10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

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

For the fiscal year ended December 31, 2012.

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition period from                      to                     .

Commission File Number: 0-29020

ViewCast.com, Inc.

(Exact name of registrant as specified in its charter)

Delaware	75-2528700
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3701 W. Plano Parkway, Suite 300, Plano, TX	75075
(Address of principal executive offices)	(Zip Code)

972-488-7200

Registrant’s telephone number, including area code

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.0001 par value

(Title of class)

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

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

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

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

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

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

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

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2012 was $3,484,471. As of March 15, 2013, there were 62,386,490 shares of the registrant’s common stock (par value $0.0001) outstanding.

Documents incorporated by reference: Portions of the definitive proxy statement pursuit to Regulation 14A to be issued by the registrant in connection with the 2013 Annual Meeting are incorporated by reference into Part III of this report.

TABLE OF CONTENTS

Item No.		Page No.
	Part I
1.	Business		1
2.	Properties		7
3.	Legal Proceedings		7
4.	Mining Safety Disclosures		7
	Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		8
6.	Selected Financial Data		9
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
7A.	Quantitative and Qualitative Disclosures About Market Risk		13
8.	Financial Statements and Supplementary Data		14
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		38
9A.	Controls and Procedures		38
9B.	Other Information		39
	Part III
10.	Directors, Executive Officers and Corporate Governance		39
11.	Executive Compensation		39
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		39
13.	Certain Relationships and Related Transactions, and Director Independence		39
14.	Principal Accountant Fees and Services		39
	Part IV
15.	Exhibits and Financial Statement Schedules		40

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

Item 1. Business

Overview

ViewCast.com, Inc., doing business as ViewCast Corporation (“ViewCast”), develops industry-leading hardware and software for the capture, management and delivery of video over IP and mobile networks. ViewCast’s solutions simplify the complex workflows required for these tasks, allowing broadcasters, businesses, governments and various distribution entities to reach and expand their distribution of digital media easily and effectively. ViewCast’s Niagara^® streaming systems and Osprey^® video capture cards, provide high value through ease of usage, reliability and integration with third party applications. ViewCast markets and sells its products and professional services worldwide directly to end-users or through indirect channels including original equipment manufacturers (“OEMs”), value-added resellers (“VARs”), resellers, distributors and computer system integrators. ViewCast is focused on growth by leveraging video market expansion and growth into new market areas. We believe that emphasis on revenue and market share growth will enable us to realize long-term profitability and stockholder value.

On January 15, 2012, ViewCast completed the sale of certain assets from Ancept Corporation (the “Ancept Assets”) related to the development and licensing of VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation and Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. and no longer operates this business.

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

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Our common stock trades on the Over-the-Counter markets (“OTC BB” and “OTC QB”) under the symbol VCST.

Market Background and Market Drivers

Video or multi-media has moved to the mainstream as a strategic business tool for enterprises—including education and corporate enterprise, and consumer segments—while advertising, media and entertainment look to capitalize on increased viewership over a variety of devices.

Based on the 2011 and 2012 Frost & Sullivan reports, ViewCast believe the relevant portions of the encoding market have expanded to approximately $523 million in 2012 and is expected to expand to $923 million by 2016. The expansion of these markets, especially toward high definition, more powerful and reliable performance, and greater ease of use, has underscored the need for structured, secure and scalable digital video encoder solutions. We believe that ViewCast can capably fill that role.

Market Drivers

According to the Cisco^® Visual Networking Index (VNI) Global Mobile Data Traffic Forecast for 2012 to 2016, worldwide mobile data traffic will increase 18-fold over the next five years, reaching 10.8 exabytes per month — or an annual run rate of 130 exabytes — by 2016. The expected sharp increase in mobile traffic is due, in part, to a projected surge in the number of mobile Internet—connected devices. During 2012-2016, Cisco anticipates that global mobile data traffic will outgrow global fixed data traffic by three times. This mobile data traffic increase represents a compound annual growth rate (CAGR) of 78 percent spanning the forecast period. We believe the following trends are driving these significant increases and driving the market for our digital video encoding equipment:

• More Streamed Content,

• More Mobile Devices and Connections,

• Enhanced Computing of Devices, and

• Faster Mobile and Internet Speeds.

How ViewCast Addresses the Market

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

• ViewCast is a well-known and trusted streaming industry pioneer

• The streaming media industry was built on our first product line, Osprey^® video capture cards

• More than 400,000 Osprey video capture cards have been deployed globally

• ViewCast develops products that transform and deliver digital video and audio over broadband and mobile networks.

• ViewCast Niagara^® – encoding systems for video and audio

• ViewCast Osprey^® – cards for capturing video and audio

• We sell to a wide variety of broadcasters, network providers, businesses, educators and governments to repurpose their content, reach new markets, expand their audiences and create new revenue streams.

• ViewCast has an expanded global business presence with a portfolio of solutions.

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Corporate Growth and Value

ViewCast has become widely regarded as a leading global provider of high-quality digital media communication products. We intend to achieve our goals by leveraging the market’s expansion with our current and future products internally developed or acquired to capitalize on sales opportunities. Specifically, our ability to achieve our goals depends on the following:

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

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

• Strong Products and Brand Equity. ViewCast is positioned for the market with well-known solutions that appeal to a broad range of industries and continues investment in efficient and selective product and feature development for increased ROI and acceptance in market;

• Sales Focus. Expanded and knowledgeable sales presence to address the large growing global market through well-established and new worldwide indirect channels and large account & OEM business development; and

• Maintain Capitalization and Efficient Operations. ViewCast expects to maintain capitalization to sustain growth in revenue and market share for working capital and investing in growth areas of sales, marketing, and research and development.

ViewCast Products and Services

ViewCast solutions provide a bridge between digital assets and delivery networks. The ViewCast solutions family includes:

• Osprey Video^® line of capture cards,

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

• Professional services and support, and complementary products and technologies from leading third party providers.

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

• Designed for video acquisition/capture/streaming

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

• Analog /Digital Audio & Video

• Standard & High Definition

• PCI & PCI Express

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

• Balanced & Unbalanced Audio

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

• Complete systems designed for live video streaming:

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

• Dedicated, embedded operating systems, optimized for video encoding

• Features Niagara SCX^® and SimulStream^® software technology:

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

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

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

Marketing and Sales

ViewCast serves a variety of markets including:

• Broadcasters, Content Delivery Networks, and Narrowcasters,

• Federal, State, and Local Government,

• Small, Medium, and Large Enterprises,

• Mobile and Cable Providers,

• Education and Training,

• Retail and Consumer Package Goods,

• Digital Signage Integrators, and

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

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

Our product revenue is well diversified among various end-users who purchase from our direct and indirect channels. During 2012, two distributors generated more than 10% of our sales, Jeff Burgess and Associates, Inc. (17.3%) and Graphics Distribution, Inc. (16.0%) due to general increased sales volume and uptick in integrator activity. We plan to build upon our established customer base by expanding our distribution and sales force and expanding our product market awareness and reach.

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

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Production and Supply

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

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

Installation, Service and Maintenance

Most of our Osprey video card products and Niagara system products are customer installable. For those customers who need assistance with Niagara products, we utilize our channels to install and provide service. Further, we maintain an in-house technical support group to assist our channels and customers as required.

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

Research and Development

We focus our research and development activities on digital media applications, process management and new features for expanded market opportunities. We will continue to make investments in core video technology and processing techniques, focusing on how to best apply the latest advancements in the industry into commercially viable products. In some cases, strategic partnerships will be utilized to enhance our research and development, and potentially reduce costs. During the 2011 and 2012 fiscal years we expended approximately $3.1 million and $3.0 million, respectively, in research and development activities; plus capitalized software development costs and patents of $173 thousand and $247 thousand, respectively. No significant portion of such expenses was borne directly by our customers.

New products or feature enhancements are scheduled for launch in 2013 in the Osprey and Niagara product families that will provide new capabilities and features. We believe these products and services will be competitive and feature unique capabilities. We will maintain integration efforts with third party application software and hardware for our products and services.

Competition

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

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

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Patents, Copyrights, Trademarks and Proprietary Information

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

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

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

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

Government Regulation

We are subject to Federal Communications Commission regulations relating to electromagnetic radiation from our products, which impose compliance burdens on us. In the event we redesign or otherwise modify our products or complete the development of new products, we will be required to comply with Federal Communications Commission regulations with respect to such products. Our foreign markets require us to comply with additional regulatory requirements. Compliance with environment laws, both domestic and foreign, may also precipitate changes in materials or processes related to our products and packing materials and may cause us to be subject to additional requirements for testing, certifications or disposal. We do not believe the cost of compliance with environment laws will be material to the Company.

Personnel

As of March 15, 2013, our personnel consisted of forty-seven (47) people, four (4) of whom are in executive positions, twelve (12) of whom are engaged in engineering, research and development, twelve (12) of whom are engaged in marketing and sales activities, eight (8) of whom are engaged in operations, three (3) of whom are providing support and professional services and eight (8) of whom are in finance and administration. None of our employees are represented by a labor union. We consider our employee relations to be good.

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Item 1A. Risk Factors

Not required.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive offices are located in approximately 18,676 square feet of leased space in Plano, Texas. We use this space for administration, marketing, research and development and some of our sales activities. The primary lease term expired in April 2012 and provided for a base annual rent expense of $204,547. In 2011 ViewCast entered into an amendment to the lease wherein, effective May 1, 2012, the term of lease was extended with the termination date being July 31, 2021 and the base annual rent expense increases to $249,612.

Our manufacturing and distribution operations are located in approximately 16,575 square feet of leased space in Carrollton, Texas. The primary lease expired in February 2012 and provided for a base annual rent expense of $71,257. In 2012 ViewCast entered into an amendment to the lease wherein, effective March 1, 2012, the term of lease was extended with the termination date being April 30, 2017 and the base annual rent expense increases to $79,881.

Our finance, administration, sales and marketing functions are based at ViewCast headquarters in Plano, Texas

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

Item 3. Legal Proceedings

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

Item 4. Mining Safety Disclosures

None.

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PART II

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

Common Stock Price Range

As of March 15, 2013, there were 62,386,490 shares of our common stock outstanding. The following table sets forth, for the periods indicated, the high and low sales prices for the common stock on the Over-the-Counter markets (“OTC”). Our common stock is traded on the OTC-BB and the OTC-QB under the symbol “VCST”. These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. The trading market in our securities may at times be relatively illiquid due to low trading volume.

	Common Stock
Fiscal 2011	High		Low
1st Quarter	$	0.35	$	0.25
2nd Quarter	$	0.41	$	0.25
3rd Quarter	$	0.34	$	0.11
4th Quarter	$	0.20	$	0.08

	Common Stock
Fiscal 2012	High		Low
1st Quarter	$	0.25	$	0.09
2nd Quarter	$	0.21	$	0.11
3rd Quarter	$	0.13	$	0.05
4th Quarter	$	0.16	$	0.06

On March 15, 2013, the last reported sales price for our common stock as reported on the OTC was $0.18. As of March 15, 2013, there were approximately 280 holders of record of the common stock.

Dividend Policy

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

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

None

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Purchases of Equity Securities by the Issuer and the Affiliated Purchasers

None.

Item 6. Selected Financial Data

Not required.

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

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

Overview

ViewCast develops industry-leading hardware and software for the capture, management, and delivery of digital media over IP and mobile networks. ViewCast’s solutions simplify the complex workflows required for these tasks, allowing broadcasters, businesses, governments and the various distribution entities to reach and expand their distribution of digital media easily and effectively. ViewCast’s Niagara^® streaming systems and Osprey^® video capture cards, provide the technology required to deliver the multi-platform experiences driving today’s digital media market. ViewCast markets and sells its products and professional services worldwide directly to end-users or through indirect channels including OEMs, VARs, resellers, distributors and computer system integrators. ViewCast is focused on growth by leveraging the digital media market expansion and our product solutions to capitalize on sales opportunities. We believe that emphasis on revenue and market share growth will enable us to realize long-term profitability and stockholder value.

On January 15, 2012, ViewCast completed the sale of the Ancept Assets related to the development and licensing of the VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation and Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. and no longer operates this business.

ViewCast utilizes significant capital to design, develop and commercialize its products and intends to fund its 2013 operating activities and sales growth by utilizing existing cash, cash provided from operations and working capital lines of credit to the extent possible. ViewCast believes that these items will provide sufficient cash to fund operations for the next 12 months, however, ViewCast may require additional working capital during the next year to support operations and the expansion of sales channels and market distribution, to develop and introduce new products and services, to enhance existing product offerings, to address unanticipated competitive threats or technical problems, to transition adverse economic conditions and for potential acquisition transactions. There can be no assurance that additional financing will be available to ViewCast on acceptable terms, or at all. Additional equity financing may involve substantial dilution to our then existing stockholders. In the event ViewCast is unable to raise additional capital or execute other alternatives, it may be required to sell segments of the business, or substantially reduce or curtail our activities. Such actions could result in charges that could be material to ViewCast’s results of operations or financial position.

