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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-KSB/A
 þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2007.
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition period from  to .
 Commission File Number: 0-29020
 ViewCast.com, Inc.
  Delaware
    
    75-2528700(State or Other Jurisdiction of Incorporation or 
Organization)
    
    (I.R.S. Employer
Identification No.)3701 W. Plano Parkway, Suite 300, Plano, TX
    
    75075(Address of Principal Executive Offices)
    
    (Zip Code)
  
   Common Stock, $.0001 par value
  o
 þ o
 o
 o þ
 State issuers revenues for its most recent fiscal year.
    
    $15,993,541
    o þ




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##### 



TABLE OF CONTENTS
 Item
    
    
    
    PageNo
    
    
    
    No.Part I1.
    
    Description of Business
    
    
    42.
    
    Description of Property
    
    
    103.
    
    Legal Proceedings
    
    
    104.
    
    Submission of Matters to a Vote of Security Holders
    
    
    10Part II5.
    
    Market for Common Equity and Related Stockholder Matters and Related Small Business Issuer Purchases of Equity Securities
    
    
    116.
    
    Managements Discussion and Analysis or Plan of  Operation
    
    
    127.
    
    Financial Statements
    
    
    178.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    378A(T).
    
    Controls and Procedures
    
    
    378B.
    
    Other Information
    
    
    38Part III9.
    
    Directors, Executive Officers, Promoters, Control Person and Corporate Governance; Compliance with Section 16(a) of the Exchange Act
    
    
    3910.
    
    Executive Compensation
    
    
    4211.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    4912.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    5113.
    
    Exhibits
    
    
    5214.
    
    Principal Accountant Fees and Services
    
    
    55Amended and Restated Employment Agreement - David T. StonerAmended and Restated Employment Agreement - Laurie L. LathamAmended and Restated Employment Agreement - Gary KlembaraAmended and Restated Employment Agreement - George C. PlattConsent of KBA Group LLPRule 13a-14(a)/15d-14(a) CertificationsSection 1360 Certifications
  3




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PART I
 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
    
 Item 1. Description of Business
 Overview
    4




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Industry Background and Market Drivers
    
    
    The return on investment for deployment of media streaming solutions appears to drive
deployments from both the technology standpoint and from the perspective of customer
demand. Viewers want to access media content over the Internet and are willing to pay for
it and/or to allow advertisements.
    
    Simultaneously technology enhancements such as higher compression rates, better caching,
smart control of bandwidth utilization and higher resolution will likely spur further
growth as the viewing experience for end-users gets better.
    
    Online video-on-demand based business models are expected to drive further penetration
of streaming platforms. Various entertainment portals and media companies are entering the
market to convert the Internet into a profitable medium.
    
    The value proposition in terms of investment, flexibility and speed has started to
increase demand on the enterprise side. The main applications for this market segment are
in corporate communications, signage and training.
  5




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How ViewCast Addresses the Industry
   Training,News, Sports,
    
    Webcasting,
    
    Corporate
    
    Marketing,
    
    Distance
    
    SecurityEntertainment
    
    Public Access
    
    Comm.
    
    Advertising
    
    Learning
    
    SurveillanceBroadcasters and 
Narrowcasters
    
    P
    
    P
    
    
    
    PNetworks: 
Internet, Telco, 
Cable, Mobile
    
    P
    
    P
    
    PCorporate 
Enterprises
    
    P
    
    P
    
    P
    
    P
    
    P
    
    PEducation, 
Government, 
Religion
    
    P
    
    P
    
    P
    
    P
    
    P
    
    P
 Drivers for Growth and Value
 
    
    Rapidly Growing Market. Media, enterprise, government, and network communication
sectors are rapidly adopting and allocating funds for digital media technologies due to the
increase in broadband penetration and customer demand for Internet-delivered media.
    
    Strong Products and Brand Equity. ViewCast is positioned for the market with well
known products that appeal to a broad range of industries and to continue investment in
research and development projects.
    
    Two-Pronged Sales Focus. Well established worldwide indirect channels and large
account & OEM business development.
    
    Industry/Technology Relationships. ViewCast product strategies leverage key marketing
and development relationships with notable technology industry leaders.
    
    Profitability and Increasing Revenue.Viewcast believes that a focus on revenue and
market share growth will enable us to realize long-term profitability and enhanced
shareholder value.
    
    Maintain Efficient Operations.We will continue to monitor expenses during 2008 while
investing in growth areas of sales, marketing, and research and development.
    
    Continue to Increase and Enhance Our Industry and Technology Relationships.We have
established significant industry partnerships with leaders in the technology and video
industry. We intend to strengthen these partnerships and continue to establish new
partnerships to enhance endorsements, referrals, technology, product development, channel
distribution, and sales. We seek companies who can add valuable services, technology or
bundling opportunities to our product offerings with the potential of future
co-development, merger or acquisition by ViewCast.
 6




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ViewCast Products and Services
  Osprey Video Products.
    Niagara Streaming Systems.
   7




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Marketing and Sales
     Production and Supply
   8




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Installation, Service and Maintenance
   Research and Development
   Competition
   Patents, Copyrights, Trademarks and Proprietary Information
    9




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Government Regulation
  Employees
  
 Item 2. Description of Property
   
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  10




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PART II
 
 Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer
Purchases of Equity Securities
 Common Stock Price Range
  Common Stock
    
    Public WarrantsFiscal 2006
    
    High
    
    Low
    
    High
    
    Low1st Quarter
    
    $
    0.27
    
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.062nd Quarter
    
    $
    0.24
    
    
    $
    0.15
    
    
    $
    0.14
    
    
    $
    0.063rd Quarter
    
    $
    0.23
    
    
    $
    0.13
    
    
    $
    0.10
    
    
    $
    0.034th Quarter
    
    $
    0.59
    
    
    $
    0.13
    
    
    $
    0.15
    
    
    $
    0.07
 Common Stock
    
    Public WarrantsFiscal 2007
    
    High
    
    Low
    
    High
    
    Low1st Quarter (1)
    
    $
    0.53
    
    
    $
    0.38
    
    
    $
    0.20
    
    
    $
    0.102nd Quarter
    
    $
    0.47
    
    
    $
    0.36
    
    
    
    
    
    
    
    3rd Quarter
    
    $
    0.54
    
    
    $
    0.37
    
    
    
    
    
    
    
    4th Quarter
    
    $
    0.54
    
    
    $
    0.35
    
    
    
    
    
    
    
    
 
 (1)
    
    Public Warrants sales price information for 2007 is through January 29, 2007, the last trading
day prior to expiration.  Dividend Policy
  11




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Item 6. Managements Discussion and Analysis or Plan of Operation
 Overview
 ® ® ®
   Financial Highlights of 2007
   12




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Critical Accounting Policies
  §
    
    Revenue Recognition We apply provisions of SEC Staff Accounting Bulletin (SAB) No.
101, Revenue Recognition in Financial Statements as revised by SAB 104, Revenue
Recognition, SOP 97-2, Software Revenue Recognition, as amended by SOP 98-9, Modification
of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions and EITF
00-21, Revenue Arrangements with Multiple Deliverables to transactions involving sales of
our hardware and software products. Under these guidelines, we recognize revenue on
transactions where persuasive evidence of an arrangement exists, title has transferred,
product payment is not contingent upon performance of installation or service obligations,
the price is fixed or determinable and payment is reasonably assured. We accrue warranty
costs and sales allowances for promotional activities at time of shipment based on
historical experience. In addition, we defer revenue associated with maintenance and
support contracts and recognize revenue ratably over the contract term.§
    
    Allowance for Doubtful Accounts We maintain allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make required payments.
If the financial condition of our customers or distribution partners were to deteriorate,
resulting in an impairment of their ability to make payments, additional allowances may be
required.§
    
