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                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

          [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934.

          [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934.

                     For Fiscal Year Ended December 31, 1999
                     Commission File Number: 0-29020

                               VIEWCAST.COM, INC.
                               ------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)

           Delaware                                  75-2528700
           --------                                  ----------
    (State of Incorporation)            (I.R.S. Employer Identification No.)

      2665 VILLA CREEK DRIVE, SUITE 200 DALLAS, TEXAS 75234 (972) 488-7200

         (Address including zip code, area code and telephone number of
                        Registrant's executive offices.)

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:

<TABLE>
<CAPTION>
           Title of Each Class             Name of Each Exchange on Which Registered
           -------------------             -----------------------------------------
<S>                                        <C>
      Common Stock, $.0001 par value                         NASDAQ
Redeemable Common Stock Purchase Warrants                    NASDAQ
</TABLE>

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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 [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to
this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year:   $7,270,080

As of March 20, 2000, 15,260,350 shares of the Registrant's common stock were
outstanding.

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: As of March 20, 2000 - $81,353,974. This amount was computed by reference
to the average of the bid and asked prices of registrant's common stock.

Documents incorporated by reference: Proxy Statement, Part III



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                                TABLE OF CONTENTS

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 ITEM NO.                                                                                             PAGE
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<S>      <C>                                                                                         <C>
                                                    PART I

     1.  Description of Business........................................................................3

     2.  Description of Property.......................................................................13

     3.  Legal Proceedings.............................................................................13

     4.  Submission of Matters to a Vote of Security Holders...........................................13

                                                   PART II

     5.  Market for Registrant's Common Equity and Related Stockholder Matters.........................14

     6.  Management's Discussion and Analysis of Financial Condition and Results of Operations.........14

     7.  Consolidated Financial Statements.............................................................18

     8.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........38

                                                   PART III

     9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
         of the Exchange Act...........................................................................39

     10. Executive Compensation........................................................................39

     11. Security Ownership of Certain Beneficial Owners and Management................................39

     12. Certain Relationships and Related Transactions................................................39

     13. Exhibits and Reports on Form 8-K..............................................................39
</TABLE>


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                                     PART I
ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

    ViewCast.com, Inc. ("ViewCast") enables video communication over the
Internet and other networks through vertically-integrated components, systems,
and turnkey solution products and services. We are a leading global provider of
enterprise-wide, digital video communication solutions for both real-time and
on-demand applications. We deliver innovative networked video solutions, as well
as systems that can work with legacy video communication equipment. Our
Osprey(R) video capture cards and codecs, ViewCast(R) Encoding and Streaming
Video System and Viewpoint VBX(TM) System products deliver a wide array of video
solutions for both digital and analog video communication systems.

    As a new initiative in the year 2000, we have added video content hosting
services and will be providing professional services to meet the growing demand
from public and private sector enterprises to add or extend video communications
internally and externally. One of our hosting services, "YourVideoOnTheWeb(TM)",
is a consumer product designed to bring streaming media capabilities to home
users and small businesses enabling them to add video content to their web
sites.

    Our customers acquire our solutions and products to enhance communication
and productivity, reduce costs and increase customer service within
corporations, educational networks, healthcare facilities, financial
institutions and government agencies, as well as between those entities, their
customers, vendors and others with whom they may communicate. Our customers use
our products to enable them to broadcast video over computer networks (streaming
video), deliver video from web sites (on-demand streaming video), provide
interactive video communication (video conferencing), and distribute video
within a network. We market, install and support our products either directly or
through arrangements with leading OEMs, system integrators, leading resellers
and application developers worldwide.

    To reflect the growing importance of the Internet as a means of transmitting
video, on April 8, 1999, we changed our name to ViewCast.com, Inc. from
MultiMedia Access Corporation. As part of a strategic emphasis on sales,
marketing and strategic planning, we added three senior executives within the
last five months: President and Chief Executive Officer George C. Platt, Senior
Vice President of Sales and Marketing Harry E. Bruner, and Chief Financial
Officer Laurie L. Latham. These executives are now leading the organization
along with certain of our continuing executives, including Neal Page, Vice
President/General Manager of Osprey(R) Technologies Division and David T.
Stoner, Vice President of Operations. These management changes reflect our
commitment to the new strategies formulated for our existing and new markets.

INDUSTRY BACKGROUND

    Technology has merged with current business dynamics causing unprecedented
potential for growth and revenue, an increased likelihood for confusion, and new
challenges to compete and sustain position. As reported by the 1999 Information
Week Magazine Annual IT Survey, "Companies are more aggressive than ever about
adopting and deploying leading edge technologies -- based solely on the fear of
being left behind."

    Within this environment, we believe businesses will increasingly seek expert
support to reduce confusion and to present solutions to their business
challenges. We believe that to meet these business challenges, there will be
increased usage of video communication products and services.

Video Communications

    Video "personalizes" communications over networks, whether it is streaming
video or video conferencing. To transmit live video images (which may contain
over 90 million bits per second of data) over communications networks, video
data must be digitized and significantly compressed to fit the capacity of these
networks (as low as 28,800 bits per second). As video is compressed, redundant
data is eliminated and other data is "blended" with similar data to preserve the
essence of the original image depending on the amount of compression required.
More compression is required as the network capacity



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decreases. After transmission, the video image is reconstructed for display at
the receiving end by the viewer. The quality of the reconstructed video image is
a function of the following:

    o   the sophistication of the video and audio compression algorithms;

    o   the capacity a network has to transmit real-time data (bandwidth);

    o   the power of the video and audio encoding and decoding hardware
        (codecs); and

    o   the speed and power of PCs and workstations.

    We believe cost-effective video communication applications and services are
now attainable because the performance, capabilities and cost of these four key
elements have improved significantly.

    Video no longer requires special equipment and networks, and can utilize
existing network capabilities and equipment. Networks have been advanced through
the deployment of additional bandwidth by carriers and Internal Service
Providers (ISPs), new network technologies (such as multicast), faster
capabilities to connect to networks (xDSL and cable modem) and lower bandwidth
costs. We believe the unparalleled reach of the video-capable audience has
created increased demand, currently estimated at over 150,000,000 seats of users
capable of receiving video at their computer.

Streaming Video

    The explosive growth of the Internet has resulted in the growing popularity
of networked streaming media. Streaming video allows both audio and video
content to begin playing at the viewer's computer even before the content has
been fully received, since a viewer does not have to wait for the full data
content file to be downloaded before hearing and viewing the file.

    Network streaming video makes it possible to put the power and impact of
video communications on most computers. Corporations, schools, government
agencies and healthcare entities are already using streaming video for all kinds
of communications, including training, e-commerce, customer service, marketing,
entertainment and security. Revenues related to the streaming video industry
have been estimated at $277 million in 1998 and $540 million in 1999. According
to Paul Kagan's forecast for the streaming video market, revenues should reach
$900 million in 2000 with growth more than doubling in each of the next two
years to reach $4.7 billion by 2002 and reaching $9 billion by 2004.

    E-commerce growth has created greater demand for video to allow customers to
"see" a product before purchasing and to enhance online advertisements. In
addition, businesses are using video to deliver a variety of high quality radio
and TV content, support product sales and improve customer relations with
"video" contact centers, allow investors to view annual and quarterly meetings,
and support an endless variety of other services and businesses.

Content Hosting and Distribution

    The advent of the commercial streaming video market has resulted in
specialized businesses that offer substantially improved capabilities to
produce, host, aggregate, and deliver media over the Internet. These businesses
offer services similar to traditional ISPs, but they optimize their network and
services to effectively deliver streaming media data to clients. These providers
have created an increased demand for video communication products.

    High traffic media hosting and distribution services are expensive and out
of reach for most individuals and small to medium sized businesses. Network and
hosting needs for this set of customers differ from that required by large scale
businesses. We believe this market represents a new potential for growth in the
streaming video marketplace.






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Videoconferencing and Video Distribution

    Over the past decade, videoconferencing has evolved from high-cost,
stand-alone boardroom systems to standards-based desktop systems and set-top
appliances. Customers are seeking solutions and products that are complementary
to their existing systems, interface with a variety of networks and protocols,
provide a method for system management, reduce the effective cost of ownership,
and are upgradeable. We believe the expansion in streaming video has caused a
resurgence of interest in enterprise video distribution and conferencing.

OUR SOLUTION

    As a vertically integrated provider, ViewCast provides video and media
solutions to our customers. We provide:

    o   TECHNOLOGY -- Our technology provides a competitive edge allowing us to
        differentiate our products from those of our competitors and increasing
        our ability to develop customer driven applications.

    o   PRODUCTS AND APPLICATIONS -- Our products consist of Video Subsystems,
        such as capture cards and codecs for encoding, decoding and streaming,
        and Video Systems solutions for digital and analog video applications.
        We manufacture and distribute worldwide our Osprey(R) video capture
        cards and codecs, ViewCast(R) Streaming Video solutions and Viewpoint
        VBX(TM) Systems. YourVideoOnTheWeb(TM) is a consumer product used to
        encode video from a camcorder or VCR.

    o   EXPERTISE AND SERVICES -- Our comprehensive video expertise enables us
        to assist customers in identifying their communication needs and
        determine appropriate media mechanisms for their business requirements.
        Once established, our professional service organization will complement
        our sales engineering and training organization by offering broader
        customer solutions and support services. A significant addition will be
        our content hosting service (ViewCast Online(TM)).

    To successfully implement our solution, we provide installation, training,
customer service, integration, customization, and contract development. Our
software and firmware integration modules and drivers allow us to integrate our
products and systems into a variety of video communication standards and
software applications. Our products function on several network standards (some
concurrently) and interface with a variety of equipment and PC systems.

BUSINESS STRATEGY

    Our objective is to be the world's premier supplier of products, services
and solutions for networked video applications. Key elements of our strategy
include:


    o   EXTEND PRODUCT OFFERINGS BUILDING ON OUR LEADERSHIP IN THE STREAMING
        VIDEO MARKET -- We intend to expand product offerings and add
        significant value to the leading networked video applications by
        developing competitive hardware products and providing world-class
        software. We believe our recognized technological expertise will allow
        us to lead the industry and capture market share.

    o   PROVIDE VIDEO COMMUNICATION SYSTEM AND APPLICATION SOLUTIONS -- We
        deliver video communication solutions, including individual video
        subsystems and turnkey systems and applications, that appeal to
        customers who are looking for a complete solution to their video
        communication needs. Our systems are designed to be easy to install,
        cost-effective and user-friendly. We believe our system and application
        solutions approach provides a significant competitive advantage.






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    o   ESTABLISH CONTENT HOSTING SERVICES -- As part of our vertically
        integrated solution, we intend to use our expertise, hardware solutions
        and technology to establish the ViewCast Online(TM) Content Hosting
        Service to offer solutions to web content channels for hosting video.
        YourVideoOnTheWeb(TM) is our first phase of this service for individuals
        and small businesses.

    o   PROVIDE PROFESSIONAL SERVICES -- We are establishing a professional
        services organization to assist customers who want to add video to their
        networks. We believe we can shorten the video learning curve by offering
        consultation to end users, general consultants and specific e-commerce
        web consultants and providing innovative video capabilities to give
        their business a competitive advantage.

    o   EXPAND AND LEVERAGE OUR STRATEGIC PARTNERSHIPS -- We have established
        significant industry partnerships with leaders in the networked video
        industry. We intend to strengthen these partnerships and establish new
        partnerships to enhance endorsements, referrals, technology, product
        development, channel distribution, and sales.

    o   EXPAND SALES, MARKETING, AND CHANNEL DEVELOPMENT EFFORTS -- Critical to
        our success is an effective worldwide sales, marketing, and channel
        partner program. We are expanding our sales efforts, both domestically
        and internationally, through additional sales representatives, sales
        engineers and channel partners. Our strategy is to utilize a combination
        of our direct sales force, resellers, system integrators, OEMs and
        custom application developers to distribute our product solutions.

    o   DEVELOP WORLDWIDE BRAND RECOGNITION -- We are developing a strong brand
        identity in the video communication marketplace that will result in a
        significant competitive advantage and permit us to more easily introduce
        new products, applications, and services.

