast,” “the Company,” “we,” “us,” and “our” refer to
ViewCast.com, Inc. and its subsidiaries.





Item
1.  Business





Overview





ViewCast.com,
Inc., doing business as ViewCast Corporation (“ViewCast”), develops
industry-leading hardware and software for the capture, management,
transformation and delivery of digital media over IP and mobile
networks.  ViewCast’s solutions simplify the complex workflows
required for these tasks, allowing broadcasters, businesses, and governments to
reach and expand their use and distribution of their digital media easily and
effectively.  ViewCast’s Niagara® streaming appliances, Osprey® video
capture cards, and ViewCast Media Platform (VMpTM) software suite provide the
highly reliable technology required to deliver the multi-platform experiences
driving today’s digital media market. ViewCast markets and sells its products
and professional services worldwide directly to end-users or through indirect
channels including original equipment manufacturers (“OEMs”), value-added
resellers (“VARs”), resellers, distributors and computer system
integrators.ViewCast
is focused on growth by leveraging the digital media market expansion and our
product solutions to capitalize on sales opportunities.  We believe
that emphasis on revenue and market share growth will enable us to realize
long-term profitability and stockholder value.





On March
13, 2009, ViewCast completed the purchase of certain assets from Ancept Media
Server, LLC (the “Ancept Assets”) related to the development and licensing of
software products that provide the management of the life cycle phases of
digital media pursuant to the terms of the Asset Purchase Agreement dated March
5, 2009, as amended, by and between ViewCast and Ancept Media Server,
LLC. ViewCast’s wholly-owned subsidiary, ViewCast Online Solutions, Inc.,
was renamed Ancept Corporation and operates this business. The lead
software product,  rebranded as VMp Production and the core of VMp,
has been an established digital asset management (“DAM”) solution capable
of supporting the needs of large enterprises, while remaining flexible and
affordable to serve the needs of small to medium businesses.  Fortune 1000
companies, educators, small businesses and public sector organizations have
chosen Ancept to help meet their media production, management and distribution
needs. The combined company has an expanded global business presence and
offers a complete set of solutions for the transformation, management and
delivery of live and on-demand video content to broadband and mobile
networks.







ViewCast
was incorporated in Delaware in February 1994 as MultiMedia Access
Corporation.  We changed our name to ViewCast.com, Inc. on April 8,
1999.  ViewCast has four wholly-owned subsidiaries: VideoWare, Inc.,
Osprey Technologies, Inc., Ancept Corporation previously known as ViewCast
Online Solutions, Inc. and ViewCast Technology Services Corporation, all
Delaware corporations.  Our principal executive offices are located at
3701 W. Plano Parkway, Suite 300, Plano, Texas 75075.  Our Internet
address is www.viewcast.com.





Our
common stock trades on the Over-the-Counter Bulletin Board (“OTC BB”) under the
symbol VCST-OB.





Market
Background and Market Drivers





“The sum
of all forms of video (TV, video on demand, Internet, and P2P) will account for
over 91 percent of global consumer traffic by 2013.” (Cisco® Visual
Networking Index -2009)





ViewCast
has seen digital media move to the mainstream as a strategic business tool for
enterprises—including education and corporate enterprise, and consumer
segments—while advertising, media and entertainment look to capitalize on
increased viewership over a variety of devices.  Customers are looking
for solutions that will drive business value either directly or
indirectly.  From a technology standpoint, the quality continues to
improve due to increased available bandwidth and more efficient encoding
technologies.  More importantly, customers have learned how to
increase profits by using the Internet as alternative distribution medium for
their content.





ViewCast
believes its market opportunity is now expanded to approximately $1.4 billion
based on 2010 Frost & Sullivan reports regarding DAM and a portion of the
encoding market, along with management’s estimates. The DAM market alone will
reach $853.7 million in revenues in 2010, reflecting an anticipated compound
average growth rate of 26 percent (2007-2013) as the market continues to mature
(also according to 2010 Frost & Sullivan reports).  The rapid
expansion of these markets, especially toward high definition, more powerful and
reliable performance, and greater ease of use, has underscored the need for
structured, secure and scalable digital asset and media management solutions
delivered comprehensively, from one trusted provider. We believe that ViewCast
can capably fill that role.





Market
Drivers





We believe the following factors are
driving the market for our digital media equipment and management
systems:





§
            Transition
      to digitized Internet Protocol (IP) distribution platform for information,
      content and communication;





§
            Increase
      adoption of webcasting, streaming and video applications for business
      efficiency;





§
            Increase
      in adoption of high-definition content demand drives the need for advanced
      solutions;





§
            Proliferation
      of digital assets within media and entertainment, business, educational,
      and government entities;





§
            Evolution
      of digital asset management with web content management creates increased
      value for managing online presence;





§
            Increase
      in DAM technology within new markets such as advertising, publishing,
      telecommunications and life sciences as new standards are
      adopted;





§
            Increase
      in advertising spend (TV vs.
Web);







§
            The
      value proposition in terms of investment, efficiency, flexibility and
      speed continues to increase demand on the enterprise side;
    and





§
            Rising
      adoption of mobile video worldwide is expected to drive the demand for
      efficient video compression solutions and delivery
    solutions.





How
ViewCast Addresses the Market





ViewCast
believes it is well positioned to address the expanding digital media market for
the following reasons:




§
            ViewCast
      develops industry-leading solutions for the transformation,
      management and delivery of professional quality video over IP and
      mobile networks





§
            We
      simplify the
      complex workflows required for the Web-based streaming of news,
      sports, music and other video content to computers and mobile
      devices





§
            We
      empower
      broadcasters, businesses and governments to repurpose their content, reach
      new markets, and expand their
audiences





§
            We
      provide the highly reliable
      technology required to deliver the multi-platform
      experiences driving today’s digital media
  market





ViewCast
has an expanded global business presence with a complete portfolio of solutions
that encompass live and on-demand video encoding, digital asset management and
delivery solutions.





ViewCast
Advantage





We believe we provide the following
advantages:





§
            Proprietary
      designs and proven performance,




§
            Patent-pending
      technologies,




§
            Third-party
      integration capabilities,




§
            Established
      relationships with other industry
leaders,




§
            Broad
      portfolio of solutions:




§
            Capture
      Cards, Appliances, Software,




§
            Strong
      brand and product awareness:




§
            Osprey
      Cards, Niagara Encoders, ViewCast Media Platform
  software,




§
            Solutions
      for multiple markets, and multiple
applications,




§
            Global
      presence, and




§
            Reputation
      for reliable, advanced technology and
design:




§
            Controlled
      engineering & manufacturing
process.




Corporate
Growth and Value





ViewCast
has become widely regarded as a leading global provider of high-quality digital
media communication products.  As the global economy recovers and the
market for our digital media products continues to grow, we believe ViewCast’s
goals of driving revenue growth, enhancing stockholder value and providing a
path to long-term profitability will regain momentum in 2010.  We
intend to achieve our goals by leveraging the market’s expansion with our
current and future products internally developed or acquired to capitalize on
sales opportunities.  Specifically, our ability to achieve our goals
depends on the following:




§
            Rapidly Growing
      Market.  Media, enterprise, government, and network
      communication sectors are adopting and allocating funds for digital media
      technologies;









§
            Profitability and Increasing
      Revenue. ViewCast believes that a focus on revenue and market share
      growth, both organically and through acquisition, will enable us to
      realize long-term profitability and enhanced stockholder
      value;




§
            Strong Products and Brand
      Equity.  ViewCast is positioned for the market with well
      known solutions that appeal to a broad range of industries and to continue
      investment in research and development
projects;




§
            Two-Pronged Sales
      Focus.  Well established worldwide indirect channels and
      large account & OEM business
development;




§
            Maintain Efficient
      Operations.We
      have adjusted our expense levels and will continue to monitor expenses
      during 2010 while investing in growth areas of sales, marketing, and
      research and development; and




§
            Continue to Increase and Enhance Our
      Industry and Technology Relationships.We
      have established significant industry partnerships with leaders in the
      technology and video industry.  We intend to strengthen these
      partnerships and continue to establish new partnerships to enhance
      endorsements, referrals, technology, product development, channel
      distribution, and sales.  We seek companies who can add valuable
      services, technology or bundling opportunities to our product offerings
      with the potential of future co-development, merger or acquisition by
      ViewCast.




ViewCast
Products and Services





The
ViewCast solutions family includes:





§
            Osprey
      Video® line of capture cards,





§
            Niagara®
      line of video encoding systems and related SimulStream® and Niagara SCX®
      software,





§
            ViewCast
      Media Platform (VMp) DAM software suite including ViewCast Media
      Production,





§
            Professional
      services and support, and





§
            Other
      complementary products and technologies from leading
      providers.





ViewCast
solutions provide a bridge between digital assets and delivery
networks.  Our customers seek to have their digital assets, including
MS Office documents, PDF files and still image files, in addition to audio and
video media, processed in one or more of the following ways:





·
            Ingest/Encode




·
            Index




·
            Transform




·
            Manage




·
            Search/Access




·
            Edit




·
            Workflow




·
            Deliver
      (Live or on-demand) to users and devices on delivery networks, such as
      enterprise, web, IPTV, digital signage, and
  mobile





Osprey Video
Products.  Since the inception of Internet streaming media,
starting with Progressive Networks (now RealNetworks®) in 1997, ViewCast Osprey
Video has been a major player in pioneering efforts of the streaming media
industry.  Throughout the streaming media market's emergence and
high-rate growth, Osprey Video has maintained its position as an
industry-leading developer and manufacturer of digital media capture
technology.  Moreover, Osprey Video products have enabled many
companies to deliver on key applications like Internet TV, mobile streaming,
webcasting, and more recently, video signage.





§
            Designed
      for video
acquisition/capture/streaming




§
            Award-winning
      capture cards for streaming from the first card for Web streaming to
      professional-quality cards for Internet
TV:




§
            Analog /Digital Audio &
      Video







§
            Standard & High
      Definition




§
            PCI & PCI
      Express




§
            Composite, Component & SDI
      Video, Y/C, S-Video




§
            Balanced & Unbalanced
      Audio




Niagara Streaming Systems and
Software.The ViewCast Niagara family of streaming media
encoders have been designed from the ground up to provide reliable,
pre-configured, plug-and-play solutions enabling the user to quickly encode and
stream premium quality audio and video over the Internet or corporate
network.  The Niagara systems are built upon the well known ViewCast
Osprey Video streaming capture boards.  These systems include a mix of
Osprey analog and digital capture boards along with our remote encoder
management software (Niagara SCX®) and streaming productivity software
(SimulStream®) resulting in a powerful, reliable, and cost-effective streaming
media platform.





§
            Complete
      systems designed for live video
streaming:




§
            Acquire, transform, and
      deliver video content to IP and mobile
  networks




§
            Dedicated, embedded operating
      systems, optimized for video
encoding




§
            Features
      Niagara SCX® and SimulStream® software
  technology:




§
            Stream a single video source
      in multiple formats, bitrates and resolutions –
      simultaneously




§
            Configure & control
      encoding into multiple formats over the network through an easy-to-use Web
      interface allowing scalability and remote
  access





We
believe our Niagara products offer unique advantages to application developers,
integrators and OEMs including extensive Software Developments Kits
(“SDKs”).  These streaming appliances comply with the most popular
industry video standards, and we provide expert support and development staff to
enable custom development of required applications.





ViewCast Media Platform (VMp)
Software.Since the asset acquisition from Ancept in March
2009, ViewCast has expanded its software solutions into DAM and workflow
software solutions known as VMp.  ViewCast develops software solutions
to manage and automate media, from production to scheduling, editing, processing
and content distribution.  These solutions enable ViewCast’s customers
to save operating costs while scaling their media management applications and
automating complex workflows.





The
available modules – VMp Live, VMp Portal and VMp Production – include
comprehensive support for live video sources and events as well as archived or
on-demand content. The VMp modules, as well as third-party applications, can
access this functionality through a robust Web services application programming
interface (API).





§
            Comprehensive
      File Management




§
            Unlike other digital
      management solutions -- the VMp software manages dozens of audio and video
      formats, hundreds of image formats, Microsoft® Office docs and Adobe® PDF
      files.




§
            Full-featured solution
      supports the needs of large enterprises, while remaining flexible and
      affordable to serve the needs of small to medium
      businesses.




§
            Complete
      Life Cycle Management




§
            From ingest to delivery – the
      VMp software enables and automates content production; manages
      distribution and publishing; controls access and usage of content;
      significantly reduce costs.




§
            Includes live event
      management, which allows scheduling, recording and delivery of live video
      from encoder and video sources on the
  network.




VMp
Production is the core module and has been an established DAM solution
capable of supporting the needs of large enterprises, while remaining flexible
and affordable to serve the needs of small to medium businesses.  With
the VMp Live and VMp Portal modules and additional new features available in
2010, ViewCast’s current and future customers will continue to benefit from
their investment in the ViewCast Media Platform.  By adding ViewCast’s
industry-leading Osprey and Niagara IP video encoding solutions, we have created
a wide-ranging framework available for building audiences, organizing workflows
and creating new revenue streams in today’s IP-centric digital media
marketplace.  We believe our digital media management suite of
software will be an increasingly significant factor in our 2010 sales growth and
beyond.











Marketing
and Sales




ViewCast
serves a variety of markets including:




§
            Broadcasters
      and Narrowcasters,




§
            Federal,
      State, and Local Government,




§
            Small,
      Medium, and Large Enterprises,




§
            Mobile
      and Wireline Carriers,




§
            Education
      and Training,




§
            Retail
      and Consumer Package Goods,




§
            Content
      Delivery Networks,




§
            Digital
      Signage Integrators,




§
            Other
      industry verticals such as advertising, medical and
    insurance.




ViewCast
brings market synergies and customer advantages by providing comprehensive,
robust and proven digital media solutions built on leading-edge
technologies.  ViewCast has expanded its scope and capabilities while
broadening its market and bringing a comprehensive, integrated solution to our
customer base, ss highlighted below,





§
            Opsrey
      and Niagara – best-in-class live encoding solutions
  for:




§
            Industry
      leading brands, proven solutions, Microsoft & Adobe partners and
      significant customers





§
            ViewCast
      Media Platform (VMp) – best-in-class media management solutions
      for:




§
            Strong
      industry brand, robust and proven solutions, IBM partner and significant
      customers





§
            VMp
      customers have access to a high-quality content ingest solution using
      Niagara encoders:




§
            Integrated
      control via the VMp software
modules





Our
solutions are globally marketed to media and entertainment, Internet, corporate,
financial, educational, security, healthcare, governmental and network
enterprises.  We also market our products and services directly or via
third-party distribution channels including, but not limited to, OEMs, VARs,
distributors, and system integrators.  These relationships are
non-exclusive and typically require that these resellers participate in the
marketing, installation and technical support of our products.