Financial Highlights of 2012

Total revenues from continuing operations for the year ended December 31, 2012 were $12,140,697, a 14% decrease from revenues of $14,110,797 reported in 2011. Gross margin for 2012 decreased 14% to $7,574,358, or 62.4% of sales, from $8,795,480, or 62.3% of sales, in the year ended December 31, 2011. Total operating expenses from continuing operations decreased 12% to $8,775,708 for 2012 when compared to the $9,964,534 for 2011, resulting in a net loss from continuing operations of $1,359,928 for the fiscal year of 2012, compared to the net loss from continuing operations of $1,393,162 for the fiscal year of 2011.

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Critical Accounting Policies

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

• Revenue Recognition – We apply provisions of Securities and Exchange Commission Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements as revised by SAB 104, Revenue Recognition, FASB ASC 605, “Revenue Recognition” and FASB ASC 985, “Software”. Under these guidelines, we recognize revenue on transactions where persuasive evidence of an arrangement exists, title has transferred, product payment is not contingent upon performance of installation or service obligations, the price is fixed or determinable and payment is reasonably assured. We accrue warranty costs and sales allowances for promotional activities at time of shipment based on historical experience. In addition, we defer revenue associated with maintenance and support contracts and recognize revenue ratably over the contract term.

• Allowance for Doubtful Accounts – We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers or distribution partners were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

• Excess and Obsolete Inventories – We write down our inventories for estimated obsolescence and unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less than those projected by management, additional write-downs may be required.

• Reporting for Discontinued Operations / Assets Held for Sale—In accordance with FASB ASC 205-20, “Presentation of Financial Statements—Discontinued Operations”, assets held for sale are reported separately on the Balance Sheet by class of asset and/or liability, not as a single net amount, and these new line items are reclassified on the face financial statements (Balance Sheet) for the prior year(s). The net income or loss from the operations of the assets held for sale are reported separately on the Income Statement, located below Income from Continuing Operations and above any Extraordinary Items; and similar to the Balance Sheet presentation, the prior year(s) are also reclassified. Additionally, where any of these items affect the Statement of Cash Flow and/or Shareholders’ Equity, those items will be a new line item on the face of those financial statements and they will also be reclassified for prior year(s).

Results of Operations

Year Ended December 31, 2012 compared to Year Ended December 31, 2011.

Net Sales. During the year ended December 31, 2012, net sales from continuing operations decreased $1,970,100 to $12,140,697 from $14,110,797 in 2011, representing a 14% decrease from 2011. Net sales for combined Osprey and Niagara products decreased during 2012 in all sales regions.

10

Osprey Product Sales. During the year ended December 31, 2012, Osprey sales decreased $520,451 to $8,259,841 from $8,780,292 in 2011, representing a 6% decrease from 2011 and 68% of total 2012 net sales, compared to 62% in 2011. The decrease in sales for 2012 was primarily due to sales decreases of 17% in the Europe, Middle East and Africa (“EMEA”) sales region, 6% in the Pacific Rim sales region, and 3% in the North America sales region, which was partially offset by a 37% increase in the Latin America sales region. With the introduction of new Osprey products and additional Linux drivers, we anticipate growth in 2013 from broadband networking providers as they deploy new, higher bandwidth services and technologies and from integrators with other applications requiring video capture.

ViewCast Niagara^® Streaming/Encoding Systems. During the year ended December 31, 2012, combined systems sales decreased $1,534,421 to $3,633,727 from $5,168,148 in 2011, representing a 30% decrease from 2011 and 30% of total 2012 net sales, compared to 37% in 2011. The decrease in sales for 2012 was primarily due to a sales decrease of 33% in the North America sales region, which was mostly due to the cancellation of a large OEM customer’s orders during the 2012 year. Additionally, sales decreased 29% in the EMEA sales region and 26% in the Latin America sales region, which were partially offset by a 10% increase the Pacific Rim sales region. During 2013 we anticipate sales of the Niagara 9100 product series along with a new portable line and our other Niagara systems and software will contribute to improving sales during 2013.

Other Revenues. During the year ended December 31, 2012, other revenues from support and maintenance increased $84,772 to $247,129 from $162,357 in 2011, representing a 52% increase from the 2011 levels and 2% of total 2012 revenue, compared to 1% in 2011. We anticipate that Other Revenue will vary quarter to quarter depending on the level of support and maintenance revenues that are amortized over contract periods.

Cost of Sales/Gross Profit. During the year ended December 31, 2012, cost of sales from continuing operations decreased $748,978 to $4,566,339 from $5,315,317 in 2011, representing a 14% decrease from 2011. Gross profit margin decreased $1,221,122 to $7,574,358 from $8,795,480 in 2011, representing a 14% decrease from 2011 and 62.4% of total 2012 net sales, compared to 62.3% in 2011. The slight increase in gross profit margin percentage was primarily due to a higher percentage of sales derived from the higher margin Osprey products.

We expect 2013 gross profit margins to remain comparable to historical margins in the 55%-68% range. Margins will be affected quarter to quarter by promotional activities, price adjustments, cost of materials, inventory obsolescence, new products, and the sales mix between capture cards, systems and services in any one reporting period.

Selling, General and Administrative Expense. During 2012, selling, general and administrative expenses from continuing operations decreased $956,351 to $5,429,547 from $6,385,898 in 2011, representing a 15% decrease from 2011. The decrease is primarily attributable to the expansion of our distributor network, which has reduced our internal expenses related to sales and marketing.

Research and Development Expense. During 2012, research and development expense from continuing operations decreased $112,817 to $2,954,991 from $3,067,808 in 2011, representing a 4% decrease from 2011. The decrease is primarily from reduced headcount related to a consolidation of products and processes.

Depreciation and Amortization Expense. During 2012, depreciation and amortization expense from continuing operations decreased $119,658 to $391,170 from $510,828 in 2011, representing a 23% decrease from 2011. The decrease was primarily due to the reduction in expenditures for capital assets over the last two years.

Other Income and Expense. During 2012, total other expense decreased by $65,530 to $158,578 from $224,108 in 2011, representing a 29% decrease from the 2011 levels. This was primarily due to a $66,903 decrease in interest expense to $160,131 from $227,034 in 2011, representing a 30% decrease. The decrease in interest expense is due mostly to the decrease of interest rate on the Stockholder Term Notes (see Note 9).

Net Loss from Continuing Operations. During 2012, the net loss from continuing operations improved $33,234 to a loss of $1,359,928 from a loss of $1,393,162 in 2011.

Net Loss from Discontinued Operations. During 2012, the net loss from discontinued operations improved $1,466,665 to a loss of $161,594 from a loss of $1,628,258 in 2011 (see Note 4).

11

Net Loss. During the year ended December 31, 2012, the net loss improved $1,499,899 to a loss of $1,521,522 from a loss of $3,021,421 in 2011. For the year ended December 31, 2012, the net loss per share applicable to the common shareholders was ($0.02). For the same period 2011, after increasing the net loss for stated preferred dividends of $282,444 and decreasing the net loss for Preferred Stock Redemption of $5,586,666 (see Note 11), the net income per share applicable to the common shareholders was $0.05 per share.

Liquidity and Capital Resources

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

Net cash used by operating activities for the year ended December 31, 2012 totaled $883,520, compared to the cash used by operating activities of $1,367,123 in 2011. The net cash used in operating activities for the year ended December 31, 2012 was due to the net loss from continuing operations of $1,359,928 plus the net loss from the discontinued operations of $161,594, which was partially offset by non-cash operating expenses of $497,416 and cash provided from net changes in operating assets and liabilities of $140,586. The cash provided from operating assets and liabilities was from decreases in inventory, assets held for sale, deposits and prepaid expenses, and increases in accounts payable and deferred revenue, which was partially offset by cash used for an increase in accounts receivable and a decrease in accrued expenses and other current liabilities.

Net cash used for investing activities during the year ended December 31, 2012 totaled $266,727, of which $66,263 was used for property and equipment purchased and $247,490 was used for software development costs and patents that were capitalized. These were partially offset by $47,026 provided from the proceeds from the sale of property and equipment.

During the year ended December 31, 2012, ViewCast’s financing activities provided cash of $1,088,598, of which $323,306 was provided from the sale of stock under a private placement (see Note 11) and $808,279 was provided from the net proceeds from the bank line of credit (see Note 8). These were partially offset by $42,987 used for repayment of long-term debt.

In June 2007, ViewCast entered into a Purchase and Sale Agreement/Security Agreement with Amegy Bank National Association, a national banking association to provide a line of credit for working capital. The general borrowing availability under this facility is $1,000,000, reviewed as growth of business dictates. However, this may be exceeded without penalty. As of December 31, 2012, we have an outstanding balance of $1,143,920 under this facility based on the outstanding accounts receivable at year end.

Since October 1998, the Company has maintained a credit facility with an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger. Most recently, ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (jointly and severally, “the Borrower”) amended the terms and conditions of the loan and security agreement with the Ardinger Family Partnership, Ltd. on December 30, 2011, to be effective as of October 1, 2011. Under the amended terms any amounts outstanding of the primary principal amount and secondary principal amount mature December 31, 2014, subject to certain earlier payment conditions. The interest on the primary principal amount will accrue based on an interest rate per annum which is the greater of 5.0% or the effective prime rate plus 0.75% (5.00% as of December 31, 2011 and 2012). Interest on the secondary principal shall accrue based on the effective Applicable Federal Rate, as defined in the agreement, (1.27% and 0.21%) as of December 31, 2011 and 2012, respectively). The amendment defers the payment of the accrued interest on the unpaid primary and secondary principal amounts from October 1, 2011 through March 31, 2012. Beginning April 30, 2012 payment of such accrued interest was paid in three approximately equal monthly payments. The amended terms call for interest accruing after March 31, 2012 to be paid monthly; and beginning July 31, 2013, minimum monthly principal payments of $21,422, in addition to the monthly interest payments. Accrued interest was $27,906 and $10,769 at December 31, 2011 and December 31, 2012, respectively. The amended note agreement is secured by all the assets of the Borrower.

12

There were no preferred stock dividends declared or paid during 2012. On May 4, 2011, under an Exchange Agreement, the Series B Preferred Stock and Series C Preferred Stock were converted into Common Stock and any and all dividends, owed or owing on the Preferred Stock, were cancelled (see Note 11).

On December 27, 2011, ViewCast entered into subscription agreements (the “Subscription Agreements”) with twelve investors (the “Investors”) for the purchase of private placement units consisting of an aggregate 6,618,068 shares of Common Stock and warrants (the “Warrants”) to purchase 6,618,068 shares of Common Stock for an aggregate purchase price of $745,000. Of the $745,000 subscribed, ViewCast received $425,000 in December with the remainder received in January 2012. The purchase price per private placement unit was $0.1125707, which was the weighted average closing price for the five trading days immediately prior to December 27, 2011. Pursuant to the Subscription Agreements, the Warrants are exercisable into shares of Common Stock at an exercise price of 0.1238278 per share of Common Stock which was 110% of the weighted average closing price for the five trading days immediately prior to December 27, 2011. The Warrants will expire on December 31, 2014.

At December 31, 2012, ViewCast had working capital of $1,492,906 and cash and cash equivalents of $258,259. ViewCast expects to obtain additional working capital by increasing sales, maintaining reduced operating expenses, borrowing under its loan facilities, and through other initiatives that may include raising additional equity. ViewCast utilizes significant capital to design, develop and commercialize its products and intends to fund its operating activities and sales growth during the next twelve months by utilizing existing cash, cash contributed from operations and its available working capital lines of credit. ViewCast anticipates it may require additional working capital during 2013 to support the expansion of sales channels and market distribution, to develop and introduce new products and services, to enhance existing product offerings, to address unanticipated competitive threats or technical problems, to transition adverse economic conditions, to service its debt, and for potential acquisition transactions.

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

At December 31, 2012, ViewCast had no material commitments for capital expenditures.

Off Balance Sheet Arrangements

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not required.

13

Item 8. Financial Statements

ViewCast.com, Inc. and Subsidiaries

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	15
Consolidated Balance Sheets at December 31, 2011 and 2012	16
Consolidated Statements of Operations for the years ended December 31, 2011 and 2012	17
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December  31, 2011 and 2012	18
Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2012	19
Notes to Consolidated Financial Statements	20

14

Report of Independent Registered Public Accounting Firm

To the Board of Directors

ViewCast.com, Inc.