    Excess and Obsolete Inventories We write down our inventories for estimated
obsolescence and unmarketable inventory equal to the difference between the cost of the
inventory and the estimated market value based upon assumptions about future demand and
market conditions. If actual market conditions are less than those projected by
management, additional write-downs may be required.§
    
    Deferred Taxes We record a valuation allowance to reduce our deferred tax assets to an
amount that we believe is more likely than not to be realized. In our opinion, realization
of our net operating loss carryforward is not reasonably assured, and a valuation allowance
has been provided against deferred tax assets in excess of deferred tax liabilities in the
accompanying consolidated financial statements. However, should we in the future determine
that realization of deferred tax assets in excess of recorded amounts is likely, an
adjustment to the deferred tax assets would increase income in the period such
determination was made.
 Results of Operations
 Year Ended December 31, 2007 compared to Year Ended December 31, 2006.
 Net Sales .
 Osprey Product Sales .
 13




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ViewCast Niagara® Streaming/Encoding Systems.
 Other Revenues .
 Cost of Sales/Gross Profit .
  Selling, General and Administrative Expense .
 Research and Development Expense.
 Depreciation Expense.
 Other Income and Expense
 Net Income (Loss) .
 14




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Liquidity and Capital Resources
          15




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Operating Leases
  Contractual Obligations
    
    
    
    
    
    
    
    
    
    (In thousands)and Commitments:
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    TotalOperating leases
    
    $
    308
    
    
    $
    289
    
    
    $
    292
    
    
    $
    149
    
    
    $
    13
    
    
    $
    1,051
  Off Balance Sheet Arrangements
  16




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Item 7. Financial Statements
 ViewCast.com, Inc. and Subsidiaries
Index to Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    
    18Consolidated Balance Sheets at December 31, 2006 and 2007
    
    
    19Consolidated Statements of Operations for the years ended December 31, 2006 and 2007
    
    
    20Consolidated Statements of Stockholders Equity (Deficit) for the years ended December 31, 2006 and 2007
    
    
    21Consolidated Statements of Cash Flows for the years ended December 31, 2006 and 2007
    
    
    22Notes to Consolidated Financial Statements
    
    
    23
 17




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,
  Share-Based Payment
 
 18




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    December 31,2006
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    567,509
    
    
    $
    1,135,416Accounts receivable, less allowance for doubtful accounts of
$30,756 and $30,390 at December 31, 2006 and 2007 respectively
    
    
    2,084,723
    
    
    
    2,261,133Inventories, net
    
    
    2,155,212
    
    
    
    2,367,200Prepaid expenses
    
    
    148,039
    
    
    
    243,614Total current assets
    
    
    4,955,483
    
    
    
    6,007,363Property and equipment, net
    
    
    446,758
    
    
    
    721,413Intangible assets, net
    
    
    177,737
    
    
    
    323,367Deposits
    
    
    59,107
    
    
    
    45,566Total assets
    
    $
    5,639,085
    
    
    $
    7,097,709LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    982,472
    
    
    $
    456,641Accrued expenses
    
    
    1,020,535
    
    
    
    927,857Current maturities of long-term debt
    
    
    2,807
    
    
    
    21,345Total current liabilities
    
    
    2,005,814
    
    
    
    1,405,843Long-term debt less current maturities
    
    
    491
    
    
    
    28,157Stockholder note payable
    
    
    5,141,361
    
    
    
    5,141,361Stockholder accrued interest
    
    
    10,561
    
    
    
    192,994Commitments and contingenciesStockholders equity (deficit):Preferred stock, $0.0001 par value, authorized 5,000,000 shares:Series B convertible  issued and outstanding shares - 800,000 - liquidation value
of $14 and $15 per share as of December 31, 2006 and 2007 respectively
    
    
    80
    
    
    
    80Series C convertible  issued and outstanding shares - 200,000 - liquidation value
of $30 and $31 per share as of December 31, 2006 and 2007 respectively
    
    
    20
    
    
    
    20Series E convertible  issued and outstanding shares - 80,000 - liquidation value
of $101 and $102 per share as of December 31, 2006 and 2007 respectively
    
    
    8
    
    
    
    8Common stock, $.0001 par value, authorized 100,000,000 shares:Issued shares - 28,752,143 and 32,341,753 at December 31, 2006
and 2007, respectively
    
    
    2,875
    
    
    
    3,234Additional paid-in capital
    
    
    68,986,065
    
    
    
    69,990,960Accumulated deficit
    
    
    (70,496,284
    )
    
    
    (69,653,042
    )Treasury stock, 261,497 shares at cost
    
    
    (11,906
    )
    
    
    (11,906
    )Total stockholders equity (deficit)
    
    
    (1,519,142
    )
    
    
    329,354Total liabilities and stockholders equity (deficit)
    
    $
    5,639,085
    
    
    $
    7,097,709
  19




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year ended December 31,2006
    
    
    2007Net sales
    
    $
    13,981,096
    
    
    $
    15,993,541Cost of sales
    
    
    6,280,863
    
    
    
    6,388,191Gross profit
    
    
    7,700,233
    
    
    
    9,605,350Operating expenses:Selling, general and administrative
    
    
    6,253,183
    
    
    
    6,252,972Research and development
    
    
    1,956,082
    
    
    
    2,074,120Depreciation and amortization
    
    
    338,431
    
    
    
    369,506Total operating expenses
    
    
    8,547,696
    
    
    
    8,696,598Operating income (loss)
    
    
    (847,463
    )
    
    
    908,752Other income (expense):Interest expense (including $936,709 and
$295,463 of expense to related parties)
    
    
    (938,533
    )
    
    
    (305,966
    )Interest income
    
    
    24,731
    
    
    
    33,216Loss on disposal of fixed assets
    
    
    (13,219
    )
    
    
    (25,560
    )Other
    
    
    23,395
    
    
    
    250,000Total other expense
    
    
    (903,626
    )
    
    
    (48,310
    )Income tax expense
    
    
    
    
    
    
    (17,200
    )NET INCOME (LOSS)
    
    $
    (1,751,089
    )
    
    $
    843,242Preferred stock dividends
    
    
    (819,243
    )
    
    
    (819,243
    )Net income (loss) applicable to common stockholders
    
    $
    (2,570,332
    )
    
    $
    23,999Net income (loss) per shareBasic
    
    $
    (0.10
    )
    
    $
    0.00Diluted
    
    $
    (0.10
    )
    
    $
    0.00Weighted average number of common shares outstandingBasic
    
    
    25,792,662
    
    
    
    31,714,363Diluted
    
    
    25,792,662
    
    
    
    47,726,772
  20




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2007
 SeriesB
    
    
    Series C
    
    
    Series EConvertible
    
    
    Convertible
    
    
    Convertible
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    TotalPreferred Stock
    
    
    Preferred Stock
    
    
    Preferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Treasury
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Shares
    
    
    Par Value
    
    
    Shares
    
    
    ParValue
    
    
    Shares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Stock
    
    
    Equity (Deficit)Balances, December 31, 2005
    
    
    800,000
    
    
    $
    80
    
    
    
    200,000
    
    
    $
    20
    
    
    
    
    
    
    $
    
    
    
    
    25,889,456
    
    
    $
    2,589
    
    
    $
    59,718,393
    
    
    $
    (68,745,195
    )
    
    $
    (11,906
    )
    
    $
    (9,036,019
    )Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,384
    
    
    
    
    
    
    
    
    
    
    
    8,384Conversion of stockholder line of
credit and note payable into
Series E Preferred stock,
common stock and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,000
    
    
    
    8
    
    
    
    2,862,687
    
    
    
    286
    
    
    
    9,259,288
    
    
    
    
    
    
    
    
    
    
    
    9,259,582Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,751,089
    )
    
    
    
    
    