Our
product revenue has been well diversified among various end-users who purchase
from our direct and indirect channels.  During 2009, two distributors
generated more than 10% of our sales, Jeff Burgess and Associates, Inc. (12.7%)
and Graphics Distribution, Inc. (14.0%) due to general increased sales volume
and the movement of lower volume reseller sales to our
distributors.  In addition, one of our OEM customers, Cisco Systems,
Inc. generated 12.1% of our 2009 sales.  We plan to build upon our
established customer base by expanding our distribution and sales force and
expanding our product market awareness and reach.





Our sales
and marketing program utilizes direct business development and indirect
reseller, OEM and VAR channels that enhances our ability to cover domestic and
international geographical territories and market segments in an efficient and
cost-effective manner.  Under the terms of the indirect channel
program, an authorized reseller of ViewCast products must meet certain
qualifications regarding its business, personnel, product and market knowledge,
and support and service capabilities.  Through this authorized
reseller program, we support and enhance our channels of distribution to
encourage placement of ViewCast video products into the
marketplace.








Production
and Supply





We build
our Osprey video products using contract manufacturers in the United States and
Asia.  Our operations personnel in the Carrollton, Texas area are
responsible for parts planning, procurement, Niagara system assembly, software
loading, final testing and inspection to quality standards.  We plan
for most high-volume production to be handled through large OEMs or contract
manufacturers.





We have
been and will continue to be dependent on third parties for the supply and
manufacturing of our subassemblies, components and electronic parts, including
standard and custom-designed components.  We generally do not maintain
supply agreements with such third parties but instead purchase components and
electronic parts pursuant to purchase orders in the ordinary course of
business.  We are dependent on the ability of our third-party
manufacturers and suppliers to meet our design, performance and quality
specifications.





Installation,
Service and Maintenance





Most of
our Osprey video card products and Niagara system products are customer
installable.  For those customers who need assistance with Niagara
products, we utilize our channels to install and provide
service.  Further, we maintain an in-house technical support group to
assist our channels and customers as required which has been expanded in March
2009 with the addition of a professional services group.  The VMp
software solution is typically installed and customized with assistance from the
ViewCast professional services group or authorized third party.





We offer
limited warranties covering workmanship and materials, during which period our
resellers or ViewCast will replace parts or make repairs.  We maintain
an in-house staff of engineering personnel and offer telephone support to assist
resellers and end-users during normal business hours.  In addition, we
enter into annual contracts with end-users to provide software maintenance and
support on our products.





Research
and Development





We
continue to focus our research and development activities on digital media
applications, process management and new features for expanded market
opportunities.  We will continue to make investments in core video
technology and processing techniques, focusing on how to best apply the latest
advancements in the industry into commercially viable products.  In
some cases, strategic partnerships will be utilized to enhance our research and
development, and potentially reduce costs.  During the 2008 and 2009
fiscal years we expended approximately $2.9 million and $3.0 million,
respectively, in research and development activities; plus capitalized software
development costs of $0.2 million and $0.5 million, respectively.  No
significant portion of such expenses was borne directly by our
customers.





New
products or feature enhancements are scheduled for launch in 2010 in the Osprey,
Niagara and VMp product families that will provide new capabilities and features
for digital media applications.  We believe these products and
services will be competitive and feature unique capabilities.  We will
maintain integration efforts with third party application software and hardware
for our products and services.





Competition





The
market for digital media software, systems and services is highly competitive
and characterized by the frequent introduction of new products and features
based upon innovative technologies.  We compete with numerous
well-established manufacturers and suppliers of video streaming technologies,
videoconferencing, networking, telecommunications, DAM and multimedia products,
certain of which dominate the existing network or video communications market
for such products.  In addition, we are aware of others that are
developing, and in some cases have introduced, new products and services for
digital media communications and management.





We are
not aware of any direct competitors that compete in all of our digital media
product families and applications.  However, among our direct
competitors competing with one or more of our products or applications are:
VBrick and Digital Rapids.  Electronics manufacturers may be sales
channels for our products but also actively compete for business in this
market.







Patents,
Copyrights, Trademarks and Proprietary Information




We hold a
U.S. patent covering certain aspects of compressed video and have two patents
pending covering certain aspects of a confidence monitor and system and a media
encoder system.  Although we do not believe these patents or any other
patent is essential to our business operations, we may apply for additional
patents relating to other aspects of our products.  We also rely on
copyright laws to protect our software applications, which we consider
proprietary.





We
believe that product recognition is an important competitive factor and,
accordingly, we promote the ViewCast®, Osprey®, Niagara®, SimulStream®, Niagara
GoStream®, Niagara SCX®, VMpTM and AnceptTM names, among others, in connection
with our marketing activities, and have applied for or received trademark or
service mark registration for such names.  Our use of these marks and
our trade names may be subject to challenge by others, which, if successful,
could have a material adverse effect on our operations.





We also
rely on confidentiality agreements with our directors, employees, consultants
and manufacturers and employ various methods to protect the source codes,
concepts, ideas, proprietary know-how and documentation of our proprietary
technology.  However, such methods may not afford us complete
protection, and there can be no assurance that others will not independently
develop similar know-how or obtain access to our know-how or software codes,
concepts, ideas and documentation.  Furthermore, although we have and
expect to continue to have confidentiality agreements with our directors,
employees, consultants, manufacturers, and appropriate vendors, there can be no
assurance that such arrangements will adequately protect our trade
secrets.





We
purchase certain components that are incorporated into our products from
third-party suppliers and rely on their assurances that such components do not
infringe on the patents of others.  A successful claim against any
components used in our products could affect our ability to manufacture, supply
and support our products.  We use commercially reasonable efforts to
ensure third-party supplied components are non-infringing, but there can be no
assurances against future claims.





Government
Regulation





We are
subject to Federal Communications Commission regulations relating to
electromagnetic radiation from our products, which impose compliance burdens on
us.  In the event we redesign or otherwise modify our products or
complete the development of new products, we will be required to comply with
Federal Communications Commission regulations with respect to such
products.  Our foreign markets require us to comply with additional
regulatory requirements.  Compliance with environment laws, both
domestic and foreign, may also precipitate changes in materials or processes
related to our products and packing materials and may cause us to be subject to
additional requirements for testing, certifications or disposal.





Employees





As of
March 15, 2010, we had seventy-three (73) employees, three (3) of whom are in
executive positions, twenty (20) of whom are engaged in engineering, research
and development, nineteen (19) of whom are engaged in marketing and sales
activities, fourteen (14) of whom are engaged in operations, ten (10) of whom
are providing support and professional services and seven (7) of whom are in
finance and administration.  None of our employees are represented by
a labor union.  We consider our employee relations to be
satisfactory.





Item
1A. Risk Factors





Not
required.





Item
1B. Unresolved Staff Comments





None.








Item
2.  Properties





Our
principal executive offices are located in approximately 18,676 square feet of
leased space in Plano, Texas.  We use this space for administration,
marketing, research and development and some of our sales
activities.  The primary lease term expires in April 2011 and provides
for a base annual rent expense of $204,547.  In 2010 ViewCast entered
into an amendment to the lease wherein, effective May 1, 2011, the term of lease
shall be extended with the termination date being July 31, 2021 and the base
annual rent expense increases to $244,003.
Our manufacturing and distribution operations are located in approximately
16,575 square feet of leased space in Carrollton, Texas.  The lease
expires in February 2012 and provides for a base annual rent expense of
$71,257.





Our
Ancept subsidiary will continue to operate its engineering, support and services
operations at its current location in Bloomington, Minnesota and Grand Forks,
North Dakota and other sites.  Our finance, administration, sales and
marketing functions are based at ViewCast headquarters in Plano,
Texas





We
believe that our facilities are adequate for our current and reasonable
foreseeable future needs and our current facilities can accommodate expansion,
as required.





Item
3.  Legal Proceedings





There are
no material legal proceedings pending to which we are a party, or of which any
of our property is the subject, other than ordinary, routine litigation
incidental to the business.





Item
4.  Submission of Matters to a Vote of Security Holders





ViewCast
held its annual meeting on October 1, 2009.  The proposals submitted
to shareholders and the tabulations of votes for each proposal were as
follows:





1.  Election
of directors for one-year terms.





Nominees
            
            Number of Votes For
            
            
            Number of Votes Against or
      Withheld
            
            Number of Votes Abstaining
            
            Broker
              Non-VotesGeorge
      C. Platt
            
            
            40,794,760
            
            
            
            1,144,332
            
            
            
            
            4,473,798David
      T. Stoner
            
            
            40,794,960
            
            
            
            1,144,132
            
            
            
            
            4,473,798Joseph
      Autem
            
            
            40,822,246
            
            
            
            1,116,846
            
            
            
            
            4,473,798Sherel
      Horsley
            
            
            40,822,346
            
            
            
            1,116,746
            
            
            
            
            4,473,798David
      W. Brandenburg
            
            
            40,822,246
            
            
            
            1,116,846
            
            
            
            
            4,473,798John
      Slocum, Jr.
            
            
            40,822,246
            
            
            
            1,116,846
            
            
            
            
            4,473,798





2. Approval
of an amendment to ViewCast’s 2005 Incentive Stock Plan increasing the number of
shares of common stock available for award from 3,000,000 to
6,000,000.





Number of Votes For
            
            
            Number of Votes Against
            
            
            Number of Votes Abstaining
            
            
            Broker
              Non-Votes25,015,197
            
            
            
            2,412,666
            
            
            
            2,479
            
            
            
            18,982,548





3. Ratification
of BKD, LLP as ViewCast’s independent registered public accounting firm for the
fiscal year 2009.





Number of Votes For
            
            
            Number of Votes Against
            
            
            Number of Votes Abstaining
            
            
            Broker Non-Votes41,031,706
            
            
            
            895,183
            
            
            
            12,203
            
            
            
            4,473,798







PART
II





Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities





Common
Stock Price Range





As of
March 15, 2010, there were 35,864,809 shares of our common stock were
outstanding.  The following table sets forth, for the periods
indicated, the high and low sales prices for the common stock on the
OTC-BB.  Our common stock is traded on the OTC-BB under the symbol
“VCST.OB”.  These over-the-counter market quotations reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.  The trading market in our securities
may at times be relatively illiquid due to low trading volume.





Common
      StockFiscal
      2008
            
            High
            
            
            Low1st
      Quarter
            
            $
            0.42
            
            
            $
            0.262nd
      Quarter
            
            $
            0.44
            
            
            $
            0.263rd
      Quarter
            
            $
            0.45
            
            
            $
            0.254th
      Quarter
            
            $
            0.42
            
            
            $
            0.27Common
      StockFiscal
      2009
            
            High
            
            
            Low1st
      Quarter
            
            $
            0.41
            
            
            $
            0.302nd
      Quarter
            
            $
            0.40
            
            
            $
            0.283rd
      Quarter
            
            $
            0.34
            
            
            $
            0.154th
      Quarter
            
            $
            0.26
            
            
            $
            0.15




On March
15, 2010, the last reported sales price for our common stock as reported on the
OTC-BB was $0.15.  As of March 15, 2010, there were approximately 298
holders of record of the common stock.





Dividend
Policy





We have
never paid cash dividends on our common stock.  The Board of Directors
does not anticipate declaring cash dividends in the foreseeable future as it
intends to retain future earnings to finance the expansion of our business and
for general corporate purposes.  The payment of future cash dividends
will depend on such factors as our earnings levels, anticipated capital
requirements, operating and financial condition, consent from our lenders and
other factors deemed relevant by our Board of Directors.





Recent
Sales of Unregistered Securities; Use of Proceeds from Registered
Securities





None.





Purchases
of Equity Securities by the Issuer and the Affiliated Purchasers





None.





Item
6.  Selected Financial Data





Not
required.





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operation





The
following information should be read in conjunction with our consolidated
financial statements and related notes thereto included elsewhere in this
Report.  The following discussion may contain forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in these forward-looking
statements. Factors that could cause or contribute to these differences include,
but are not limited to, those discussed above under “Special Note Regarding
Forward-Looking Statements.”





Overview





ViewCast.com,
Inc., doing business as ViewCast Corporation (“ViewCast”), develops
industry-leading hardware and software for the capture, management,
transformation and delivery of digital media over IP and mobile
networks.  ViewCast’s solutions simplify the complex workflows
required for these tasks, allowing broadcasters, businesses, and governments to
reach and expand their use and distribution of their digital media easily and
effectively.  ViewCast’s Niagara® streaming appliances, Osprey® video
capture cards, and ViewCast Media Platform (VMpTM) software suite provide the
highly reliable technology required to deliver the multi-platform experiences
driving today’s digital media market. ViewCast markets and sells its products
and professional services worldwide directly to end-users or through indirect
channels including original equipment manufacturers (“OEMs”), value-added
resellers (“VARs”), resellers, distributors and computer system
integrators.ViewCast
is focused on growth by leveraging the digital media market expansion and our
product solutions to capitalize on sales opportunities.  We believe
that emphasis on revenue and market share growth will enable us to realize
long-term profitability and stockholder value.





On March
13, 2009, ViewCast completed the purchase of the Ancept Assets from Ancept Media
Server, LLC (the “Seller”) related to the development and licensing of software
products that provide the management of the life cycle phases of digital media
pursuant to the terms of the Asset Purchase Agreement dated March 5, 2009, as
amended, by and between ViewCast and the Seller. ViewCast’s wholly owned
subsidiary, ViewCast Online Solutions, Inc., was renamed Ancept Corporation and
operates this business. The lead software product,  rebranded as
VMp Production and the core of VMp, has been an established digital asset
management (“DAM”) solution capable of supporting the needs of large
enterprises, while remaining flexible and affordable to serve the needs of small
to medium businesses.  Fortune 1000 companies, educators, small businesses
and public sector organizations have chosen Ancept to help meet their media
production, management and distribution needs. The combined company has an
expanded global business presence and offers a complete set of solutions for the
transformation, management and delivery of live and on-demand video content to
broadband and mobile networks.