OUR PRODUCTS AND SERVICES

    We currently provide and intend to expand the following product families:

         VIDEO SUBSYSTEMS                            VIDEO SYSTEM SOLUTIONS

         Osprey(R) video capture cards and codecs    ViewCast(R) Streaming Video
                                                     Viewpoint VBX(TM)

    We are in the process of establishing the following new services:

         PROFESSIONAL SERVICES                       CONTENT HOSTING SERVICES

                                                     YourVideoOnTheWeb(TM)
                                                     ViewCastOnline(TM)


OUR PRODUCTS

    We currently offer a broad array of products that when used together provide
an enterprise-wide solution for multiple video communication applications for
private and public sector customers. Our standards-based and multi-standards
based products complement each other and can be used in a variety of ways to
best serve our customers' needs. Our solutions can work within the framework of
legacy systems, and are flexible enough to meet present and future needs. The
ViewCast product family includes the Osprey(R) line of video capture cards and
codec cards, the ViewCast(R) Streaming Video Systems, and the Viewpoint VBX(TM)
video distribution and switching system.

VIDEO SUBSYSTEMS

    CAPTURE CARDS, CODECS AND VIDEO PERIPHERAL PRODUCTS. Under the Osprey(R)
brand, we design, develop, manufacture and market standards-based video and
audio capture cards, codecs, and peripheral products for multimedia
applications.





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    We believe our Osprey(R) capture cards offer unique advantages to
application developers, integrators and OEMs including a cross-platform API
(application programming interface) available on both Windows and UNIX systems.
These cards are in compliance with most popular industry video standards, and we
provide an expert support and development staff to enable custom development of
required applications.

    Our Osprey(R) codecs provide the necessary capability at the web site server
to allow the one-way transmission of live broadcasts over the Internet and
intranets. The codecs capture, digitize, compress, transmit, receive, decompress
and display full-motion video. The codecs are compatible with multiple video and
audio compression standards and can be used for PCs and workstations that are
standard PCI-bus or Sun's S-bus. Our codecs also support Microsoft's WindowsNT
and Windows95, and Sun's Solaris and UNIX operating systems.

    Osprey(R) cards and codecs are sold world wide through OEMs, integrators,
and a worldwide network of VARs and distributors. This product line includes:

    o   Osprey(R)100, video capture for Windows and Linux platforms;

    o   Osprey(R)150, video capture for Sun (Solaris UNIX) workstations;

    o   Osprey(R)200, video and audio capture for Windows and Linux platforms;

    o   Osprey(R)1000, video codec for Windows platforms; and

    o   Osprey(R) 1500, video codec for Sun workstations (re-labeled as the
        SunVideo Plus card by Sun Microsystems).

VIDEO SYSTEM SOLUTIONS

    VIEWCAST(R) STREAMING VIDEO SYSTEMS. Our ViewCast(R) Streaming Video System
product line is designed to capitalize on the rapid growth of the Internet and
intranets to deliver streaming media. Our ViewCast(R) Streaming Video Systems
are designed to simplify the streaming of video onto networks and from web
sites. This product family offers a turnkey solution combined with capabilities
that remove deployment barriers.

    The ViewCast(R) Streaming Video servers combine our Osprey(R) codecs with
popular video-streaming software to provide a complete hardware and software
system for encoding and streaming Internet video broadcasts. Two advantages of
our system are:

    o   Capacity -- Our Osprey(R) codecs provide the capability necessary to
        allow multiple streams from the web site server.

    o   Added Value Bundling -- Value add packages of additional software and
        applications deliver increased versatility and value to the marketplace.

    Our ViewCast(R) Encoding Station is a Windows NT-based system that handles
up to six video feeds from cameras, tape or other A/V devices and provides
broadcast streams at multiple bandwidths simultaneously. ViewCast(R) Encoding
stations are fully integrated and optimized for media systems with
pre-configured Osprey(R) video devices, media capture software, and streaming
video encoding software. Our encoding control software simplifies the user
interface and dramatically reduces CPU memory requirements, thereby increasing
overall system performance. Configurations are also available in versions for
professional broadcasters who require redundant power supplies and disk storage.

    The ViewCast(R) Streaming Server, which is bundled with either RealServer or
Windows Media Server, can broadcast encoded streaming content to more than 1,000
simultaneous endpoints. Our ViewCast(R) Streaming Server delivers a turnkey
system pre-loaded with streaming server software, ready for addition to a
corporate, workgroup, or business network.




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    With software from Virage, the ViewCast(R) "Encoding/Logging Station" is a
single system that creates a fully searchable index of video content. This
capability is made possible by the use of our advanced Osprey-1000/G2 codec,
making a one system solution. The ViewCast(R) Logging Station won Best of Show
at Internet World in Chicago, July 1999.

    VIEWPOINT VBX(TM) SYSTEMS. Our Viewpoint VBX(TM) enterprise-wide video
communication system enables desktops and conference rooms to access a choice of
video communication resources. The server and codec array support a suite of
video communication standards, including H.323 (video over TCP/IP networks),
MPEG-2, H.320 (video over ISDN), and H.324 (video over standard telephone
lines), in addition to NTSC and PAL interfaces for connection of commercial and
consumer A/V devices. The Viewpoint VBX(TM)'s premise distribution of
uncompressed, TV-quality video over standard unshielded twisted pair (UTP)
cabling at distances up to 3,500 feet provides relief to the LAN, using the LAN
only for client-server control. The Viewpoint VBX(TM) can be integrated with our
ViewCast(R) Streaming Video encoders to enable a supported standards-based video
communication system to originate a streaming video broadcast.

    Viewpoint VBX(TM) simplifies video communication by integrating support for
multiple applications and multiple standards into a single platform with a
single user interface. The Viewpoint VBX(TM) system can be used for broadcast
and closed circuit television distribution, security, training, and video
conferencing. Regardless of the application, the highest possible video quality
is maintained. The addition of MPEG-2 codecs to the Viewpoint VBX(TM) extends
the TV quality of local VBX communication to multiple sites. Users can choose a
video quality level based on the content and purpose of each call.

    Viewpoint VBX(TM) systems are suited for the implementation of video enabled
customer service systems, especially for Internet e-commerce applications. SNMP
support is available for all supported codecs, enabling network managers to
monitor and manage the status of VBX communication resources using standard
network management tools.

    Viewpoint VBX(TM) systems are compatible with a wide variety of
standards-based video communication products from third party vendors, while
offering a growth path to new technology. Local VBX clients do not require high
bandwidth networks to extend television quality video to the desktop. The H.323
and MPEG-2 codecs take advantage of the investment in backbone LAN and WAN
networks and the Internet to transport video without incurring per-minute
charges for circuit-switched networks such as ISDN.

    Software development kits (SDKs) are available for the Viewpoint VBX(TM),
allowing integrators to customize applications to take advantage of the
Viewpoint VBX(TM) capabilities. Our professional service organization will use
these capabilities to create new point products in response to customer needs.

OUR CONTENT HOSTING SERVICES

    We have recently introduced simple, comprehensive hosting services for
streaming media. Initially targeted at the individual and small business market,
we have developed a scalable infrastructure for providing outsourced services
that complements our products. In this manner, we can serve millions of
individual consumer's needs and utilize the same infrastructure to provide
outsourced streaming hosting and delivery for our business customers. We believe
these services round out our full spectrum of solutions, leveraging our
expertise, products, and distribution channels for our customers.

    YOURVIDEOONTHEWEB(TM)--YourVideoOnTheWeb(TM) allows individuals and small
businesses to use camcorders to share video with friends, family and customers
over the Internet. We believe YourVideoOnTheWeb(TM) removes existing barriers
(i.e., price and complexity) to consumer video communication.

    Our concept consists of three elements:

    o   YourVideoOnTheWeb(TM)Retail Package and Distribution.

    o   www.YourVideoOnTheWeb.com Internet Site.



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    o   YourVideoOnTheWeb(TM)Hosting Service.

    The retail package of YourVideoOnTheWeb(TM), includes an Osprey(R) video
capture device (PCI or external USB) and software to permit customers to use
their PC and VCR or camcorder for:

    o   Preparing video for the Internet.

    o   Saving video to the hosting site.

    o   Viewing video on the recipient's PC.

    We sell this product in the U.S. from our Internet site, in retail stores
and through catalogues. Hauppauge Digital, Inc., a distributor of consumer video
products, distributes YourVideoOnTheWeb(TM)to retail stores.

    VIEWCAST ONLINE(TM) HOSTING SERVICES -- Embedded on the
YourVideoOnTheWeb(TM) site is a hosting service for online storage and delivery
of streaming media. We have developed extensive account management, measurement,
and upload capabilities with a secure database that is optimized for media
hosting and delivery. This scalable infrastructure provides the foundation for
our consumer, small business and professional hosting services. Internet content
channels can use our hosting services to provide extended products and services
to Internet communities.

OUR PROFESSIONAL SERVICES

    We are establishing a professional services organization to provide our
customers with the expertise necessary to access their video communication needs
and successfully deploy the infrastructure and systems capable of meeting their
requirements.

    In addition to providing technical expertise, our expert consultants will
advise businesses on how to get the most value from their video communications,
whether by adding streaming training video to desktops, adding face-to-face
real-time customer service to e-commerce Internet sites, or other innovative
uses of video. We can work with internal and external resources to provide
custom development of applications, software, hardware and installation to meet
the needs of our customers.

APPLICATIONS

    Our product family is designed to meet the three fundamentals of video-based
applications:

    o   LIVE VIDEO BROADCAST-- One-way, one-to-many broadcast of video, audio
        and other data as content is produced;

    o   STORED VIDEO BROADCAST -- One-way, one-to-many broadcast of video, audio
        and other data after content is produced; and

    o   LIVE INTERACTIVE -- Interactive video/audio communication, with
        bi-directional real-time channels (sometimes combined with other data).

    A number of these fundamentals are combined utilizing our products to meet
the needs of various communication system requirements.

    o   INTERNET VIDEO PUBLISHING -- We offer applications that allow
        stored-video content to be played back to a user's system in real-time.
        This entails compressing a video "clip" and storing it on a server that
        is available to the user through the relevant web page.

    o   INTERNET VIDEO BROADCASTING -- We offer systems that provide one-way
        live audio and motion-video. Our products work in conjunction with web
        servers and browser software to establish connections between multiple
        users and a broadcast source, allowing businesses to deliver live
        programs, commercials and other information over the Internet.



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    o   INTERNET VIDEO CONTACT CENTER -- We offer systems that provide one-way
        live video and two-way audio across the Internet. The use of H.323
        (video conferencing over TCP/IP networks) as a Viewpoint VBX(TM)
        supported video communication standard provides new solutions to
        e-commerce by adding the opportunity for customers to access a contact
        center through video over the Internet. The Viewpoint VBX(TM)
        architecture, in concert with new web-centric software development,
        manages Internet video calls in a contact center environment. Viewpoint
        VBX(TM) systems support call queuing, transfer, and ad hoc conferencing
        necessary for contact center call management. Extensions to our software
        development kits include Active Server Page (ASP) technology for
        webserver integration and call management extensions enabling
        integration of Viewpoint VBX(TM) systems within existing contact center
        call management software.

    o   STREAMING VIDEO GATEWAY -- Our Viewpoint VBX(TM) and ViewCast(R) encoder
        systems can be combined to deliver solutions for origination of
        streaming video broadcasts. For example, an H.320 codec combined with a
        ViewCast(R) Streaming Video encoder can be configured as a gateway
        device, turning any H.320 conferencing system into a web video broadcast
        site. Viewpoint VBX(TM) systems can also be used as camera
        concentrators, allowing the selection of any connected camera as the
        source of a web video broadcast.

    o   VIDEO PRESENTATIONS OR LIVE VIDEO -- Our products offer businesses or
        organizations the opportunity to broadcast live events over enterprise
        networks, intranets and the Internet. These events could include
        educational seminars, management briefings, human resources orientations
        or breaking news being created and transmitted by the organization
        itself or by outside sources.

    o   VIDEOCONFERENCING -- Our products offer the business and institutional
        customer a cost-effective and efficient means of establishing an
        enterprise-wide videoconferencing system. Our Viewpoint VBX(TM) and
        Osprey(R) codecs permit employees, students or other members of an
        organization in different offices or geographic locations to communicate
        with each other through live video.

    o   SPECIFIC APPLICATIONS -- Our products offer a broad array of
        applications within specific industries. For instance, in the health and
        medical industry, our products allow doctors to collaborate via
        videoconferencing, to receive computed tomography (CT) scans,
        ultrasounds and other diagnostic tests at locations remote from the
        hospital or patient and to take part in educational and training
        broadcasts.

    o   REMOTE TECHNICAL SUPPORT -- Video can add value when attempting to
        remotely troubleshoot a field problem. Frequently, difficult problems
        require an expert to travel to a problem site to resolve a relatively
        simple problem, resulting in an unnecessary waste of time and money.