We have audited the accompanying consolidated balance sheets of ViewCast.com, Inc. and subsidiaries (the “Company”) as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits also included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 financial position of ViewCast.com, Inc. as of December 31, 2012 and 2011 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/S/ BKD, LLP

Dallas, Texas

April 1, 2013

15

VIEWCAST.COM, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2011			2012
ASSETS
Current assets:
Cash and cash equivalents	$	319,908		$	258,259
Accounts receivable, less allowance for doubtful accounts of $22,292 and $39,018 at December 31, 2011 and 2012, respectively		1,632,239			2,314,624
Inventories, net		2,708,081			2,123,379
Prepaid expenses		134,799			123,858
Assets held for sale		534,907			—
Total current assets		5,329,934			4,820,120
Property and equipment, net		251,848			135,212
Capitalized software development costs, net		266,713			329,532
Earn-out receivable		—			127,062
Intangible assets, net		108,962			84,693
Deposits		84,770			30,044
Total assets	$	6,042,227		$	5,526,663
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Line of credit	$	335,641		$	1,143,920
Accounts payable		834,185			1,004,326
Accrued expenses and other current liabilities		850,300			723,071
Deferred revenue		260,638			305,027
Current maturities of long-term debt and stockholder notes payable		171,525			150,870
Liabilities related to assets held for sale		250,837			—
Total current liabilities		2,703,126			3,327,214
Long-term debt, less current maturities		32,152			9,820
Stockholder notes payable, less current maturities		5,541,448			5,541,448
Total liabilities		8,276,726			8,878,482
Stockholders’ deficit:
Preferred stock, $0.0001 par value, authorized 5,000,000 shares:
Series E convertible—issued and outstanding shares—80,000—liquidation value of $107 per share as of December 31, 2011 and 2012, respectively		8			8
Common stock, $.0001 par value, authorized 100,000,000 shares; issued shares— 59,768,846 and 62,647,987 at December 31, 2011 and 2012, respectively		5,977			6,265
Additional paid-in capital		73,205,369			73,609,283
Accumulated deficit		(75,433,947	)		(76,955,469	)
Treasury stock, 261,497 shares at cost		(11,906	)		(11,906	)
Total stockholders’ deficit		(2,234,499	)		(3,351,819	)
Total liabilities and stockholders’ deficit	$	6,042,227		$	5,526,663

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

16

VIEWCAST.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year ended December 31,
	2011			2012
Net revenue	$	14,110,797		$	12,140,697
Cost of revenue		5,315,318			4,566,339
Gross profit		8,795,479			7,574,358
Operating expenses:
Selling, general and administrative		6,385,898			5,429,547
Research and development		3,067,808			2,954,991
Depreciation and amortization		510,828			391,170
Total operating expenses		9,964,534			8,775,708
Operating loss		(1,169,055	)		(1,201,350	)
Other income (expense):
Interest expense (including $116,441 and $64,002 to related parties)		(227,034	)		(160,131	)
Interest income		2,403			60
Other		523			1,493
Total other expense, net		(224,108	)		(158,578	)
Loss from continuing operations		(1,393,163	)		(1,359,928	)
Net loss from discontinued operations		(1,628,258	)		(161,594	)
NET LOSS	$	(3,021,421	)	$	(1,521,522	)
Preferred stock dividends		(282,444	)		—
Preferred stock redemption		5,586,666			—
Net income (loss) applicable to common stockholders	$	2,282,801		$	(1,521,522	)
Net loss per common share (basic and diluted):
Continuing operations	$	0.08		$	(0.02	)
Discontinued operations	$	(0.03	)	$	(0.00	)
Net income (loss)	$	0.05		$	(0.02	)
Weighted average number of common shares outstanding
Basic and Diluted		50,080,639			62,125,538

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

17

VIEWCAST.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

YEARS ENDED DECEMBER 31, 2010 AND 2011

	Series B						Series C						Series E
	Convertible						Convertible						Convertible								Additional									Total
	Preferred Stock						Preferred Stock						Preferred Stock				Common Stock				Paid-in			Accumulated			Treasury			Stockholders’
	Shares			Par Value			Shares			Par Value			Shares		Par Value		Shares		Par Value		Capital			Deficit			Stock			Equity (Deficit)
Balances, December 31, 2010		800,000		$	80			200,000		$	20			80,000	$	8		39,277,815	$	3,927	$	72,641,272		$	(72,473,281)		$	(11,906)		$	160,120
Stock based compensation expense		—			—			—			—			—		—		—		—		131,858			—			—			131,858
Employee stock purchase plan issuance		—			—			—			—			—		—		45,624		5		8,618			—			—			8,623
Conversion of preferred stock to common stock		(800,000	)		(80	)		(200,000	)		(20	)		—		—		16,666,666		1,667		(1,567	)		—			—			—
Forfeiture of convertible preferred stock dividends—Series B		—			—			—			—			—		—		—		—		—			33,140			—			33,140
Forfeiture of convertible preferred stock dividends—Series C		—			—			—			—			—		—		—		—		—			27,615			—			27,615
Exercise of stock option		—						—						—		—		3,333		—		566			—			—			566
Stock and warrants issued in private placement																		3,775,408		378		424,622									425,000
Net loss		—			—			—			—			—		—		—		—		—			(3,021,421	)		—			(3,021,421	)
Balances, December 31, 2011		—			—			—			—			80,000		8		59,768,846		5,977		73,205,369			(75,433,947	)		(11,906	)		(2,234,499	)
Stock based compensation expense																		—		—		80,896			—			—			80,896
Employee stock purchase plan issuance																		36,481		4		3,302			—			—			3,306
Stock and warrants issued in private placement																		2,842,660		284		319,716			—			—			320,000
Net loss																		—		—		—			(1,521,522	)		—			(1,521,522	)
Balances, December 31, 2012		—		$	—			—		$	—			80,000	$	8		62,647,987	$	6,265	$	73,609,283		$	(76,955,469)		$	(11,906)			$(3,351,819)

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

18

VIEWCAST.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended
	December 31,
	2011			2012
Operating activities:
Net loss	$	(3,021,421	)	$	(1,521,522	)
Net loss from discontinued operations		(1,628,258	)		(161,594	)
Net loss from continuing operations		(1,393,163	)		(1,359,928	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense		(45,144	)		22,634
Depreciation of property and equipment		260,069			182,228
Amortization of software and intangible assets		406,168			208,940
Impairment of goodwill and intangible assets		713,842			—
Stock based compensation expense		131,858			80,896
Loss (Gain) on sale of assets		(2,398	)		2,718
Changes in operating assets and liabilities:
Accounts receivable		560,551			(705,019	)
Inventories		(492,832	)		584,702
Prepaid expenses		132,472			10,941
Deposits		(52,133	)		54,726
Assets and liabilities held for sales, net		(164,226	)		107,935
Accounts payable		(201,489	)		170,141
Accrued expenses and other current liabilities		573,851			(127,229	)
Deferred revenue		(166,291	)		44,389
Net cash used in operating activities		(1,367,123	)		(883,520	)
Investing activities:
Capitalized software development costs and patents		(172,708	)		(247,490	)
Purchase of property and equipment		(138,146	)		(66,263	)
Proceeds from sale of assets		2,398			47,026
Net cash used in investing activities		(308,456	)		(266,727	)
Financing activities:
Net proceeds from stockholder line of credit		700,000			—
Proceeds from sale of common stock and warrants		433,623			323,306
Proceeds from exercise of employee stock options		566			—
Net proceeds (payment) from (to) line of credit		(705,836	)		808,279
Repayments of long-term debt including $42,845 to related party in 2011		(81,342	)		(42,987	)
Net cash provided by financing activities		347,011			1,088,598
Net decrease in cash and cash equivalents		(1,328,568	)		(61,649	)
Cash and cash equivalents, beginning of year		1,648,476			319,908
Cash and cash equivalents, end of year	$	319,908		$	258,259
Supplemental cash flow information:
Cash paid for interest	$	199,128		$	166,673
Non-cash items:
Acquisition of property and equipment under capital leases	$	59,720		$	—

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

19

ViewCast.com, Inc.

Notes to the Consolidated Financial Statements

1. The Company and Description of Business and Future Liquidity Needs

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

On January 15, 2012, ViewCast completed the sale of certain assets from Ancept Corporation (the “Ancept Assets”) related to the development and licensing of the VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation and Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. and no longer operates this business.

During the year ended December 31, 2012, the Company incurred a net loss of $1,521,522 and used cash in operations of $883,520. At December 31, 2012, the Company has working capital of $1,492,906 and cash and cash equivalents of $258,259. The Company expects to obtain additional working capital by increasing revenue, reducing operating expenses, borrowing on its line of credit and through other initiatives that may include raising additional capital through issuing debt and/or equity securities. There can be no assurance that additional capital will be available to the Company on acceptable terms, or at all. Additional equity financing may involve substantial dilution to its then existing stockholders. The Company believes that these items will provide sufficient cash to fund operations during 2013, however, the Company may require additional working capital during 2013 to support operations and the expansion of sales channels and market distribution, to develop and introduce new products and services, to enhance existing product offerings, to address unanticipated competitive threats or technical problems, to transition adverse economic conditions and for potential acquisition transactions. In the event the Company is unable to raise additional debt and/or equity capital or execute other alternatives, it may be required to sell segments of the business, or substantially reduce or curtail its activities. However, no assurance can be given that we will be able to sell any segments of the business on terms that are acceptable to us. Such actions could result in charges that could be material to ViewCast’s results of operations or financial position.

2. Summary of Significant Accounting Policies

Principles of Consolidation

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

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2012 and 2011, cash equivalents consisted primarily of money market accounts with brokers and certificates of deposit.

At December 31, 2012, the Company’s cash accounts exceeded federally insured limits by approximately $8,000.

Pursuant to legislation enacted in 2010, the FDIC fully insured all noninterest-bearing transaction accounts beginning December 31, 2010, through December 31, 2012, at all FDIC-insured institutions. This legislation expired on December 31, 2012. Beginning January 1, 2013, noninterest-bearing transaction accounts are subject to the $250,000 limit on FDIC insurance per covered institution.

20

Accounts Receivable

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

Changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2011 and 2012 are as follows:

	Year ended December 31,
	2011			2012
Beginning balance	$	67,436		$	22,292
Bad debt expense (recoveries)		(45,144	)		22,634
Uncollectible accounts written off		—			(5,908	)
Ending balance	$	22,292		$	39,018

Inventories

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

Property and Equipment

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

Capitalized Software Development Costs

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

Intangible Assets and Amortization

Legal fees and similar capitalizable costs relating to patents, copyrights, and trademarks are capitalized as appropriate. Patent costs are generally amortized on a straight-line basis over 10 years. Non-compete agreements are amortized over their estimated useful lives of three years. See Note 3 for capitalized software held as assets for sale as of December 31, 2011, and Note 4 for $93,840 impairment of the discontinued operations’ customer lists and software recognized during 2011. No impairment of any intangible assets was recognized in 2012.

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Intangible assets consist of the following:

		December 31, 2011				December 31, 2012
	Average life (years)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Non-Compete agreements	3		24,000		22,387		—		—
Patents	10		145,897		38,548		145,995		61,302
		$	169,897	$	60,935	$	145,995	$	61,302

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

Year ending December 31, 2013	$	22,754
Year ending December 31, 2014		22,754
Year ending December 31, 2015		22,754
Year ending December 31, 2016		16,431
	$	84,693

The weighted average remaining amortization period for intangible assets at December 31, 2012 is 3.7 years.

Impairment of Long-Lived Assets

Assets that are held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment is recognized when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. Assets held for sale are carried at the lower of carrying amount or fair value less selling costs. See Note 4 for impairment charges.

Goodwill

Goodwill is evaluated annually for impairment. A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the fair value is less than the carrying amount, including goodwill. If, based on the evaluation, it is determined to be more likely than not that the fair value is less than the carrying value, then goodwill is tested further for impairment. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements.

Discontinued Operations / Assets Held for Sale

In accordance with FASB ASC 205-20, “Presentation of Financial Statements—Discontinued Operations”, assets held for sale are reported separately on the balance sheet by class of asset and/or liability, not as a single net amount, and these new line items are reclassified on the face financial statements (Balance Sheet) for the prior year(s). The net income or loss from the operations of the assets held for sale are reported separately on the Income Statement, located below Income from Continuing Operations and above any Extraordinary Items; and similar to the Balance Sheet presentation, the prior year(s) are also reclassified. Additionally, where any of these items affect the Statement of Cash Flow and/or Shareholders’ Equity, those items will be a new line item on the face of those financial statements and they will also be reclassified for prior year(s). The Company recognizes contingent earn-out receivable by using the cost recovery method, based on the present value of the estimated earn-out payments at the time of the sale. The Company applies the quarterly payments towards the carrying value of the earn-out receivable. An assessment of the expected future cash flows of the earn-out receivable is performed annually.

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Revenue Recognition

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in financial Statement as revised by SAB 104, Revenue Recognition, FASB ASC 605, “Revenue Recognition” and FASB ASC 985, “Software”. Under these guidelines, the Company recognizes revenue on transactions where persuasive evidence of an arrangement exists, title has transferred, product payment is not contingent upon performance of installation or service obligations, the price is fixed or determinable and payment is reasonably assured. The Company accrues warranty costs and sales allowances for promotional activities at time of shipment based on historical experience.

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

Taxes Collected From Customers and Remitted To Government Authorities

Taxes collected from customers and remitted to governmental authorities are presented in the accompanying statements of operations on a net basis.

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenue in the accompanying statements of operations.