ViewCast
utilizes significant capital to design, develop and commercialize its products
and intends to fund its 2010 operating activities and sales growth by utilizing
existing cash, cash provided from operations and working capital lines of credit
to the extent possible.  ViewCast believes that these items will
provide sufficient cash to fund operations for the next 12 months, however,
ViewCast may require additional working capital during the next year to support
operations and the expansion of sales channels and market distribution, to
develop and introduce new products and services, to enhance existing product
offerings, to address unanticipated competitive threats or technical problems,
to transition adverse economic conditions and for potential acquisition
transactions.  There can be no assurance that additional financing
will be available to ViewCast on acceptable terms, or at
all.  Additional equity financing may involve substantial dilution to
our then existing stockholders.  In the event ViewCast is unable to
raise additional capital or execute other alternatives, it may be required to
sell segments of the business, or substantially reduce or curtail our
activities.  Such actions could result in charges that could be
material to ViewCast’s results of operations or financial
position.





Financial
Highlights of 2009





Total
revenues for the year ended December 31, 2009 were $13,905,860, a 20% decrease
from revenues of $17,362,212 reported in 2008.  Gross margin for 2009
decreased 26% to $8,782,674, or 63.2% of sales, from $11,927,923, or 68.7% of
sales, in the year ended December 31, 2008.  Total operating expenses
of $11,446,605 for the fiscal year of 2009 were up 2% when compared to the
$11,234,726 for the fiscal year of 2008.  Net loss for the fiscal year
of 2009 was $2,800,347 compared to the net income of $531,105 for the fiscal
year of 2008.





The
$3,331,451 difference in net income was mainly due to lower revenues and gross
margin, which resulted from a year over year decline of 5.5% in gross margin
percentage and a decrease of sales of $3,456,352.  In addition,
increases in development, depreciation and amortization operating expenses of
$406,133 were partially offset by a decline in sales, general and administrative
operating expenses of $194,254.




Critical
Accounting Policies




Management’s
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the U.S
(“GAAP”).  We review the accounting policies we use in reporting our
financial results on a regular basis.  The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities.  On an on-going basis
we evaluate our estimates, including those related to accounts receivable,
inventories, warranty obligations, income taxes, restructuring and contingencies
and litigation.  Our estimates are based on historical experience and
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other
sources.  In addition to the items listed above which are affected by
estimates, we believe that the following are critical accounting policies used
in the preparation of our consolidated financial statements:




§
            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, FASB ASC 605, “Revenue
      Recognition” and FASB ASC 985, “Software”.  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 determine in the future 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.








§
            Purchase Accounting, Goodwill
      and Intangible Assets – We use the purchase method of accounting
      for our business acquisitions, accordingly, the statement of operation
      include the results of acquired businesses since the date of
      acquisition.  The assets acquired and liabilities assumed are
      recorded at their estimated fair value as determined by management and
      supported by an independent third-party
  valuation.




§
            Goodwill Arising from the
      Acquisitions of Business– We record goodwill arising from the
      acquisition of a business as the excess of the purchase price over the
      estimated fair value of the net assets of the business
      acquired.  In accordance with FASB ASC 350, “Intangibles –
      Goodwill and Other,” we are required to test goodwill for impairment
      annually or more frequently if circumstances indicate potential
      impairment.  Consistent with this standard, we will review
      goodwill, as well as other intangible assets and long-term assets, for
      impairment annually or more frequently as warranted, and if circumstances
      indicate that the recorded value of any such other asset is impaired, such
      asset is written down to its new, lower fair value.  If any item
      of goodwill or such other asset is determined to be impaired, an
      impairment loss would be recognized equal to the amount by which the
      recorded value exceeds the estimated fair market
  value.




Results
of Operations





Year
Ended December 31, 2009 compared to Year Ended December 31, 2008.





Net
Sales.During
the year ended December 31, 2009, net sales decreased $3,456,352 to $13,905,860
from $17,362,212 in 2008, representing a 20% decrease from 2008.  This
decrease was mainly due to the global economic recession which adversely
affected the bulk of our Osprey and Niagara product lines across all of our
global regions as customers cancelled or delayed plans for business expansion or
new media initiatives.  The decrease during 2009 was primarily due to
decreases in Osprey® capture card and Niagara® system revenue which was
partially offset by an increase in Ancept-related revenues of $1,105,368, as
noted below.  Excluding Ancept, net sales decreased during 2009
compared to the same period in 2008 by 24% in the North America sales region,
41% in the Europe, Middle East and Africa (“EMEA”) and 7% in the Pacific
Rim/South America sales regions.





We
believe that our sales volume began recovery during the fourth quarter of 2009
and expect that trend to continue for the 2010 year.  We can now see
evidence of increases in sales of all product lines taking hold where we have
seen a greater than 30% increase in booked orders received in the first quarter
of 2010 compared to the fourth quarter of 2009.





Osprey Product
Sales.  During the year
ended December 31, 2009, Osprey sales decreased $3,128,055 to $7,870,571 from
$10,998,626 in 2008, representing a 28% decrease from 2008 and 56.6% of total
2009 net sales, compared to 63.3% in 2008.  The decrease in sales for
2009 was due to sales declines in all sales regions.  Due to the
global economic recession and, consequently, the reduction in larger integration
projects, sales of these products for 2009 were negatively
affected.  We expect the recovery in Osprey sales, which began during
the last half of 2009, to continue during 2010 as customer transition to the PCI
Express-based Osprey 240e and Osprey 450e increases.  As consumer
demand for high definition (“HD”) Internet content continues to accelerate, we
believe the market opportunity for ViewCast’s Osprey 700e HD will
expand.  We anticipate further growth as broadband networking
providers deploy new, higher bandwidth services and technologies, such as Cisco
and Google.





ViewCast Niagara®
Streaming/Encoding Systems.During the year ended
December 31, 2009, combined systems sales decreased $1,381,912 to $4,707,290
from $6,089,202 in 2008, representing a 23% decrease from 2008 and 33.9% of
total 2009 net sales, compared to 35.1% in 2008.  The decrease in
sales for 2009 was due to sales declines in all sales regions.  Due to
the global economic recession and, consequently, the reduction in customer
budgets and solution integration projects for 2009, sales of these products for
2009 were negatively affected.  During 2010 we anticipate the
availability of the Niagara 7500 for shipment and the new version of SCX
released for our Niagara systems will have a positive impact on sales activity
within this product line.  In addition our largest OEM customer has
resumed orders in the first quarter of 2010, following six months of being
dormant.  Based on its outlook for 2010, we expect robust sales from
this customer throughout the year.







Software Licenses
and Other Revenues.During the year
ended December 31, 2009, other revenues from software licenses, support and
maintenance, professional services and net third-party product revenue increased
$1,053,615 to $1,327,999 from $274,384 in 2008, representing a 384% increase
from the 2008 levels and 9.5% of total 2009 revenue, compared to 1.6% in
2008.  This increase was primarily due to ViewCast’s newly-acquired
Ancept business late in the first quarter, which contributed in software
license, maintenance and support, and professional service revenue of
$1,105,368, representing 7.9% of total revenue in 2009.  We anticipate
that Other Revenue will vary quarter to quarter depending on the mix of software
license and professional service revenues in addition to support and maintenance
revenues that are amortized over the contract period.




Cost of
Sales/Gross Profit.  During the year
ended December 31, 2009, cost of sales decreased $311,103 to $5,123,186 from
$5,434,289 in 2008, representing a 5.7% decrease from 2008.  Gross
profit margin decreased $3,145,249 to $8,782,674 from $11,927,923 in 2008,
representing a 26% decrease from 2008 and 63.2% of total 2009 net sales,
compared to 68.7% in 2008.  The decrease in gross profit was primarily
due to decreased net sales in 2009. The decrease in gross profit margin
percentage was primarily due to lower Osprey sales and a higher percentage of
sales derived from the lower margin OEM system products.  In addition,
the increased revenues from professional services, support and maintenance
experience a lower margin than the hardware and software
products.




We expect
2010 gross profit margins to remain comparable to historical margins in the
55%-68% range.  Margins will be affected quarter to quarter by
promotional activities, price adjustments, cost of materials, inventory
obsolescence, new products and the sales mix between capture cards, systems and
services in any one reporting period.





Selling, General
and Administrative Expense.  During 2009,
selling, general and administrative expenses decreased $194,254 to $7,624,962
from $7,819,216 in 2008, representing a 2.5% decrease from 2008 and 55% of total
2009 net sales, compared to 45% in 2008.  The decrease is attributable
to a reduction in sales and customer support expenses offset partially by
increases in marketing reflecting increased headcount, advertising, public
relations and related expenses.  Additionally, there were
non-recurring expenses of $167,000 during 2009 related to the acquisition of the
Ancept Assets.





Research and
Development Expense. During 2009, research and development expense
increased $96,161 to $3,032,215 from $2,936,054 in 2008, representing a 3%
increase over 2008 and 21.8% of total 2009 net sales, compared to 16.9% in
2008.  The increase reflects additional personnel plus higher new
product prototype and related development expenses compared to
2008.  Research and development expenses fluctuate depending on the
number of product introductions planned and as new product prototypes, testing
and certifications are completed.




Depreciation and
Amortization Expense.  During 2009, depreciation and
amortization expense increased $309,972 to $789,428 from $479,456 in 2008,
representing a 65% increase from 2008.  The increase was primarily due
to the amortization of acquired intangible assets and capitalized software
development plus capital expenditures in 2009 for IT infrastructure, test
equipment and demo gear.




Other Income and
Expense.  During 2009, total other expense increased by $3,498
to $154,190 from $150,692 in 2008, representing a 2% increase from the 2008
levels. Interest expense for 2009 decreased $20,666 to $162,831 from $183,497 in
2008, representing an 11% decrease from the 2008 levels.  The decrease
in interest expense is principally due to the decrease of interest rates from
our debt under the credit facility we have in place with Ardinger Family
Partnership, Ltd. (See Note 8).  Interest income for 2009 decreased
$28,139 to $4,666 from $32,805 in 2008.  The decrease in interest
income is primarily due to lower interest rates and average cash balance during
the period.
 
 Net
Income.During
the year ended December 31, 2009, net income decreased $3,331,452 to a net loss
of $2,800,347 from net income of $531,105 in 2008.  The decrease in
net income was mainly due to decreased revenue and the related gross
margins.  After adjusting 2009 net income for preferred dividends of
$820,000, the net loss per share to the common stockholders for the year ended
December 31, 2009 was ($0.10) per share, compared to a net loss of ($0.01) per
share, for the year ended December 31, 2008.








Liquidity
and Capital Resources





ViewCast's
primary sources of funds for conducting its business activities are derived from
sales of its products and services, from its credit facilities and from the
placement of its equity securities with investors.  ViewCast requires
working capital primarily to increase inventories and accounts receivable during
sales growth, develop products, service debt, purchase capital assets, fund
operating losses and strategic acquisitions.




Net cash
used by operating activities for the year ended December 31, 2009 totaled
$480,682, a decrease from the cash provided of $1,033,974 in
2008.  The net cash used in operating activities for the year ended
December 31, 2009 was due to the net loss of $2,800,347 offset by non-cash
operating expenses of $1,030,314 and by changes in operating assets and
liabilities of $1,289,351.  The cash provided by operating assets and
liabilities was principally from decreases in accounts receivable, inventories,
and prepaid expenses, partially offset by cash used from decreases in accounts
payable, and accrued expenses.




Net cash
used for investing activities during the year ended December 31, 2009 totaled
$1,747,686, of which $1,031,422 was used for the acquisition of the Ancept
Assets.  The remaining $716,264 of cash utilized for investing
activities was for $195,458 of property and equipment purchased and $520,806 of
software development costs capitalized.




During
the year ended December 31, 2009, ViewCast’s financing activities, provided cash
of $1,016,836 of which $940,000 was provided from the exercise of warrants by
H.T. Ardinger and the Ardinger Family Partnership, Ltd. for the purchase of
2,500,000 shares of the Company’s unregistered common stock at an amended
exercise price of $0.376 per share, which proceeds were used to fund a
significant portion of the cash paid to the Seller for the purchase of the
Ancept Assets.  The remaining $76,836 of cash provided included
$92,321 provided from an increase in line of credit, $14,441 from the sale of
stock under the Employee Stock Purchase Plan, and $2,850 from the exercise of
employee stock options, offset by $32,776 cash used for repayment of long-term
debt.




On March
13, 2009, ViewCast acquired the Ancept Assets for
$1,431,422.  ViewCast (i) paid to the Seller’s lender $1,000,000 in
cash, (ii) paid to the Seller $31,422 in cash which is the difference between
$170,000 in cash less a holdback amount of $138,578 based on the difference in
accounts receivables and deferred revenue as of March 13, 2009, which may be
adjusted in the future based on actual collected accounts receivable, (iii)
issued to the Seller Company common stock of $400,000 which resulted in the
issuance of 1,141,314 shares based on the weighted average closing price of our
common stock for the ten trading days immediately prior to the closing of the
transaction, which was $0.35047, and (iv) assumed deferred revenue liabilities
related to the Ancept Assets.  The primary purpose of the acquisition
was to enable ViewCast to expand its global business presence with a complete
portfolio of solutions that encompasses live and on-demand video encoding,
management and delivery.





Since
October 1998, ViewCast has maintained a credit facility with an entity
controlled by its largest stockholder, Mr. H.T. Ardinger.  Most
recently, ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc.
(jointly and severally, the “Borrower”) amended the terms and conditions of the
loan and security agreement with the Ardinger Family Partnership, Ltd. on March
10, 2010, effective January 31, 2010. Under the amended terms, the $1,250,000 of
the primary principal amount and $3,891,361 of the secondary principal amount
mature December 31, 2012, subject to certain earlier payment
conditions.  The interest on the primary principal amount will accrue
based on an interest rate per annum which is the greater of 5.00% or the
effective prime rate plus 0.75% (4.00% as of December 31, 2008 and
2009).  Interest on the secondary principal shall accrue based on an
interest rate per annum which is the lesser of 9.50% or the effective Applicable
Federal Rate, as defined in the agreement (2.85% and 2.64% as of December 31,
2008 and December 31, 2009, respectively).  The amended terms call for
interest to be paid monthly; and previously accrued interest ($169,846 at
December 31, 2008) to be paid in approximately equal monthly payments from
October 31, 2008, through June 30, 2009.  Beginning July 31, 2010,
minimum monthly principal payments of $21,422 will be made, in addition to the
monthly interest payments.  Any amounts remaining outstanding on
December 31, 2012, will become due on that date.  The amended note
agreement is secured by all the assets of the Borrower.







In June
2007, ViewCast entered into a Purchase and Sale Agreement/Security Agreement
with Amegy Bank National Association, a national banking
association.  This agreement provides ViewCast with an account up to
$1,000,000 receivable loan facility to provide a source of working
capital.  As of December 31, 2009, we have an outstanding balance of
$92,321 under this facility.