MARKETING AND SALES

    We market our products primarily via third-party distribution channels
including, but not limited to, OEMs, resellers 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. In addition, we plan to continue to expand our distribution channels
both domestically and internationally. We have added a small direct sales
component to address defined vertical markets and early video adopters.

    Our Internet-related products are marketed primarily to entities that
develop web sites. We bundle our products with other popular web-video products
and sell or license our subsystems to resellers to integrate with their web
development products.

    For consumer products, we depend on major OEM customers, such as Hauppauge
Digital, Inc. that provide access to consumer marketing channels. These OEMs
have established relationships with manufacturers and resellers and typically
pay licensing fees and royalties to bring new leading-edge products to market.
Hauppauge Digital, Inc. is our retail distribution partner for
YourVideoOnTheWeb(TM).

    We have recently increased our advertising efforts. We intend to
aggressively publicize our many products and services.



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PRODUCTION AND SUPPLY

    We build our current products using contract manufacturers in the U.S. Our
operations personnel in Dallas, Texas are responsible for parts planning,
procurement and 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 manufacture of our 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 substantially dependent on the ability of our third-party manufacturers
and suppliers to meet our design, performance and quality specifications.

INSTALLATION, SERVICE AND MAINTENANCE

    Many of our products are customer installable. We provide third-party field
installation and support. We maintain a small in-house technical support group
and also depend on our resellers to install and service our products.

    We offer limited warranties covering workmanship and materials, during which
period our resellers or we 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 and hardware maintenance on our products.

RESEARCH AND DEVELOPMENT

    We continue to focus on research and development activities related to video
communications applications. Our recent development efforts have been devoted to
the design and development of our products and software applications, primarily
in the streaming sector (ViewCast(R) encoding and streaming services, and our
Osprey(R) line of capture cards and codecs). These include media processing
devices (CPUs, DSPs), operating system software, standard computer I/O
interfaces, media devices, media API software, and application software. 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 offset some research and development costs.

    Several new products are scheduled for launch in 2000 in the Osprey(R)
product family that will provide new I/O capabilities for streaming video
applications, as well as products utilizing new video compression formats
delivering higher quality video over digital networks. We believe these products
will be competitive and feature unique capabilities that will enhance leading
video applications. We believe these products will keep us in a leadership
position in the marketplace.

    We are also focusing on maintaining the Viewpoint VBX(TM) as an
architecturally viable product in the conferencing and distribution space,
providing specific industry applications and the extension of support for new
codecs.

    We will continue integration efforts with third party application software
for our system products family. These new software tools are emerging as the
industry continues to grow.

COMPETITION

    The market for video communication systems is highly competitive and
characterized by the frequent introduction of new products based upon innovative
technologies. We compete with numerous well-established manufacturers and
suppliers of videoconferencing, networking, telecommunications and multimedia
products, certain of which dominate the existing videoconferencing market for
such products.



                                       11
<PAGE>   12

In addition, we are aware of others that are developing, and in some cases have
introduced, new video communications systems.

    We are not aware of any direct competitors that compete in all of our
product families and applications. However, among our direct competitors
competing with one or more of our products or applications are Zydacron, Inc.,
VCON, Ltd., Winnov, LP., First Virtual Corporation, Picturetel Corporation,
Video Network Communications, Inc., VTEL Corporation, Pinnacle Systems, Inc.,
Tandberg Inc., and Polycom, Inc. In addition, electronics manufacturers such as
Intel Corp. and Cisco Systems, Inc. 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. Although
we do not believe this patent 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(R), Osprey(R), YourVideoOnTheWeb(TM),
ViewCast Online(TM), Viewpoint VBX(TM), and WorkFone(R) names, among others, in
connection with our marketing activities, and have applied for or received
trademark registration for such names. Our use of those marks may be subject to
challenge by others, which, if successful, could have a material adverse effect
on us.

    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.

EMPLOYEES

    As of February 29, 2000, we had eighty-six (86) employees, five (5) of whom
are in executive positions, twenty-five (25) of whom are engaged in engineering,
research and development, thirty-two (32) of whom are engaged in marketing and
sales activities, eighteen (18) of whom are engaged in operations and six (6) 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.






                                       12
<PAGE>   13

ITEM 2.  DESCRIPTION OF PROPERTY

    Our executive offices and some of our sales, design and development
activities are located in approximately 21,100 square feet of leased space in
Dallas, Texas. The lease expires in August of 2000 and provides for a base
annual rent of $316,512. Our assembly operations are located in approximately
4,065 square feet of leased space in Dallas, Texas. The lease expires in June of
2000 and provides for a base annual rent of $33,372. The leases expiring during
2000 will either be extended or new space will be obtained within the same
geographic area.

    The Osprey(R) product design and development activities are located in
approximately 11,800 square feet of leased space in Morrisville, North Carolina.
The main lease for approximately 10,000 square feet expires in December 2002 and
provides for a base annual rent of $99,000. The remaining 1,800 square feet
expires in January of 2005 and provides for a base annual rent of $23,831. We
also lease office space for a sales office in Fairfax, Virginia consisting of
approximately 2,152 square feet of leased space. This lease expires in February
2001 and provides for base annual costs of $55,952. 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

    We are not currently a party to any litigation that we believe could have a
material adverse effect on us or our business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None







                                       13
<PAGE>   14
                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

COMMON STOCK PRICE RANGE

    Our Common Stock is traded on the Nasdaq under the symbol "VCST." Our Public
Warrants are traded on the Nasdaq under the symbol "VCSTW." As of February 29,
2000, there were 15,205,607 shares of Common Stock and 2,609,817 Public Warrants
outstanding. The following table sets forth, for the periods indicated, the high
and low sales prices for the Common Stock and the Public Warrants on the Nasdaq.
These over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down 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.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
                                   COMMON STOCK            PUBLIC WARRANTS
------------------------------------------------------------------------------
FISCAL 1998                     HIGH          LOW         HIGH          LOW
------------------------------------------------------------------------------
<S>                          <C>          <C>          <C>          <C>
1st Quarter                  $     5.00   $     3.00   $     1.88   $     0.88
------------------------------------------------------------------------------
2nd Quarter                        3.81         2.69         1.25         0.66
------------------------------------------------------------------------------
3rd Quarter                        3.50         1.81         0.88         0.34
------------------------------------------------------------------------------
4th Quarter                        3.69         0.88         1.69         0.25
------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
------------------------------------------------------------------------------
                                   COMMON STOCK            PUBLIC WARRANTS
------------------------------------------------------------------------------
FISCAL 1999                     HIGH          LOW         HIGH          LOW
------------------------------------------------------------------------------
<S>                          <C>          <C>          <C>          <C>
1st Quarter                  $     6.94   $     2.63   $     3.69   $     0.81
------------------------------------------------------------------------------
2nd Quarter                       17.38         4.84        13.38         2.13
------------------------------------------------------------------------------
3rd Quarter                       10.81         5.75         6.50         3.13
------------------------------------------------------------------------------
4th Quarter                        8.38         3.06         5.25         1.81
------------------------------------------------------------------------------
</TABLE>

    On March 20, 2000, the last reported sales prices for the Common Stock and
the Public Warrants as reported on the Nasdaq were $6.94 and $3.84,
respectively.

DIVIDEND POLICY

    We have never paid cash dividends on our Common Stock. The Board of
Directors does not anticipate paying 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.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

OVERVIEW

    ViewCast enables video communication over the Internet and other networks
through vertically-integrated components, systems, and turnkey solution products
and services. We are a leading global provider of enterprise-wide, digital video
communication solutions for both real-time and on-demand applications. We
deliver innovative networked video solutions, as well as systems that can work
with legacy video communication equipment. Our Osprey(R) video capture cards and
codecs, ViewCast(R) Encoding and Streaming Video System and Viewpoint VBX(TM)
System products deliver a wide array of video solutions for both digital and
analog video communication systems.

    As a new initiative in the year 2000, we have added video content hosting
services and will be providing professional services to meet the growing demand
from public and private sector enterprises to add or extend video communications
internally and externally. One of our hosting services, "YourVideoOnTheWeb(TM)",
is a consumer product designed to bring streaming media capabilities to home



                                       14


<PAGE>   15

users and small businesses enabling them to add video content to their web
sites.

    Our customers acquire our solutions and products to enhance communication
and productivity, reduce costs and increase customer service within
corporations, educational networks, healthcare facilities, financial
institutions and government agencies, as well as between those entities, their
customers, vendors and others with whom they may communicate. Our customers use
our products to enable them to broadcast video over computer networks (streaming
video), deliver video from web sites (on-demand streaming video), provide
interactive video communication (video conferencing), and distribute video
within a network. We market, install and support our products either directly or
through arrangements with leading OEMs, system integrators, leading resellers
and application developers worldwide.

    To reflect the growing importance of the Internet as a means of transmitting
video, on April 8, 1999, we changed our name to ViewCast.com, Inc. from
MultiMedia Access Corporation. As part of a strategic emphasis on sales,
marketing and strategic planning, we added three senior executives within the
last five months: President and Chief Executive Officer George C. Platt, Senior
Vice President of Sales and Marketing Harry E. Bruner, and Chief Financial
Officer Laurie L. Latham. These executives are now leading the organization
along with certain of our continuing executives, including Neal Page, Vice
President/General Manager of Osprey(R) Technologies Division and David T.
Stoner, Vice President of Operations. These management changes reflect our
commitment to the new strategies formulated for our existing and new markets.

RESULTS OF OPERATIONS

    YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998.

    Net Sales. Net sales for the year ended December 31, 1999 decreased 9.4% to
$7,270,080 from $8,027,948 reported in 1998. The decrease can be attributed to a
decline in revenues for our video distribution systems offset in part by
increased revenues for our video peripheral and video streaming products during
1999 compared to 1998.

    During the year ended December 31, 1999, sales of Osprey(R) video peripheral
products increased 38.4% over 1998 and represented 69.5% of total 1999 revenues,
compared to 45.5% of total revenues in 1998. Sales of ViewCast(R) video encoder
and video streaming systems represented 7.2% of total revenues since their
launch in the first quarter of 1999. Sales of Viewpoint VBX(TM) video
distribution systems decreased 63.8% in 1999, compared to 1998 and represented
approximately 21% of total 1999 revenues, compared to 52.6% of total revenues in
1998. The decline in Viewpoint VBX(TM) system sales can be attributed to a sharp
decrease in sales from two of our largest Viewpoint VBX(TM) resellers, who
changed the strategic focus of their companies, compounded by the loss of sales
representatives and directional leadership during our reorganization efforts. To
stimulate Viewpoint VBX(TM) sales in 2000, we have released new Viewpoint
VBX(TM) product enhancements and added a direct sales force to target specific
vertical markets.

    Cost of Goods Sold. Cost of goods sold decreased $232,751 to $3,948,377 for
the year ended December 31, 1999 compared to 1998 primarily due to the decrease
in Viewpoint VBX(TM) video distribution sales described above. Our consolidated
gross profit margin for 1999 was 45.7%, representing a slight decline from the
47.9% margin reported during 1998. Excluding a charge of $275,000 to record a
lower of cost or market adjustment to inventory as a result of a new contractual
pricing from one of our major suppliers, gross profit margins showed an increase
of approximately 1.6% over 1998 levels due to improved product designs,
manufacturing efficiencies and direct sales of our Viewpoint VBX(TM) video
systems. Management expects profit margins to fluctuate based on product mix,
but over extended periods anticipates its margins will remain in the range of
46% -- 52%.