    
    (1,751,089
    )Balances, December 31, 2006
    
    
    800,000
    
    
    $
    80
    
    
    
    200,000
    
    
    $
    20
    
    
    
    80,000
    
    
    $
    8
    
    
    
    28,752,143
    
    
    $
    2,875
    
    
    $
    68,986,065
    
    
    $
    (70,496,284
    )
    
    $
    (11,906
    )
    
    $
    (1,519,142
    )Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,875
    
    
    
    
    
    
    
    
    
    
    
    51,875Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,000
    
    
    
    6
    
    
    
    16,940
    
    
    
    
    
    
    
    
    
    
    
    16,946Exercise of stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,534,610
    
    
    
    353
    
    
    
    936,080
    
    
    
    
    
    
    
    
    
    
    
    936,433Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    843,242
    
    
    
    
    
    
    
    843,242Balances, December 31, 2007
    
    
    800,000
    
    
    $
    80
    
    
    
    200,000
    
    
    $
    20
    
    
    
    80,000
    
    
    $
    8
    
    
    
    32,341,753
    
    
    $
    3,234
    
    
    $
    69,990,960
    
    
    $
    (69,653,042
    )
    
    $
    (11,906
    )
    
    $
    329,354
  21




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VIEWCAST.COM, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year ended December 31,2006
    
    
    2007Operating activities:Net income (loss)
    
    $
    (1,751,089
    )
    
    $
    843,242Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Bad debt expense
    
    
    17,585
    
    
    
    (366
    )Depreciation of property and equipment
    
    
    195,067
    
    
    
    305,775Amortization of intangible assets
    
    
    143,364
    
    
    
    63,731Stock based compensation expense
    
    
    8,384
    
    
    
    51,875Loss on disposition of property and equipment
    
    
    13,219
    
    
    
    25,560Changes in operating assets and liabilitiesAccounts receivable
    
    
    (797,532
    )
    
    
    (176,044
    )Inventories
    
    
    (143,721
    )
    
    
    (203,471
    )Prepaid expenses
    
    
    (74,965
    )
    
    
    (95,575
    )Deposits
    
    
    (29,781
    )
    
    
    13,541Accounts payable
    
    
    400,209
    
    
    
    (525,831
    )Accrued expenses
    
    
    (222,842
    )
    
    
    (92,678
    )Stockholder accrued interest
    
    
    1,688,159
    
    
    
    182,433Net cash provided by (used in) operating activities
    
    
    (553,943
    )
    
    
    392,192Investing activities:Capitalized software development costs
    
    
    (181,976
    )
    
    
    (209,361
    )Purchase of property and equipment
    
    
    (390,120
    )
    
    
    (554,797
    )Proceeds from disposition of property and equipment
    
    
    3,711
    
    
    
    Net cash used in investing activities
    
    
    (568,385
    )
    
    
    (764,158
    )Financing activities:Net proceeds from stockholder line of credit
    
    
    250,000
    
    
    
    Proceeds from exercise of employee stock options
    
    
    
    
    
    
    16,946Net proceeds from exercise of warrants
    
    
    
    
    
    
    936,433Repayments of long-term debt
    
    
    (8,036
    )
    
    
    (13,506
    )Net cash provided by financing activities
    
    
    241,964
    
    
    
    939,873Net increase (decrease) in cash and cash equivalents
    
    
    (880,364
    )
    
    
    567,907Cash and cash equivalents, beginning of period
    
    
    1,447,873
    
    
    
    567,509Cash and cash equivalents, end of period
    
    $
    567,509
    
    
    $
    1,135,416Supplemental cash flow information:Cash paid for interest
    
    $
    8,458
    
    
    $
    117,855Supplemental non-cash flow activities:Conversion of Stockholder debt to common stock,
Series E convertible preferred stock and warrants
    
    $
    9,259,582
    
    
    $
    Conversion of Stockholder accrued interest to Stockholder
note payable
    
    $
    3,891,361
    
    
    $
    Acquisition of assets under capital leases
    
    $
    
    
    
    $
    59,710Property and equipment reclassed to inventory
    
    $
    
    
    
    $
    8,517
  22




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##### Table of Contents



ViewCast.com, Inc.
 
 Notes to the Consolidated Financial Statements
 1. The Company and Description of Business
   2. Summary of Significant Accounting Policies
 Principles of Consolidation
  Cash and Cash Equivalents
  Accounts Receivable
  23




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  Year ended December 31,2006
    
    
    2007Beginning balance
    
    $
    13,171
    
    
    $
    30,756Bad debt expense
    
    
    17,585
    
    
    
    (366
    )Ending balance
    
    $
    30,756
    
    
    $
    30,390
 Inventories
  Property and Equipment
  Intangible Assets and Amortization
    December 31, 2006
    
    December 31, 2007Average life
    
    Gross carrying
    
    Accumulated
    
    Gross carrying
    
    Accumulated(years)
    
    amount
    
    amortization
    
    amount
    
    amortizationCapitalized Software Costs
    
    
    3
    
    
    $
    966,717
    
    
    $
    867,985
    
    
    $
    1,163,455
    
    
    $
    926,514Patents
    
    
    17
    
    
    
    83,409
    
    
    
    4,404
    
    
    
    96,032
    
    
    
    9,606$
    1,050,126
    
    
    $
    872,389
    
    
    $
    1,259,487
    
    
    $
    936,120
  2008
    
    2009
    
    2010
    
    Thereafter
    
    TotalCapitalized Software Costs
    
    $
    103,940
    
    
    $
    87,590
    
    
    $
    45,411
    
    
    $
    
    
    
    $
    236,941Patents
    
    
    5,649
    
    
    
    5,649
    
    
    
    5,649
    
    
    
    69,479
    
    
    
    86,426$
    109,589
    
    
    $
    93,239
    
    
    $
    51,060
    
    
    $
    69,479
    
    
    $
    323,367
 24




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 Impairment of Long-Lived Assets
  Revenue Recognition
   Net Earning Per Share
  Year Ended December 31,2006
    
    
    2007Net income (loss) applicable to common stockholders
 numerator for basic and diluted earnings per share
    
    $
    (2,570,332
    )
    
    $
    23,999Weighted  average common shares outstanding  denominator for
basic earnings per share
    
    
    25,792,662
    
    
    
    31,714,363Dilutive potential common shares:Stock options
    
    
    
    
    
    
    197,503Warrants
    
    
    
    
    
    
    128,632Convertible preferred stock  Series E
    
    
    
    
    
    
    15,686,274Weighted  average common shares and dilutive potential common
shares outstanding  denominator for diluted earning per share
    
    
    25,792,662
    
    
    
    47,726,772Net income (loss) per share:Basic
    
    $
    (0.10
    )
    
    $
    0.00Diluted
    
    $
    (0.10
    )
    
    $
    0.00
 25




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  Twelve Months Ended December 31,2006
    
    2007Stock options
    
    
    2,739,700
    
    
    
    1,904,600Public and private warrants
    
    
    4,746,482
    
    
    
    2,500,000Convertible preferred stock  Series B
    
    
    2,206,896
    
    
    
    2,206,896Convertible preferred stock  Series C
    
    
    3,333,333
    
    
    
    3,333,333Convertible preferred stock  Series E
    
    
    3,137,255
    
    
    
    
 Warranty Reserves
   Year ended December 31,2006
    
    
    2007Beginning balance
    
    $
    57,667
    
    
    $
    117,636Charged to expense
    
    
    127,237
    
    
    
    162,256Usage
    
    
    (67,268
    )
    
    
    (145,952
    )Ending balance
    
    $
    117,636
    
    
    $
    133,940
 Risks and Uncertainties
  Customers exceeding 10% of Year-Customers Exceeding 10%
    
    End Accountsof Net Sales
    
    Receivable BalanceNumber of
    
    Combined
    
    Number of
    
    CombinedYear
    
    Customers
    
    Percent
    
    Customers
    
    Percent2006
    
    
    1
    
    
    