There
were no preferred stock dividends declared or paid during 2009.  The
Series B and Series C preferred stock issues carry cumulative dividends of 8%
and 9% per year, respectively, and are generally payable semi-annually in
arrears in cash or in ViewCast common stock, at ViewCast’s
option.  Cumulative dividends in arrears on preferred shares are
approximately: Series B-$5,120,000, Series C-$1,437,500.  Holders of
Series B and Series C preferred stock have no voting rights except as required
by law.




At
December 31, 2009, ViewCast had working capital of $2,056,216 and cash and cash
equivalents of $368,151.  ViewCast expects to obtain additional
working capital position by increasing sales, maintaining reduced operating
expenses, borrowing under its loan facilities and through other initiatives that
may include raising additional equity.  We believe that our sales
volume has begun recovery during the fourth quarter of 2009 and expect that
trend to continue for the rest of 2010 year.  We can now see evidence
of increases in sales of all product lines taking hold where we have seen a
greater than 30% increase in booked orders received in the first quarter of 2010
vs. the fourth quarter of 2009.  ViewCast utilizes significant capital
to design, develop and commercialize its products and intends to fund its
operating activities and sales growth during the next twelve months by utilizing
existing cash, cash contributed from operations and its available working
capital lines of credit.  ViewCast anticipates it may require
additional working capital during 2010 to support the expansion of sales
channels and market distribution, to develop and introduce new products and
services, to enhance existing product offerings, to address unanticipated
competitive threats or technical problems, to transition adverse economic
conditions, to service its debt and for potential acquisition
transactions.




Although
ViewCast has no firm arrangements with respect to additional capital financing,
on an ongoing basis, it considers proposals received from potential investors
relating to the issuance of equity securities in exchange for a cash investment
in ViewCast.  There can be no assurance that additional financing will
be available to ViewCast on acceptable terms, or at all.  Additional
equity financing may involve substantial dilution to our then existing
stockholders.  ViewCast intends to actively pursue other strategic
merger and acquisition opportunities to the extent possible.  In the
event we are unable to raise additional capital or execute other alternatives,
we may be required to sell segments of the business, or substantially reduce or
curtail our activities.  Such actions could result in charges that
could be material to ViewCast’s results of operations or financial
position.





At
December 31, 2009, ViewCast had no material commitments for capital
expenditures.





Operating
Leases





The
following table summarizes ViewCast’s operating leases with definitive payment
terms that will require cash outlays in the future.  These future cash
payment amounts are as of December 31, 2009:





(In
      thousands)Contractual
      Obligations and Commitments:
            
            2010
            
            
            2011
            
            
            2012
            
            
            2013
            
            
            Thereafter
            
            
            TotalOperating
      leases
            
            $
            370
            
            
            $
            274
            
            
            $
            239
            
            
            $
            243
            
            
            $
            1,934
            
            
            $
            3,060$
            370
            
            
            $
            274
            
            
            $
            239
            
            
            $
            243
            
            
            $
            1,934
            
            
            $
            3,060




ViewCast
is obligated under various operating lease agreements, primarily for office
facilities that expire at various dates through 2012.  The scheduled
monthly base rental payments for facilities range from $6,160 to $17,898 and
differ from the monthly rental expense due to free or varied monthly rental
payments during the term of the lease agreements.





Off
Balance Sheet Arrangements





ViewCast does not have any off-balance
sheet arrangements that have or are reasonably likely to have a current or
future effect on ViewCast’s financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to investors.





Item
7A.  Quantitative and Qualitative Disclosures About Market
Risk





Not required.







Item
8.  Financial Statements





ViewCast.com,
Inc. and Subsidiaries


Index
to Consolidated Financial Statements




Reports
      of Independent Registered Public Accounting Firms
            
            21-22Consolidated
      Balance Sheets at December 31, 2008 and 2009
            
            23Consolidated
      Statements of Operations for the years endedDecember
      31, 2008 and 2009
            
            24Consolidated
      Statements of Stockholders’ Equity (Deficit) for theyears ended December 31, 2008 and 2009
            
            25Consolidated
      Statements of Cash Flows for the years endedDecember
      31, 2008 and 2009
            
            26Notes
      to Consolidated Financial Statements
            
            27







Report of
Independent Registered Public Accounting Firm





To the
Board of Directors


ViewCast.com,
Inc.




We have
audited the accompanying consolidated balance sheet of ViewCast.com, Inc. and
subsidiaries (the “Company”) as of December 31, 2009 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the year then ended.  The Company’s management is
responsible for these consolidated financial statements.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.




We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of ViewCast.com, Inc. and
subsidiaries as of December 31, 2009 and the consolidated results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.




/S/ BKD,
LLP





Dallas,
Texas


March 31,
2010







Report of
Independent Registered Public Accounting Firm





The Board
of Directors


ViewCast.com,
Inc.




We have
audited the accompanying consolidated balance sheet of ViewCast.com, Inc. and
subsidiaries as of December 31, 2008, and the related consolidated statements of
operations, stockholders’ equity and cash flows for the year then
ended.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimate made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.




In our
opinion, the financial statements referred to above, present fairly, in all
material respects, the consolidated financial position of ViewCast.com, Inc. and
subsidiaries as of December 31, 2008, and the consolidated results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.




/s/ KBA
Group LLP





Dallas,
Texas


March 31,
2009








VIEWCAST.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCESHEETS





December
      31,
            
            
            December
      31,2008
            
            
            2009ASSETSCurrent
      assets:Cash
      and cash equivalents
            
            $
            1,579,683
            
            
            $
            368,151Accounts
      receivable, less allowance for doubtful accounts of $82,317 and $69,767 at
      December 31, 2008 and 2009, respectively
            
            
            2,654,217
            
            
            
            1,208,929Inventories,
      net
            
            
            2,824,236
            
            
            
            2,283,348Prepaid
      expenses
            
            
            352,089
            
            
            
            208,804Total
      current assets
            
            
            7,410,225
            
            
            
            4,069,232Property
      and equipment, net
            
            
            772,290
            
            
            
            575,032Goodwill
            
            
            -
            
            
            
            620,002Intangible
      assets, net
            
            
            423,028
            
            
            
            1,535,135Deposits
            
            
            48,177
            
            
            
            48,433Total
      assets
            
            $
            8,653,720
            
            
            $
            6,847,834LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      liabilities:Accounts
      payable
            
            $
            1,106,892
            
            
            $
            730,395Accrued
      expenses and other current liabilities
            
            
            1,143,882
            
            
            
            1,033,167Stockholder
      accrued interest
            
            
            169,846
            
            
            
            -Line
      of credit
            
            
            -
            
            
            
            92,321Current
      maturities of long-term debt and stockholder notes payable
            
            
            159,032
            
            
            
            157,133Total
      current liabilities
            
            
            2,579,652
            
            
            
            2,013,016Long-term
      debt, less current maturities
            
            
            38,172
            
            
            
            46,698Stockholder
      notes payable, less current maturities
            
            
            5,012,827
            
            
            
            5,012,827Total
      liabilities
            
            
            7,630,651
            
            
            
            7,072,541Commitments
      and contingenciesStockholders'
      equity (deficit):Preferred
      stock, $0.0001 par value, authorized 5,000,000 shares: Series B
      convertible - issued and outstanding shares - 800,000 - liquidation value
      of $16 per share as of December 31, 2008 and 2009
            
            
            80
            
            
            
            80Series
      C convertible - issued and outstanding shares - 200,000 - liquidation
      value of $31 and $32 per share as of December 31, 2008 and 2009,
      respectively
            
            
            20
            
            
            
            20Series
      E convertible - issued and outstanding shares - 80,000 - liquidation value
      of $104 and $105 per share as of December 31, 2008 and 2009
      respectively
            
            
            8
            
            
            
            8Common
      stock, $.0001 par value, authorized 100,000,000 shares; issued shares -
      32,419,886 and 36,126,306 at December 31, 2008 and 2009,
      respectively
            
            
            3,242
            
            
            
            3,613Additional
      paid-in capital
            
            
            70,153,562
            
            
            
            71,705,762Accumulated
      deficit
            
            
            (69,121,937
            )
            
            
            (71,922,284
            )Treasury
      stock, 261,497 shares at cost
            
            
            (11,906
            )
            
            
            (11,906
            )Total
      stockholders' equity (deficit)
            
            
            1,023,069
            
            
            
            (224,707
            )Total
      liabilities and stockholders' equity (deficit)
            
            $
            8,653,720
            
            
            $
            6,847,834





The
accompanying notes are an integral part of these consolidated
statements.








VIEWCAST.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS





Year
      ended December 31,2008
            
            
            2009Net
      sales
            
            $
            17,362,212
            
            
            $
            13,905,860Cost
      of sales
            
            
            5,434,289
            
            
            
            5,123,186Gross
      profit
            
            
            11,927,923
            
            
            
            8,782,674Operating
      expenses:Selling,
      general and administrative
            
            
            7,819,216
            
            
            
            7,624,962Research
      and development
            
            
            2,936,054
            
            
            
            3,032,215Depreciation
      and amortization
            
            
            479,456
            
            
            
            789,428Total
      operating expenses
            
            
            11,234,726
            
            
            
            11,446,605Operating
      income (loss)
            
            
            693,197
            
            
            
            (2,663,931
            )Other
      income (expense):Interest
      expense (including $172,526 and $154,426 of expense to related
      parties)
            
            
            (183,497
            )
            
            
            (162,831
            )Interest
      income
            
            
            32,805
            
            
            
            4,666Other
            
            
            -
            
            
            
            3,975Total
      other expense, net
            
            
            (150,692
            )
            
            
            (154,190
            )Net
      income (loss) before income taxes
            
            
            542,505
            
            
            
            (2,818,121
            )Income
      tax income benefit (expense)
            
            
            (11,400
            )
            
            
            17,774NET
      INCOME(LOSS)
            
            $
            531,105
            
            
            $
            (2,800,347
            )Preferred
      stock dividends
            
            
            (820,029
            )
            
            
            (820,000
            )Net
      loss applicable to common stockholders
            
            $
            (288,924
            )
            
            $
            (3,620,347
            )Net
      loss per shareBasic
            
            $
            (0.01
            )
            
            $
            (0.10
            )Diluted
            
            $
            (0.01
            )
            
            $
            (0.10
            )Weighted
      average number of common shares outstandingBasic
            
            
            32,110,458
            
            
            
            35,171,107Diluted
            
            
            32,110,458
            
            
            
            35,171,107





The
accompanying notes are an integral part of these consolidated
statements.





VIEWCAST.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


YEARS
ENDED DECEMBER 31, 2008 AND 2009





Series
      B
                        Convertible
                        Preferred
      Stock
                      
                      
                      Series
      C
                        Convertible
                        Preferred
      Stock
                      
                      
                      Series
      E
                        Convertible
                        Preferred
      Stock
                      
                      
                      Common
      Stock
                      
                      
                      Additional
                        Paid-in
                      
                      
                      Accumulated
                      
                      
                      Treasury
                      
                      
                      Total
                        Stockholders'Shares
                      
                      
                      Par
      Value
                      
                      
                      Shares
                      
                      
                      Par
      Value
                      
                      
                      Shares
                      
                      
                      Par
      Value
                      
                      
                      Shares
                      
                      
                      Par
      Value
                      
                      
                      Capital
                      
                      
                      Deficit
                      
                      
                      Stock
                      
                      
                      Equity Deficit)Balances,
      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
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      138,491
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      138,491Employee
      stock purchase plan issuance
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      50,397
                      
                      
                      
                      5
                      
                      
                      
                      17,231
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      17,236Exercise
      of stock options
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      19,165
                      
                      
                      
                      2
                      
                      
                      
                      3,881
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      3,883Employee
      stock issuance for services
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      8,571.00
                      
                      
                      
                      1
                      
                      
                      
                      2,999
                      
                      
                      
                      0
                      
                      
                      
                      -
                      
                      
                      
                      3,000Net
      income
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      531,105
                      
                      
                      
                      -
                      
                      
                      
                      531,105Balances,
      December 31, 2008
                      
                      
                      800,000
                      
                      
                      
                      80
                      
                      
                      
                      200,000
                      
                      
                      
                      20
                      
                      
                      
                      80,000
                      
                      
                      
                      8
                      
                      
                      
                      32,419,886
                      
                      
                      
                      3,242
                      
                      
                      
                      70,153,562
                      
                      
                      
                      (69,121,937
                      )
                      
                      
                      (11,906
                      )
                      
                      
                      1,023,069Stock
      based compensation expense
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      195,280
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      195,280Employee
      stock purchase plan issuance
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      55,106
                      
                      
                      
                      6
                      
                      
                      
                      14,435
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      14,441Exercise
      of stock options
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      10,000
                      
                      
                      
                      1
                      
                      
                      
                      2,849
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      2,850Exercise
      of warrants
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      2,500,000
                      
                      
                      
                      250
                      
                      
                      
                      939,750
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      940,000Stock
      issuance for acquisition
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,141,314
                      
                      
                      
                      114
                      
                      
                      
                      399,886
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      400,000Net
      loss
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (2,800,347
                      )
                      
                      
                      -
                      
                      
                      
                      (2,800,347
                      )Balances,
      December 31, 2009
                      
                      
                      800,000
                      
                      
                      $
                      80
                      
                      
                      
                      200,000
                      
                      
                      $
                      20
                      
                      
                      
                      80,000
                      
                      
                      $
                      8
                      
                      
                      
                      36,126,306
                      
                      
                      $
                      3,613
                      
                      
                      $
                      71,705,762
                      
                      
                      $
                      (71,922,284
                      )
                      
                      $
                      (11,906
                      )
                      
                      $
                      (224,707
                      )




The
accompanying notes are an integral part of these consolidated
statements.