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Net Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income or loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by using the weighted-average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued. Dilutive potential shares of common stock include convertible preferred stock, options and warrants which are exercisable based on the average market price during the year. For 2011 and 2012, the computation of diluted loss per share excludes the convertible preferred stock, options and warrants as they are anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share:

	Year Ended December 31,
	2011			2012
Loss from continuing operations	$	(1,393,163	)	$	(1,439,928	)
Preferred stock dividends		(282,444	)		—
Preferred stock redemption		5,586,666			—
Net income (loss) from continuing operations applicable to common stockholders	$	3,911,059		$	(1,439,928	)
Net loss from discontinued operations		(1,628,258	)		(81,594	)
Net income (loss) applicable to common stockholders—numerator for basic and diluted loss per share	$	2,282,801		$	(1,521,522	)
Weighted—average common shares and dilutive potential common shares outstanding—denominator for dilluted earning per share		50,080,639			62,125,538
Net income (loss) per common share (basic and diluted):
Continuing operations	$	0.08		$	(0.02	)
Discontinued operations	$	(0.03	)	$	(0.00	)
Net income (loss)	$	0.05		$	(0.02	)

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

Anti-dilutive securities excluded from diluted earnings per share:

Stock options	5,146,485	4,330,285
Stock warrants	3,775,408	6,049,536
Convertible preferred stock—Series E	14,933,333	14,400,000

Warranty Reserves

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

The following table below shows the roll forward of the warranty reserve for the years ended December 31, 2011 and 2012:

	Year ended December 31,
	2011			2012
Beginning balance	$	155,918		$	135,708
Charged to expense		21,955			51,977
Usage		(42,165	)		(72,119	)
Ending balance	$	135,708		$	115,566

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Risk and Uncertainties

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

	Customer Exceeding 10%					Customer Exceeding 10% of Year-End
	of Net Sales					Accounts Receivable Balance
	Number of		Combined			Number of		Combined
Year	Customers		Percent			Customers		Percent
2011		2		34	%		2		36	%
2012		2		33	%		3		51	%

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

Use of Estimates

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

Income Taxes

The Company utilizes the liability method of accounting for income taxes wherein deferred tax assets and liabilities are determined based upon the differences between the financial statement and tax bases of assets and liabilities, as measured by enacted tax rates expected to be in effect when these differences reverse. Deferred tax assets are recognized when it becomes more likely than not that the assets will be realized. The Company files tax returns with the U.S. Federal and various state jurisdictions and is no longer subject to income tax examinations for years before 2007.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2011 and 2012 was $651,195 and $296,183, respectively.

Fair Value of Financial Instruments

The Company believes that the carrying amount of its financial instruments, which include cash and cash equivalents, receivable from sale of assets, and short-term debt, approximate fair value. The Company also has long-term debt with its primary shareholder, of which fair value is not practical to determine. Cash and cash equivalents fall within Level 1 of the valuation hierarchy. Receivable from sale of assets and short-term debt fall within Level 3 of the valuation hierarchy.

Stock-Based Compensation

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

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The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) as its method of valuation. The fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the Black-Scholes model is affected by the Company’s stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards, the actual and projected employee stock option exercise behaviors and an estimated forfeiture rate. The weighted-average estimated value of employee stock options granted during the years ended December 31, 2011 and 2012 was estimated using the Black-Scholes model with the following weighted-average assumptions:

	Year Ended December 31,
	2011			2012
Expected volatility		127	%		119	%
Risk-free interest rate		2.16	%		1.22	%
Expected dividends		0.0	%		0.0	%
Expected term in years		4.44			4.08

Reclassifications

Certain reclassifications have been made to the 2012 financial statements to conform to the 2011 financial statement presentation. These reclassifications had no effect on net earnings.

3. Sale of Ancept Assets and Contingent Consideration

On January 15, 2012, ViewCast completed the sale of certain assets from Ancept Corporation (the “Ancept Assets”) related to the development and licensing of the VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation, Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. (“VSI”) and no longer operates this business. The Ancept Assets are classified as held for sale at December 31, 2011, and the assets and liabilities are included in the respective current assets and liabilities sections of the Consolidated Balance Sheet.

Upon the terms and subject to the conditions of the purchase agreement, the buyer has agreed to pay an earn-out payment as follows: until the earlier of paying VSI $650,000 or January 15, 2017 (the “Earn-Out Period”), the buyer shall pay VSI on a quarterly basis a percentage of the net license fees, subscription fees and similar revenues paid or payable to the buyer or otherwise earned by buyer with respect to the software sold from Ancept to the buyer (“Net Software License Revenue”). The buyer agreed to pay VSI (i) 20% of the Software License Revenue from sales opportunities in the pipeline on January 15, 2012 and from post-closing referrals from ViewCast plus (ii) 10% of Net Software License Revenue, up to a maximum of $400,000, generated from buyer’s customers not derived from ViewCast. Prior to January 15, 2014, the buyer may terminate the earn-out payment obligations by paying VSI $400,000 which amount shall not be reduced by any prior earn-out payments. On or after January 15, 2014 until the end of the Earn-Out Period, Buyer may terminate the earn-out payment obligations by paying Ancept $650,000 less any prior earn-out payments. The buyer also (i) assumed specified liabilities related to the Ancept Assets, and (ii) paid $47,026 in cash to VSI.

Proceeds from the sale totaled $592,976 and were comprised of the following: cash of $47,026, receivable for future earn out consideration having a fair value of $227,531, and liabilities assumed by the buyer of $318,419. The carrying value of the reporting unit approximated the proceeds received on the date of the transaction; as a result, a loss of $2,047 was recorded on the sale. Management recorded the contingent earn out consideration at estimated fair value determined using discounted estimated future cash flows. Subsequent to the sale, proceeds received under the arrangement will be applied to the carrying value of the asset. Subsequently, earn-out receivable was decreased by $80,000 in 4^th quarter of 2012.

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The following table provides a detail of the net assets held for sale as of December 31, 2011:

	December 31,
	2011
Assets:
Accounts receivable	$	67,086
Prepaid expenses		4,381
Property and equipment, net		17,415
Deposit		3,250
Capitalized software development cost, net		442,775
Total assets		534,907
Liabilities related to assets held for sale		250,837
Net assets held for sale	$	284,070

4. Discontinued operations

As described in Note 3, the assets of Ancept were sold effective January 15, 2012, and were classified as held for sale at December 31, 2011. The table below calculates the $656,329 impairment based upon the difference between the value of proceeds received from the transaction in January 2012 and the carrying amount of the Ancept Assets, including the goodwill prior to any impairment adjustment:

	Held for sale as of 1/15/12
Assets (exclude goodwill)	$	911,397
Less: liabilities		(318,420	)
Net assets before goodwill		592,977
Goodwill		—
Net assets	$	592,977
Value of proceeds received		650,490
Impairment expense	$	713,842
Goodwill		(620,002	)
Customer List, net		(26,419	)
Software		(67,421	)
Total Asset Impairment	$	(713,842	)

Goodwill of $620,002 is solely related to Ancept was adjusted for impairment of $620,002 along with $93,840 impairment to intangible assets and capitalized software.

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The net loss from discontinued operations related to the Ancept for years ended December 31, 2011 and 2012 are as follows:

	Years ended December 31,
	2011			2012
Net revenue	$	1,111,559		$	22,255
Cost of revenue		885,879			39,057
Gross profit		225,680			(16,802	)
Operating expenses		1,140,096			64,792
Impairment of goodwill and other intangible assets		713,842			—
Impairment of Earn-out receivable		—			80,000
Net loss from net assets held for sale	$	(1,628,258	)	$	(161,594	)

5. Inventories

Inventories consist of the following:

	December 31,
	2011			2012
Purchased materials	$	1,369,041		$	1,013,492
Finished goods		1,596,877			1,561,043
Inventory obsolescence reserve		(257,837	)		(451,156	)
	$	2,708,081		$	2,123,379

6. Property and Equipment

Property and equipment, consists of the following:

	Estimated
	Useful Life		December 31,
	(Years)		2011			2012
Computer equipment		2 to 7	$	568,899		$	574,096
Software		3 to 5		104,500			104,500
Leasehold improvements		1 to 5		174,429			174,429
Office furniture and equipment		5 to 7		1,405,559			1,452,675
				2,253,387			2,305,700
Less accumulated depreciation and amortization				(2,001,539	)		(2,170,488	)
			$	251,848		$	135,212

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7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	December 31,
	2011		2012
Accrued interest	$	27,906	$	10,769
Accrued compensation		310,500		320,251
Accrued warranty		135,708		115,566
Accrued inventory purchases		59,577		81,146
Customer deposits		135,597		5,841
Deferred rent		25,341		65,380
Accrued taxes and other		155,671		124,118
	$	850,300	$	723,071

8. Line of Credit

On June 29, 2007, the Company entered into a Purchase and Sale Agreement/Security Agreement with Amegy Bank National Association (“Amegy”), a national banking association. This agreement provides the Company with an accounts receivable loan facility to provide a source of working capital with advances generally limited to 85% of submitted accounts receivable. Upon collection of an account receivable, the remaining fifteen percent is rebated to the Company less the Amegy fixed and variable discounts. The Amegy fixed discount equals 0.2% of the account receivable for the first 15 days the account receivable is outstanding plus an additional 0.2% for each additional 15 day period, up to 1.2% for receivables 76 to 90 days outstanding. The variable discount is calculated for each day that the amount advanced by Amegy is outstanding until repaid by collection of the account receivable and equals the prime rate plus 1.5% divided by 360 multiplied by the advance amount for each account receivable. The general borrowing availability under this facility is $1,000,000, reviewed as growth of business dictates. However, this may be exceeded without penalty. To secure the amounts due under the agreement, the Company granted Amegy a security interest in all of its assets owned as of the date of the agreement or thereafter acquired. The Company had $335,641 outstanding as of December 31, 2011 and $1,143,920 outstanding as of December 31, 2012 under this facility based on the outstanding accounts receivable at year end.

9. Long-term Debt

Stockholder Term Notes

Since October 1998, the Company has maintained a credit facility with an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger. Most recently, ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (jointly and severally, “the Borrower”) amended the terms and conditions of the loan and security agreement with the Ardinger Family Partnership, Ltd. on December 30, 2011, to be effective as of October 1, 2011. Under the amended terms any amounts outstanding of the primary principal amount and secondary principal amount mature December 31, 2014, subject to certain earlier payment conditions. The interest on the primary principal amount will accrue based on an interest rate per annum which is the greater of 5.0% or the effective prime rate plus 0.75% (5.00% as of December 31, 2011 and 2012). Interest on the secondary principal shall accrue based on the effective Applicable Federal Rate, as defined in the agreement, (1.27% and 0.21%) as of December 31, 2011 and 2012, respectively). The amendment defers the payment of the accrued interest on the unpaid primary and secondary principal amounts from October 1, 2011 through March 31, 2012. Beginning April 30, 2012 payment of such accrued interest was paid in three approximately equal monthly payments. The amended terms call for interest accruing after March 31, 2012 to be paid monthly; and beginning July 31, 2013, minimum monthly principal payments of $21,422, in addition to the monthly interest payments. The amended note agreement is secured by all the assets of the Borrower.

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Long-term debt consists of the following:

	December 31,
	2011			2012
Outstanding Primary Principal Amount	$	1,078,621		$	1,078,621
Outstanding Secondary Principal Amount		4,591,361			4,591,361
Other debt		75,143			32,156
Total long-term debt		5,745,125			5,702,138
Less current maturities		(171,525	)		(150,870	)
Total long-term debt, less current maturities	$	5,573,600		$	5,551,268

The following are the scheduled maturities of long-term debt at December 31, 2012:

	Long Term Debt
Year ended December 31,
2013	$	150,870
2014		5,550,377
2015		891
	$	5,702,138

10. Income Taxes

The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In the opinion of management, realization of the Company’s net operating loss carryforward is not reasonably assured, and a valuation allowance of $24,471,000 and $25,023,000 has been provided against deferred tax assets in excess of deferred tax liabilities in the accompanying consolidated financial statements at December 31, 2011 and 2012, respectively.

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

	Year ended December 31,
	2011			2012
Deferred tax assets (liability):
Net operating loss carryforwards	$	23,741,000		$	24,182,000
Deferred revenue		176,000			192,000
Goodwill and other intangibles		(30,000	)		(53,000	)
Stock based Compensation		251,000			281,000
Inventory		177,000			167,000
Allowance for Dobtful accounts		8,000			14,000
Accrued liabilities		104,000			101,000
Property and equipment		80,000			159,000
Software development costs		(36,000	)		(20,000	)
Total deferred tax assets		24,471,000			25,023,000
Less: valuation allowance		(24,471,000	)		(25,023,000	)
Net deferred taxes	$	—		$	—

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

	Year ended December 31,
	2011			2012
U.S. federal statutory rate applied to pretax income	$	(1,027,000	)	$	(521,058	)
Change in valuation allowance		(2,868,000	)		552,000
Expiration of net operating loss carryforwards		4,218,000			—
Permanent Differences & Other		(323,000	)		(30,942	)
	$	—		$	—

At December 31, 2012 the Company has federal income tax net operating loss carryforwards of approximately $65,000,000, which expire at various dates beginning in 2017. 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.

11. Stockholders’ Equity

Preferred Stock

On May 4, 2011, the Company entered into a Preferred Stock Exchange Agreement (the “Exchange Agreement”) with Ardinger, Ardinger Partnership (the “Ardinger Partnership”), Adkins Family Partnership, Ltd. and RDB Limited, p/k/a Baker Family Partnership, Ltd. to convert the outstanding shares of its Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and to restructure Series E Convertible Redeemable Preferred Stock (the “Series E Preferred Stock), collectively the “Preferred Stock”. The Exchange Agreement and all related changes to the Preferred Stock (collectively the “Preferred Stock Redemption”) have been accounted for as an extinguishment of Preferred Stock.