    13
    %
    
    
    2
    
    
    
    29
    %2007
    
    
    3
    
    
    
    41
    %
    
    
    3
    
    
    
    47
    %
   26




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 Use of Estimates
  Income Taxes
   Advertising Costs
  Fair Value of Financial Instruments
  Stock-Based Compensation
   27




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
    Year EndedDecember 31,2006
    
    2007Expected volatility
    
    
    109
    %
    
    
    105
    %Risk-free interest rate
    
    
    4.76
    %
    
    
    4.50
    %Expected dividends
    
    
    0.0
    %
    
    
    0.0
    %Expected term in years
    
    
    4.08
    
    
    
    3.91
  Recent Accounting Pronouncements
    28




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  3. Inventories
  December 31,2006
    
    
    2007Purchased materials
    
    $
    1,410,411
    
    
    $
    1,351,377Finished goods
    
    
    744,801
    
    
    
    1,015,823$
    2,155,212
    
    
    $
    2,367,200
 4. Property and Equipment
  EstimatedUseful Life
    
    
    December 31,(Years)
    
    
    2006
    
    
    2007Service equipment
    
    
    3
    
    
    $
    
    
    
    $
    242,362Computer equipment
    
    
    3 to 7
    
    
    
    408,174
    
    
    
    309,112Software
    
    
    3 to 5
    
    
    
    132,909
    
    
    
    182,110Leasehold improvements
    
    
    1 to 5
    
    
    
    121,746
    
    
    
    130,409Office furniture and equipment
    
    
    5 to 7
    
    
    
    604,768
    
    
    
    890,3001,267,597
    
    
    
    1,754,293Less accumulated depreciation and
amortization
    
    
    
    
    
    
    (820,839
    )
    
    
    (1,032,880
    )$
    446,758
    
    
    $
    721,413
 5. Accrued Expenses
  December 31,2006
    
    
    2007Accrued compensation
    
    $
    217,445
    
    
    $
    174,030Accrued warranty
    
    
    117,636
    
    
    
    133,940Accrued inventory purchases
    
    
    95,068
    
    
    
    55,713Customer deposits
    
    
    166,844
    
    
    
    22,435Deferred rent
    
    
    118,496
    
    
    
    100,555Deferred revenue
    
    
    71,857
    
    
    
    174,084Accrued taxes and other
    
    
    233,189
    
    
    
    267,100$
    1,020,535
    
    
    $
    927,857
 29




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 6. Stockholder Line of Credit
   7. Long-term Debt
 Stockholder Term Note
   December 31, 2006
    
    
    December 31, 2007Aggregate of the Outstanding Principal (Primary Principal Amount), with interest due at
a rate per annum equal to the lesser of prime plus 1.0% (9.25% and 8.25% at December
31, 2006 and 2007 respectively) or 9.5% fixed rate, due December 31, 2009.
    
    $
    1,250,000
    
    
    $
    1,250,000Accrued and Outstanding Interest (Secondary Principal Amount), with interest due at a
rate per annum equal to the lesser of Applicable Federal Rate (4.73% and 3.88% at
December 31, 2006 and 2007 respectively) or 9.5% fixed rate, due December 31, 2009.
    
    
    3,891,361
    
    
    
    3,891,361Other debt
    
    
    3,298
    
    
    
    49,502Total long-term debt
    
    
    5,144,659
    
    
    
    5,190,863Less current maturities
    
    
    (2,807
    )
    
    
    (21,345
    )Total long-term debt less current maturities
    
    $
    5,141,852
    
    
    $
    5,169,518
  Long-term Notes
    
    
    StockholderYear ended December 31
    
    Payable
    
    
    Accrued Interest2008
    
    $
    21,345
    
    
    $
    2009
    
    
    5,161,335
    
    
    
    192,9942010
    
    
    8,183
    
    
    
    $
    5,190,863
    
    
    $
    192,994
 30




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 8. Conversion of Ardinger Debt to Equity
  9. Income Taxes
   Year ended December 31,2006
    
    
    2007Deferred tax assets:Net operating loss carryforwards
    
    $
    26,129,000
    
    
    $
    25,934,000Deferred revenue
    
    
    31,000
    
    
    
    64,000Patent
    
    
    4,000
    
    
    
    Accrued liabilities
    
    
    209,000
    
    
    
    144,000Property and equipment
    
    
    63,000
    
    
    
    74,000Software development costs
    
    
    355,000
    
    
    
    235,000Total deferred tax assets
    
    
    26,791,000
    
    
    
    26,451,000Net deferred tax assets
    
    
    26,791,000
    
    
    
    26,451,000Less: valuation allowance
    
    
    (26,791,000
    )
    
    
    (26,451,000
    )Net deferred taxes
    
    $
    
    
    
    $
    
 31




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  Year ended December 31,2006
    
    
    2007U.S. federal statutory rate applied to pretax income (loss)
    
    $
    (595,000
    )
    
    $
    293,000State tax net of federal benefit
    
    
    
    
    
    
    Change in valuation allowance
    
    
    552,000
    
    
    
    (340,000
    )Other
    
    
    43,000
    
    
    
    64,000$
    
    
    
    $
    17,000
   10. Stockholders Equity (Deficit)
 Preferred Stock
      32




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 Common Stock
   Stock Option Plan
    Stock OptionsWeighted-AverageNumber
    
    
    Price Per
    
    
    Exercise Priceof Shares
    
    
    Share
    
    
    Per ShareOutstanding at January 1, 2006
    
    
    3,124,642
    
    
    $
    0.20 - $9.00
    
    
    $
    2.07Granted
    
    
    155,000
    
    
    
    0.20 -   0.39
    
    
    
    0.23Exercised
    
    
    Canceled/forfeited
    
    
    (745,042
    )
    
    
    0.20 -   5.50
    
    
    
    1.25Outstanding at December 31, 2006
    
    
    2,534,600
    
    
    $
    0.20 - $9.00
    
    
    $
    2.20Granted
    
    
    1,395,000
    
    
    
    0.39 -   0.48
    
    
    
    0.43Exercised
    
    
    (55,000
    )
    
    
    0.29 -   0.41
    
    
    
    0.31Canceled/forfeited
    
    
    (1,213,750
    )
    
    
    0.20 -   9.00
    
    
    
    0.72Outstanding at December 31, 2007
    
    
    2,660,850
    
    
    $
    0.20 - $7.14
    
    
    $
    1.99
  33




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  Weighted-Average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Outstanding at
    
    
    Remaining
    
    
    Average
    
    
    Exercisable at
    
    
    AverageExercise
    
    December 31,
    
    
    Contractual
    
    
    Exercise
    
    
    December 31,
    
    
    ExercisePrices
    
    2007
    
    
    Life
    
    
    Price
    
    
    2007
    
    
    Price$0.01 - 1.00
    
    
    1,401,500
    
    
    
    6.2
    
    
    $
    0.40
    
    
    
    869,958
    
    
    $
    0.401.01 - 2.00
    
    
    541,350
    
    
    
    3.2
    
    
    
    1.12
    
    
    
    541,350
    
    
    
    1.122.01 - 3.00
    
    
    110,000
    
    
    
    2.1
    
    
    
    2.51
    
    
    
    110,000
    
    
    
    2.513.01 - 4.00
    
    
    67,500
    
    
    
    0.9
    
    
    
    3.50
    
    
    
    67,500
    
    
    
    3.504.01 - 5.00
    
    
    12,500
    
    
    
    1.8
    
    
    
    4.53
    
    
    
    12,500
    
    
    
    4.535.01 - 6.00
    
    
    116,000
    
    
    
    2.0
    
    
    
    5.50
    
    
    
    116,000
    
    
    
    5.506.01 - 7.00
    
    
    2,000
    
    
    