VIEWCAST.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS





Year
      endedDecember
      31,2008
            
            
            2009Operating
      activities:Net
      income (loss)
            
            $
            531,105
            
            
            $
            (2,800,347
            )Adjustments
      to reconcile net income (loss) to net cash provided
      by (used in) operating activities:Bad
      debt expense (gain)
            
            
            57,912
            
            
            
            (175
            )Depreciation
      of property and equipment
            
            
            350,795
            
            
            
            446,729Amortization
      of intangible assets
            
            
            128,661
            
            
            
            342,699Warranty
      reserve
            
            
            137,126
            
            
            
            44,808Stock
      based compensation expense
            
            
            138,491
            
            
            
            195,280Common
      stock issued to employee for services
            
            
            3,000
            
            
            
            -Loss
      on disposition of property and equipment
            
            
            -
            
            
            
            973Changes
      in operating assets and liabilities: (net of effect of
      acquisition)Accounts
      receivable
            
            
            (450,996
            )
            
            
            1,606,223Inventories
            
            
            (457,036
            )
            
            
            540,888Prepaid
      expenses
            
            
            (108,475
            )
            
            
            143,700Deposits
            
            
            (2,611
            )
            
            
            (256
            )Accounts
      payable
            
            
            650,251
            
            
            
            (376,497
            )Accrued
      expenses and other current liabilities
            
            
            78,899
            
            
            
            (454,861
            )Stockholder
      accrued interest
            
            
            (23,148
            )
            
            
            (169,846
            )Net
      cash provided by (used in) operating activities
            
            
            1,033,974
            
            
            
            (480,682
            )Investing
      activities:Capitalized
      software development costs
            
            
            (228,322
            )
            
            
            (520,806
            )Purchase
      of property and equipment
            
            
            (353,310
            )
            
            
            (195,458
            )Cash
      paid for acquisition
            
            
            -
            
            
            
            (1,031,422
            )Net
      cash used in investing activities
            
            
            (581,632
            )
            
            
            (1,747,686
            )Financing
      activities:Proceeds
      from sale of common stock
            
            
            17,236
            
            
            
            14,441Proceeds
      from exercise of employee stock options
            
            
            3,883
            
            
            
            2,850Net
      proceeds from exercise of warrants
            
            
            -
            
            
            
            940,000Proceeds
      from line of credit
            
            
            -
            
            
            
            92,321Repayments
      of long-term debt
            
            
            (29,194
            )
            
            
            (32,776
            )Net
      cash provided by (used in) financing activities
            
            
            (8,075
            )
            
            
            1,016,836Net
      increase (decrease) in cash and cash equivalents
            
            
            444,267
            
            
            
            (1,211,532
            )Cash
      and cash equivalents, beginning of period
            
            
            1,135,416
            
            
            
            1,579,683Cash
      and cash equivalents, end of period
            
            $
            1,579,683
            
            
            $
            368,151Supplemental
      cash flow information:Cash
      paid for interest
            
            $
            206,645
            
            
            $
            332,677Cash
      paid for income taxes
            
            $
            34,115
            
            
            $
            1,085Non-cash
      items:Stock
      issued for acquisition
            
            $
            -
            
            
            $
            400,000Liabilities
      assumed in acquisition
            
            $
            -
            
            
            $
            299,338Acquisition
      of property and equipment under capital leases
            
            $
            48,362
            
            
            $
            39,403





The
accompanying notes are an integral part of these consolidated
statements.







ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements
  1.
The Company and Description of Business and Future Liquidity
Needs


The
accompanying consolidated financial statements include the accounts of
ViewCast.com, Inc. dba ViewCast Corporation and its wholly-owned subsidiaries,
VideoWare, Inc., Osprey Technologies, Inc., Ancept Corporation, previously known
as ViewCast Online Solutions, Inc., and ViewCast Technology Services Corporation
(collectively, ViewCast or the Company).  The Company develops
industry-leading hardware and software for the capture, management,
transformation and delivery of digital media over IP and mobile
networks.  ViewCast’s solutions simplify the complex workflows
required for these tasks, allowing broadcasters, businesses, and governments to
reach and expand their use and distribution of their digital media easily and
effectively.  ViewCast’s Niagara® streaming appliances, Osprey® video
capture cards, and ViewCast Media Platform (VMpTM) software suite provide the
highly reliable technology required to deliver the multi-platform experiences
driving today’s digital media market. ViewCast markets and sells its products
and professional services worldwide directly to end-users or through indirect
channels including original equipment manufacturers (“OEMs”), value-added
resellers (“VARs”), resellers, distributors and computer system
integrators.






In March
2009, ViewCast purchased certain assets from Ancept Media Server, LLC (the
“Ancept Assets”) pursuant to the terms of the Asset Purchase Agreement
dated March 5, 2009, as amended, by and between ViewCast and Ancept Media
Server, LLC. (“Seller”). ViewCast’s wholly owned subsidiary, ViewCast
Online Solutions, Inc., was renamed Ancept Corporation (“Ancept”) and operates
this business.  The lead software product,  rebranded as VMp
Production, has been an established digital asset management (“DAM”)
solution capable of supporting the needs of large enterprises, while remaining
flexible and affordable to serve the needs of small to medium businesses. 
Fortune 1000 companies, educators, small businesses and public sector
organizations have chosen Ancept to help meet their media production, management
and distribution needs. The Company has an expanded global business
presence and offers a complete set of solutions for the transformation,
management and delivery of live and on-demand video content to broadband and
mobile networks.





During
the year ended December 31, 2009, the Company incurred a net loss of $2,800,347
and used cash in operations of $480,682.  At December 31, 2009, the
Company has working capital of $2,056,216 and cash and cash equivalents of
$368,151.  The Company expects to obtain additional working capital by
increasing revenue, maintaining reduced operating expenses which were reduced
during late 2009, borrowing on its line of credit and through other initiatives
that may include raising additional capital.  The Company believes
that these items will provide sufficient cash to fund operations for the next 12
months, however, the Company may require additional working capital during 2010
to support operations and the expansion of sales channels and market
distribution, to develop and introduce new products and services, to enhance
existing product offerings, to address unanticipated competitive threats or
technical problems, to transition adverse economic conditions and for potential
acquisition transactions.  There can be no assurance that additional
financing will be available to the Company on acceptable terms, or at
all.  Additional equity financing may involve substantial dilution to
our then existing stockholders.  In the event the Company is unable to
raise additional capital or execute other alternatives, it may be required to
sell segments of the business, or substantially reduce or curtail our
activities.  Such actions could result in charges that could be
material to ViewCast’s results of operations or financial
position.


2.
Summary of Significant Accounting Policies





Principles
of Consolidation




The
consolidated financial statements include the accounts of the Company and all of
its subsidiaries, all of which are wholly-owned.  All inter-company
accounts and transactions have been eliminated in consolidation.









ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued


Cash
and Cash Equivalents




The
Company considers all highly liquid investments purchased with an initial
maturity of three months or less to be cash equivalents.




The
financial institution holding the Company’s cash accounts is participating in
the FDIC’s Transaction Account Guarantee Program.  Under that program,
through June 30, 2010, all noninterest-bearing accounts are fully guaranteed by
the FDIC for the entire amount in the account.





Accounts
Receivable




The
Company’s accounts receivable are primarily due from resellers and distributors
of its video products.  Credit is extended based on evaluation of each
customer’s financial condition and, generally collateral is not required except
for certain international customers.  Accounts receivable are
generally due within 30 days and are stated net of an allowance for doubtful
accounts.  Accounts are considered past due if outstanding longer than
contractual payment terms.  The Company records an allowance on a
specific basis by considering a number of factors, including the length of time
trade accounts are past due, the Company’s previous loss history, the
credit-worthiness of individual customers, economic conditions affecting
specific customer industries and economic conditions in general.  The
Company writes-off accounts receivable when they become uncollectible and
payments subsequently received on such receivables are credited against
write-offs in the period the payment is received.




Changes
in the Company’s allowance for doubtful accounts for the years ended December
31, 2008 and 2009 are as follows:




Year
      ended December 31,2008
            
            
            2009Beginning
      balance
            
            $
            30,390
            
            
            $
            82,317Bad
      debt expense
            
            
            57,912
            
            
            
            (175
            )Uncollectible
      accounts written off
            
            
            (5,985
            )
            
            
            (12,375
            )Ending
      balance
            
            $
            82,317
            
            
            $
            69,767




Inventories





Inventories
consist primarily of purchased electronic components and computer system
products, along with the related documentation manuals and packaging
materials.  Inventories are carried at the lower of cost or market,
cost being determined at average cost. In order to assess the ultimate
realization of inventories, the Company is required to make judgments as to the
future demand requirements compared to current or committed inventory
levels.  Write downs are made to the lower of cost or market when
projected demand requirements decrease due to market conditions, technological
obsolescence and product life cycle changes.





Property
and Equipment





Property and equipment is recorded at
cost, less accumulated depreciation.  Depreciation is determined using
the straight-line method over the estimated useful lives, generally two to seven
years, of the related assets.  Leasehold improvements are amortized
over the shorter of the useful life or the remaining term of the related
leases.  Expenditures for repairs and maintenance are charged to
operations as incurred; renewals and betterments are
capitalized.  Gains and losses on the disposition of property and
equipment are recorded in the period incurred.





Intangible
Assets and Amortization





Costs of developing new software
products and substantial enhancements to existing software products are expensed
as incurred until technological feasibility has been established, after which
time additional costs incurred are capitalized.  Amortization of
capitalized software development costs begins when products are available for
general release to customers, and is computed using the greater of the revenue
method or the straight-line method over a period not to exceed three
years.








ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued


Legal
fees and similar capitalizable costs relating to patents, copyrights, and
trademarks are capitalized as appropriate.  Patent costs are generally
amortized on a straight-line basis over 17 years.





Intangible
assets consist of the following:





December
      31, 2008
            
            
            December
      31, 2009Gross
      carrying
            
            
            Accumulated
            
            
            Gross
      carrying
            
            
            Accumulatedamount
            
            
            amortization
            
            
            amount
            
            
            amortizationCustomer
      Lists
            
            $
            -
            
            
            $
            -
            
            
            $
            60,000
            
            
            $
            9,581Non-Compete
      agreements
            
            
            -
            
            
            
            -
            
            
            
            24,000
            
            
            
            6,387Capitalized
      Software Costs
            
            
            1,385,215
            
            
            
            1,049,412
            
            
            
            2,733,950
            
            
            
            1,369,532Patents
            
            
            102,594
            
            
            
            15,369
            
            
            
            124,665
            
            
            
            21,980$
            1,487,809
            
            
            $
            1,064,781
            
            
            $
            2,942,615
            
            
            $
            1,407,480




The
estimated aggregate amortization expense for the succeeding years are as
follows:




2010
            
            $
            434,3372011
            
            
            369,9692012
            
            
            246,9572013
            
            
            140,7622014
            
            
            131,180Thereafter
            
            
            211,929$
            1,535,135




The
weighted average remaining amortization period for intangible assets at December
31, 2009 is 5.5 years.




Impairment
of Long-Lived Assets





Assets
that are held and used are analyzed for impairment whenever events or changes in
circumstances indicate that the carrying amounts may not be
recoverable.  Impairment is recognized when the estimated undiscounted
cash flow generated by those assets is less than the carrying amounts of such
assets.  The amount of impairment is the excess of the carrying amount
over the fair value of such assets.  Assets held for sale are carried
at the lower of carrying amount or fair value less selling costs.  No
impairment charges were recognized for 2008 and 2009.





Goodwill





Goodwill
is tested annually for impairment.  If the implied fair value of
goodwill is lower than its carrying amount, goodwill impairment is indicated and
goodwill is written down to its implied fair value.  Subsequent
increases in goodwill value are not recognized in the financial
statements.





Revenue
Recognition





The Company recognizes revenue in
accordance with Securities and Exchange Commission Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition in financial Statement as revised by SAB 104,
Revenue Recognition, FASB ASC 605, “Revenue Recognition” and FASB ASC 985,
“Software”.  Under these guidelines, the Company recognizes 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.  The Company accrues warranty costs and sales
allowances for promotional activities at time of shipment based on historical
experience.





ViewCast.com,
Inc.


Notes
to the Consolidated Financial Statements - Continued




Product
sales are recognized upon shipment, provided title and risk of loss has passed
to the customer, there is evidence of an arrangement, fees are fixed or
determinable, and collectibility is reasonably assured.  Transactions
that do not meet all these requirements are deferred until the point at which
these requirements are satisfied.  Maintenance and support revenues
are recognized monthly over the contract term.





Net
Earnings Per Share





Basic
earnings per share (“EPS”) is calculated by dividing net income or loss
applicable to common stockholders by the weighted-average number of common
shares outstanding during the period.  Diluted earnings per share is
calculated by using the weighted-average number of common shares outstanding
during the period increased to include the number of additional shares of common
stock that would have been outstanding if the dilutive potential shares of
common stock had been issued.  Dilutive potential shares of common
stock include convertible preferred stock, options and warrants which are
exercisable based on the average market price during the year.  For
2008 and 2009, the computation of diluted loss per share excludes the portion of
convertible preferred stock, options and warrants as they are
anti-dilutive.  The following table sets forth the computation of
basic and diluted earnings per share:





Year
      Ended December 31,2008
            
            
            2009Net
      loss applicable to common stockholders - numerator for basic and diluted
      earnings per share
            
            $
            (288,924
            )
            
            $
            (3,620,347
            )Weighted
      - average common shares outstanding - denominator for basic earnings per
      share
            
            
            32,110,458
            
            
            
            35,171,107Net
      loss per share:Basic
            
            $
            (0.01
            )
            
            $
            (0.10
            )Diluted
            
            $
            (0.01
            )
            
            $
            (0.10
            )




The
following table sets forth the anti-dilutive securities excluded from diluted
earnings per share:





Anti-dilutive
securities excluded from diluted earnings per share:





Stock
      options
            
            
            3,776,368
            
            
            
            4,554,881Public
      and private warrants
            
            
            2,500,000
            
            
            
            2,500,000Convertible
      preferred stock - Series B
            
            
            2,206,896
            
            
            
            2,206,896Convertible
      preferred stock - Series C
            
            
            3,333,333
            
            
            
            3,333,333Convertible
      preferred stock - Series E
            
            
            15,215,686
            
            
            
            13,333,333





Warranty
Reserves





Reserves
are provided for the estimated warranty costs when revenue is
recognized.  The costs of warranty obligations are estimated based on
the Company’s warranty policy or applicable contractual warranty obligations,
historical experience of known product failure rates and use of materials and
service delivery charges incurred in correcting product
failures.  Specific warranty accruals may be made if unforeseen
technical problems arise.  If actual experience, relative to these
factors, adversely differs from these estimates, additional warranty expense may
be required.