    Selling, General and Administrative Expense. Selling, general, and
administrative expense decreased to $7,543,409 for the year ended December 31,
1999 from $8,352,476 reported during 1998 primarily due to our restructuring
efforts instituted in the fourth quarter of 1999 to reduce our sales staff and
sales administrative costs. The savings generated from the reduced sales
expenses during 1999 were offset in part by increases in marketing and customer
support expenditures. Administrative expenses during 1999 increased slightly
over 1998 levels after excluding the effects of a $610,000 bad debt write-off in
1998 that




                                       15
<PAGE>   16

arose when a reseller failed to meet its financial obligations.

    Research and Development Expense. Research and development expense decreased
$159,341 or 5.2% to $2,930,761 during 1999 compared to 1998, principally due to
development staff reductions initiated during the fourth quarter of 1998.

    Other Income (Expense). For the year ended December 31, 1999, other income
(expense) decreased $139,587 to $704,121, primarily due to an increase in
interest income generated by higher average cash and cash equivalent balances
during the year. Interest expense increased approximately 8.7% over 1998 levels
due principally to the amortization of debt issue costs and interest associated
with our line of credit financing consummated in October 1998.

LIQUIDITY AND CAPITAL RESOURCES

    Our primary sources of funds for conducting our business activities are from
sales of our products and from the sale of debt and equity securities. We
require liquidity and working capital primarily to fund operating losses,
increases in inventories and accounts receivable associated with sales growth,
development of our products, debt service and for capital expenditures.

    Net cash used in operating activities for the year ended December 31, 1999
was $8,471,721 resulting primarily from a net loss of $8,473,674, which includes
non-cash operating expenses of $1,266,584, and changes in operating assets and
liabilities of $1,264,631.

    Investing activities during 1999 utilized cash of $571,187 for capital
expenditures for computer equipment, test equipment and purchased software to
aid in the marketing, development and testing of our products.

    During the year ended December 31, 1999, financing activities generated cash
in the amount of $12,919,097 resulting principally from the completion of our
private placement of Series B Convertible Preferred Stock which provided net
proceeds of $8,834,346. During 1999, we also received proceeds of $5,486,678
from the exercise of options and warrants and utilized cash in the amount of
$1,501,737 to retire short-term debt.

    During September of 1998, we entered into a strategic business relationship
with TekInsight.com, Inc. ("TEKS"), formerly Tadeo Holdings, Inc., that involved
a stock purchase agreement whereby we acquired 1,240,310 shares of TEKS common
stock in exchange for 1,000,000 shares of our Common Stock. Because all of the
TEKS shares held by us will be available for trading under Rule 144 of the
Securities and Exchange Commission prior to December 31, 2000, we have presented
those shares at their fair market value on the balance sheet as of December 31,
1999. The quoted market price of TEKS registered common stock at December 31,
1999 and March 20, 2000 was $2.75 and $5.38 per share, respectively.

    At December 31, 1999, we had working capital of $7,575,154 compared to
$1,452,778 at December 31, 1998 and cash and cash equivalents of $4,315,980 at
December 31, 1999 compared to $439,791 at December 31, 1998. We experienced an
overall decrease in sales during 1999 and anticipate that losses will continue
during 2000 and until such time as profit margins from the sales of our products
exceed our development, selling, administrative and financing costs. In October
of 1998, we entered into a working capital line of credit financing arrangement
for up to $9,000,000 with an entity controlled by one of our principal
stockholders, who is now also our Chairman of the Board. The availability of
funds under this facility is subject to certain borrowing base limitations based
principally on outstanding accounts receivable and inventory. At December 31,
1999, we had utilized $2.41 million of this facility and may further utilize the
facility to fund future growth. Additionally, during January and February of
2000, we received proceeds of $1,863,828 from the exercise of 621,276 private
warrants to purchase our Common Stock at $3.00 per share.

    Should all the 2,609,817 redeemable public warrants and 1,466,664 redeemable
private warrants outstanding at December 31, 1999, be exercised, our proceeds
would aggregate $18,344,407. Each redeemable warrant entitles the warrant holder
to purchase 1.074 shares of Common Stock for $4.50 resulting in an effective
exercise price of $4.19 per share of Common Stock.



                                       16
<PAGE>   17

    During 2000, we expect to significantly increase our sales, marketing and
public relations efforts to promote both our new and existing product offerings,
and anticipate that additional capital will be required in the latter part of
2000 to effectively do so. We have had preliminary discussions with several
potential sources of additional financing and may seek additional financing to
provide working capital in the future. Such financing may include the issuance
of convertible debt, convertible preferred stock or other equity securities in
exchange for a cash investment in us. There can be no assurance that any such
additional financing will be available to us on acceptable terms, or at all.
Additional equity financing may involve substantial dilution to our then
existing stockholders. In the event we are unable to raise additional capital,
we may be required to substantially reduce or curtail our activities.

    At December 31, 1999, we had no material commitments for capital
expenditures.


YEAR 2000 COMPLIANCE

    In prior years, we discussed the nature and progress of our plans to become
Year 2000 ready. In late 1999, we completed our remediation and testing of
systems. As a result of those planning and implementation efforts, we
experienced no significant disruptions in mission critical information
technology and non-information technology systems and believe those systems
successfully responded to the Year 2000 date change. We expensed approximately
$15,000 during 1999 in connection with remediating our systems. We are not aware
of any material problems resulting from Year 2000 issues, either with our
products, our internal systems, or the products and services of third parties.
We will continue to monitor our mission critical computer applications and those
of our suppliers and vendors throughout the year 2000 to ensure that any latent
Year 2000 matters that may arise are addressed promptly.





                                       17
<PAGE>   18

ITEM 7.  FINANCIAL STATEMENTS

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




<TABLE>
<S>                                                                    <C>
Report of Independent Auditors..........................................19

Consolidated Balance Sheets at December 31, 1998 and 1999...............20

Consolidated Statements of Operations for the years ended
 December 31, 1998 and 1999.............................................21

Consolidated Statements of Stockholders' Equity for the
 years ended December 31, 1998 and 1999.................................22

Consolidated Statements of Cash Flows for the years ended
 December 31, 1998 and 1999.............................................23

Notes to Consolidated Financial Statements..............................24
</TABLE>



                                       18
<PAGE>   19
                         Report of Independent Auditors

The Board of Directors
ViewCast.com, Inc.

We have audited the accompanying consolidated balance sheets of ViewCast.com,
Inc. and subsidiaries as of December 31, 1998 and 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
ViewCast.com, Inc. and subsidiaries at December 31, 1998 and 1999, 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.




Dallas, Texas                                   ERNST & YOUNG LLP
February 18, 2000






                                       19
<PAGE>   20

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                            ----------------------------
                                                                                 1998            1999
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
                               ASSETS
Current assets:
  Cash and cash equivalents                                                 $    439,791    $  4,315,980
  Available-for-sale securities                                                       --       3,410,853
  Accounts receivable, less allowance for  doubtful accounts of
    $823,000 and $117,000 at December 31, 1998 and 1999, respectively          1,839,783       1,386,395
  Stock subscription receivable                                                3,400,000              --
  Inventory                                                                    3,110,588       2,526,096
  Prepaid expenses                                                                90,646          93,598
  Deferred charges, principally deferred debt issue costs                        568,252              --
                                                                            ------------    ------------
      Total current assets                                                     9,449,060      11,732,922

Property and equipment, net                                                    1,382,044       1,338,143
Software development costs, net                                                  431,500         429,502
Deferred charges                                                                 213,048              --
Investment in equity securities                                                2,000,000              --
Deposits                                                                         135,938          64,815
                                                                            ------------    ------------

      Total assets                                                          $ 13,611,590    $ 13,565,382
                                                                            ============    ============

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                          $  2,847,807    $    662,247
  Accrued compensation                                                           326,169         418,360
  Deferred revenue                                                               157,891         270,779
  Accrued restructuring charges                                                  275,000              --
  Other accrued liabilities                                                      488,337         392,713
  Short-term debt, officer                                                        96,285              --
  Shareholder line of credit                                                   3,687,513       2,408,827
  Short-term debt, other                                                         117,280           4,842
                                                                            ------------    ------------
      Total current liabilities                                                7,996,282       4,157,768

Long-term debt                                                                 1,360,000              --

Commitments

Stockholders' equity:
  Convertible preferred stock, $.0001 par value:
    Authorized shares - 5,000,000
      Series A - issued and outstanding shares - 334,000 and none at
          December, 31, 1998 and 1999, respectively                                   33              --
      Series B - issued and outstanding shares - 400,000 and 945,000
          at December 31, 1998 and 1999, respectively                                 40              95
  Common stock, $.0001 par value:
    Authorized shares - 30,000,000 and 40,000,000 at
      December 31, 1998 and 1999, respectively
    Issued and outstanding shares -  11,324,974 and 14,624,898
      at December 31, 1998 and 1999, respectively                                  1,132           1,463
  Additional paid-in capital                                                  31,947,418      44,889,810
  Unrealized gain on securities reported at fair value and accumulated
      other comprehensive income                                                      --       1,410,853
  Accumulated deficit                                                        (27,681,409)    (36,882,701)
  Treasury stock,  261,497 shares at December 31, 1998 and 1999                  (11,906)        (11,906)
                                                                            ------------    ------------
      Total stockholders' equity                                               4,255,308       9,407,614
                                                                            ------------    ------------

      Total liabilities and stockholders' equity                            $ 13,611,590    $ 13,565,382
                                                                            ============    ============
</TABLE>


                             See accompanying notes.

                                       20
<PAGE>   21


                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31,
                                           ----------------------------
                                               1998            1999
                                           ------------    ------------
<S>                                        <C>             <C>
NET SALES                                  $  8,027,948    $  7,270,080

Cost of goods sold                            4,181,128       3,948,377
                                           ------------    ------------

GROSS PROFIT                                  3,846,820       3,321,703

Operating expenses:
  Selling, general and administrative         8,352,476       7,543,409
  Research and development                    3,090,102       2,930,761
  Restructuring charge                          402,800              --
  Depreciation and amortization                 524,427         617,086
                                           ------------    ------------
      Total operating expenses               12,369,805      11,091,256
                                           ------------    ------------

OPERATING LOSS                               (8,522,985)     (7,769,553)

Other income (expense):
  Dividend and interest income                   34,117         249,985
  Interest expense                             (877,873)       (954,168)
  Other                                              48              62
                                           ------------    ------------
      Total other income (expense)             (843,708)       (704,121)
                                           ------------    ------------

NET LOSS                                   $ (9,366,693)   $ (8,473,674)
                                           ============    ============

NET LOSS PER SHARE - BASIC AND DILUTED     $      (1.02)   $      (0.71)
                                           ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
   outstanding                                9,367,537      13,105,884
                                           ============    ============
</TABLE>

                             See accompanying notes.