As of May 4, 2011, 800,000 shares of Series B Preferred Stock were outstanding at a stated value of $10 per share. Ardinger, a principal stockholder of the Company, held 400,000 shares of Series B Preferred Stock, with the remainder held by other stockholders. The Series B Preferred Stock was convertible into common stock of the Company (“Common Stock”) at a fixed price of $3.625 per share, subject to certain requirements, which was modified under the Exchange Agreement to $0.60 per share of underlying Common Stock and was converted on May 4, 2011 into a total of 13,333,333 shares of Common Stock.

As of May 4, 2011, 200,000 shares of Series C Preferred Stock were outstanding at a stated value of $10 per share held by Ardinger. The Series C Preferred Stock was convertible into Common Stock at a fixed price of $0.60 per share, subject to certain requirements, which remained the conversion price under the Exchange Agreement and was converted on May 4, 2011 into a total of 3,333,333 shares of Common Stock.

Holders of Series B Preferred Stock and Series C Preferred Stock had no voting rights except on amendments to the Company’s Certificate 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. The Series B Preferred Stock and Series C Preferred Stock carried cumulative dividends of 8% and 9% per year, respectively, and were generally payable semi-annually in arrears in cash or Common Stock, at the Company’s option. On May 4, 2011, under the Exchange Agreement, when the Series B Preferred Stock and Series C Preferred Stock were converted into Common Stock, any and all dividends, owed or owing on the Preferred Stock, were cancelled.

In December 2006, the Company retired certain debt from the Ardinger Partnership in exchange for certain Company securities, including 80,000 shares of Series E Preferred Stock with each share having a stated value of $100 with voting rights on an “as converted’ basis with the Common Stock and accrues no dividends. The liquidation preference on the Series E Preferred Stock is the $100 per share stated value multiplied by 107% if the liquidation event occurs after December 11, 2010.

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The Company has also agreed under the Exchange Agreement, among other things: (i) that the definition of registrable securities under that certain Registration Rights Agreement, dated December 11, 2006, between the Company and the Ardinger Partnership (the “Registration Rights Agreement”) shall include any shares of Common Stock issued in exchange for the shares of Preferred Stock previously held by Ardinger or the Ardinger Partnership, (ii) that Ardinger shall be a party to the Registration Rights Agreement, and (iii) to use commercially reasonable efforts to: (a) meet the applicable listing requirements of the NASDAQ Stock Market and (b) upon meeting such requirements, list its Common Stock on the NASDAQ Stock Market.

The Company accounted for the changes made to its Preferred Stock in connection with the exchange agreement as an extinguishment in accordance with FASB’s Codification at ASC 260-10-S99-2. Therefore, in calculating the net income (loss) applicable to common shareholders, the Company has recognized an imputed amount for the extinguishment which represents the carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities and other consideration transferred in the transaction.

Preferred stock redemption	Carrying amount of Preferred Stock		Fair value as of May 4, 2011		Change of value as of May 4, 2011
Series B—Preferred Stock		8,000,000		5,066,667		2,933,333
Series C—Preferred Stock		2,000,000		1,266,667		733,333
Series E—Preferred Stock		8,000,000		6,080,000		1,920,000
Preferred stock redemption		18,000,000		12,413,334		5,586,666

The Preferred Stock extinguishment value results in an adjustment to the net loss, which is a reconciling adjustment in calculating the net income (loss) applicable to common shareholders.

Common Stock

During 2012, the Company had no proceeds from the exercise of its outstanding employee stock options. During 2011, the Company received $567 in proceeds from the exercise of 3,333 of its outstanding employee stock options, with a weighted-average exercise price of approximately $0.17 per share.

During 2011 and 2012, the Company received $8,623 and $3,306 in proceeds from the purchase of 45,624 and 36,481 shares of Common Stock by employees through the 2005 Employee Stock Purchase Plan.

On December 27, 2011, ViewCast entered into the Subscription Agreements with investors for the purchase of private placement units consisting of an aggregate 6,618,068 shares of Common Stock and warrants to purchase 6,618,068 shares of Common Stock for an aggregate purchase price of $745,000. In December 2011, $425,000 was received for 3,775,408 shares of Common Stock and warrants to purchase 3,775,408 shares of Common Stock, and in January 2012, the remaining $320,000 was received for 2,842,660 shares of Common Stock and warrants to purchase 2,842,660 shares of Common Stock. The purchase price per private placement unit was $0.1125707, which was the weighted average closing price for the five trading days immediately prior to December 27, 2011. Pursuant to the Subscription Agreements, the warrants are exercisable into shares of Common Stock at an exercise price of $0.1238278 per share of Common Stock which was 110% of the weighted average closing price for the five trading days immediately prior to December 27, 2011.

Warrants

At December 31, 2011 and December 31, 2012, the Company had outstanding warrants to purchase 3,775,408 and 6,618,068 shares of Common Stock, respectively, with an exercise price of $0.1238278 per share of Common Stock that will expire on December 31, 2014.

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Stock Option Plan

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

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

Following is a summary of stock option activity from January 1, 2011 through December 31, 2012:

	Stock Options
	Number of Shares			Exercise Price Per Share	Weighted- Average Exercise Price Per Share
Outstanding at January 1, 2010		4,787,085		$0.17 – $1.09	$	0.41
Granted		2,565,000		0.13 – 0.36		0.31
Exercised		(3,333	)	0.17		0.17
Canceled/forfeited		(2,925,417	)	0.13 – 1.09		0.47
Outstanding at December 31, 2011		4,423,335		$0.13 – $0.62	$	0.31
Granted		2,105,000		0.11 – 0.21		0.11
Canceled/forfeited		(2,998,250	)	0.11 – 0.49		0.29
Outstanding at December 31, 2012		3,530,085		$0.11 – $0.62	$	0.24

The weighted-average grant-date fair value of options granted was $0.26 and $0.09 for the years ended December 31, 2011 and 2012, respectively.

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The following information applies to options outstanding at December 31, 2012:

Range of Exercise Prices	Outstanding at December 31, 2012		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Exercisable at December 31, 2012		Weighted- Average Exercise Price
$0.01 – 0.19		1,485,000		6.0	$	0.12		370,278	$	0.16
0.20 – 0.29		886,335		4.2	$	0.25		626,613	$	0.25
0.30 – 0.39		772,500		4.3	$	0.35		576,528	$	0.35
0.40 – 0.49		376,250		2.1	$	0.46		376,250	$	0.46
0.60 – 0.69		10,000		1.0	$	0.62		10,000	$	0.62
		3,530,085		4.8	$	0.24		1,959,669	$	0.31

Stock-based compensation expense was $131,858 and $ 80,896 for the years ended December 31, 2011 and December 31, 2012, respectively. At December 31, 2012, the balance of unearned stock-based compensation to be expensed in future periods related to unvested share-based awards, as adjusted for expected forfeitures, is approximately $179,000. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately three years.

Employee Stock Purchase Plan

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

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

During 2011 and 2012, 45,624 and 36,481 shares of common stock were issued under the ESPP.

12. Employee Benefit Plan

Effective March 1, 1997, the Company adopted a profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code whereby participants may elect to contribute up to sixty percent (60%) of their compensation subject to statutory limitations. The plan provides for discretionary matching and profit sharing contributions by the Company. All employees are eligible to participate in the plan provided they meet minimum age requirement of eighteen. The Company discontinued matching contributions under this plan in December 2011. The Company made $40,906 and $0 matching contributions to this plan for the years ended December 31, 2011 and December 31, 2012, respectively.

34

13. Commitments and Contingencies

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

	Operating Leases
Year ended December 31:
2013	$	304,298
2014		333,445
2015		345,997
2016		345,997
Thereafter		1,226,555
Total minimum lease payments	$	2,556,292

Rent expense was $458,734 and $402,599 for the years ended December 31, 2011 and 2012, respectively.

14. Related Party Transactions

As discussed in Note 9, the Company has two outstanding notes payable to an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger. See Note 11 for prefer stock activities.

Other than as permitted in the Exchange Agreement, from May 4, 2011 through July 31, 2011, the holders of the shares of Common Stock issued pursuant to the Series B/C Conversion have agreed not to sell or otherwise transfer such shares of Common Stock. Additionally, from August 1, 2011 through January 27, 2012, such holders agreed to limit any sales or transfers of such Common Stock in accordance with the volume limitations of Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), as if such holders were affiliates of the Company. If during the Temporary Conversion Period, a change in control of the Company occurs, these transfer restrictions shall terminate.

Ardinger is the largest stockholder of the Company and the sole general partner of the Ardinger Partnership. Immediately prior to the Series B/C Conversion, Ardinger: (i) directly beneficially held (a) 400,000 shares of Series B Preferred Stock and (b) 200,000 shares of Series C Preferred Stock and (ii) indirectly beneficially held, as sole general partner of the Ardinger Partnership, 80,000 shares of Series E Preferred Stock. The Company reimbursed the Ardinger Partnership $10,000 for their legal expenses related to this transaction.

On December 27, 2011, ViewCast entered into the Subscription Agreements with the Investors for the purchase of private placement units consisting of an aggregate 6,618,068 shares of Common Stock and Warrants to purchase 6,618,068 shares of Common Stock for an aggregate purchase price of $745,000, of which $425,000 was received in December 2012 and the remaining $320,000 was received in January 2012. The purchase price per private placement unit was $0.1125707, which was the weighted average closing price for the five trading days immediately prior to December 27, 2011. Pursuant to the Subscription Agreements, the Warrants are exercisable into shares of Common Stock at an exercise price of $0.1238 per share of Common Stock which was 110% of the weighted average closing price for the five trading days immediately prior to December 27, 2011. The Warrants will expire on December 31, 2014.

The following Investors have a relationship to the Company and subscribed for the following number of shares of Common Stock and Warrants exercisable into the same number of shares of Common Stock:

David W. Brandenburg RIRA – 888,331 shares

Diana L. Brandenburg RIRA – 888,331 shares

John C. Hammock – 888,331 shares

Laurie L. Latham – 888,331 shares

Lance E. Ouellette – 888,331 shares

Christina K. Hanger – 222,083 shares

George C. Platt – 177,667 shares

35

Messrs. Brandenburg, Hammock, Ouellette and Platt are directors of the Company, Ms. Hanger was director of the Company until November 28, 2012. Mr. Hammock is the President and Chief Executive Officer of the Company and Ms. Latham was, until August 21, 2012, the Chief Financial Officer and Senior Vice President of Finance and Administration of the Company. They acquired the shares of Common Stock on the same terms as the other five Investors. Mr. Ouellette is the stepson of H.T. Ardinger, Jr., a principal stockholder of the Company. There are no additional material relationships between the Company and the Investors aside from entering into the Subscription Agreements. Each of the Investors is an “accredited investor” as defined under Rule 501 promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”), and the shares of Common Stock and the Warrants are being issued pursuant to Rule 506 promulgated pursuant to the Securities Act.

15. Current Economic Conditions

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

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

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

16. Fair Value Measurements

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

36

Goodwill and Other Intangible Assets

The fair value is estimated using discounted cash flows that are unobservable or that cannot be corroborated by observable market data and, therefore, are classified within Level 3 of the valuation hierarchy.

The following table presents the fair value measurement of assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2011 for the Ancept Assets:

			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Goodwill	$	—	$	—	$	—	$	—
Customer List		—		—		—		—
Software		442,775		—		—		442,775
	$	442,775	$	—	$	—	$	442,775

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

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As required by Rule 13a-15(b) under the Exchange Act, our management carried out an evaluation, with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2012. Based upon that evaluation, our Principal executive officer and Principal financial officer concluded that, as of December 31, 2012, our disclosure controls and procedures were effective in providing such reasonable assurance.

Management’s Report on Internal Control Over Financial Reporting

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

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

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

Management, under the supervision of the Company’s Principal Executive Officer and Principal Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2012 under the criteria set forth in the Internal Control—Integrated Framework.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404 ( c ) of the Sarbanes-Oxley Act that permit us to provide only management’s report in this Annual Report on Form
10-K.

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

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Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to the information contained under the caption “Proposal 1 – Election of Directors” in the Company’s Proxy Statement for the 2013 Annual Meeting of Stockholders (the “Proxy Statement”).

Item 11. Executive Compensation

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

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

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

Equity Compensation Plan Information

The following table sets forth certain information as of December 31, 2012 concerning outstanding awards and securities available for future issuance pursuant to ViewCast’s equity compensation plans.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		3,530,085	$	0.24		1,959,669
Equity compensation plans not approved by security holders		—		—		—
Total		3,530,085	$	0.24		1,959,669

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

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

Item 14. Principal Accountant Fees and Services

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

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) Documents filed as part of the Report:

1. Financial Statements:

Consolidated Balance Sheets at December 31, 2011 and 2012

Consolidated Statements of Operations for the years ended December 31, 2011 and 2012

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2011 and 2012

Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2012

Notes to Consolidated Financial Statements.