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued


The
following table below shows the roll forward of the warranty reserve for the
years ended December 31, 2008 and 2009:





Year
      ended December 31,2008
            
            
            2009Beginning
      balance
            
            $
            133,940
            
            
            $
            199,446Charged
      to expense
            
            
            137,126
            
            
            
            44,808Usage
            
            
            (71,620
            )
            
            
            (88,404
            )Ending
      balance
            
            $
            199,446
            
            
            $
            155,850




Risk
and Uncertainties





Financial
instruments that potentially subject the Company to credit risk consist
principally of cash, cash equivalents and trade accounts
receivable.  The Company invests its cash and cash equivalents with
commercial banks in Texas.  The Company sells its products and
services primarily to end users, distributors and resellers without requiring
collateral; however, the Company routinely assesses the financial condition of
its customers and maintains allowances for anticipated losses.  The
following table discloses the number of customers that accounted for more than
10% of annual sales and receivable balances:








Customer
      Exceeding
              10%
      of Net Sales
            
            
            Customer
      Exceeding 10% of
              Year-End
      Accounts Receivable BalanceYear
            
            Number
      of Customers
            
            
            Combined
              Percent
            
            
            Number
      of Customers
            
            
            Combined
              Percent2008
            
            
            3
            
            
            
            42
            %
            
            
            1
            
            
            
            31
            %2009
            
            
            3
            
            
            
            39
            %
            
            
            2
            
            
            
            42
            %




The
Company believes it has no significant credit risk in excess of provided
reserves.





The
Company is substantially dependent on its third-party suppliers and
manufacturers to supply its components and electronic parts, including standard
and custom-designed components.





Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes.  Significant estimates used in
preparing these financial statements are related primarily to accounts
receivable allowances, inventory valuation, warranty reserves, deferred tax
asset valuation allowances and stock options.  Management believes the
estimates used in preparing the financial statements are reasonable; however,
actual results could differ from those estimates.





Income
Taxes




The
Company utilizes the liability method of accounting for income taxes wherein
deferred tax assets and liabilities are determined based upon the differences
between the financial statement and tax bases of assets and liabilities, as
measured by enacted tax rates expected to be in effect when these differences
reverse.  Deferred tax assets are recognized when it becomes more
likely than not that the assets will be realized.  The Company files
tax returns with the U.S. Federal and various state jurisdictions and is no
longer subject to income tax examinations for years before
2004.




Advertising
Costs





Advertising
costs are expensed as incurred.  Advertising expense for the years
ended December 31, 2008 and 2009 was $752,010 and $866,612,
respectively.







ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued


Fair
Value of Financial Instruments


The Company believes that the carrying
amount of certain of its financial instruments, which include cash equivalents,
accounts receivable, accounts payable, short-term debt and accrued expenses,
approximate fair value due to the short-term maturities of these
instruments.  The Company also has long-term debt with its primary
shareholder.


Stock-Based
Compensation




The
Company accounts for all share-based payment awards made to employees and
directors including stock options and employee stock purchases related to the
Employee Stock Purchase Plan ("ESPP") based on estimated fair
values.  The Company estimates the fair value of share-based payment
awards on the date of grant using an option-pricing model and the value of the
portion of the award that is ultimately expected to vest is recognized as
expense over the requisite service period, net of forfeitures.




The
Company uses the Black-Scholes option-pricing model ("Black-Scholes") as its
method of valuation.  The fair value is then amortized on a
straight-line basis over the requisite service periods of the awards, which is
generally the vesting period.  The fair value of share-based payment
awards on the date of grant as determined by the Black-Scholes model is affected
by the Company’s stock price as well as other assumptions.  These
assumptions include, but are not limited to the expected stock price volatility
over the term of the awards and the actual and projected employee stock option
exercise behaviors.  The weighted-average estimated value of employee
stock options granted during the year ended December 31, 2008 and 2009 was
estimated using the Black-Scholes model with the following weighted-average
assumptions:




Year
      EndedDecember
      31,2008
            
            
            2009Expected
      volatility
            
            
            126
            %
            
            
            132
            %Risk-free
      interest rate
            
            
            3.17
            %
            
            
            2.81
            %Expected
      dividends
            
            
            0.0
            %
            
            
            0.0
            %Expected
      term in years
            
            
            4.60
            
            
            
            4.48




3.  Acquisition





On March
13, 2009, the Company acquired certain assets (the “Ancept Assets”) of Ancept
Media Server, LLC (“Seller”) for $1,431,422.  The Company (i) paid to
the Seller’s lender $1,000,000 in cash, (ii) paid to the Seller $31,422 in cash,
which is the difference between $170,000 in cash less a holdback amount of
$138,578 based on the difference in accounts receivables and deferred revenue as
of March 13, 2009, (iii) issued to the Seller Company common stock of $400,000
which resulted in the issuance of 1,141,314 shares based on the weighted average
closing price of the Company’s common stock for the ten trading days immediately
prior to the closing of the transaction, which was $0.35, and (iv) assumed
deferred revenue liabilities related to the Ancept Assets.  The
primary purpose of the acquisition was to enable the Company to expand its
global business presence with a complete portfolio of solutions that encompasses
live and on-demand video encoding, management and
delivery.  ViewCast’s wholly-owned subsidiary ViewCast Online
Solutions, Inc. was renamed Ancept Corporation (“Ancept”) and this subsidiary
operates the Ancept business.





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued


The
following table summarizes the assets acquired and liabilities assumed as of the
closing date:





Accounts
      receivable
            
            $
            160,760Prepaid
      expenses
            
            
            415Software
            
            
            850,000Customer
      related intangible assets
            
            
            60,000Non-compete
      agreements
            
            
            24,000Goodwill
            
            
            620,002Property
      and equipment
            
            
            15,583Total
      assets acquired
            
            
            1,730,760Liabilities
      assumed
            
            
            (299,338
            )Net
      assets acquired
            
            $
            1,431,422




The
acquisition was accounted for using the purchase method of
accounting.  Intangible assets will be amortized over their estimated
useful life of three to seven years.  The purchase price allocated to
the intangible assets was determined by management’s estimate with the
assistance of a professional valuation group.  Goodwill represents the
excess of purchase consideration over the fair value of assets
acquired.  In the event that the Company enters into certain key
contracts with either one of two specified entities to redistribute or resell in
volume certain of Seller’s products by the second anniversary of the closing of
the acquisition (the “Closing”), the Company shall issue $100,000 of additional
shares of the Company’s common stock to the Seller, with a value per share based
on the weighted average closing price of the Company’s common stock for the ten
trading days immediately prior to finalizing such agreement.  Further,
the Seller is eligible to receive an earn-out amount equal to 5% of the
Company’s net revenue relating solely to certain business related to the Ancept
Assets that is in excess of $2,000,000 for each of the two years following the
Closing.  The goodwill acquired may be amortized for federal income
tax purposes.





The
amount of Ancept revenue and earnings included in the Company’s consolidated
statement of operations for the year ended December 31, 2009 was $1,116,665 and
$(643,308), respectively.





The
following unaudited pro forma summary approximates the consolidated results of
operations as if the acquisition disclosed above had occurred as of January 1,
2008, after giving effect to certain adjustments, including allocation of
specifically identifiable expenses.  The pro forma financial
information does not purport to be indicative of the results of operations that
would have occurred had the transactions taken place at the beginning of the
period presented or indicative of future results of operations.




Year
      ended December 31,2008
            
            
            2009(Unaudited)
            
            
            (Unaudited)Net
      sales
            
            $
            18,951,729
            
            
            $
            14,066,487Net
      income (loss) applicable to common stockholders
            
            
            371,395
            
            
            
            (2,807,661
            )Basic
      and diluted net income (loss) per common share applicable to common
      stockholders
            
            $
            0.01
            
            
            $
            (0.08
            )Weighted
      average number of common shares outstandingbasic
            
            
            33,251,772
            
            
            
            35,396,243diluted
            
            
            33,371,262
            
            
            
            35,396,243





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




4.  Inventories





Inventories
consist of the following:





December
      31,
            
            
            December
      31,2008
            
            
            2009Purchased
      materials
            
            $
            1,670,260
            
            
            $
            1,077,135Finished
      goods
            
            
            1,207,518
            
            
            
            1,330,783Inventory
      obsolescence reserve
            
            
            (53,542
            )
            
            
            (124,570
            )$
            2,824,236
            
            
            $
            2,283,348




5.  Property
and Equipment




Property
and equipment, consists of the following:





Estimated
              Useful
      Life
            
            
            December
      31,(Years)
            
            
            2008
            
            
            2009Service
      equipment
            
            
            3
            
            
            $
            242,362
            
            
            $
            242,362Computer
      equipment
            
            2
      to 7
            
            
            
            420,398
            
            
            
            497,139Software
            
            3
      to 5
            
            
            
            184,038
            
            
            
            207,531Leasehold
      improvements
            
            1
      to 5
            
            
            
            172,697
            
            
            
            172,697Office
      furniture and equipment
            
            5
      to 7
            
            
            
            1,136,470
            
            
            
            1,284,8842,155,965
            
            
            
            2,404,613Less
      accumulated depreciation and amortization
            
            
            
            
            
            
            (1,383,675
            )
            
            
            (1,829,581
            )$
            772,290
            
            
            $
            575,032




6.  Accrued
expenses and other current liabilities






Accrued
expenses and other current liabilities consist of the
following:




December
      31,2008
            
            
            2009Accrued
      compensation
            
            $
            302,310
            
            
            $
            123,882Accrued
      warranty
            
            
            199,446
            
            
            
            155,850Accrued
      inventory purchases
            
            
            39,595
            
            
            
            50,450Customer
      deposits
            
            
            122,321
            
            
            
            28,919Deferred
      rent
            
            
            73,484
            
            
            
            46,258Deferred
      revenue
            
            
            156,611
            
            
            
            353,458Accrued
      taxes and other
            
            
            250,115
            
            
            
            274,350$
            1,143,882
            
            
            $
            1,033,167





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




7.  Line
of Credit




On June
29, 2007, the Company entered into a Purchase and Sale Agreement/Security
Agreement with Amegy Bank National Association (“Amegy”), a national banking
association.  This agreement provides the Company with an accounts
receivable loan facility to provide a source of working capital with advances
generally limited to 85% of submitted accounts receivable.  Upon
collection of an account receivable, the remaining fifteen percent is rebated to
the Company less the Amegy fixed and variable discounts.  The Amegy
fixed discount equals 0.2% of the account receivable for the first 15 days the
account receivable is outstanding plus an additional 0.2% for each additional 15
day period, up to 1.2% for receivables 76 to 90 days outstanding.  The
variable discount is calculated for each day that the amount advanced by Amegy
is outstanding until repaid by collection of the account receivable and equals
the prime rate plus 1.5% divided by 360 multiplied by the advance amount for
each account receivable.  The borrowing line under this facility is
$1,000,000, reviewed as growth of business dictates.  To secure the
amounts due under the agreement, the Company granted Amegy a security interest
in all of its assets owned as of the date of the agreement or thereafter
acquired.  The Company had no outstanding balance as of December 31,
2008 and $92,321 outstanding as of December 31, 2009 under this
facility.




8.  Long-term
Debt





Stockholder
Term Notes





Since
October 1998, the Company has maintained a credit facility with an entity
controlled by one of its principal stockholders, Mr. H.T.
Ardinger.  Most recently, ViewCast.com, Inc., Osprey Technologies,
Inc. and VideoWare, Inc. (jointly and severally, “the Borrower”) amended the
terms and conditions of the loan and security agreement with the Ardinger Family
Partnership, Ltd. on March 10, 2010, effective January 31,
2010.  Under the amended terms the $1,250,000 of the primary principal
amount and $3,891,361 of the secondary principal amount mature December 31,
2012, subject to certain earlier payment conditions.  The interest on
the primary principal amount will accrue and be paid monthly based on an
interest rate per annum which is the greater of 5.0% or the effective prime rate
plus 0.75% (4.00% as of December 31, 2008 and 2009).  Interest on the
secondary principal shall accrue based on the effective Applicable Federal Rate,
as defined in the agreement, (2.85% and 2.64% as of December 31, 2008 and 2009,
respectively).  The amended terms call for interest to be paid
monthly; and previously accrued interest ($169,846 at December 31, 2008) to be
paid in approximately equal monthly payments from October 31, 2008, through June
30, 2009.  Beginning July 31, 2010, minimum monthly principal payments
of $21,422 will be made, in additional to the monthly interest payments. Any
amounts remaining outstanding on December 31, 2012, will become due on that
date.  The amended note agreement is secured by all the assets of the
Borrower.





Long-term
debt consists of the following:





December
      31, 2008
            
            
            December
      31, 2009Aggregate
      of the Outstanding Principal ("Primary Principal Amount")
            
            $
            1,250,000
            
            
            $
            1,250,000Accrued
      and Outstanding Interest ("Secondary Principal Amount")
            
            
            3,891,361
            
            
            
            3,891,361Other
      debt
            
            
            68,670
            
            
            
            75,297Total
      long-term debt
            
            
            5,210,031
            
            
            
            5,216,658Less
      current maturities
            
            
            (159,032
            )
            
            
            (157,133
            )Total
      long-term debt less current maturities
            
            $
            5,050,999
            
            
            $
            5,059,525





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




The
following are the scheduled maturities of long-term debt at December 31,
2009:





Year
      ended December 31,2010
                    
                    $
                    157,1332011
                    
                    
                    279,7602012
                    
                    
                    4,777,7262013
                    
                    
                    2,039$
                    5,216,658




9.  Income
Taxes





The
Company records a valuation allowance when it is more likely than not that some
portion or all of the deferred tax assets will not be realized.  In
the opinion of management, realization of the Company’s net operating loss
carryforward is not reasonably assured, and a valuation allowance of $26,242,000
and $27,138,000 has been provided against deferred tax assets in excess of
deferred tax liabilities in the accompanying consolidated financial statements
at December 31, 2008 and 2009, respectively.





The
components of the Company’s net deferred taxes are as follows:




Year
      ended December 31,2008
                
                
                2009Deferred
      tax assets (liability):Net
      operating loss carryforwards
                
                $
                25,712,000
                
                
                $
                26,675,000Deferred
      revenue
                
                
                51,000
                
                
                
                130,000Goodwill
      and other intangibles
                
                
                -
                
                
                
                10,000Accrued
      liabilities
                
                
                365,000
                
                
                
                338,000Property
      and equipment
                
                
                (24,000
                )
                
                
                36,000Software
      development costs
                
                
                138,000
                
                
                
                67,000Total
      deferred tax assets
                
                
                26,242,000
                
                
                
                27,256,000Less:
      valuation allowance
                
                
                (26,242,000
                )
                
                
                (27,256,000
                )Net
      deferred taxes
                
                $
                -
                
                
                $
                -




The
reconciliation between the income tax expense (benefit) calculated by applying
statutory rates to net income (loss) and the income tax expense (benefit)
reported in the accompanying consolidated financial statements is as
follows:




Year
      ended December 31,2008
            
            
            2009U.S.
      federal statutory rate applied to pretax income
            
            $
            184,000
            
            
            $
            (1,032,000
            )Change
      in valuation allowance
            
            
            (209,000
            )
            
            
            1,014,000Other
            
            
            36,000
            
            
            
            -$
            11,000
            
            
            $
            (18,000
            )




At
December 31, 2009 the Company has federal income tax net operating loss
carryforwards of approximately $73,000,000, which expire at various dates
beginning in 2010. The Company is subject to limitations existing under Internal
Revenue Code Section 382 (Change of Control) relating to the availability
of the operating loss carryforward.





ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




10.  Stockholders’
Equity





Preferred
Stock





In
December 1998 through February 1999, the Company received net proceeds of
$8,834,346 from the private placement of 945,000 shares of Series B Convertible
Preferred Stock at a stated value of $10 per share.  Two principal
stockholders of the Company purchased $4,000,000 and $2,000,000 of the offering,
respectively and other existing stockholders purchased the balance of $3.45
million.  The Series B Preferred Stock is convertible into common
stock of the Company at a fixed price of $3.625 per share, subject to certain
requirements, and carries a dividend of 8% per year payable in cash or common
stock of the Company, at the Company's option.





In
November 2001, the Company received net proceeds of $2,000,000 from the private
placement of 200,000 shares of Series C Convertible Preferred Stock at a stated
value of $10 per share with H.T. Ardinger, Jr., a principal stockholder and
former Chairman of the Board of the Company.  The Series C Preferred
Stock is convertible into common stock of the Company at a fixed price of $0.60
per share, subject to certain requirements, and carries a dividend of 9% per
year payable in cash or common stock of the Company, at the Company's
option.





Holders
of Series B and Series C Preferred Stock have no voting rights except on
amendments to the Company's Articles of Incorporation to change the authorized
shares, or par value, or to alter or change the powers or preferences of their
respective preferred stock issues.





In
December 2006, the Company retired certain debt from the Ardinger Family
Partnership, Ltd. in exchange for certain Company securities, including 80,000
shares of ViewCast’s Series E Convertible Preferred Stock with each share having
a stated value of $100 with voting rights on an “as converted’ basis with the
common stock and accrues no dividends.  The Series E preferred stock
provides for a conversion option to common stock at $0.60 per share of ViewCast
common stock with an early conversion discount of 15% during the first
twenty-four months.





There
were no preferred stock dividends declared or paid during 2008 and
2009.  The Series B and Series C Preferred Stock issues carry
cumulative dividends of 8% and 9% per year, respectively, and are generally
payable semi-annually in arrears in cash or common stock of the Company, at the
Company’s option.  Cumulative dividends on Series B and Series C
preferred shares in arrears at December 31, 2009 are $5,120,000 and
$1,437,500.





Common
Stock




During
2008 and 2009, the Company received $3,883 and $2,850 in proceeds from the
exercise of 19,165 and 10,000 of its outstanding employee stock options, with a
weighted-average exercise price of approximately $0.20 and $0.29 per share,
respectively.  During 2008 and 2009, the Company received $17,236 and
$14,441in proceeds from the purchase of 50,397 and 55,106 shares of the Common
Stock by employees through the 2005 Employee Stock Purchase Plan.  On
March 19, 2009, the Company issued 1,141,314 shares based on the weighted
average closing price of the Company’s common stock for the ten trading days
immediately prior to the closing of the transaction of Ancept acquisition, which
was $0.35.




Stock
Option Plan





In
October 2005, the Company adopted the ViewCast 2005 Stock Incentive Plan, which
replaced the Company’s expired stock option plans (the 1995 Employee Stock
Option Plan and the 1995 Director Stock Option Plan) and become the sole plan
for providing equity-based incentive compensation to the Company’s employees,
non-employee directors and other service providers.  Options granted
under the expired stock option plans will continue to be subject to the terms of
those plans in effect before the effective date of the 2005 Stock Incentive
Plan.  The plan allows for the grant of stock options, restricted
stock, restricted stock units, stock appreciation rights, performance awards and
other incentive awards to employees, non-employee directors and other service
providers of the Company and its affiliates who are in a position to make a
significant contribution to the success of the Company and its
affiliates.  The purposes of the plan are to attract and retain
individuals, further align employee and stockholder interests, and closely link
compensation with Company performance.  The plan is administered by
the Board of Directors.









ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




The
maximum number of shares available for grant under the plan is 6,000,000 shares
of Common Stock, plus any shares of Common Stock subject to outstanding awards
under the Company’s prior stock option plans as of the date the plan was
approved by ViewCast’s stockholders that later cease to be subject to such
awards for any reason other than such awards having been exercised or
expired.  The number of shares available for award under the plan is
subject to adjustment for certain corporate changes in accordance with the
provisions of the plan.





Following
is a summary of stock option activity from January 1, 2008 through December 31,
2009:





Stock
      OptionsNumber
              of
      Shares
            
            
            Price
              Per Share
            
            
            Weighted- Average Exercise
      Price Per ShareOutstanding
      at January 1, 2008
            
            
            2,660,850
            
            
            $
            0.20
      - $7.14
            
            
            $
            1.99Granted
            
            
            1,812,500
            
            
            
            0.30
      - 0.48
            
            
            
            0.37Exercised
            
            
            (19,165
            )
            
            
            0.20
      - 0.22
            
            
            
            0.20Canceled/forfeited
            
            
            (388,250
            )
            
            
            0.22
      - 3.56
            
            
            
            0.60Outstanding
      at December 31, 2008
            
            
            4,065,935
            
            
            $
            0.20
      - $7.14
            
            
            $
            1.42Granted
            
            
            1,587,500
            
            
            
            0.33
      - 0.33
            
            
            
            0.33Exercised
            
            
            (10,000
            )
            
            
            0.29
      - 0.29
            
            
            
            0.29Canceled/forfeited
            
            
            (1,480,972
            )
            
            
            0.29
      - 7.14
            
            
            
            2.78Outstanding
      at December 31, 2009
            
            
            4,162,463
            
            
            $
            0.20
      - $3.52
            
            
            $
            0.52




The
weighted-average grant-date fair value of options granted was $0.20 and $0.29
for the years ended December 31, 2008 and 2009, respectively.





The
following information applies to options outstanding at December 31,
2009:





Range
      of
              Exercise Prices
            
            
            Outstanding
      at
              December
      31,
              2009
            
            
            Weighted Average
              Remaining Contractual Life
            
            
            Weighted- Average Exercise Price
            
            
            Exercisable
              atDecember
      31,
              2009
            
            
            Weighted- Average Exercise Price$
            0.01
      - 1.00
            
            
            
            3,547,913
            
            
            
            5.1
            
            
            $
            0.38
            
            
            
            2,161,153
            
            
            $
            0.401.01
      - 2.00
            
            
            
            532,050
            
            
            
            1.2
            
            
            
            1.12
            
            
            
            532,050
            
            
            
            1.122.01
      - 3.00
            
            
            
            80,000
            
            
            
            0.6
            
            
            
            2.50
            
            
            
            80,000
            
            
            
            2.503.01
      - 4.00
            
            
            
            2,500
            
            
            
            0.5
            
            
            
            3.52
            
            
            
            2,500
            
            
            
            3.524,162,463
            
            
            
            4.5
            
            
            $
            0.52
            
            
            
            2,775,703
            
            
            $
            0.60




At
December 31, 2009, the balance of unearned stock-based compensation to be
expensed in future periods related to unvested share-based awards, as adjusted
for expected forfeitures, is approximately $249,000.  The
weighted-average period over which the unearned stock-based compensation is
expected to be recognized is approximately two years.




Employee
Stock Purchase Plan





In
October 2005, the Company established the ViewCast 2005 Employee Stock Purchase
Plan (the “ESPP”) to provide employees of the Company with an opportunity to
purchase common stock through payroll deductions.  The plan replaced
the Company’s expired employee stock purchase plan (the 1995 Employee Stock
Purchase Plan) which expired in April 2005.  Under the ESPP, 1,000,000
shares of Common Stock have been reserved for issuance, subject to certain
antidilution adjustments.  The ESPP is intended to qualify as an
employee stock purchase plan within the meaning of Section 423 of the IRS
Code.









ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




Under the
ESPP each offering is for a period of six months ending March 31 and September
30 of each year.  Eligible employees may participate in the ESPP by
authorizing payroll deductions during an offering period within a percentage
range determined by the Board of Directors.  Initially, the amount of
authorized payroll deductions is not more than ten percent of an employee's cash
compensation during an offering period, and not more than $25,000 per
year.  Amounts withheld from payroll are applied at the end of each
offering period to purchase shares of Common Stock.  Participants may
withdraw their contributions at any time before stock is purchased, and in the
event of withdrawal such contributions will be returned to
participants.  The purchase price of the Common Stock is equal to
ninety-five percent (95%) of the market price of Common Stock at the end of each
offering period (the "Exercise Date").  The Purchase Price may be
changed by the Board or its committee but in any case shall never be lower than
85% to the fair market value of a share of Common Stock on the Exercise
Date.ViewCast pays
all expenses incurred in connection with the implementation and administration
of the ESPP.





During
2008 and 2009, 50,397 and 55,106 shares of common stock were issued under the
ESPP.





Warrants




At
December 31, 2008, the Company had outstanding 2,500,000 private warrants with
exercise prices of $0.48 per share and expiration dates in December
2013.  On February 27, 2009, the Company entered into an amendment to
the warrant to purchase common stock, dated December 11, 2006, (the “Amendment”)
by and between the Company and the Ardinger Family Partnership,
Ltd.  The general partner of the Ardinger Family Partnership, Ltd. is
H.T. Ardinger, Jr., the Company’s largest stockholder. Pursuant to the
Amendment, the Company agreed to reduce the per share warrant exercise price to
the average closing price for the five consecutive trading days ending on
February 27, 2009 on the Over-The-Counter Bulletin Board in exchange for the
Ardinger Family Partnership agreeing to exercise the warrant on or prior to
March 5, 2009 with the proceeds to be used by the Company for the acquisition of
Ancept Assets (see Note 3).  On March 5, 2009, the Ardinger Family
Partnership, Ltd. exercised the outstanding warrant to purchase 2,500,000 shares
of the Company’s unregistered common stock at the amended exercise price of
$0.376 per share and the Company received proceeds of $940,000.  At
December 31, 2009, the Company had no outstanding warrants.




11.  Employee
Benefit Plan





Effective
March 1, 1997, the Company adopted a profit sharing plan pursuant to Section
401(k) of the Internal Revenue Code whereby participants may elect to contribute
up to sixty percent (60%) of their compensation subject to statutory
limitations.  The plan provides for discretionary matching and profit
sharing contributions by the Company.  All employees are eligible to
participate in the plan provided they meet minimum age requirement of
eighteen.  The Company discontinued matching contributions under this
plan in April 2009.  The Company made $82,684 and $21,453 matching
contributions to this plan, for the year ended December 31, 2008 and 2009,
respectively.





12.  Commitments
and Contingencies





The Company leases offices and
manufacturing space at various locations under non-cancelable operating leases
extending through 2021.  The Company also leases certain office and
computer equipment under non-cancelable operating leases.  Future
minimum operating lease payments with initial or remaining terms of one year or
more are as follows:





Operating

                LeasesYear
      ended December 31:2010
            
            $
            369,8432011
            
            
            274,0802012
            
            
            238,7312013
            
            
            243,320Thereafter
            
            
            1,934,523Total
      minimum lease payments
            
            $
            3,060,497









ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




Rent
expense was $330,204 and $422,969 for the years ended December 31, 2008 and
2009, respectively.




13.  Related
Party Transactions




As
discussed in Note 8, the Company has two outstanding notes payable to anentity
controlled by one of its principalstockholders, Mr. H.T.
Ardinger.


In
addition, the source of a significant portion of the cash paid to Seller for the
purchase of the Ancept Assets (more fully described in Note 3) was obtained by
the Company pursuant to the warrant exercise on March 5, 2009 by H.T. Ardinger
and the Ardinger Family Partnership, Ltd. for the purchase 2,500,000 shares of
the Company’s unregistered common stock at an amended exercise price of $0.376
per share, pursuant to which the Company received proceeds of
$940,000.  See Note 10 for related party warrant
activity.





14.   Current
Economic Conditions




The
current protracted economic decline continues to present companies with
difficult circumstances and challenges, which insome cases have
resulted in large and unanticipated declines in the fair value of certain
assets, declines in the volume of business, constraints on liquidity and
difficulty obtaining financing.  The financial statements have been
prepared using values and information currently available to the
Company.




Current
economic and financial market conditions could adversely affect the Company’s
results of operations in future periods.  The current instability in
the financial markets may make it difficult for certain of the Company’s
customers to obtain financing, which may significantly impact the volume of
future sales which could have an adverse impact on the Company’s future
operating results.





In
addition, given the volatility of current economic conditions, the values of
assets and liabilities recorded in the financial statements could change
rapidly, resulting in material future adjustments in allowances for accounts
receivable, inventory and valuation of intangibles and goodwill.




15.   Subsequent
Event
  EffectiveJanuary31,
2010,
theterms and conditions of the loan and security agreement with the
Ardinger Family Partnership, Ltd. were amended to change the commencement date
for the monthly principal payments on the primary principal amount from January
31, 2010 to July 31, 2010.







ViewCast.com,
Inc.
 Notes
to the Consolidated Financial Statements - Continued




Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure





None.





Item
9A(T).  Controls and Procedures





Evaluation
of Disclosure Controls and Procedures




Our
disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are
designed to provide reasonable assurance that information required to be
disclosed by us in the reports we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission and that
such information is accumulated and communicated to our management, including
our principal executive officer and principal financial officer, as appropriate
to allow timely decisions regarding required disclosure. As required by
Rule 13a-15(b) under the Exchange Act, our management carried out an
evaluation, with the participation of our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure controls and
procedures as of December 31, 2009. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that, as of
December 31, 2009, our disclosure controls and procedures were effective in
providing such reasonable assurance.





Management’s
Report on Internal Control Over Financial Reporting




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) of the Company.  Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America.





The
Company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with GAAP, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.





Management,
under the supervision of the Company’s Chief Executive Officer and Chief
Financial Officer, conducted an evaluation of the effectiveness of internal
control over financial reporting based on the framework in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.  Based on this evaluation, management
concluded that the Company’s internal control over financial reporting was
effective as of December 31, 2009 under the criteria set forth in the Internal
Control—Integrated Framework.





This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this Annual Report on Form 10-K.





There
have been no changes in the Company’s internal control over financial reporting
identified in connection with the evaluation that occurred during the Company’s
last fiscal quarter that has materially affected, or that is reasonably likely
to materially affect, the Company’s internal control over financial
reporting.





Item 9B.  Other
Information None.