                                       21
<PAGE>   22


                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999

<TABLE>
<CAPTION>
                                                   CONVERTIBLE                              ADDITIONAL
                                                 PREFERRED STOCK         COMMON STOCK        PAID-IN
                                               SHARES     PAR VALUE    SHARES    PAR VALUE   CAPITAL
                                             ----------   ---------  ----------  --------- ------------
<S>                                          <C>          <C>        <C>         <C>       <C>
BALANCE,  DECEMBER 31, 1997                          --    $   --     8,995,455   $  900   $ 19,628,703

  Conversion of long-term debt to
    convertible preferred stock - Series A      364,000        36            --       --      2,903,604

  Sale of convertible preferred stock -
     Series B                                   400,000        40            --       --      3,999,960

  Conversion of convertible preferred
     stock - Series A to common stock           (30,000)       (3)       82,770        8             (5)

  Common stock issued in exchange
     for equity securities                           --        --     1,000,000      100      1,999,900

  Exercise of options and warrants                   --        --     1,043,374      104      2,185,392

  Sale of common stock, employee
     stock purchase plan                             --        --        73,787        7        139,109

  Value of options and warrants
      issued for consulting services                 --        --            --       --        461,851

  Warrants issued for inducement
     of debt                                         --        --            --       --        266,000

  Accelerated vesting of employee
     stock options in connection with
     restructuring                                   --        --            --       --        127,800

  Common stock issued for
     consulting services                             --        --        73,443        7        133,389

  Convertible preferred stock
     dividends - Series A                            --        --        56,145        6        101,715

  Net loss and comprehensive loss                    --        --            --       --             --

                                             ----------    ------    ----------   ------   ------------
BALANCE,  DECEMBER 31, 1998                     734,000        73    11,324,974    1,132     31,947,418

  Sale of convertible preferred stock -
     Series B, net                              545,000        55            --       --      5,434,291

  Conversion of convertible preferred
     stock - Series A to common stock          (334,000)      (33)      921,505       92            (59)

  Conversion of 8% convertible notes
     to common stock                                 --        --       317,313       32      1,162,818

  Exercise of options and warrants                   --        --     1,885,332      189      5,486,491

  Value of options and warrants
      issued for consulting services                 --        --            --       --         65,347

  Sale of common stock, employee
     stock purchase plan                             --        --        44,220        4         99,806

  Other                                              --        --            --       --        (14,330)

  Convertible preferred stock
     dividends - Series A and B                      --        --       131,554       14        708,028

  Unrealized gain on securities reported
     at fair value                                   --        --            --       --             --
  Net loss                                           --        --            --       --             --

          Comprehensive loss

                                             ----------    ------    ----------   ------   ------------
BALANCE,  DECEMBER 31, 1999                     945,000    $   95    14,624,898   $1,463   $ 44,889,810
                                             ==========    ======    ==========   ======   ============

<CAPTION>
                                                OTHER                                     TOTAL
                                            COMPREHENSIVE  ACCUMULATED     TREASURY   STOCKHOLDERS'
                                                INCOME        DEFICIT       STOCK        EQUITY
                                            -------------  ------------    --------   -------------
<S>                                          <C>           <C>             <C>         <C>
BALANCE,  DECEMBER 31, 1997                   $       --   $(18,199,433)   $(11,906)   $ 1,418,264

  Conversion of long-term debt to
    convertible preferred stock - Series A            --             --          --      2,903,640

  Sale of convertible preferred stock -
     Series B                                         --             --          --      4,000,000

  Conversion of convertible preferred
     stock - Series A to common stock                 --             --          --             --

  Common stock issued in exchange
     for equity securities                            --             --          --      2,000,000

  Exercise of options and warrants                    --             --          --      2,185,496

  Sale of common stock, employee
     stock purchase plan                              --             --          --        139,116

  Value of options and warrants
      issued for consulting services                  --             --          --        461,851

  Warrants issued for inducement
     of debt                                          --             --          --        266,000

  Accelerated vesting of employee
     stock options in connection with
     restructuring                                    --             --          --        127,800

  Common stock issued for
     consulting services                              --             --          --        133,396

  Convertible preferred stock
     dividends - Series A                             --       (115,283)         --        (13,562)

  Net loss and comprehensive loss                     --     (9,366,693)         --     (9,366,693)

                                              ----------   ------------    --------    -----------
BALANCE,  DECEMBER 31, 1998                           --    (27,681,409)    (11,906)     4,255,308

  Sale of convertible preferred stock -
     Series B, net                                    --             --          --      5,434,346

  Conversion of convertible preferred
     stock - Series A to common stock                 --             --          --             --

  Conversion of 8% convertible notes
     to common stock                                  --             --          --      1,162,850

  Exercise of options and warrants                    --             --          --      5,486,680

  Value of options and warrants
      issued for consulting services                  --             --          --         65,347

  Sale of common stock, employee
     stock purchase plan                              --             --          --         99,810

  Other                                               --             --          --        (14,330)

  Convertible preferred stock
     dividends - Series A and B                       --       (727,618)         --        (19,576)

  Unrealized gain on securities reported
     at fair value                             1,410,853             --          --      1,410,853
  Net loss                                            --     (8,473,674)         --     (8,473,674)
                                                                                       -----------
          Comprehensive loss                                                            (7,062,821)

                                              ----------   ------------    --------    -----------
BALANCE,  DECEMBER 31, 1999                   $1,410,853   $(36,882,701)   $(11,906)   $ 9,407,614
                                              ==========   ============    ========    ===========
</TABLE>


                             See accompanying notes.

                                       22
<PAGE>   23


                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                                    -------------------------------
                                                                        1998               1999
                                                                    ------------       ------------
<S>                                                                 <C>                <C>
OPERATING ACTIVITIES:
  Net loss                                                          $ (9,366,693)      $ (8,473,674)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation of fixed assets                                       380,742            496,169
      Amortization of software development costs                         143,685            120,917
      Non-cash charges to interest expense                               289,885            584,151
      Non-cash charge to restructuring costs                             127,800                 --
      Non-cash consulting fees exchanged for options, warrants
         and common stock                                                595,247             65,347
      Changes in operating assets and liabilities:
        Accounts receivable                                             (644,553)           453,388
        Inventory                                                     (1,348,402)           584,492
        Prepaid expenses                                                 (15,550)            (2,952)
        Deferred charges                                                (598,132)                --
        Deposits                                                         (98,947)            71,123
        Accounts payable                                               2,088,488         (2,185,560)
        Accrued compensation                                              12,535             92,191
        Accrued restructuring charges                                    275,000           (275,000)
        Deferred revenue                                                 105,107            112,888
        Other accrued liabilities                                        131,723           (115,201)
                                                                    ------------       ------------
               Net cash used in operating activities                  (7,922,065)        (8,471,721)
                                                                    ------------       ------------

INVESTING ACTIVITIES:
  Purchase of property and equipment, net                               (885,350)          (452,268)
  Software development costs                                            (371,323)          (118,919)
  Other                                                                       --                 --
                                                                    ------------       ------------
               Net cash used in investing activities                  (1,256,673)          (571,187)
                                                                    ------------       ------------

FINANCING ACTIVITIES:
  Net proceeds from convertible preferred stock - Series B               600,000          8,834,346
  Net proceeds from shareholder line of credit                         3,687,513                 --
  Repayment of short-term debt-officer                                  (214,958)           (96,285)
  Repayment of shareholder line of credit, net                                --         (1,278,685)
  Short-term debt, other                                                 104,160           (126,767)
  Proceeds from exercise of options and warrants                       2,185,496          5,486,678
  Net proceeds from sale of common stock and warrants                    139,116             99,810
                                                                    ------------       ------------
               Net cash provided by financing activities               6,501,327         12,919,097
                                                                    ------------       ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  (2,677,411)         3,876,189

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                         3,117,202            439,791
                                                                    ------------       ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                            $    439,791       $  4,315,980
                                                                    ============       ============
</TABLE>



                            See accompanying notes.

                                       23
<PAGE>   24
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. THE COMPANY AND DESCRIPTION OF BUSINESS

    The accompanying consolidated financial statements include the accounts of
ViewCast.com, Inc. (VCST), and its wholly-owned subsidiaries, Viewpoint Systems,
Inc. (Viewpoint), VideoWare, Inc. (VideoWare) and Osprey Technologies, Inc.
(Osprey) (collectively, the Company). The Company operates in one business
segment and is engaged in designing, developing and marketing advanced,
standards-based video products that enable video communication over the Internet
and corporate networks. The Company's Viewpoint VBX(TM) video distribution
system, Osprey(R) line of video peripheral products and video
compression-decompression cards and ViewCast(R) line of Internet encoding and
streaming video servers deliver business applications for video conferencing,
video broadcasting, video-based training, distance learning, telemedicine,
surveillance and Internet and intranet video communications. The Company markets
its products directly to end-users, through original equipment manufacturers,
value-added resellers and computer system integrators, worldwide. Effective
April 8, 1999, the Company changed its name from MultiMedia Access Corporation
to ViewCast.com, Inc. to better reflect its current and anticipated future
business operations. Accordingly, prior references to MultiMedia Access
Corporation in the accompanying financial statements and notes have been changed
to reflect the Company's new name.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPALS OF CONSOLIDATION

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

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.

INVENTORY

    Inventory consists primarily of purchased electronic components and computer
system products, along with the related documentation manuals and packaging
materials. Inventory is carried at the lower of cost or market, cost being
determined on a standard cost basis, which approximates average cost.

PROPERTY AND EQUIPMENT

    Property and equipment is recorded at cost. Depreciation is determined using
the straight-line method over the estimated useful lives, generally three to
five years, of the related assets. Leasehold improvements are amortized over the
lives of the related leases. Expenditures for repairs and maintenance are
charged to operations as incurred; renewals and betterments are capitalized.

SOFTWARE DEVELOPMENT COSTS

    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 in accordance with Statement of Financial Accounting Standards No.
86, "Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed." Amortization of capitalized software development costs
begins when products are available for general release to customers, and is
computed using the straight-line method over a period not to exceed three years.





                                       24
<PAGE>   25
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

REVENUE RECOGNITION

    Revenue from the sale of video communication systems and products and
licensing of the related software is recognized upon shipment to customers. The
Company maintains an accrued warranty reserve for products which are returned
defective during the warranty period.

NET LOSS PER SHARE

    Basic earnings per share is calculated by dividing net loss by the number of
weighted average common shares outstanding for the period. Since the Company has
reported net losses for all periods presented, the computation of diluted loss
per share excludes the effects of convertible debt, options, and warrants since
their effect is anti-dilutive. (See Note 10.)

    Loss per share calculations for the years ended December 31, 1998 and 1999
are as follows:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                                   DECEMBER 31,
                                                        -----------------------------------
                                                             1998               1999
                                                        ---------------    ----------------
<S>                                                     <C>                <C>
     Net loss                                           $    (9,366,693)   $     (8,473,674)

     Preferred dividends and accretion of
       issue costs                                            (175,945)            (778,381)
                                                        ---------------    ----------------

     Net loss applicable to common shareholders         $    (9,542,638)   $     (9,252,055)
                                                        ===============    ================

     Weighted average number of common shares
        outstanding                                          9,367,537           13,105,884
                                                        ===============    ================

     Loss per share as reported in the financial
       statements: basic and diluted                    $         (1.02)   $          (0.71)
                                                        ===============    ================
</TABLE>


DEFERRED CHARGES AND OTHER ASSETS

    Deferred charges at December 31, 1998 consisted of legal, accounting and
lead manager fees and expenses associated with the issuance of 8% senior
convertible notes in December 1997 as well as fees and expenses associated with
the procurement of a $9 million working capital credit facility in October of
1998. During August 1998, the Company exchanged $3.64 million of its 8% senior
convertible notes for newly created shares of Series A convertible preferred
stock and, accordingly, a proportionate share of issue costs in the amount
$736,359 were charged against the exchange proceeds. Net debt issue costs at
December 31, 1998 were $781,300 of which $568,252 was classified as current.
During 1999, $197,149 of issue costs associated with the conversion of 8% senior
convertible notes to common stock of the Company, was charged against additional
paid-in capital.

    Deferred charges amortized to interest expense for the years ended December
31, 1998 and 1999 were $289,885, and $584,151, respectively.




                                       25
<PAGE>   26

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


CONCENTRATION OF CREDIT RISK

    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 a Texas commercial bank and a
commercial brokerage firm. The brokerage firm maintains accounts in several
banks throughout the country and in government securities. The Company sells its
products and services primarily to distributors and resellers without requiring
collateral; however, the Company routinely assesses the financial condition of
its customers and maintains allowances for anticipated losses. During the years
ended December 31, 1998 and 1999, three customers accounted for 41% and one
customer accounted for 23% of total consolidated revenues, respectively.
Balances due from these customers at December 31, 1998 and 1999 represented 39%
and 8% of net accounts receivable, respectively. The receivable was written off
against the reserve at December 31, 1999. The Company believes it has no
significant credit risk in excess of provided reserves.

USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. 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.

ADVERTISING COSTS

    Advertising costs are expensed as incurred. Advertising expense for the
years ended December 31, 1998 and 1999 was $353,024 and $448,859, respectively.

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. At December 31, 1999,
available-for-sale securities consist of the investment in equity securities of
a strategic business alliance partner, and are stated at fair market value as
determined by quoted market prices. Gross unrealized gains, which have been
included as a separate component of stockholders' equity, were $1,410,853 at
December 31, 1999. No unrealized holding gains or losses were included in
earnings during the years ended December 31, 1998 and 1999 (See Note 5).