    1.3
    
    
    
    7.00
    
    
    
    2,000
    
    
    
    7.007.01 - 8.00
    
    
    410,000
    
    
    
    1.7
    
    
    
    7.10
    
    
    
    260,000
    
    
    
    7.102,660,850
    
    
    
    4.4
    
    
    $
    1.99
    
    
    
    1,979,308
    
    
    $
    2.03
 Employee Stock Purchase Plan
   Warrants
  34




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
  Weighted-Number
    
    
    Exercise
    
    
    Averageof Warrants
    
    
    Price
    
    
    Exercise PriceOutstanding and exercisable
at January 2006
    
    
    4,483,982
    
    
    $
    0.28 - 1.00
    
    
    $
    0.31Granted
    
    
    2,500,000
    
    
    
    0.48
    
    
    
    0.48Exercised
    
    
    
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    Outstanding and exercisable
at December 2006
    
    
    6,983,982
    
    
    $
    0.28 - 1.00
    
    
    $
    0.37Granted
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (3,534,610
    )
    
    
    0.28
    
    
    
    0.28Cancelled
    
    
    (949,372
    )
    
    
    0.28 - 1.00
    
    
    
    0.42Outstanding and exercisable
at December 2007
    
    
    2,500,000
    
    
    $
    0.48
    
    
    $
    0.48
      11. Employee Benefit Plan
  35




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 12. Commitments and Contingencies
  Operating LeasesYear ended December 31:2008
    
    $
    308,1642009
    
    
    288,6992010
    
    
    292,0142011
    
    
    149,4942012
    
    
    12,984Total minimum lease payments
    
    $
    1,051,355
  13. Related Party Transactions
     14. Accounts Receivable Loan Facility
  36




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 
 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 8A(T). Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
       37




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##### Table of Contents



ViewCast.com, Inc.
Notes to the Consolidated Financial Statements  Continued
 
 Item 8B. Other Information
     38




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##### Table of Contents



PART III
 
 Item 9. Directors, Executive Officers, Promoters, Control Persons, and Corporate Governance;
Compliance with Section 16(a) of the Exchange Act
  Name
    
    Age
    
    Director Since
    
    Office Held with CompanyGeorge C. Platt
    
    67
    
    1999
    
    Chairman of the Board and Chief Executive OfficerJoseph Autem
    
    50
    
    1999
    
    DirectorSherel D. Horsley
    
    65
    
    2006
    
    DirectorJohn W. Slocum, Jr.
    
    67
    
    2006
    
    Director
 George C. Platt
 Joseph Autem
 Sherel D. Horsley th
 John W. Slocum, Jr. Journal of World Business Organizational Dynamics Journal of Leadership and
Organizational Studies Organizational Behavior
 39




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##### Table of Contents



Executive Officers
  Name
    
    Age
    
    Office Held with CompanyGeorge C. Platt
    
    67
    
    Chief Executive OfficerDavid T. Stoner
    
    51
    
    President and Chief Operating OfficerLaurie L. Latham
    
    51
    
    Chief Financial Officer and Senior Vice President of Finance and AdministrationGary J. Klembara
    
    56
    
    Senior Vice President of Sales
 George C. Platts
 David T. Stoner
 Laurie L. Latham
 Gary J. Klembara
 40




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##### Table of Contents



Meetings of the Board of Directors and Committees
   Compensation Committee.
  Audit Committee.
   Nomination of Directors
   41




---



##### Table of Contents



Code of Ethics
   Shareholder Communications with the Board of Directors.
 Compliance with Section 16(a) of the Securities Exchange Act of 1934
   
 Item 10. Executive Compensation
 Director Compensation
   42




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##### Table of Contents




    
    Each independent director of the Corporation shall be paid a cash
retainer equal to $500 per month with an additional cash payment for each meeting of the
Board of Directors of the Corporation equal to $1,000 if attended in person and $250 if
attended by telephone; and
    
    Each independent director of the Corporation who has not previously
served on the Board of Directors of the Corporation be granted options under the 2005
Stock Incentive Plan, as described below, to acquire 50,000 shares of the Corporation upon
the appointment to the Board of Directors with such option grant to vest annually in three
equal parts with the first such installment to vest one year from the date of grant; and
    
    Each independent director of the Corporation be granted options under
the 2005 Stock Incentive Plan to acquire 25,000 shares of the Corporation each year
immediately following the date of the Corporations annual meeting, provided that such
independent director shall have served as a director of the Corporation at least twelve
months prior to the date of such grant, with such option grant to vest annually in three
equal parts with the first such installment to vest one year from the date of grant.
   DIRECTOR COMPENSATION TABLE
 Name
    
    Fees Earned(1)($)
    
    Option Awards(2)($)
    
    Total ($)Joseph Autem
    
    
    10,750
    
    
    
    3,783
    
    
    
    14,533Sherel D. Horsley
    
    
    12,250
    
    
    
    2,889
    
    
    
    15,139John W. Slocum, Jr.
    
    
    12,250
    
    
    
    2,889
    
    
    
    15,139
 
 (1)
    
    Includes meeting fees earned during the fiscal year, whether such fees were paid
currently or deferred.(2)
    
    Represents the compensation cost recognized for the fiscal year for options to
purchase shares of ViewCast.com, Inc. common stock outstanding to the director,
regardless of the year in which granted and calculated in accordance with FAS 123R
for financial statement purposes. For more information concerning the assumptions
used for these calculations, please refer to the discussion under Note 2 to the
audited financial statements. 43




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##### Table of Contents



Summary Compensation Table
  SUMMARY COMPENSATION TABLE
 Non-EquityName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Incentive Plan
    
    All OtherPrincipal
    
    
    
    
    
    
    
    
    
    
    
    
    
    Option
    
    Compensation
    
    Compensation(4)Positions
    
    Year
    
    Salary(1) ($)
    
    Bonus(1) ($)
    
    Awards(2) ($)
    
    ($)
    
    ($)
    
    Total ($)George C. Platt,
    
    
    2007
    
    
    
    125,000
    
    
    
    
    
    
    
    1,085
    
    
    
    
    
    
    
    126,085Chairman and CEO
    
    
    2006
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,000David T. Stoner,
    
    
    2007
    
    
    
    183,000
    
    
    
    9,245
    
    
    
    5,426
    
    
    
    
    
    
    
    197,671President and COO
    
    
    2006
    
    
    
    183,000
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    188,000Laurie L. Latham,
    
    
    2007
    
    
    
    171,000
    
    
    
    8,639
    
    
    
    5,426
    
    
    
    
    
    
    
    185,065CFO and Sr.
VP Finance and
Administration
    
    
    2006
    
    
    
    171,000
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    176,000Gary J. Klembara, Sr.,
    
    
    2007
    
    
    
    62,500
    
    
    
    
    
    
    
    8,922
    
    
    4,935(3)
    
    
    
    
    76,357Sr. VP Sales (5)
 
 (1)
    
    The figures shown for salary and bonus represent amounts earned for the fiscal year, whether
or not actually paid during such year, and include amounts deferred pursuant non-incentive
deferred compensation plans.(2)
    
    Represents the compensation cost recognized for the fiscal 2007 for options to purchase
shares of ViewCast.com, Inc. common stock outstanding to the named executive officer,
regardless of the year in which granted and calculated in accordance with FAS 123R for
financial statement purposes. For more information concerning the assumptions used for these
calculations, please refer to the discussion under the caption Stock-Based Compensation in the
Managements Discussion and Analysis and footnotes to the audited financial statements,
included in this 2007 Annual Report.(3)
    
    Represents amounts earned for services rendered during the fiscal year under our SR. VP of
Sales and Business Compensation Plan, whether or not actually paid during such fiscal year.
Incentive payments calculated based on achievement of 85% of the cumulative quota for sales
through September 2007, plus achievement of 78% of the total cumulative quota through December
2007.(4)
    