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

3. Exhibits:

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
2.1	Agreement and Plan of Merger and Reorganization (1)
2.2	Asset Purchase Agreement between ViewCast.com, Inc. and Ancept Media Server, LLC, dated March 5, 2009 (26)
2.3	First Amendment to Asset Purchase Agreement between ViewCast.com, Inc. and Ancept Media Server, LLC, dated March 13, 2009 (26)
2.5	Asset Purchase Agreement by and among Genus Technologies Software, LLC, as Buyer, Genus Technologies, LLC, as Member, Ancept Corporation, as Seller, and ViewCast.com, Inc., as Shareholder dated as of January 13, 2012 (35).
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)

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10.2	Working Capital Line of Credit Loan Agreement between ViewCast and the Ardinger Family Partnership, LTD (3)
10.3	Sublease Agreement between ViewCast and Host Communications, Inc. (6)
10.4	Reserved.
10.5	Revolving Loan Agreement between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (7)
10.6	Guarantee of Payment and Performance from ViewCast.com, Inc. to Keltic Financial Partners, LP dated as of October 11, 2002 (7)
10.7	Subordination Agreement by and among Keltic Financial Partners, LP, MMAC Communications Corp. and ViewCast.com, Inc. dated as of October 11, 2002 (7)
10.8	General Security Agreement by and between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (7)
10.9	Revolving Note by MMAC Communications Corp. in favor of Keltic Financial Partners, LP dated as of October 11, 2002 (7)
10.10#	ViewCast.com, Inc. 2005 Stock Incentive Plan (14)
10.11	ViewCast.com, Inc. 2005 Employee Stock Purchase Plan (15)
10.12	Reserved.
10.13	Reserved.
10.14	Reserved.
10.15	Form of Amended and Restated Security Agreement dated October 15, 2003 between ViewCast.com, Inc. and the Ardinger Family Partnership, LTD (8)
10.16	Form of Amended and Restated Pledge Agreement dated October 15, 2003 between ViewCast.com, Inc. and the Ardinger Family Partnership, LTD (8)
10.17	Form of First Amendment to the Revolving Loan Agreement dated October 11, 2003 between Delta Computec Inc. and Keltic Financial Partners, LP (8)
10.18	Reserved.
10.19	Reserved.
10.20	Third Amendment dated as of December 10, 2004 to Revolving Loan Agreement between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (9)
10.21	Fourth Amendment dated as of January 10, 2005 to Revolving Loan Agreement between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (9)
10.22	Fifth Amendment dated as of February 15, 2005 to Revolving Loan Agreement between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (9)
10.23	Notice of Lower Temporary Conversion Price dated March 21, 2005 (10)
10.24	Letter Agreement Amending Revolving and Term Credit Facility dated March 22, 2005 (10)
10.25	Sixth Amendment, dated as if April 15, 2005, to Revolving Loan Agreement Between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (11)
10.26	Seventh Amendment, dated as if July 15, 2005, to Revolving Loan Agreement Between MMAC Communications Corp. and Keltic Financial Partners, LP dated as of October 11, 2002 (12)

41

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 Technologies, Inc. and VideoWare, Inc. and Ardinger Family Partnership, Ltd. (20)
10.36#	Employment Agreement by and between ViewCast Corporation and David T. Stoner effective as of March 1, 2007 (21)
10.37#	2007 Executive Incentive Compensation Plan for David T. Stoner (21)
10.38#	Employment Agreement by and between ViewCast Corporation and Laurie L. Latham effective as of March 1, 2007 (21)
10.39#	2007 Executive Incentive Compensation Plan for Laurie L. Latham (21)
10.40	Purchase and Sale Agreement/Security Agreement by and among ViewCast.com, Inc., Osprey Technologies, Inc., VideoWare, Inc. and Amegy Bank National Association, dated June 29, 2007 (22)
10.41	Amendment to Purchase and Sale Agreement/Security Agreement by and among ViewCast.com, Inc., Osprey Technologies, Inc., VideoWare, Inc. and Amegy Bank National Association, dated June 29, 2007 (22)
10.42#	Employment Agreement by and between ViewCast.com, Inc. and Gary Klembara effective September 1, 2007 (23)
10.43	First Amendment to Amended and Restated Security Agreement by and among Ardinger Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (24)
10.44	First Amendment to Warrant to Purchase Common Stock by and between ViewCast.com, Inc. and Ardinger Family Partnership, Ltd., dated February 27, 2009. (25)
10.45	Second Amendment to Amended and Restated Security Agreement by and among Ardinger Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (28)
10.46	Third Amendment to Amended and Restated Security Agreement by and among Ardinger Family Partnership, Ltd., ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (29).
10.47	Subscription agreement by and between ViewCast.com, Inc. and John J. Scamardella, dated December 30, 2011. (30)
10.48	Subscription agreement by and between ViewCast.com, Inc. and Stuart Barab, dated December 30, 2011. (30)
10.49	Subscription agreement by and between ViewCast.com, Inc. and Lionel L. Dace, dated December 30, 2011. (30)

42

10.50	Subscription agreement by and between ViewCast.com, Inc. and John A. Doyle, dated December 30, 2011. (30)
10.51	Subscription agreement by and between ViewCast.com, Inc. and Diana L. Brandenburg, dated December 30, 2011. (30)
10.52	Subscription agreement by and between ViewCast.com, Inc. and David W. Brandenburg, dated December 30, 2011. (30)
10.53	Fourth Amendment to Amended and Restated Security Agreement by and among Ardinger Family (31)
10.54	Preferred Stock Exchange Agreement, dated May 4, 2012, by and between the Company and H.T. Ardinger Jr., Ardinger Family Partnership, Ltd., Adkins Family Partnership, Ltd. and RDB Limited. (32)
10.55#	Employment Agreement by and between ViewCast.com, Inc. and John C. Hammock effective December 14, 2012. (33)
10.56	Fifth Amendment to Second Amended and Restated Loan and Security Agreement (34).
10.57	Form of Indemnification Agreement (36).
10.58	Subscription agreement by and between ViewCast.com, Inc. and David W. Brandenburg, dated December 27, 2012. (37)
10.59	Subscription agreement by and between ViewCast.com, Inc. and Diana L. Brandenburg, dated December 27, 2012. (37)
10.60	Subscription agreement by and between ViewCast.com, Inc. and John C. Hammock, dated December 27, 2012. (37)
10.61	Subscription agreement by and between ViewCast.com, Inc. and Laurie L. Latham, dated December 27, 2012. (37)
10.62	Subscription agreement by and between ViewCast.com, Inc. and Lance E. Ouelette, dated December 27, 2012. (37)
10.63	Subscription agreement by and between ViewCast.com, Inc. and Christina K. Hanger, dated December 27, 2012. (37)
10.64	Subscription agreement by and between ViewCast.com, Inc. and George C. Platt, dated December 27, 2012. (37)
10.65	Subscription agreement by and between ViewCast.com, Inc. and John Scamardella, dated December 27, 2012. (37)
10.66	Subscription agreement by and between ViewCast.com, Inc. and Stuart Barab, dated December 27, 2012. (37)
10.67	Subscription agreement by and between ViewCast.com, Inc. and Richard Molinsky, dated December 27, 2012. (37)
10.68	Subscription agreement by and between ViewCast.com, Inc. and Kevin D. and Cathy D. Towery, dated December 27, 2012. (37)
10.69	Subscription agreement by and between ViewCast.com, Inc. and Lionel L. Dace, dated December 27, 2012. (37)
21.1	Subsidiaries of ViewCast.com, Inc. (1)
23.1	Consent of BKD, LLP*
31.1	Rule 13a-14(a)/15d-14(a) Certifications *
31.2	Rule 13a-14(a)/15d-14(a) Certifications *
32.1	Statement 1350 Certifications *
32.2	Statement 1350 Certifications *

43

101 Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets at December 31, 2011 and December 31, 2012, (ii) Condensed Consolidated Statements of Operations for the Years Ended December 31, 2011 and 2012, (iii) Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2011 and 2012, (iv) Condensed Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2012 and (v) Notes to the Condensed Consolidated Financial Statements. (38)

* Filed herewith.

# Denotes management compensatory plan, contract or arrangement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(29) Incorporated by reference to Form 8-K filed March 15, 2011.

(30) Incorporated by reference to Form 8-K not yet filed.

(31) Incorporated by reference to Form 8-K filed April 4, 2012.

(32) Incorporated by reference to Form 8-K filed May 6, 2012.

(33) Incorporated by reference to Form 8-K filed December 15, 2012.

(34) Incorporated by reference to Form 8-K filed January 5, 2012.

(35) Incorporated by reference to Form 8-K filed January 20, 2012

(36) Incorporated by reference to Form 8-K filed March 8, 2012

(37) Incorporated by reference to Form 10-K filed April 2, 2012

(38) In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as set forth by specific reference in such filings.

44

SIGNATURES

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

Date	ViewCast.com, Inc.
April 1, 2013	By: /s/ John C. Hammock
	John C. Hammock
	Director and Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

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

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

April 1, 2013	By: /s/ John C. Hammock
	John C. Hammock
	Director and Chief Executive Officer (Principal Executive Officer)
April 1, 2013	By: /s/ Cordia F. Leung
	Cordia F. Leung
	Controller (Principal Financial Officer and Chief Accounting Officer)
April 1, 2013	By: /s/ George C. Platt
	George C. Platt
	Director
April 1, 2013	By: /s/ Joseph W. Autem
	Joseph W. Autem
	Director
April 1, 2013	By: /s/ Lance E. Ouellette
	Lance E. Ouellette
	Director
April 1, 2013	By: /s/ David W. Brandenburg
	David W. Brandenburg
	Director

45

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

ViewCast.com, Inc.:

We consent to incorporation by reference in the registration statements on Form SB-2 No. 333-31947, S-8 No. 333-53159, S-8 No. 333-63799, S-8 No. 333-119104, S-8 No. 333-150094, S-3 No. 333-77923, S-3 No. 333-35662 and S-3 No. 333-40630 of our report dated April 1, 2013 on our audits of the consolidated financial statements of ViewCast.com, Inc. and Subsidiaries as of December 31, 2012 and 2011, and for the years then ended, which report is included in this Annual Report on Form 10-K.

/s/ BKD, LLP

Dallas, Texas

April 1, 2013

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, John C. Hammock, certify that:

1. I have reviewed this annual report on Form 10-K of ViewCast.com, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2013	/s/ John C. Hammock
	John C. Hammock
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Cordia F. Leung, certify that:

1. I have reviewed this annual report on Form 10-K of ViewCast.com, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2013	/s/ Cordia F. Leung
	Cordia F. Leung
	Controller
	(Principal Financial Officer and Chief Accounting Officer)

EX-32.1

EXHIBIT 32.1

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

The undersigned, John C. Hammock, is the Chief Executive Officer of ViewCast.com, Inc. (the “Company”). This statement is being furnished in connection with the filing by the Company of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (the “Report”).

By execution of this statement, I certify that:

(A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and

(B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

April 1, 2013	/s/ John C. Hammock
Date	John C. Hammock
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

The undersigned, Cordia F. Leung, is the Controller of ViewCast.com, Inc. (the “Company”). This statement is being furnished in connection with the filing by the Company of the Company’s Annual Report on Form 10-K for the Year ended December 31, 2012 (the “Report”).

By execution of this statement, I certify that:

(A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and

(B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

April 1, 2013	/s/ Cordia F. Leung
Date	Cordia F. Leung
	Controller
	(Principal Financial Officer and Chief Accounting Officer)

XML

Summary of Significant Accounting Policies (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Intangible assets
Gross carrying amount	$ 145,995	$ 169,897
Accumulated amortization	61,302	60,935
Non-Compete agreements [Member]
Intangible assets
Average life (years)	3 years
Gross carrying amount		24,000
Accumulated amortization		22,387
Patents [Member]
Intangible assets
Average life (years)	10 years
Gross carrying amount	145,995	145,897
Accumulated amortization	$ 61,302	$ 38,548

XML

Accrued Expenses and Other Current Liabilities (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Accrued expenses and other current liabilities
Accrued interest	$ 10,769	$ 27,906
Accrued compensation	320,251	310,500
Accrued warranty	115,566	135,708	155,918
Accrued inventory purchases	81,146	59,577
Customer deposits	5,841	135,597
Deferred rent	65,380	25,341
Accrued taxes and other	124,118	155,671
Accrued expenses, Total	$ 723,071	$ 850,300

XML

Sale of Ancept Assets and Contingent Consideration (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Jan. 15, 2012
Sale of Ancept Assets and Contingent Consideration (Textual) [Abstract]
Earn-out payment on sale of asset- description	until the earlier of paying VSI $650,000 or January 15, 2017 (the “Earn-Out Period”), the buyer shall pay VSI on a quarterly basis a percentage of the net license fees, subscription fees and similar revenues paid or payable to the buyer or otherwise earned by buyer with respect to the software sold from Ancept to the buyer (“Net Software License Revenue”).
Earn-out payment on sale of asset	$ 650,000
Earn-out period agreement	Jan. 15, 2017
Software Pipeline License Revenue Percentage		20.00%
Net Software License Revenue Percentage	10.00%
Maximum non pipeline software license revenue	400,000
Termination of the earn-out payment obligations by paying VSI	400,000
Cash portion for sale of assets	47,026
Total Proceeds from the sale	592,976
Receivable for future earn-out consideration	227,531
Liabilities assumed by the buyer	318,419
Loss on sale of assets	2,047
Decrease in earn-out receivables	$ 80,000