STOCK-BASED COMPENSATION

    In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock-Based
Compensation. SFAS 123 defines a fair-value based method of accounting for an
employee stock option or similar equity instrument. As permitted by SFAS 123,
the Company has elected to continue to measure the cost of its stock-based
compensation plans using the intrinsic-value based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees. See Note 10 to the Consolidated Financial Statements for
additional information concerning stock-based compensation.



                                       26
<PAGE>   27
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)




SEGMENT REPORTING

    Under Statement of Financial Accounting Standards No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information, the Company
operated, for all periods presented, in a single segment.

COMPREHENSIVE INCOME

    Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting
Comprehensive Income requires that total comprehensive income be disclosed with
equal prominence as net income and earnings per share. Comprehensive income is
defined as changes in stockholders' equity exclusive of transactions with owners
such as capital contributions and dividends. The Company had no elements of
comprehensive income during the year ended December 31, 1998. At December 31,
1999, the Company had gross unrealized gains on available-for-sale securities of
$1,410,853 (See Note 5).

IMPAIRMENT OF LONG-LIVED ASSETS

    In accordance with Statement of Financial Accounting Standards No. 121 (SFAS
121), Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, the Company reviews its long-lived assets for
impairment when events or changes in circumstances indicate that the carrying
value of such assets may not be recoverable. This review consists of a
comparison of the carrying value of the asset with the asset's expected future
undiscounted cash flows without interest costs. Estimates of expected future
cash flows represent management's best estimate based on reasonable and
supportable assumptions and projections. If the expected future cash flow
exceeds the carrying value of the asset, no impairment is recognized. If the
carrying value of the asset exceeds the expected future cash flows, impairment
is measured by the excess of the carrying value over the fair value of the
asset. Any impairment provisions recognized are permanent and may not be
restored in the future. Impairment expense of $30,000 was recognized in 1998,
and is included as a component of the 1998 restructuring charge (See Note 3).
The Company recognized no material impairment expense during 1999.

NEW ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS 133), Accounting for Derivative
Instruments and Hedging Activities. SFAS 133 is effective commencing in the
Company's fiscal year 2001. SFAS 133 requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and the type of hedge transaction. The ineffective portion of all
hedges will be recognized in earnings. The Company's management is currently
evaluating the impact of the statement.

3.  BUSINESS RESTRUCTURING

    Results of operations for 1998 include charges of $402,800 for resizing and
restructuring the Company's operations and workforce. The charges were recorded
in the fourth quarter of 1998 in accordance with a plan of restructuring
approved by the Company's Board of Directors. Charges included severance costs
for work force reductions of 16 employees including two Executive Officers of
the Company, closure of three sales offices and losses on impairment of certain
assets. Personnel reductions were made in the Company's sales, development and
finance and administration departments in an effort to reduce operating
expenses. At December 31, 1998 the Company had $275,000 of accrued restructuring
charges consisting principally of severance that was paid during 1999.



                                       27
<PAGE>   28
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



4.  INVENTORY

    Inventory consists of the following:

<TABLE>
<CAPTION>
                                      DECEMBER 31,
                              --------------------------
                                 1998            1999
                              ----------      ----------
<S>                           <C>             <C>
     Purchased materials      $  815,999      $  766,553
     Work in progress            108,639              --
     Finished goods            2,185,950       1,759,543
                              ----------      ----------
                              $3,110,588      $2,526,096
                              ==========      ==========
</TABLE>

    Inventory at December 31, 1998 and 1999 is presented net of reserves of
$199,255 and $346,153 for obsolete, slow moving and damaged inventory.

5. INVESTMENT IN EQUITY SECURITIES

    In September 1998, the Company entered into a strategic business alliance
with TEKS that included a stock purchase agreement whereby the Company acquired
1,240,310 shares of TEKS common stock in exchange for 1,000,000 shares of the
Company's common stock. As specified in the purchase agreement, the number of
shares exchanged was determined by dividing $2,000,000 by the average closing
price per share of each company's common stock for the five trading days prior
to September 24, 1998. The shares issued by the Company and TEKS are not
registered under the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise distributed in the absence of such registration or an
applicable exemption therefrom.

    At December 31, 1998, the Company valued its entire investment in TEKS
common stock at cost due to limitations imposed by Rule 144 of the Securities
and Exchange Commission limiting all trading for the first two years that the
stock is held. At December 31, 1999, all TEKS common stock will be available for
sale within the next twelve months; and accordingly, it has been classified as a
current asset and stated at fair market value of $2.75 per share as determined
by quoted market prices. At February 18, 2000, the quoted market price of TEKS
registered shares was $4.43.

6. PROPERTY AND EQUIPMENT

    Property and equipment, at cost, consists of the following:

<TABLE>
<CAPTION>
                                              DECEMBER 31,
                                    -----------------------------
                                        1998              1999
                                    -----------       -----------
<S>                                 <C>               <C>
Computer equipment                  $ 1,397,444       $ 1,702,786
Software                                374,403           471,103
Leasehold improvements                  100,779           100,779
Office furniture and equipment          441,080           491,227
                                    -----------       -----------
                                      2,313,706         2,765,895
Less accumulated depreciation
  and amortization                     (931,662)       (1,427,752)
                                    -----------       -----------
                                    $ 1,382,044       $ 1,338,143
                                    ===========       ===========
</TABLE>




                                       28
<PAGE>   29
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



7. SHORT-TERM DEBT

    Short-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                 --------------------------
                                                                     1998            1999
                                                                 ----------      ----------
<S>                                                              <C>             <C>
     OFFICER:
       Unsecured note payable to an officer and affiliate
        of the Company, due on demand with interest at 15%       $   96,285              --
                                                                 ==========      ==========

     OTHER:
       Fully secured $9,000,000 working capital credit
        facility payable to a principal shareholder of the
        Company, with interest payable monthly at 12%            $3,687,513      $2,408,827

       Other                                                        117,280           4,842
                                                                 ----------      ----------
                                                                 $3,804,793      $2,413,669
                                                                 ==========      ==========
</TABLE>

    In October 1998, the Company entered into a working capital line of credit
facility for up to $9 million with an entity controlled by one of its principal
shareholders, H.T. Ardinger, Jr. This one year, renewable facility, which
contains terms more favorable than the Company's prior facility, bears interest
at 12% per annum and is secured by all assets of the Company. The availability
of funds under this facility is subject to certain borrowing base limitations
based principally on qualifying accounts receivable and inventory. A portion of
the proceeds from this facility was used to retire the Texas commercial bank
line of credit. As an incentive to advance the line of credit, Mr. Ardinger was
issued 200,000 three-year warrants to purchase Company stock at $4.50 per share.
The value of the warrants of $1.33 per share, as determined using the
Black-Sholes option valuation model, is being charged to interest expense over
the term of the note.

    At December 31, 1998, the Company had $96,285 of 15% notes outstanding to
its former Chief Executive Officer. The 15% notes were due on demand with
interest payable monthly and were paid during January 1999.

    Interest paid was $528,301 and $422,169 for the years ended December 31,
1998 and 1999, respectively.

8. LONG-TERM DEBT

    Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                            --------------------------
                                                                1998          1999
                                                            -----------    -----------
<S>                                                         <C>            <C>
      Senior 8% convertible notes issued December 9, 1997
        due December 2002 with interest payable
        semi-annually in arrears.                           $ 1,360,000    $        --
                                                            ===========    ===========
</TABLE>


    On December 9, 1997 the Company sold $5,000,000 aggregate principal amount
of 8% senior convertible notes due 2002 (the "Notes") at an initial offering
price of 100% of the principal amount thereof, less 8% gross commission. The
Notes were convertible to common stock of the Company at the initial conversion
price of $4.625 per share. The Notes ranked senior to all existing and future
subordinated obligations and ranked pari passu with all senior indebtedness of
the Company, except to the extent of any collateral securing such debt. Lead
managers in connection with the Notes offering received 108,108




                                       29
<PAGE>   30
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



warrants to purchase Company stock at an exercise price of $4.625 per share. In
December 1997, the Company received net proceeds of $4,168,000 from the Notes
offering.

     In August 1998, the Company exchanged $3,640,000 of its 8% senior
convertible notes for 364,000 shares of a newly created Series A convertible
preferred stock. The Series A preferred stock carried a dividend of 8.5% per
year payable in cash or common stock of the Company, at the Company's option,
and was convertible into Common Stock of the Company at a fixed conversion price
of $3.625 per share (subject to certain conditions).

     In February through April 1999, holders of $1,360,000 principal amount of
8% convertible notes exchanged their notes for 317,313 shares of common stock of
the Company at conversion prices ranging from of $3.625 to $4.625 per share
completing the exchange of all 8% convertible notes outstanding at December 31,
1998.

9. INCOME TAXES

    The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes.
SFAS 109 requires a valuation allowance to be recorded 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 $9,327,000 and $12,492,000 has been provided against deferred tax assets in
excess of deferred tax liabilities in the accompanying consolidated financial
statements at December 31, 1998 and 1999, respectively.


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

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                         -------------------------------
                                                                             1998               1999
                                                                         ------------       ------------
<S>                                                                      <C>                <C>
     Deferred tax assets:
          Net operating loss carryforward                                $  8,182,000       $ 11,830,000
          Revenue deferred for financial statements, recognized
             for tax                                                           38,000             80,000
          Excess of tax over financial statement basis of
             patent                                                            33,000             30,000
          Accruals deductible for tax purposes when paid                      606,000            399,000
          Excess of  tax over financial statement basis of software
             development costs                                                532,000            754,000
                                                                         ------------       ------------
                    Total deferred tax assets                               9,391,000         13,093,000
     Less: valuation allowance                                             (9,327,000)       (12,492,000)
                                                                         ------------       ------------
                                                                               64,000            601,000
     Deferred tax liabilities:
         Excess of financial statement over tax basis of
           of property and equipment                                           64,000            480,000
                                                                         ------------       ------------
                    Total deferred tax liabilities                             64,000            121,000
                                                                         ============       ============
     Net deferred taxes                                                  $         --       $         --
                                                                         ============       ============
</TABLE>




                                       30
<PAGE>   31
                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     A reconciliation between the federal income tax benefit calculated by
applying U.S. federal statutory rates to net loss and the absence of a tax
benefit reported in the accompanying consolidated financial statements is as
follows:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                          -----------------------------
                                                              1998              1999
                                                          -----------       -----------
<S>                                                       <C>               <C>
U.S. federal statutory rate applied to pretax loss        $(3,185,000)      $(2,881,000)
State tax net of federal benefit                             (281,000)         (219,000)
Change in valuation allowance                               2,611,000         3,165,000
Net operating loss carryforward adjustment                    734,000          (761,000)
Unrealized gain on securities reported at fair value               --           480,000
Other                                                         121,000           216,000
                                                          -----------       -----------
                                                          $        --       $        --
                                                          ===========       ===========
</TABLE>

     At December 31, 1999 the Company has federal income tax net operating loss
carryforwards of approximately $31,400,000 which expire as follows:

<TABLE>
<CAPTION>
                          YEAR
                          ENDED          AMOUNT
                          -----          ------
<S>                                   <C>
                           2009       $ 2,700,000
                           2010         4,700,000
                           2011         4,000,000
                           2012         5,200,000
                           2018         7,400,000
                           2019         7,400,000
</TABLE>

     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. Beginning with 1994, utilization of approximately $21,000,000
of the carryforward is subject to annual limitations.

     No income taxes were paid during the years ended December 31, 1998 and
1999.

10. STOCKHOLDERS' EQUITY

PREFERRED STOCK

    In August 1998, the Company exchanged $3,640,000 of its 8% senior
convertible notes for 364,000 shares of its newly created Series A convertible
preferred stock. The Series A preferred stock carries a dividend of 8.5% per
year payable in cash or common stock of the Company, at the Company's option,
and is convertible into Common Stock of the Company at a fixed conversion price
of $3.625 per share (subject to certain conditions).