    The named executive officers participate in certain group life, health, disability insurance
and medical reimbursement plans, not disclosed in the Summary Compensation Table, that are
generally available to salaries employees and do not discriminate in scope, terms and
operation.(5)
    
    Information for 2006 has been omitted because this executive was not a named executive
officer for 2006. 44




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##### Table of Contents



Stock Awards and Stock Option Grants Outstanding
  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
 Option AwardsNumber of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    UnderlyingUnexercised
    
    
    UnexercisedOptions (#)
    
    
    Options (#)
    
    
    Option Exercise
    
    
    OptionName
    
    Exercisable
    
    
    Unexercisable
    
    
    Price ($)
    
    
    Expiration Date
    
    Vesting ScheduleGeorge C. Platt
    
    
    250,000
    
    
    
    
    
    
    
    7.0940
    
    
    9/17/2009
    
    Fully vested on December 31, 200616,666 shares of this option shall vest whenthe average closing price of ViewCastCommon Stock, for a 20 out of 30consecutive trading day period, has doubledin price from the exercise price; theremaining 33,334 shares shall vest in equalinstallments of 1,388 shares per month50,000
    
    
    
    7.0940
    
    
    9/17/2009
    
    thereafter.16,666 shares of this option shall vest whenthe average closing price of ViewCastCommon Stock, for a 20 out of 30consecutive trading day period, has doubledin price from the exercise price; theremaining 33,334 shares shall vest in equalinstallments of 1,388 shares per month50,000
    
    
    
    7.0940
    
    
    9/17/2009
    
    thereafter.All shares vest immediately on the datefollowing three consecutive quarters ofprofitability as defined by GAAP consistently50,000
    
    
    
    7.0940
    
    
    9/17/2009
    
    applied by the Company.50,000
    
    
    
    
    
    
    
    2.5000
    
    
    8/4/2010
    
    Fully vested on December 31, 2006200,000
    
    
    
    
    
    
    
    1.0940
    
    
    2/28/2011
    
    Fully vested on December 31, 200670,000
    
    
    
    
    
    
    
    0.4850
    
    
    7/3/2012
    
    Fully vested on December 31, 200670,000
    
    
    
    
    
    
    
    0.2850
    
    
    4/19/2015
    
    Fully vested on December 31, 200612,500
    
    
    
    0.4200
    
    
    7/10/2014
    
    Options vest on July 10, 2008Laurie L. Latham
    
    
    100,000
    
    
    
    
    
    
    
    5.5005
    
    
    12/21/2009
    
    Fully vested on December 31, 200610,000
    
    
    
    
    
    
    
    2.5000
    
    
    8/4/2010
    
    Fully vested on December 31, 2006100,000
    
    
    
    
    
    
    
    1.0940
    
    
    2/28/2011
    
    Fully vested on December 31, 200660,000
    
    
    
    
    
    
    
    0.4850
    
    
    7/3/2012
    
    Fully vested on December 31, 200650,000
    
    
    
    
    
    
    
    0.2850
    
    
    4/19/2015
    
    Fully vested on December 31, 200662,500
    
    
    
    0.4200
    
    
    7/10/2014
    
    Options vest on July 10, 2008David T. Stoner
    
    
    5,000
    
    
    
    
    
    
    
    2.0625
    
    
    9/9/2008
    
    Fully vested on December 31, 200615,000
    
    
    
    
    
    
    
    5.5005
    
    
    12/21/2009
    
    Fully vested on December 31, 200610,000
    
    
    
    
    
    
    
    2.5000
    
    
    8/4/2010
    
    Fully vested on December 31, 2006100,000
    
    
    
    
    
    
    
    1.0940
    
    
    2/28/2011
    
    Fully vested on December 31, 200660,000
    
    
    
    
    
    
    
    0.4850
    
    
    7/3/2012
    
    Fully vested on December 31, 200650,000
    
    
    
    
    
    
    
    0.2850
    
    
    4/19/2015
    
    Fully vested on December 31, 200662,500
    
    
    
    0.4200
    
    
    7/10/2014
    
    Options vest on July 10, 2008Gary J. Klembara
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/3 will vest on August 15, 2008; remainder75,000
    
    
    
    0.4600
    
    
    9/4/2014
    
    to vest 1/36th each month thereafter
 45




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##### Table of Contents



2005 Stock Incentive Plan
    Employee Stock Purchase Plan
   Employment Agreements
 (1)
  46




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47




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##### Table of Contents



(1)
    
    The options granted to Mr. Platt consist of five separate option grants that become
exercisable or vest as follows provided Mr. Platt is employed by ViewCast as of the applicable
vesting date: (i)
    
    an option for 50,000 shares that vested as of September 17, 2000;(ii)
    
    an option for 200,000 shares that vested in equal installments of 4,166 shares per
month beginning in October, 2000;(iii)
    
    an option for 50,000 shares that will vest immediately on the date following three
consecutive calendar quarters of profitability as defined under generally accepted
accounting principles;(iv)
    
    an option for 50,000 shares, of which 16,666 shares of such option will vest when the
average closing price of Common Stock, for a twenty out of thirty consecutive trading day
period, has doubled in price from the exercise price ($7.094) of the option, and of which
33,334 shares of such option will vest in equal installments of 1,388 share per month
thereafter;(v)
    
    an option for 50,000 shares, of which 16,666 shares of such option will vest when the
average closing price of Common Stock, for a twenty out of thirty consecutive trading day
period, has tripled in price from the exercise price of the option, and of which 33,334
shares of such option will vest in equal installment of 1,388 shares per month thereafter.
  48




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##### Table of Contents

\

Item 11. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  Percentage of
    
    
    
    Percentage ofShares of
    
    Outstanding
    
    Shares of Series E
    
    Outstanding SeriesName and Address
    
    Common Stock
    
    Common Stock
    
    Preferred
    
    E Preferredof Beneficial Owner
    
    Beneficially Owned
    
    Owned (1),(2)
    
    Beneficially Owned
    
    OwnedH.T. ARDINGER, JR.
1990 Lakepointe Dr.
Lewisville, TX 75057
    
    
    29,649,601
    (3)
    
    
    54.20
    
    
    80,000 (12)
    
    
    100DAVID RUGGIERI
525 East Olympia Ave.
Punta Gorda, FL 33950
    
    
    2,068,500
    (4)
    
    
    6.45
    
    
    
    
    DONALD ADAMS
370 Crestmont Drive
San Luis Obispo, CA 93401
    
    
    1,657,000
    (5)
    
    
    5.17
    
    
    
    
    GEORGE C. PLATT
    
    
    790,694
    (6)
    
    
    2.42
    
    
    
    
    LAURIE L. LATHAM
    
    
    351,892
    (7)
    
    
    1.09
    
    
    
    
    DAVID T. STONER
    
    
    275,994
    (8)
    
    
    *
    
    
    
    
    SHEREL D. HORSLEY
    
    
    16,665
    (9)
    
    
    *
    
    
    
    
    JOSEPH AUTEM
    
    
    131,532
    (10)
    
    
    *
    
    
    
    
    JOHN W. SLOCUM, JR.
    