XML

Fair Value Measurements (Details) (USD $)	Dec. 31, 2011
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements	$ 442,775
Goodwill [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Customer Lists [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Software [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements	442,775
Level 1 [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 1 [Member] | Goodwill [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 1 [Member] | Customer Lists [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 1 [Member] | Software [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 2 [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 2 [Member] | Goodwill [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 2 [Member] | Customer Lists [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 2 [Member] | Software [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 3 [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements	442,775
Level 3 [Member] | Goodwill [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 3 [Member] | Customer Lists [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements
Level 3 [Member] | Software [Member]
Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis
Fair Value Measurements	$ 442,775

XML

Line of Credit (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Line of Credit (Additional Textual) [Abstract]
Advances available as percent of submitted accounts receivable	85.00%
Rebate percent on accounts receivable	15.00%
Fixed discount on accounts receivable for first 15 days	0.20%
Fixed discount on accounts receivable outstanding for each additional 15 days	0.20%
Fixed discount on accounts receivable outstanding for 76 to 90 days	1.20%
Accounts receivable fix discount rate end days	15 days
Rate used to calculate variable discount	Prime rate plus 1.5% divided by 360
Variable discount prime rate	1.50%
Maximum borrowing under facility	$ 1,000,000
Amount outstanding under facility	$ 1,143,920	$ 335,641
Minimum [Member]
Line of Credit (Textual) [Abstract]
Account receivable additional discount rate period	76 days
Maximum [Member]
Line of Credit (Textual) [Abstract]
Account receivable additional discount rate period	90 days

XML

Summary of Significant Accounting Policies (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Jan. 01, 2013
Property, Plant and Equipment [Line Items]
Impairment of intangible asset	$ 93,840
Summary of Significant Accounting Policies (Textual) [Abstract]
Maturity period of highly liquid investments	three months or less
Cash accounts exceeded federally insured	8,000
Non-interest bearing transaction accounts			250,000
Period of accounts receivable due	30 days
Amortization period of capitalized software development costs	3 years
Weighted average remaining amortization period for intangible assets	3 years 8 months 12 days
Customer Exceeding 10% of Net Sales	10.00%
Customer Exceeding 10% of Year-End Accounts Receivable Balance	10.00%
Advertising Expense	296,183	651,195
Non-Compete agreements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Customer Lists [Member]
Property, Plant and Equipment [Line Items]
Impairment of intangible asset	$ 0	$ 93,840
Patents [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	2 years
Minimum [Member] | Non-Compete agreements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	7 years

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Components of the Company's net deferred taxes

	Year ended December 31,
	2011			2012
Deferred tax assets (liability):
Net operating loss carryforwards	$	23,741,000		$	24,182,000
Deferred revenue		176,000			192,000
Goodwill and other intangibles		(30,000	)		(53,000	)
Stock based Compensation		251,000			281,000
Inventory		177,000			167,000
Allowance for Dobtful accounts		8,000			14,000
Accrued liabilities		104,000			101,000
Property and equipment		80,000			159,000
Software development costs		(36,000	)		(20,000	)
Total deferred tax assets		24,471,000			25,023,000
Less: valuation allowance		(24,471,000	)		(25,023,000	)
Net deferred taxes	$	—		$	—

Reconciliation between the income tax expense (benefit) calculated by applying statutory rates to net loss and the income tax benefit

	Year ended December 31,
	2011			2012
U.S. federal statutory rate applied to pretax income	$	(1,027,000	)	$	(521,058	)
Change in valuation allowance		(2,868,000	)		552,000
Expiration of net operating loss carryforwards		4,218,000			—
Permanent Differences & Other		(323,000	)		(30,942	)
	$	—		$	—

XML

Long-term Debt (Details 1) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Scheduled maturities of long-term debt
2013	$ 150,870
2014	5,550,377
2015	891
Total long-term debt	$ 5,702,138	$ 5,745,125

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

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

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2012 and 2011, cash equivalents consisted primarily of money market accounts with brokers and certificates of deposit.

At December 31, 2012, the Company’s cash accounts exceeded federally insured limits by approximately $8,000.

Pursuant to legislation enacted in 2010, the FDIC fully insured all noninterest-bearing transaction accounts beginning December 31, 2010, through December 31, 2012, at all FDIC-insured institutions. This legislation expired on December 31, 2012. Beginning January 1, 2013, noninterest-bearing transaction accounts are subject to the $250,000 limit on FDIC insurance per covered institution.

Accounts Receivable

Accounts Receivable

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

Changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2011 and 2012 are as follows:

	Year ended December 31,
	2011			2012
Beginning balance	$	67,436		$	22,292
Bad debt expense (recoveries)		(45,144	)		22,634
Uncollectible accounts written off		—			(5,908	)
Ending balance	$	22,292		$	39,018

Inventories

Inventories

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

Property and Equipment

Property and Equipment

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

Capitalized Software Development Costs

Capitalized Software Development Costs

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

Intangible Assets and Amortization

Intangible Assets and Amortization

Legal fees and similar capitalizable costs relating to patents, copyrights, and trademarks are capitalized as appropriate. Patent costs are generally amortized on a straight-line basis over 10 years. Non-compete agreements are amortized over their estimated useful lives of three years. See Note 3 for capitalized software held as assets for sale as of December 31, 2011, and Note 4 for $93,840 impairment of the discontinued operations’ customer lists and software recognized during 2011. No impairment of any intangible assets was recognized in 2012.

Intangible assets consist of the following:

		December 31, 2011				December 31, 2012
	Average life (years)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Non-Compete agreements	3		24,000		22,387		—		—
Patents	10		145,897		38,548		145,995		61,302
		$	169,897	$	60,935	$	145,995	$	61,302

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

Year ending December 31, 2013	$	22,754
Year ending December 31, 2014		22,754
Year ending December 31, 2015		22,754
Year ending December 31, 2016		16,431
	$	84,693

The weighted average remaining amortization period for intangible assets at December 31, 2012 is 3.7 years.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Assets that are held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment is recognized when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. Assets held for sale are carried at the lower of carrying amount or fair value less selling costs. See Note 4 for impairment charges.

Goodwill

Goodwill

Goodwill is evaluated annually for impairment. A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the fair value is less than the carrying amount, including goodwill. If, based on the evaluation, it is determined to be more likely than not that the fair value is less than the carrying value, then goodwill is tested further for impairment. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements.

Discontinued Operations / Assets Held for Sale

Discontinued Operations / Assets Held for Sale

In accordance with FASB ASC 205-20, “Presentation of Financial Statements—Discontinued Operations”, assets held for sale are reported separately on the balance sheet by class of asset and/or liability, not as a single net amount, and these new line items are reclassified on the face financial statements (Balance Sheet) for the prior year(s). The net income or loss from the operations of the assets held for sale are reported separately on the Income Statement, located below Income from Continuing Operations and above any Extraordinary Items; and similar to the Balance Sheet presentation, the prior year(s) are also reclassified. Additionally, where any of these items affect the Statement of Cash Flow and/or Shareholders’ Equity, those items will be a new line item on the face of those financial statements and they will also be reclassified for prior year(s). The Company recognizes contingent earn-out receivable by using the cost recovery method, based on the present value of the estimated earn-out payments at the time of the sale. The Company applies the quarterly payments towards the carrying value of the earn-out receivable. An assessment of the expected future cash flows of the earn-out receivable is performed annually.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in financial Statement as revised by SAB 104, Revenue Recognition, FASB ASC 605, “Revenue Recognition” and FASB ASC 985, “Software”. Under these guidelines, the Company recognizes revenue on transactions where persuasive evidence of an arrangement exists, title has transferred, product payment is not contingent upon performance of installation or service obligations, the price is fixed or determinable and payment is reasonably assured. The Company accrues warranty costs and sales allowances for promotional activities at time of shipment based on historical experience.

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

Taxes Collected From Customers and Remitted To Government Authorities

Taxes Collected From Customers and Remitted To Government Authorities

Taxes collected from customers and remitted to governmental authorities are presented in the accompanying statements of operations on a net basis.

Shipping and Handling Costs

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenue in the accompanying statements of operations.

Net Earnings Per Share

Net Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income or loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by using the weighted-average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued. Dilutive potential shares of common stock include convertible preferred stock, options and warrants which are exercisable based on the average market price during the year. For 2011 and 2012, the computation of diluted loss per share excludes the convertible preferred stock, options and warrants as they are anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share:

	Year Ended December 31,
	2011			2012
Loss from continuing operations	$	(1,393,163	)	$	(1,439,928	)
Preferred stock dividends		(282,444	)		—
Preferred stock redemption		5,586,666			—
Net income (loss) from continuing operations applicable to common stockholders	$	3,911,059		$	(1,439,928	)
Net loss from discontinued operations		(1,628,258	)		(81,594	)
Net income (loss) applicable to common stockholders—numerator for basic and diluted loss per share	$	2,282,801		$	(1,521,522	)
Weighted—average common shares and dilutive potential common shares outstanding—denominator for dilluted earning per share		50,080,639			62,125,538
Net income (loss) per common share (basic and diluted):
Continuing operations	$	0.08		$	(0.02	)
Discontinued operations	$	(0.03	)	$	(0.00	)
Net income (loss)	$	0.05		$	(0.02	)

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

Anti-dilutive securities excluded from diluted earnings per share:

Stock options	5,146,485	4,330,285
Stock warrants	3,775,408	6,049,536
Convertible preferred stock—Series E	14,933,333	14,400,000

Warranty Reserves

Warranty Reserves

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

The following table below shows the roll forward of the warranty reserve for the years ended December 31, 2011 and 2012:

	Year ended December 31,
	2011			2012
Beginning balance	$	155,918		$	135,708
Charged to expense		21,955			51,977
Usage		(42,165	)		(72,119	)
Ending balance	$	135,708		$	115,566

Risk and Uncertainties

Risk and Uncertainties

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

	Customer Exceeding 10%					Customer Exceeding 10% of Year-End
	of Net Sales					Accounts Receivable Balance
	Number of		Combined			Number of		Combined
Year	Customers		Percent			Customers		Percent
2011		2		34	%		2		36	%
2012		2		33	%		3		51	%

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

Use of Estimates

Use of Estimates

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

Income Taxes

Income Taxes

The Company utilizes the liability method of accounting for income taxes wherein deferred tax assets and liabilities are determined based upon the differences between the financial statement and tax bases of assets and liabilities, as measured by enacted tax rates expected to be in effect when these differences reverse. Deferred tax assets are recognized when it becomes more likely than not that the assets will be realized. The Company files tax returns with the U.S. Federal and various state jurisdictions and is no longer subject to income tax examinations for years before 2007.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2011 and 2012 was $651,195 and $296,183, respectively.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company believes that the carrying amount of its financial instruments, which include cash and cash equivalents, receivable from sale of assets, and short-term debt, approximate fair value. The Company also has long-term debt with its primary shareholder, of which fair value is not practical to determine. Cash and cash equivalents fall within Level 1 of the valuation hierarchy. Receivable from sale of assets and short-term debt fall within Level 3 of the valuation hierarchy.

Stock-Based Compensation

Stock-Based Compensation

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

The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) as its method of valuation. The fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the Black-Scholes model is affected by the Company’s stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards, the actual and projected employee stock option exercise behaviors and an estimated forfeiture rate. The weighted-average estimated value of employee stock options granted during the years ended December 31, 2011 and 2012 was estimated using the Black-Scholes model with the following weighted-average assumptions:

	Year Ended December 31,
	2011			2012
Expected volatility		127	%		119	%
Risk-free interest rate		2.16	%		1.22	%
Expected dividends		0.0	%		0.0	%
Expected term in years		4.44			4.08

Reclassifications

Reclassifications

Certain reclassifications have been made to the 2012 financial statements to conform to the 2011 financial statement presentation. These reclassifications had no effect on net earnings.

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Discontinued Operations (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Summary of net loss from discontinued operations related to Ancept
Net loss from net assets held for sale	$ 81,594	$ 1,628,258
Ancept [Member]
Summary of net loss from discontinued operations related to Ancept
Net revenue	22,255	1,111,559
Cost of revenue	39,057	885,879
Gross profit	(16,802)	225,680
Operating expenses	64,792	1,140,096
Impairment of goodwill and other intangible assets		713,842
Impairment of Earn-out receivable	80,000
Net loss from net assets held for sale	$ (161,594)	$ (1,628,258)

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Summary of Significant Accounting Policies (Details 4)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Stock options [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	4,330,285	5,146,485
Stock warrants [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	6,049,536	3,775,408
Series E - Preferred Stock - [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Anti-dilutive securities excluded from diluted earnings per share	14,400,000	14,933,333

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The Company and Description of Business and Future Liquidity Needs (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
The Company and Description of Business and Future Liquidity Needs (Textual) [Abstract]
Net loss	$ (1,521,522)	$ (3,021,421)
Cash used in operations	883,520
Working capital	1,492,906
Cash and cash equivalents	$ 258,259	$ 319,908	$ 1,648,476

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Inventories (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Inventories
Purchased materials	$ 1,013,492	$ 1,369,041
Finished goods	1,561,043	1,596,877
Inventory obsolescence reserve	(451,156)	(257,837)
Inventories, net	$ 2,123,379	$ 2,708,081

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Commitments and Contingencies (Details) (USD $)	Dec. 31, 2012
Future minimum operating lease payments
2013	$ 304,298
2014	333,445
2015	345,997
2016	345,997
Thereafter	1,226,555
Total minimum lease payments	$ 2,556,292

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Income Taxes (Details Textual) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Income Taxes (Textual) [Abstract]
Valuation allowance	$ 25,023,000	$ 24,471,000
Federal income tax, net operating loss carryforwards	$ 65,000,000

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Sale of Ancept Assets and Contingent Consideration (Details) (USD $)	Dec. 31, 2011
Assets:
Total assets	$ 534,907
Liabilities related to assets held for sale	250,837
Held for sale [Member]
Assets:
Accounts receivable	67,086
Prepaid expenses	4,381
Property and equipment, net	17,415
Deposit	3,250
Capitalized software development cost, net	442,775
Total assets	534,907
Liabilities related to assets held for sale	250,837
Net assets held for sale	$ 284,070

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The Company and Description of Business and Future Liquidity Needs

12 Months Ended

Dec. 31, 2012

The Company and Description of Business and Future Liquidity Needs [Abstract]

The Company and Description of Business and Future Liquidity Needs

1. The Company and Description of Business and Future Liquidity Needs

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

On January 15, 2012, ViewCast completed the sale of certain assets from Ancept Corporation (the “Ancept Assets”) related to the development and licensing of the VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation and Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. and no longer operates this business.