    In December 1998 through February 1999, the Company received net proceeds of
$8,834,346 from the private placement of 945,000 shares of a newly created
Series B convertible preferred stock at $10 per share. Two principal
shareholders of the Company each purchased $4,000,000 of the Series B offering
and other existing shareholders purchased the balance of $1,450,000. 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. At December 31, 1998, the Company had received a $4,000,000
subscription for the Series B preferred stock from H.T. Ardinger Jr., a
principal shareholder and Chairman of the Board of the




                                       31
<PAGE>   32

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



Company, of which $600,000 was paid in December 1998 and the balance of
$3,400,000 was classified as a stock subscription receivable at December 31,
1998 and paid January 27, 1999.

    Holders of the Series A and Series B 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. Additionally, the holders of Series
A preferred stock have Board of Director representation privileges in instances
of dividend default by the Company.

COMMON STOCK

    In September 1998, holders of 30,000 shares of Series A preferred stock
converted their shares into 82,770 shares of common stock of the Company. In
January through August 1999, holders of 334,000 shares of Series A preferred
stock converted their shares into 921,505 shares of common stock completing the
conversion of all outstanding shares Series A preferred stock.

    In June through December of 1998, the Company received $343,225 in proceeds
from the exercise of 343,225 warrants to purchase Company common stock at an
exercise price of $1.00 per share. During 1999, the Company received $1,922,037
from the exercise of 525,791 warrants with exercise prices ranging from $3.00 to
$4.19 per share.

    During 1998, the Company received proceeds of $37,275 from the exercise of
66,817 stock options with exercise prices ranging from $.04 to $3.00 per share.
During 1999, the Company received $3,564,641 from the exercise of 1,333,622
stock options with exercise prices ranging from $0.10 to $5.84 per share.

    In September 1998, the Company entered into a strategic business alliance
with TEKS, whereby the Company acquired 1,240,310 shares of TEKS common stock in
exchange for 1,000,000 shares of the Company's common stock. The number of
Company shares exchanged was determined by dividing $2,000,000 by the average
closing price per share of the Company's common stock for the five trading days
prior to September 24, 1998 which was $2.00 per share (see Note 5).

    During 1998 and 1999, the Company issued 59,230 shares of Company common
stock to Series A preferred shareholders of record on December 1, 1998 as
payment of $107,310 of 8.5% accrued dividends from August 17, 1998 through
December 15, 1998. During 1999, the Company issued 2,461 shares of common stock
to Series A preferred shareholders of record on June 1, 1999 as payment of
$21,192 of 8.5% dividends accrued for the six months ended June 15, 1999. Series
A preferred dividends were paid semi-annually on June 15th and December 15th of
each year in cash or, at the option of the Company, in common stock. The common
stock is valued at the average of the market prices for the 20 consecutive stock
exchange business days ending ten stock exchange business days prior to the
dividend payment date. The computed common stock value at December 15, 1998 and
June 15, 1998 was $1.81 and $8.61 per share, respectively.

    During 1999, the Company issued 34,127 shares of Company common stock to
Series B preferred shareholders of record on June 1, 1999 as payment of $293,841
of 8.0% accrued dividends for the six months ended June 15, 1999. During 1999,
the Company also issued 91,881 shares of common stock to Series B preferred
shareholders of record on December 1, 1999 as payment of $379,035 of 8.0%
dividends accrued for the six months ended December 15, 1999. Series B preferred
dividends are paid semi-annually on June 15th and December 15th of each year in
cash or, at the option of the Company, in common stock. The common stock is
valued at the average of the market prices for the 20 consecutive stock exchange
business days ending ten stock exchange business days prior to the dividend
payment date. The computed common stock value at June 15, 1999 and December 15,
1999 was $8.61 and $4.13 per share, respectively.

    During 1998 the Company issued 73,443 shares of common stock to various
consultants in exchange for financial services. The number of common shares
issued was determined by dividing the fair market value of services by an
average of the common stock market prices on the date of issuance. Total value





                                       32
<PAGE>   33

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)




of the consulting services provided during 1998 amounted to $133,396 and prices
for common stock shares issued ranged from $1.77 to $2.81 per share.

    During 1998, the Company received $139,117 in proceeds from the sale of
73,787 shares of common stock to employees under the terms of the Company's
Employee Stock Purchase Plan. The employee purchase price for the offering
periods ended April 30, 1998 and October 31, 1998 was $2.62 and $1.50 per share,
respectively.

    During 1999, the Company received $99,810 in proceeds from the sale of
44,220 shares of common stock to employees under the terms of the Company's
Employee Stock Purchase Plan. The employee purchase price for the offering
periods ended April 30, 1999 and October 31, 1999 was $1.46 and $3.85 per share,
respectively.

    In May 1999, the Company registered, in a Registration Statement on Form
S-3, 7,933,463 shares of common stock underlying non-redeemable common stock
purchase warrants and publicly traded redeemable common stock purchase warrants
for offer and sale by the persons holding the warrants. The Company also
registered 290,360 shares of common stock underlying warrants held by Network 1
Financial Securities, Inc. received as compensation for services as managing
underwriter of the Company's initial public offering in 1997, 69,888 shares of
common stock held by RP&C International, Ltd. and 183,108 shares of common stock
underlying redeemable and non-redeemable warrants held by RP&C International and
Rauscher, Pierce & Resfnes. The common stock may be offered by its holders or
their successors in interest from time to time in transactions on the Nasdaq
SmallCap Market ("Nasdaq") or in privately negotiated transactions at current
market prices or at negotiated prices. The Company will not receive the proceeds
of sales of the common stock by its holders, but has received and will receive
proceeds from the exercise of warrants, to the extent they are exercised. See
Warrants below.

    In July 1999, stockholders of the Company approved a proposal to increase
the number of authorized shares of common stock of the Company from 30,000,000
shares to 40,000,000 shares.


STOCK OPTION PLANS

    In April 1995, the Company adopted its 1995 Stock Plan (the 1995 Stock
Option Plan) under which 2,000,000 shares of the Company's common stock was
reserved for issuance to officers, key employees and consultants of the Company.
The objectives of the stock plan are to attract and retain qualified personnel
for positions of substantial responsibility and to provide additional incentives
to employees and consultants to promote the success of the Company's business.
Options granted under the plan may be incentive stock options or non-qualified
stock options. The plan is administered by the Board of Directors. The options
are granted at the discretion of the Board of Directors at an option price per
share not less than fair market value at the date of grant. In May 1998,
stockholders of the Company approved a proposal to increase the number of shares
available for issuance under the 1995 Stock Plan from 2,000,000 shares to
3,900,000 shares. In July 1999, shareholders approved a proposal to increase the
authorized shares for issuance under the 1995 Stock Plan from 3,900,000 to
4,900,000.

    In April 1995, the Company also adopted the 1995 Director Option Plan under
which 250,000 shares of the Company's common stock are reserved for issuance to
outside directors of the Company. The objective of the director plan is to
attract and retain qualified personnel for service as outside directors of the
Company and to encourage their continued service to the Board. Only
non-qualified stock options may be granted. Grants under the plan are automatic
and nondiscretionary and are issued at an option price per share not less than
fair market value at the date of grant.




                                       33
<PAGE>   34

                       VIEWCAST.COM, INC. AND SUBSIDIARIES
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



    Following is a summary of stock option activity from December 31, 1997
through December 31, 1999:


<TABLE>
<CAPTION>
                                                             STOCK OPTIONS
                                            -------------------------------------------------
                                                                                  WEIGHTED-
                                                                                  AVERAGE
                                                NUMBER          PRICE PER      EXERCISE PRICE
                                              OF SHARES          SHARE           PER SHARE
                                            ------------      ------------     --------------
<S>                                         <C>               <C>               <C>
     Outstanding at December 31, 1997          2,737,810      $ .04 -$5.84     $       3.27

     Granted                                   1,638,009       2.06 - 4.09              2.69
     Exercised                                    66,817        .04 - 3.00               .56
     Canceled/forfeited                          654,999       2.06 - 5.84              3.58
                                            ------------
     Outstanding at December 31, 1998          3,654,003        .10 - 5.84              3.00

     Granted                                   1,002,516       2.77 - 9.00              6.23
     Exercised                                 1,341,622        .10 - 5.84              2.66
     Canceled/forfeited                          552,984       1.77 - 7.14              3.27
                                            ------------

      Outstanding at December 31, 1999         2,761,913      $1.77 -$9.00      $       4.33
                                            ============
</TABLE>

    The weighted-average grant-date fair value of options granted was $1.60 and
$4.96 for the years ended December 31, 1998 and 1999, respectively.


    The following information applies to options outstanding at December 31,
1999:


<TABLE>
<CAPTION>
                             OPTIONS OUTSTANDING                                     OPTIONS EXERCISABLE
    -----------------------------------------------------------------------    ---------------------------------
                                         WEIGHTED-AVERAGE
                                            REMAINING      WEIGHTED-AVERAGE   EXERCISABLE AT   WEIGHTED-AVERAGE
        RANGE OF       OUTSTANDING AT      CONTRACTUAL        EXERCISE         DECEMBER 31,        EXERCISE
    EXERCISE PRICES   DECEMBER 31, 1999       LIFE             PRICE              1999              PRICE
    ---------------   -----------------  ---------------  ----------------    --------------   ----------------
<S>                   <C>                <C>               <C>                 <C>              <C>
       $ 1.00 - 2.00              1,000       8.8              $ 1.76                 233           $ 1.76
         2.01 - 3.00            913,381       6.0                2.71             725,971             2.76
         3.01 - 4.00            607,533       4.9                3.44             321,736             3.46
         4.01 - 5.00            316,149       7.6                4.54             151,280             4.58
         5.01 - 6.00            391,350       8.7                5.41              61,825             5.17
         6.01 - 7.00             33,000       9.3                6.14                   -                -
         7.01 - 8.00            454,000       9.7                7.10               4,998             7.14
         8.01 - 9.00             45,500       9.3                8.83                   -                -
                         --------------    ------              ------          ----------           ------
                              2,761,913       7.0              $ 4.33           1,266,043           $ 3.29
</TABLE>

    Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting
For Stock Based Compensation, requires the disclosure of pro forma net income
and earnings per share information computed as if the Company had accounted for
its employee stock options granted subsequent to December 31, 1994 under the
fair value method set forth in SFAS 123. The fair value for these options was
estimated at the date of grant using the Black-Scholes option pricing model with
the following weighted-average assumptions:




                                       34
<PAGE>   35

                               VIEWCAST.COM, INC.
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



<TABLE>
<CAPTION>
                                                    1998           1999
                                                  --------       --------
<S>                                               <C>            <C>
                Risk-free interest rate               5.35%          5.50%
                Dividend yield                           0%             0%
                Volatility factor of the
                   market price of the
                   Company's common
                   stock                                60%            91%
                Expected life of the options
                   (years)                             6.0            6.6
</TABLE>


    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options, which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions. Because the Company's employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimated, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee
stock options. In addition, because SFAS 123 is applicable only to options
granted subsequent to December 31, 1994, the pro forma information presented
below is not necessarily indicative of the effects on reported net income in
future years.

    For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting periods. Pro forma
information for the years ended December 31, 1998 and 1999 is as follows:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                  -----------------------------------
                                                       1998                 1999
                                                  --------------       --------------
<S>                                               <C>                  <C>
               Pro forma net loss                 $  (10,741,022)      $  (10,480,394)
               Pro forma net loss per share:
                 basic and diluted                $        (1.15)      $         (.80)
</TABLE>


EMPLOYEE STOCK PURCHASE PLAN

    In May 1995, the Company established an Employee Stock Purchase Plan (ESPP)
to provide employees of the Company with an opportunity to purchase common stock
through payroll deductions. Under the ESPP, 250,000 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 Internal Revenue Code.

    Each offering is for a period of six months ending April 30 and November 30.
The ESPP terminates in April, 2005. 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, but 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 eighty-five percent (85%) of the lower of (i) the market price
of common stock immediately before the beginning of the applicable offering
period or (ii) the market price of common stock at the end of each offering
period. The Company pays all expenses incurred in connection with the
implementation and administration of the ESPP.

                                       35

<PAGE>   36
                               VIEWCAST.COM, INC.
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



WARRANTS

    The Company has issued private warrants to purchase common stock of the
Company in connection with the issuance and repayment of certain notes payable,
as inducement for early exercise of private warrants and as compensation for
services rendered by various consultants. Additionally, the Company has issued
public warrants to purchase common stock of the Company in connection with its
initial public offering and concurrent debt retirement and debt for equity
exchange (as described in the Common Stock section of Note 10).