    
    26,665
    (11)
    
    
    *
    
    
    
    
    GARY J. KLEMBARA
    
    
    10,000
    
    
    
    *
    
    
    
    
    All executive officers and
directors as a group
(seven (7) persons)
    
    
    1,603,442
    
    
    
    4.93
    
    
    
    
    
 
 *
    
    Less than one percent (1%)(1)
    
    A person is deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from March 31, 2008 upon the exercise of warrants or options. Each
beneficial owners percentage ownership is determined by assuming that options or warrants
that are held by such person (but not those held by any other person) and which are
exercisable within 60 days from March 31, 2008 have been exercised. Unless otherwise
indicated, we believe that all persons named in the table have sole voting and investment
power with respect to all shares of Common Stock beneficially owned by them.(2)
    
    Based on a total of 32,080,256 shares issued and outstanding, excluding treasury stock plus,
for each person listed, any Common Stock that person has the right to acquire within 60 days
from March 31, 2008 pursuant to options, warrants, conversion privileges, etc.(3)
    
    Information is based on filings made with the Securities and
Exchange Commission under
Sections 13 or 16 of the Securities Exchange Act and includes: (i) 181,501 shares owned by Mr.
Ardingers spouse, (ii) 3,062,687 shares owned by Ardinger Family Trust, (iii) 2,500,000
shares of Common Stock reserved for issuance upon the exercise of outstanding warrants at
$0.48 per share owned by Ardinger Family Trust, (iv) 1,103,448 shares of Common Stock reserved
for issuance upon the conversion of $4,000,000 of Series B Convertible Preferred Stock to
Common Stock at $3.625 per share, (v) 3,333,333 shares of Common Stock reserved for issuance
upon the conversion of $2,000,000 of Series C Convertible Preferred Stock to Common Stock at
$0.60 per share, and (vi) 15,686,275 shares of Common Stock reserved for issuance upon the 49




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##### Table of Contents



conversion of $8,000,000 of Series E Convertible Preferred Stock to Common Stock at $0.51 per
share owned by Ardinger Family Partnership.(4)
    
    As reported on a Schedule 13G filed with the Securities and Exchange Commission on April 12,
2007.(5)
    
    As reported on a Schedule 13G filed with the Securities and Exchange Commission on November
11, 2006.(6)
    
    Includes the following shares issuable under the 1995 Option Plan upon exercise of options:
(i) 250,000 shares exercisable at $7.09 per share, (ii) 50,000 shares exercisable at $2.50 per
share, (iii) 200,000 shares exercisable at $1.094 per share, (iv) 70,000 shares exercisable at
$0.485 per share and (v) 70,000 shares exercisable at $0.285 per share.(7)
    
    Includes the following shares issuable under the 1995 Option Plan upon exercise of options:
(i) 100,000 shares exercisable at $5.50 per share, (ii) 10,000 shares exercisable at $2.50 per
share, (iii) 100,000 shares exercisable at $1.094 per share, (iv) 60,000 shares exercisable at
$0.485 per share and (v) 50,000 shares exercisable at $0.285 per share.(8)
    
    Includes the following shares issuable under the 1995 Option Plan upon exercise of options:
(i) 5,000 shares exercisable at $2.0625 per share, (ii) 15,000 shares exercisable at $5.5005
per share, (iii) 10,000 shares exercisable at $2.50 per share, (iv) 100,000 shares exercisable
at $1.094 per share, (v) 60,000 shares exercisable at $0.485 per share and (vi) 50,000 shares
exercisable at $0.285 per share.(9)
    
    Includes the following shares issuable under the 2005 Stock Incentive Plan upon exercise of
options: 16,665 shares exercisable at $0.20 per share.(10)
    
    Includes the following shares issuable under the 1995 Directors Option Plan upon exercise of
options: (i) 15,000 shares exercisable at $3.1250 per share, (ii) 10,000 shares exercisable at
$7.1405 per share, (iii) 10,000 shares exercisable at $2.50 per share, (iv) 10,000 shares
exercisable at $0.755 per share, (v) 10,000 shares exercisable at $0.26 per share, (vi) 10,000
shares exercisable at $0.615 per share, (vii) 10,000 shares exercisable at $0.37 per share;
includes 40,000 shares issuable under the 1995 Option Plan upon exercise of options at $3.6250
per share; and includes 8,332 shares issuable under the 2005 Stock Incentive Plan at $0.39 per
share.(11)
    
    Includes the following shares issuable under the 2005 Stock Incentive Plan upon exercise of
options: 16,665 shares exercisable at $0.20 per share.(12)
    
    All of these shares are held through the Ardinger Family Partnership, Ltd. Equity Compensation Plan Information
  Number of securities to be
    
    
    
    
    
    Number of securities remainingissued upon exercise of
    
    Weighted-average exercise
    
    available for future issuance underoutstanding options,
    
    price of outstanding options,
    
    equity compensation plans (excludingPlan category
    
    warrants and rights
    
    warrants and rights
    
    securities reflected in column (a))(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    2,660,850
    
    
    $
    1.99
    
    
    
    3,216,044Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,660,850
    
    
    $
    1.99
    
    
    
    3,216,044
 50




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##### Table of Contents



Item 12. Certain Relationships and Related Transactions, and Director Independence
 Certain Relationships and Related Transactions
    Director Independence
   51




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##### Table of Contents



Item 13. Exhibits.
 EXHIBIT INDEX
 Exhibit No.
    
    Description of Exhibit2.1
    
    Agreement and Plan of Merger and Reorganization (1)3.1
    
    Certificate of Incorporation (1)3.2
    
    Amendment to Certificate of Incorporation (1)3.3
    
    Restated Bylaws (4)3.4
    
    Certificate of Designation of Series B Convertible Preferred Stock (2)3.5
    
    Certificate of Designation of Series C Convertible Preferred Stock (6)3.6
    
    Certificate of Designation of Series D Redeemable Convertible Preferred Stock (7)3.7
    
    Certificate of Designation of Series E Convertible Redeemable Preferred Stock (20)4.1
    
    Form of Common Stock Certificate (1)4.2
    
    Form of Warrant Certificate (1)4.3
    
    Form of Warrant Agreement between ViewCast and Continental Stock Transfer & Trust
Company (1)4.4
    
    Form of Representatives Warrant Agreement (1)4.5
    
    Notice of Extension of Warrant Expiration Date and Exercise Price Adjustment (5)4.6
    
    Warrant Issued to Ardinger Family Partnership, LTD (20)10.1
    
    Form of Indemnification Agreement between ViewCast and Executive Officers and
Directors (1)10.2
    
    Working Capital Line of Credit Loan Agreement between ViewCast and the Ardinger
Family Partnership, LTD (3)10.3
    
    Sublease Agreement between ViewCast and Host Communications, Inc. (6)10.4
    
    Reserved.10.5
    
    Revolving Loan Agreement between MMAC Communications Corp. and Keltic Financial
Partners, LP dated as of October 11, 2002 (7)10.6
    
    Guarantee of Payment and Performance from ViewCast.com, Inc. to Keltic Financial
Partners, LP dated as of October 11, 2002 (7)10.7
    
    Subordination Agreement by and among Keltic Financial Partners, LP, MMAC
Communications Corp. and ViewCast.com, Inc. dated as of October 11, 2002 (7)10.8
    
    General Security Agreement by and between MMAC Communications Corp. and Keltic
Financial Partners, LP dated as of October 11, 2002 (7)10.9
    
    Revolving Note by MMAC Communications Corp. in favor of Keltic Financial Partners, LP
dated as of October 11, 2002 (7)10.10
    
    ViewCast.com, Inc. 2005 Stock Incentive Plan (14)10.11
    
    ViewCast.com, Inc. 2005 Employee Stock Purchase Plan (15)10.12
    
    Reserved.10.13
    
    Reserved.10.14
    
    Reserved.10.15
    
    Form of Amended and Restated Security Agreement dated October 15, 2003 between
ViewCast.com, Inc. and the Ardinger Family Partnership, LTD (8)
 52




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.16
    
    Form of Amended and Restated Pledge Agreement dated October 15, 2003 between
ViewCast.com, Inc. and the Ardinger Family Partnership, LTD (8)10.17
    
    Form of First Amendment to the Revolving Loan Agreement dated October 11, 2003
between Delta Computec Inc. and Keltic Financial Partners, LP (8)10.18
    