PART
III





Item
10.  Directors, Executive Officers and Corporate
Governance





The
information required by this item is incorporated by reference to the
information contained under the caption “Proposal 1 – Election of Directors” in
the Company’s Proxy Statement for the 2010 Annual Meeting of Stockholders (the
“Proxy Statement”).





Item
11.  Executive Compensation





The
information required by this item is incorporated by reference to the
information contained under the caption “Executive Compensation” in the Proxy
Statement.





Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder
Matters





The
information required by this item is incorporated by reference to the
information contained under the caption “Security Ownership of Certain
Beneficial Owners and Management” in the Proxy Statement.





Equity
Compensation Plan Information





The
following table sets forth certain information as of December 31, 2009
concerning outstanding awards and securities available for future issuance
pursuant to ViewCast’s equity compensation plans.





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
            
            
            4,162,463
            
            
            $
            0.52
            
            
            
            2,775,703Equity
      compensation plans not approved by security holders
            
            
            —
            
            
            
            —
            
            
            
            —Total
            
            
            4,162,463
            
            
            $
            0.52
            
            
            
            2,775,703




Item
13.  Certain Relationships and Related Transactions, and Director
Independence





The information required by this item
is incorporated by reference to the information contained under the
caption  “Certain Relationships and Related Transactions and Director
Independence” in the Proxy Statement.





Item
14.  Principal Accountant Fees and Services





The
information required by this item is incorporated by reference to the
information contained under the caption “Auditors’ Fees” in the Proxy
Statement.





Item
15.  Exhibits and Financial Statement Schedules.





(a)
            Documents
      filed as part of the Report:





1.
            Financial
      Statements:


Consolidated
Balance Sheets at December 31, 2008 and 2009


Consolidated
Statements of Operations for the years ended December 31, 2008 and
2009


Consolidated
Statements of Stockholders’ Equity for the years ended December 31, 2008 and
2009


Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and
2009


Notes to
Consolidated Financial Statements.





2.
            All
      other schedules are omitted because of they are not required or because
      the required information is given in the consolidated financial statements
      or notes thereto.





3.
            Exhibits:




EXHIBIT
INDEX





Exhibit
      No.
            
            Description
      of Exhibit2.1
            
            Agreement
      and Plan of Merger and Reorganization (1)2.2
            
            Asset
      Purchase Agreement between ViewCast.com, Inc. and Ancept Media Server,
      LLC, dated March 5, 2009 (26)2.3
            
            First
      Amendment to Asset Purchase Agreement between ViewCast.com, Inc. and
      Ancept Media Server, LLC, dated March 13, 2009 (26)3.1
            
            Certificate
      of Incorporation (1)3.2
            
            Amendment
      to Certificate of Incorporation (1)3.3
            
            Restated
      Bylaws (4)3.4
            
            Certificate
      of Designation of Series B Convertible Preferred Stock
  (2)3.5
            
            Certificate
      of Designation of Series C Convertible Preferred Stock
  (6)3.6
            
            Certificate
      of Designation of Series D Redeemable Convertible Preferred Stock
      (7)3.7
            
            Certificate
      of Designation of Series E Convertible Redeemable Preferred Stock
      (20)4.1
            
            Form
      of Common Stock Certificate (1)4.2
            
            Form
      of Warrant Certificate (1)4.3
            
            Form
      of Warrant Agreement between ViewCast and Continental Stock Transfer &
      Trust Company (1)4.4
            
            Form
      of Representative’s Warrant Agreement (1)4.5
            
            Notice
      of Extension of Warrant Expiration Date and Exercise Price Adjustment
      (5)4.6
            
            Warrant
      Issued to Ardinger Family Partnership, LTD (20)10.1
            
            Form
      of Indemnification Agreement between ViewCast and Executive Officers and
      Directors (1)10.2
            
            Working
      Capital Line of Credit Loan Agreement between ViewCast and the Ardinger
      Family Partnership, LTD (3)10.3
            
            Sublease
      Agreement between ViewCast and Host Communications, Inc.
    (6)10.4
            
            Reserved.









10.5
            
            Revolving
      Loan Agreement between MMAC Communications Corp. and Keltic Financial
      Partners, LP dated as of October 11, 2002 (7)10.6
            
            Guarantee
      of Payment and Performance from ViewCast.com, Inc. to Keltic Financial
      Partners, LP dated as of October 11, 2002 (7)10.7
            
            Subordination
      Agreement by and among Keltic Financial Partners, LP, MMAC Communications
      Corp. and ViewCast.com, Inc. dated as of October 11, 2002
    (7)10.8
            
            General
      Security Agreement by and between MMAC Communications Corp. and Keltic
      Financial Partners, LP dated as of October 11, 2002 (7)10.9
            
            Revolving
      Note by MMAC Communications Corp. in favor of Keltic Financial Partners,
      LP dated as of October 11, 2002 (7)10.10
            
            ViewCast.com,
      Inc. 2005 Stock Incentive Plan (14)10.11
            
            ViewCast.com,
      Inc. 2005 Employee Stock Purchase Plan (15)10.12
            
            Reserved.10.13
            
            Reserved.10.14
            
            Reserved.10.15
            
            Form
      of Amended and Restated Security Agreement dated October 15, 2003 between
      ViewCast.com, Inc. and the Ardinger Family Partnership, LTD
      (8)10.16
            
            Form
      of Amended and Restated Pledge Agreement dated October 15, 2003 between
      ViewCast.com, Inc. and the Ardinger Family Partnership, LTD
      (8)10.17
            
            Form
      of First Amendment to the Revolving Loan Agreement dated October 11, 2003
      between Delta Computec Inc. and Keltic Financial Partners,
      LP  (8)10.18
            
            Reserved.10.19
            
            Reserved.10.20
            
            Third
      Amendment dated as of December 10, 2004 to Revolving Loan Agreement
      between MMAC Communications Corp. and Keltic Financial Partners, LP dated
      as of October 11, 2002 (9)10.21
            
            Fourth
      Amendment dated as of January 10, 2005 to Revolving Loan Agreement between
      MMAC Communications Corp. and Keltic Financial Partners, LP dated as of
      October 11, 2002 (9)10.22
            
            Fifth
      Amendment dated as of February 15, 2005 to Revolving Loan Agreement
      between MMAC Communications Corp. and Keltic Financial Partners, LP dated
      as of October 11, 2002 (9)10.23
            
            Notice
      of Lower Temporary Conversion Price dated March 21, 2005
    (10)10.24
            
            Letter
      Agreement Amending Revolving and Term Credit Facility dated March 22, 2005
      (10)10.25
            
            Sixth
      Amendment, dated as if April 15, 2005, to Revolving Loan Agreement Between
      MMAC Communications Corp. and Keltic Financial Partners, LP dated as of
      October 11, 2002 (11)10.26
            
            Seventh
      Amendment, dated as if July 15, 2005, to Revolving Loan Agreement Between
      MMAC Communications Corp. and Keltic Financial Partners, LP dated as of
      October 11, 2002 (12)10.27
            
            Letter
      Agreement Amending Revolving and Term Credit Facility dated July 22, 2005
      (13)10.28
            
            Eighth
      Amendment, dated as if October 11, 2005, to Revolving Loan Agreement
      Between MMAC Communications Corp. and Keltic Financial Partners, LP dated
      as of October 11, 2002 (16)10.29
            
            Reserved.10.30
            
            Office
      Lease Agreement between ViewCast and TR Plano Parkway Partners, L.P.
      (17)10.31
            
            Letter
      Agreement Amending Revolving and Term Credit Facility dated March 20, 2006
      (18)10.32
            
            Office
      Lease Agreement between ViewCast and Valwood Centreport, LP
      (19)10.33
            
            Registration
      Rights Agreement by and among ViewCast and Ardinger Family Partnership,
      Ltd. Dated as of December 11, 2006
(20)









10.34
            
            Second
      Amended Loan and Security Agreement dated as of December 11, 2006
      (20)10.35
            
            Exchange
      Agreement dated as of December 11, 2006 by and among ViewCast, Osprey
      Technoligies, Inc. and Videoware, Inc. and Ardinger Family Partnership,
      Ltd. (20)10.36
            
            Employment
      Agreement by and between ViewCast Corporation and David T. Stoner
      effective as of March 1, 2007 (21)10.37
            
            2007
      Executive Incentive Compensation Plan for David T. Stoner
    (21)10.38
            
            Employment
      Agreement by and between ViewCast Corporation and Laurie L. Latham
      effective as of March 1, 2007 (21)10.39
            
            2007
      Executive Incentive Compensation Plan for Laurie L. Latham
      (21)10.40
            
            Purchase
      and Sale Agreement/Security Agreement by and among ViewCast.com, Inc.,
      Osprey Technologies, Inc., Videoware, Inc. and Amegy Bank National
      Association, dated June 29, 2007 (22)10.41
            
            Amendment
      to Purchase and Sale Agreement/Security Agreement by and among
      ViewCast.com, Inc., Osprey Technologies, Inc., Videoware, Inc. and Amegy
      Bank National Association, dated June 29, 2007 (22)10.42
            
            Employment
      Agreement by and between ViewCast.com, Inc. and Gary Klembara effective
      September 1, 2007 (23)10.43
            
            First
      Amendment to Amended and Restated Security Agreement by and among Ardinger
      Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc.
      and Videoware, Inc. (24)10.44
            
            First
      Amendment to Warrant to Purchase Common Stock by and between ViewCast.com,
      Inc. and Ardinger Family Partnership, Ltd., dated February 27, 2009.
      (25)10.45
            
            Second
      Amendment to Amended and Restated Security Agreement by and among Ardinger
      Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc.
      and Videoware, Inc. (28)10.46
            
            Third
      Amendment to Amended and Restated Security Agreement by and among Ardinger
      Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc.
      and Videoware, Inc. (29)14.1
            
            Code
      of Ethics (27)21.1
            
            Subsidiaries
      of ViewCast.com, Inc. (1)23.1
            
            Consent
      of BKD, LLP*23.2
            
            Consent
      of KBA Group LLP *31.1
            
            Rule
      13a-14(a)/15d-14(a) Certifications *32.1
            
            Statement
      1350 Certifications *





*
            Filed  herewith.




(1)
            Incorporated
      by reference to the Registration Statement on Form SB-2 and all amendments
      thereto as declared effective on February 4,
  1997




(2)
            Incorporated
      by reference to Form 8-K filed March 15,
1999.




(3)
            Incorporated
      by reference to Form 10-KSB filed March 26,
  1999.




(4)
            Incorporated
      by reference to Form S-3 filed June 30,
2000.




(5)
            Incorporated
      by reference to Form 8-K filed January 23,
2002.




(6)
            Incorporated
      by reference to Form 10-K filed April 16,
2002.




(7)
            Incorporated
      by reference to Form 8-K filed October 25,
2002.




(8)
              Incorporated
      by reference to Form 10-QSB filed November 14,
      2003.




(9)
            Incorporated
      by reference to Form 8-K filed March 25,
2005.




(10)
            Incorporated
      by reference to Form 8-K filed March 25,
2005.




(11)
            Incorporated
      by reference to Form 8-K filed April 21,
2005.




(12)
            Incorporated
      by reference to Form 8-K filed July 18,
2005.









(13)
            Incorporated
      by reference to Form 8-K filed July 27,
2005.




(14)
            Incorporated
      by reference to Appendix A to Proxy Statement filed September 9,
      2005.




(15)
            Incorporated
      by reference to Appendix B to Proxy Statement filed September 9,
      2005.




(16)
            Incorporated
      by reference to Form 8-K filed October 17,
2005.




(17)
            Incorporated
      by reference to Form 8-K filed January 17,
2006.




(18)
            Incorporated
      by reference to Form 8-K filed March 23,
2006.




(19)
            Incorporated
      by reference to Form 8-K filed November 2,
2006.




(20)
            Incorporated
      by reference to Form 8-K filed December 15,
  2006.




(21)
            Incorporated
      by reference to Form 10-KSB/A filed April 30,
  2007.




(22)
            Incorporated
      by reference to Form 8-K filed July 6,
2007.




(23)
            Incorporated
      by reference to Form 8-K filed September 5,
  2007.




(24)
            Incorporated
      by reference to Form 8-K filed November 4,
2008.




(25)
            Incorporated
      by reference to Form 8-K filed March 5,
2009.




(26)
            Incorporated
      by reference to Form 8-K filed March 23,
2009.




(27)
            Incorporated
      by reference to Form 10-KSB filed March 30,
  2004.




(28)
            Incorporated
      by reference to Form 8-K filed August 5,
2009.




(29)
            Incorporated
      by reference to Form 8-K filed March 15,
2010.









SIGNATURES





Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




Date
              ViewCast.com,
      Inc.March
      31, 2010
              By:
              /s/
      Laurie L. LathamLaurie L.
      LathamChief
      Financial Officer and Senior Vice President of Finance and
      Administration


POWER OF
ATTORNEY





Know all
people by these presents, that each person whose signature appears below
constitutes and appoints David T. Stoner and Laurie L. Latham, and each of them,
his or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any amendments to this annual
report on Form 10-K, and to file the same, with all exhibits thereto, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he or she might or could
do in person, hereby confirming all that said attorneys-in-fact and agents or
either of them, or his or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.





Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.




DateMarch
      31, 2010
              By:
              /s/ David
      T. StonerDavid
      T. StonerDirector
      and Chief Executive Officer(Principal
      Executive Officer)


March
      31, 2010
                By:
                /s/ Laurie
      L. LathamLaurie
      L. LathamChief
      Financial Officer and Senior Vice President of Finance and
      Administration(Principal Accounting and
      Financial Officer)
 March
      31, 2010
                  By:
                  /s/ George
      C. PlattGeorge
      C. PlattDirector
 March
      31, 2010
                    By:
                    /s/ Joseph
      W. AutemJoseph
      W. AutemDirector
 March
      31, 2010
                      By:
                      /s/ Sherel
      D. HorsleySherel
      D. HorsleyDirector
 March
      31, 2010
                        By:
                        /s/ John
      W. Slocum, Jr.John
      W. Slocum, Jr.Director
 March
      31, 2010
                            By:
                            /s/ David
      W. BrandenburgDavid
      W. BrandenburgDirector


EXHIBIT
      INDEX FOR DOCUMENTS FILED WITH THIS
REPORT


Exhibit
              No.
            
            Description
      of Exhibit23.1
            
            Consent
      of BKD,LLP23.2
            
            Consent
      of KBA Group LLP31.1
            
            Rule
      13a-14(a)/15d-14(a) Certifications32.1
            
            Section
      1350 Certifications