    The following is a summary of warrant activity from December 31, 1997
through December 31, 1999:


<TABLE>
<CAPTION>
                                                                        WARRANTS
                                                 -------------------------------------------------------
                                                                                            WEIGHTED-
                                                                                             AVERAGE
                                                    NUMBER OF            PRICE PER        EXERCISE PRICE
                                                     SHARES               SHARE             PER SHARE
                                                 --------------      --------------      ---------------
<S>                                              <C>                 <C>                 <C>
Outstanding and exercisable
  at December 31, 1997                                5,271,991       $ 1.00 -$4.63      $         3.76

Granted - non-public warrants                         1,796,664         3.00 - 4.50                4.02
Exercised                                               976,557         1.00 - 3.00                2.30
Canceled                                                 23,442         1.00 - 4.50                3.49
                                                 --------------
Outstanding at December 31, 1998                      6,068,656         1.00 - 4.50                3.91

Granted - non-public warrants                            40,000                3.63                3.63
Exercised                                               525,791         3.00 - 4.19                3.55
Canceled                                                     --                  --                  --
                                                 --------------

Outstanding and exercisable
  at December 31, 1999                                5,582,865       $ 3.00 -$4.50      $         3.93
                                                 ==============
</TABLE>

    In addition, at December 31, 1999 the Company's IPO representative and
assigns held warrants to purchase 140,000 units at $6.44 per unit, each unit
consisting of one share of common stock and one common stock purchase warrant
exercisable at $4.19 per share through February 2002.

    At December 31, 1999, the Company had outstanding 2,609,817 redeemable
common stock public warrants that were issued in connection with the Company's
initial public offering, as well as 1,466,664 redeemable private warrants, with
terms similar to the public warrants, that were issued in connection with the
early exercise of private warrants during 1998. When initially issued, each
redeemable warrant entitled the holder to purchase 1.0 share of common stock at
$4.50, subject to adjustment under certain circumstances. In October 1998, the
Company reduced the effective exercise price of its then redeemable warrants
from $4.50 to $4.19 per share of common stock in accordance with the provisions
of its warrant agreements, whereby each redeemable warrant currently entitles
the holder to purchase 1.074 shares for $4.50. Both the public and private
redeemable warrants expire February 4, 2002 and are redeemable by the Company,
upon notice of not less than thirty days, at a price of $.10 per warrant,
provided that the closing price or bid price of the common stock for any twenty
trading days within a period of thirty consecutive trading days ending on the
fifth day prior to the day on which the Company gives notice of redemption has
been at least $6.75 (subject to adjustment under certain circumstances).

    At December 31, 1999, the Company also had outstanding 1,506,384
non-redeemable private warrants with exercise prices ranging from $3.00 to $4.50
per share and with varying expiration dates through December 2002.




                                       36
<PAGE>   37
                               VIEWCAST.COM, INC.
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)




    During February 1999, the Company issued 40,000 three-year warrants to
purchase Company common stock at $3.625 per share for services rendered in
connection with its Series B convertible preferred stock offering (see Note 10 -
Preferred Stock).

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 twenty percent (20%) of their compensation subject to statutory
limitations. The plan provides for discretionary matching and profit sharing
contributions by the Company. All full-time employees are eligible to
participate in the plan provided they meet a minimum service requirement of six
consecutive months and a minimum age requirement of twenty-one. For the years
ended December 31, 1998 and 1999, the Company made no matching or profit sharing
contributions.

12. COMMITMENTS AND CONTINGENCIES

    The Company leases various office and manufacturing space under
non-cancelable operating leases extending through 2003. 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:


<TABLE>
<CAPTION>
                                                           OPERATING
                                                            LEASES
                                                          ---------
<S>                                                       <C>
          Year ended December 31:
             2000                                         $ 446,561
             2001                                           156,805
             2002                                           140,954
             2003                                            12,714
                                                          ---------
          Total minimum lease payments                    $ 757,034
                                                          =========
</TABLE>


    Rent expense was $545,174 and $595,169 for the years ended December 31, 1998
and 1999, respectively.

    In September, 1999 the Company entered into an employment contract with its
newly appointed Chief Executive Officer for an initial term of 18 months that
provides for a minimum annual salary and incentives based generally on the
Company's performance.

13. RELATED PARTY TRANSACTIONS

    During 1998 and 1999, the Company paid consulting fees to its Chairman and
acting Chief Executive Officer of the Company in the amount of $48,000 and
$147,000, respectively until his resignation in September of 1999.

    In June and July of 1998, the Company received $1,849,998 in gross proceeds
from the exercise of 616,666 warrants to purchase Company common stock at $3.00
per share from three principal shareholders. As an incentive for early exercise,
shareholders were issued 1,233,332 warrants to purchase Company stock at $4.50
per share. The warrants will expire in February 2002 and have exercise price
adjustment terms identical to the public warrants issued in connection with
Company's initial public offering.



                                       37
<PAGE>   38
                               VIEWCAST.COM, INC.
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)




    In November 1998, the Company entered into a working capital line of credit
facility for up to $9 million with one its principal shareholders and now
Chairman of the Board of the Company. This one year, renewable facility, bears
interest at 12% per annum and is secured by all assets of the Company (See Note
6).

    In December 1998 through February 1999, the Company received $9.45 million
in gross proceeds from the sale of 945,000 shares of a newly created Series B
convertible preferred stock at $10 per share. Two principal shareholders of the
Company purchased $4,000,000 each and other existing shareholders purchased the
balance of $1.45 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.

    During 1999, the Company received $2,129,207 proceeds from the exercise of
802,549 stock options by officers and directors of the Company at exercise
prices ranging from $.20 to $4.03 per share.


14.  SUBSEQUENT EVENTS

    During January 2000 through February 18, 2000, the Company received
$1,863,828 proceeds from the exercise 621,276 warrants to purchase Company
common stock at $3.00 per share.



ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

    There have been no disagreements concerning any matter of accounting
principle or financial statement disclosure between the Company and its
independent auditors.



                                       38
<PAGE>   39

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

    The information required by this item is incorporated by reference to
disclosure in the Company's Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the end of
the fiscal year covered by this report ("Proxy Statement").


ITEM 10. EXECUTIVE COMPENSATION

    The information required by this item is incorporated by reference to the
Proxy Statement.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by this item is incorporated by reference to the
Proxy Statement.


ITEM 12. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

    The information required by this item is incorporated by reference to the
Proxy Statement.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

    a.) Exhibits

        See Exhibit index.

    b.) Reports on Form 8-K

        No reports were filed on Form 8-K during the fourth quarter of 1999.





                                       39
<PAGE>   40

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

    Date                               ViewCast.com, Inc.

    March 30, 2000                     By:  /s/ Laurie L. Latham
                                          -------------------------------
                                          Laurie L. Latham
                                            Chief Financial Officer and Senior
                                            Vice President of Finance and
                                            Administration

    In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.


         Date                       ViewCast.Com, Inc.


   March  30, 2000          By: /s/ H.T. Ardinger, Jr.
                               ------------------------------------------------
                               H.T. Ardinger, Jr.
                               Director and Chairman of the Board


    March 30, 2000          By: /s/ George C. Platt
                               ------------------------------------------------
                               George C. Platt
                               Director, President and Chief Executive Officer


    March 30, 2000          By: /s/ Laurie L. Latham
                               ------------------------------------------------
                               Laurie L. Latham
                                Chief Financial Officer and Senior Vice
                                President of Finance and Administration

    March 30, 2000          By: /s/ Joseph W. Autem
                               ------------------------------------------------
                               Joseph W. Autem
                               Director


    March 30, 2000          By: /s/ Glenn A. Norem
                               ------------------------------------------------
                               Glenn A. Norem
                               Director


    March 30, 2000          By: /s/ David A. Dean
                               ------------------------------------------------
                               David A. Dean
                               Director






                                       40
<PAGE>   41

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
PAGE NO.                 DESCRIPTION OF EXHIBIT
--------                 ----------------------
<S>        <C>
2          Agreement and Plan of Merger and Reorganization (1)

3(a)       Certificate of Incorporation (1)

3(b)       Amendment to Certificate of Incorporation (1)

3(c)       Restated By-Laws (3)

3(d)       Certificate of Designations of Series B Convertible Preferred
           Stock (4)

4(a)       Form of Common Stock Certificate (1)

4(b)       Form of Warrant Certificate (1)

4(c)       Form of Warrant Agreement between ViewCast and Continental Stock
           Transfer & Trust Company (1)

4(d)       Form of Representative's Warrant Agreement (1)

4(e)       Form of Trust Indenture - $5,000,000 8% Senior Convertible Notes
           Due 2002 (2)

4(f)       Form of Lead Managers Warrant Agreement (2)

5(a)       Form of Opinion of Thacher Proffit Wood as to the legality of
           securities being registered.

9(a)       Voting Trust Agreement between Robert M. Sterling, Jr. and Thomas
           E. Brown (1)

9(b)       Voting Trust Agreement between Robert P. Bernardi and Richard
           Bernardi (1)

9(c)       Form of Lock-Up Agreement (1)

9(d)       Lock-Up Agreement with Robert Sterling Trust (1)

9(e)       Lock-Up Agreement with Robert Bernardi Trust (1)

9(f)       Lock-Up Agreement with Michael Nissenbaum (1)

10(a)      Modified Employment Agreement between ViewCast and Glenn A. Norem
           (1)

10(b)      Modified Consulting Agreement between ViewCast and Sterling
           Capital Group Inc. (1)

10(c)      Form of Indemnification Agreement between ViewCast and Executive
           Officers and Directors (1)

10(d)      1995 Stock Option Plan (1)

10(e)      1994 Stock Option Plan (1)

10(f)      1993 Viewpoint Stock Plan (1)

l0(g)      1995 Director Option Plan (1)

10(h)      Lease Agreement between ViewCast and Metro Squared, L P (1)
</TABLE>



<PAGE>   42


<TABLE>
<S>            <C>
10(i)          Employee Stock Purchase Plan (1)

l0(j)          Licensing Agreement between ViewCast and Boca Research, Inc. (1)

10(k)          Agreement between ViewCast and Unisys(TM)(1)

10(l)          Employment Agreement between ViewCast and Philip M. Colquhoun (1)

10(m)          Employment Agreement between ViewCast and William S. Leftwich (1)

10(n)          Employment Agreement between ViewCast and David T. Stoner (1)

10(o)          Employment Agreement between ViewCast and Neal Page (1)

10(p)          Employment Agreement between ViewCast and A. David Boomstein (1)

10(r)          Lease between ViewCast and Burlingame Home Office, Inc. (1)

10(s)          Lease between ViewCast and Family Funds Partnership (1)

10(t)          Agreement between ViewCast and Catalyst Financial Corporation (1)

10(u)          Promissory Note by ViewCast payable to Robert Rubin dated
               September 5, 1996. (1)

10(v)          Promissory Note by ViewCast payable to M. Douglas Adkins dated
               November 15, 1996. (1)

10(w)          Promissory Note by ViewCast payable to H.T. Ardinger dated
               November 15, 1996. (1)

10(x)          Promissory Note by ViewCast payable to H.T. Ardinger dated
               January 15, 1997. (1)

10(y)          Promissory Note by ViewCast payable to Adkins Family Partnership,
               Ltd. dated January 15, 1997. (1)

10(z)          Lease between ViewCast and the Air Force Association. (2)

10(aa)         Lease between ViewCast and Airport Boulevard Partners, LLC. (2)

10(bb)         Stock Purchase Agreement between ViewCast and Tadeo Holdings,
               Inc. (5)

10(cc)         Working Capital Line of Credit Loan Agreement between ViewCast
               and the Ardinger Family Partnership, Ltd. (5)

21             List of Subsidiaries of ViewCast. (1)

23             Consent of Ernst & Young LLP

27             Financial Data Schedule (Filed in electronic format only)
</TABLE>


(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 10-KSB/A filed April 15, 1998.

(3) Incorporated by reference to Form 10-QSB filed November 13, 1998

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

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