    Reserved.10.19
    
    Reserved.10.20
    
    Third Amendment dated as of December 10, 2004 to Revolving Loan Agreement between
MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11,
2002 (9)10.21
    
    Fourth Amendment dated as of January 10, 2005 to Revolving Loan Agreement between
MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11,
2002 (9)10.22
    
    Fifth Amendment dated as of February 15, 2005 to Revolving Loan Agreement between
MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11,
2002 (9)10.23
    
    Notice of Lower Temporary Conversion Price dated March 21, 2005 (10)10.24
    
    Letter Agreement Amending Revolving and Term Credit Facility dated March 22, 2005 (10)10.25
    
    Sixth Amendment, dated as if April 15, 2005, to Revolving Loan Agreement Between MMAC
Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002
(11)10.26
    
    Seventh Amendment, dated as if July 15, 2005, to Revolving Loan Agreement Between
MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11,
2002 (12)10.27
    
    Letter Agreement Amending Revolving and Term Credit Facility dated July 22, 2005 (13)10.28
    
    Eighth Amendment, dated as if October 11, 2005, to Revolving Loan Agreement Between
MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11,
2002 (16)10.29
    
    Reserved.10.30
    
    Office Lease Agreement between ViewCast and TR Plano Parkway Partners, L.P. (17)10.31
    
    Letter Agreement Amending Revolving and Term Credit Facility dated March 20, 2006 (18)10.32
    
    Office Lease Agreement between ViewCast and Valwood Centreport, LP (19)10.33
    
    Registration Rights Agreement by and among ViewCast and Ardinger Family Partnership,
Ltd. Dated as of December 11, 2006 (20)10.34
    
    Second Amended Loan and Security Agreement dated as of December 11, 2006 (20)10.35
    
    Exchange Agreement dated as of December 11, 2006 by and among ViewCast, Osprey
Technoligies, Inc. and Videoware, Inc. and Ardinger Family Partnership, Ltd. (20)10.36
    
    Amended and Restated Employment Agreement by and between ViewCast Corporation and
David T. Stoner effective as of March 1, 2007 (*)10.37
    
    2007 Executive Incentive Compensation Plan for David T. Stoner (21)10.38
    
    Amended and Restated Employment Agreement by and between ViewCast Corporation and
Laurie L. Latham effective as of March 1, 2007 (*)10.39
    
    2007 Executive Incentive Compensation Plan for Laurie L. Latham (21)10.40
    
    Purchase and Sale Agreement/Security Agreement by and among ViewCast.com, Inc.,
Osprey Technologies, Inc., Videoware, Inc. and Amegy Bank National Association, dated
June 29, 2007 (22)10.41
    
    Amendment to Purchase and Sale Agreement/Security Agreement by and among
ViewCast.com, Inc., Osprey Technologies, Inc., Videoware, Inc. and Amegy Bank
National Association, dated June 29, 2007 (22)
 53




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##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.42
    
    Amended and Restated Employment Agreement by and between ViewCast.com, Inc. and Gary
Klembara effective September 1, 2007 (*)10.43
    
    Amended and Restated Employment Agreement by and between ViewCast Corporation and
George C. Platt effective as of September 17, 1999 (*)14.1
    
    Code of Ethics (23)21.1
    
    Subsidiaries of ViewCast.com, Inc. (24)23.1
    
    Consent of KBA Group LLP *31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications *32.1
    
    Statement 1350 Certifications *
 
 *
    
    Filed herewith.(1)
    
    Incorporated by reference to the Registration Statement on Form SB-2 and all amendments
thereto as declared effective on February 4, 1997(2)
    
    Incorporated by reference to Form 8-K filed March 15, 1999.(3)
    
    Incorporated by reference to Form 10-KSB filed March 26, 1999.(4)
    
    Incorporated by reference to Form S-3 filed June 30, 2000.(5)
    
    Incorporated by reference to Form 8-K filed January 23, 2002.(6)
    
    Incorporated by reference to Form 10-K filed April 16, 2002.(7)
    
    Incorporated by reference to Form 8-K filed October 25, 2002.(8)
    
    Incorporated by reference to Form 10-QSB filed November 14, 2003.(9)
    
    Incorporated by reference to Form 8-K filed March 25, 2005.(10)
    
    Incorporated by reference to Form 8-K filed March 25, 2005.(11)
    
    Incorporated by reference to Form 8-K filed April 21, 2005.(12)
    
    Incorporated by reference to Form 8-K filed July 18, 2005.(13)
    
    Incorporated by reference to Form 8-K filed July 27, 2005.(14)
    
    Incorporated by reference to Appendix A to Proxy Statement filed September 9, 2005.(15)
    
    Incorporated by reference to Appendix B to Proxy Statement filed September 9, 2005.(16)
    
    Incorporated by reference to Form 8-K filed October 17, 2005.(17)
    
    Incorporated by reference to Form 8-K filed January 17, 2006.(18)
    
    Incorporated by reference to Form 8-K filed March 23, 2006.(19)
    
    Incorporated by reference to Form 8-K filed November 2, 2006.(20)
    
    Incorporated by reference to Form 8-K filed December 15, 2006.(21)
    
    Incorporated by reference to Form 10-KSB/A filed April 30, 2007.(22)
    
    Incorporated by reference to Form 8-K filed July 6, 2007.(23)
    
    Incorporated by reference to Form 10-KSB filed March 30, 2004.(24)
    
    Incorporated by reference to Item 1. Description of BusinessOverview of this report. 54




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
  2006
    
    
    2007Audit (1)
    
    $
    98,450
    
    
    $
    88,615Audit Related Fees (2)
    
    
    1,130
    
    
    
    Tax Fees (3)
    
    
    35,348
    
    
    
    17,650All Other Fees (4)
    
    
    
    
    
    
    15,500TOTAL
    
    $
    134,928
    
    
    $
    121,765
 
 (1)
    
    Consists primarily of quarterly review and annual audit services(2)
    
    Consists primarily of and annual shareholder meeting services(3)
    
    Consists primarily of Federal and State tax services(4)
    
    Consists primarily of Sarbanes-Oxley compliance services  55




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##### Table of Contents



SIGNATURES
  Date
    
    ViewCast.com, Inc.
 April 29, 2008
    By:
    /s/ Laurie L. LathamLaurie L. LathamChief Financial Officer and Senior Vice President of Finance
and Administration
  Date
    
    ViewCast.Com, Inc.
 April 29, 2008
    By:
    /s/ George C. PlattGeorge C. PlattDirector and Chief Executive Officer
Principal Executive OfficerApril 29, 2008
    By:
    /s/ Laurie L. LathamLaurie L. LathamChief Financial Officer and Senior Vice President of Finance
and Administration
Principal Accounting OfficerApril 29, 2008
    By:
    /s/ Joseph W. AutemJoseph W. AutemDirectorApril 29, 2008
    By:
    /s/ Sherel D. HorsleySherel D. HorsleyDirectorApril 29, 2008
    By:
    /s/ John W. Slocum, Jr.John W. Slocum, Jr.Director
 56




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##### Table of Contents



EXHIBIT INDEX FOR DOCUMENTS FILED WITH THIS REPORT
 ExhibitNo.
    
    Description of Exhibit10.36
    
    Amended and Restated Employment Agreement by and between ViewCast
Corporation and David T. Stoner effective as of March 1, 200710.38
    
    Amended and Restated Employment Agreement by and between ViewCast
Corporation and Laurie L. Latham effective as of March 1, 200710.42
    
    Amended and Restated Employment Agreement by and between
ViewCast.com, Inc. and Gary Klembara effective September 1, 200710.43
    
    Amended and Restated Employment Agreement by and between ViewCast
Corporation and George C. Platt effective as of September 17, 199923.1
    
    Consent of KBA Group LLP31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications32.1
    
    Section 1350 Certifications
 57