During the year ended December 31, 2012, the Company incurred a net loss of $1,521,522 and used cash in operations of $883,520. At December 31, 2012, the Company has working capital of $1,492,906 and cash and cash equivalents of $258,259. The Company expects to obtain additional working capital by increasing revenue, reducing operating expenses, borrowing on its line of credit and through other initiatives that may include raising additional capital through issuing debt and/or equity securities. There can be no assurance that additional capital will be available to the Company on acceptable terms, or at all. Additional equity financing may involve substantial dilution to its then existing stockholders. The Company believes that these items will provide sufficient cash to fund operations during 2013, however, the Company may require additional working capital during 2013 to support operations and the expansion of sales channels and market distribution, to develop and introduce new products and services, to enhance existing product offerings, to address unanticipated competitive threats or technical problems, to transition adverse economic conditions and for potential acquisition transactions. In the event the Company is unable to raise additional debt and/or equity capital or execute other alternatives, it may be required to sell segments of the business, or substantially reduce or curtail its activities. However, no assurance can be given that we will be able to sell any segments of the business on terms that are acceptable to us. Such actions could result in charges that could be material to ViewCast’s results of operations or financial position.

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Stockholders' Equity (Details) (USD $)	May 04, 2011
Carrying amount of Preferred Stock[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	$ 18,000,000
Fair Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	12,413,334
Change Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	5,586,666
Series B Convertible Preferred Stock | Carrying amount of Preferred Stock[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	8,000,000
Series B Convertible Preferred Stock | Fair Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	5,066,667
Series B Convertible Preferred Stock | Change Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	2,933,333
Series C Convertible Preferred Stock | Carrying amount of Preferred Stock[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	2,000,000
Series C Convertible Preferred Stock | Fair Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	1,266,667
Series C Convertible Preferred Stock | Change Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	733,333
Series E Convertible Preferred Stock | Carrying amount of Preferred Stock[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	8,000,000
Series E Convertible Preferred Stock | Fair Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	6,080,000
Series E Convertible Preferred Stock | Change Value[Member]
Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities
Preferred stock redemption	$ 1,920,000

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Summary of Significant Accounting Policies (Details 5) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Changes in accrued warranty expense
Beginning balance	$ 135,708	$ 155,918
Charged to expense	51,977	21,955
Usage	(72,119)	(42,165)
Ending balance	$ 115,566	$ 135,708

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Inventories (Tables)

12 Months Ended

Dec. 31, 2012

Inventories [Abstract]

Inventories

	December 31,
	2011			2012
Purchased materials	$	1,369,041		$	1,013,492
Finished goods		1,596,877			1,561,043
Inventory obsolescence reserve		(257,837	)		(451,156	)
	$	2,708,081		$	2,123,379

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2012

Sale of Ancept Assets and Contingent Consideration/Discontinued Operations[Abstract]

Summary of the carrying amount of the Ancept Assets, including goodwill prior to impairment adjustment

	Held for sale as of 1/15/12
Assets (exclude goodwill)	$	911,397
Less: liabilities		(318,420	)
Net assets before goodwill		592,977
Goodwill		—
Net assets	$	592,977
Value of proceeds received		650,490
Impairment expense	$	713,842
Goodwill		(620,002	)
Customer List, net		(26,419	)
Software		(67,421	)
Total Asset Impairment	$	(713,842	)

Summary of net loss from discontinued operations related to Ancept

	Years ended December 31,
	2011			2012
Net revenue	$	1,111,559		$	22,255
Cost of revenue		885,879			39,057
Gross profit		225,680			(16,802	)
Operating expenses		1,140,096			64,792
Impairment of goodwill and other intangible assets		713,842			—
Impairment of Earn-out receivable		—			80,000
Net loss from net assets held for sale	$	(1,628,258	)	$	(161,594	)

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Long-term Debt (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Components of long-term debt
Outstanding Primary Principal Amount	$ 1,078,621	$ 1,078,621
Outstanding Secondary Principal Amount	4,591,361	4,591,361
Other debt	32,156	75,143
Total long-term debt	5,702,138	5,745,125
Less current maturities	(150,870)	(171,525)
Total long-term debt, less current maturities	$ 5,551,268	$ 5,573,600

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Summary of Significant Accounting Policies (Details 6)	12 Months Ended
	Dec. 31, 2012 Customer	Dec. 31, 2011 Customer
Sales [Member]
Number of customers that accounted annual sales and receivable balances
Number of Customers	2	2
Combined Percent	33.00%	34.00%
Accounts Receivable [Member]
Number of customers that accounted annual sales and receivable balances
Number of Customers	3	2
Combined Percent	51.00%	36.00%

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property and Equipment [Abstract]

Property and equipment

	Estimated
	Useful Life		December 31,
	(Years)		2011			2012
Computer equipment		2 to 7	$	568,899		$	574,096
Software		3 to 5		104,500			104,500
Leasehold improvements		1 to 5		174,429			174,429
Office furniture and equipment		5 to 7		1,405,559			1,452,675
				2,253,387			2,305,700
Less accumulated depreciation and amortization				(2,001,539	)		(2,170,488	)
			$	251,848		$	135,212

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Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Accrued expenses and other current liabilities [Abstract]

Accrued expenses and other current liabilities

	December 31,
	2011		2012
Accrued interest	$	27,906	$	10,769
Accrued compensation		310,500		320,251
Accrued warranty		135,708		115,566
Accrued inventory purchases		59,577		81,146
Customer deposits		135,597		5,841
Deferred rent		25,341		65,380
Accrued taxes and other		155,671		124,118
	$	850,300	$	723,071

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Consolidated Statements of Cash Flows (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2011
Consolidated Statements of Cash Flows [Abstract]
Repayments of long-term debt to related party	$ 42,845

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Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2012

Long-term Debt [Abstract]

Components of long-term debt

	December 31,
	2011			2012
Outstanding Primary Principal Amount	$	1,078,621		$	1,078,621
Outstanding Secondary Principal Amount		4,591,361			4,591,361
Other debt		75,143			32,156
Total long-term debt		5,745,125			5,702,138
Less current maturities		(171,525	)		(150,870	)
Total long-term debt, less current maturities	$	5,573,600		$	5,551,268

Maturities of long term debt

	Long Term Debt
Year ended December 31,
2013	$	150,870
2014		5,550,377
2015		891
	$	5,702,138

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Summary of Significant Accounting Policies (Details 2) (USD $)	Dec. 31, 2012
Future amortization expense
Year ending December 31, 2013	$ 22,754
Year ending December 31, 2014	22,754
Year ending December 31, 2015	22,754
Year ending December 31, 2016	16,431
Future amortization expense	$ 84,693

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Property and Equipment (Details) (USD $)			12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 Computer equipment [Member]	Dec. 31, 2011 Computer equipment [Member]	Dec. 31, 2012 Computer equipment [Member] Minimum [Member]	Dec. 31, 2012 Computer equipment [Member] Maximum [Member]	Dec. 31, 2012 Software [Member]	Dec. 31, 2011 Software [Member]	Dec. 31, 2012 Software [Member] Minimum [Member]	Dec. 31, 2012 Software [Member] Maximum [Member]	Dec. 31, 2012 Leasehold improvements [Member]	Dec. 31, 2011 Leasehold improvements [Member]	Dec. 31, 2012 Leasehold improvements [Member] Minimum [Member]	Dec. 31, 2012 Leasehold improvements [Member] Maximum [Member]	Dec. 31, 2012 Office furniture and equipment [Member]	Dec. 31, 2011 Office furniture and equipment [Member]	Dec. 31, 2012 Office furniture and equipment [Member] Minimum [Member]	Dec. 31, 2012 Office furniture and equipment [Member] Maximum [Member]
Property and equipment
Estimated Useful Life (Years)			2 years	7 years			2 years	7 years			3 years	5 years			1 year	5 years			5 years	7 years
Property and equipment	$ 2,305,700	$ 2,253,387			$ 574,096	$ 568,899			$ 104,500	$ 104,500			$ 174,429	$ 174,429			$ 1,452,675	$ 1,405,559
Less accumulated depreciation and amortization	(2,170,488)	(2,001,539)
Property equipment Net	$ 135,212	$ 251,848

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Consolidated Balance Sheets (USD $)	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 258,259	$ 319,908
Accounts receivable, less allowance for doubtful accounts of $22,292 and $39,018 at December 31, 2011 and 2012, respectively	2,314,624	1,632,239
Inventories, net	2,123,379	2,708,081
Prepaid expenses	123,858	134,799
Assets held for sale		534,907
Total current assets	4,820,120	5,329,934
Property and equipment, net	135,212	251,848
Capitalized software development costs, net	329,532	266,713
Earn-out receivable	127,062
Intangible assets, net	84,693	108,962
Deposits	30,044	84,770
Total assets	5,526,663	6,042,227
Current liabilities:
Line of credit	1,143,920	335,641
Accounts payable	1,004,326	834,185
Accrued expenses and other current liabilities	723,071	850,300
Deferred revenue	305,027	260,638
Current maturities of long-term debt and stockholder notes payable	150,870	171,525
Liabilities related to assets held for sale		250,837
Total current liabilities	3,327,214	2,703,126
Long-term debt, less current maturities	9,820	32,152
Stockholder notes payable, less current maturities	5,541,448	5,541,448
Total liabilities	8,878,482	8,276,726
Preferred stock, $0.0001 par value, authorized 5,000,000 shares:
Common stock, $.0001 par value, authorized 100,000,000 shares; issued shares -59,768,846 and 62,647,987 at December 31, 2011 and 2012, respectively	6,265	5,977
Additional paid-in capital	73,609,283	73,205,369
Accumulated deficit	(76,955,469)	(75,433,947)
Treasury stock, 261,497 shares at cost	(11,906)	(11,906)
Total stockholders' deficit	(3,351,819)	(2,234,499)
Total liabilities and stockholders' deficit	5,526,663	6,042,227
Series E Convertible Preferred Stock
Preferred stock, $0.0001 par value, authorized 5,000,000 shares:
Series E convertible - issued and outstanding shares - 80,000 - liquidation value of $107 per share as of December 31, 2011 and 2012, respectively	8	8
Total stockholders' deficit	$ 8	$ 8

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Summary of Significant Accounting Policies (Details 7)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Weighted-average estimated value of employee stock options granted
Expected volatility	119.00%	127.00%
Risk-free interest rate	1.22%	2.16%
Expected dividends	0.00%	0.00%
Expected term in years	4 years 29 days	4 years 5 months 9 days

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Consolidated Statements of Stockholders' Equity (Deficit) (USD $)	Total	Series B Convertible Preferred Stock	Series C Convertible Preferred Stock	Series E Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning Balances at Dec. 31, 2010	$ 160,120	$ 80	$ 20	$ 8	$ 3,927	$ 72,641,272	$ (72,473,281)	$ (11,906)
Beginning Balances, Shares at Dec. 31, 2010		800,000	200,000	80,000	39,277,815
Stock based compensation expense	131,858					131,858
Employee stock purchase plan issuance	8,623				5	8,618
Employee stock purchase plan issuance, Shares					45,624
Conversion of preferred stock to common stock		(80)	(20)		1,667	(1,567)
Conversion of preferred stock to common stock, Shares		(800,000)	(200,000)		16,666,666
Forfeiture of convertible preferred stock dividends - Series B	33,140						33,140
Forfeiture of convertible preferred stock dividends - Series C	27,615						27,615
Exercise of stock option	566					566
Exercise of stock option, Shares	3,333				3,333
Stock and warrants issued in private placement	425,000				378	424,622
Stock and warrants issued in private placement, Shares					3,775,408
Net loss	(3,021,421)						(3,021,421)
Ending Balances at Dec. 31, 2011	(2,234,499)			8	5,977	73,205,369	(75,433,947)	(11,906)
Ending Balances, Shares at Dec. 31, 2011				80,000	59,768,846
Stock based compensation expense	80,896					80,896
Employee stock purchase plan issuance	3,306				4	3,302
Employee stock purchase plan issuance, Shares					36,481
Stock and warrants issued in private placement	320,000				284	319,716
Stock and warrants issued in private placement, Shares					2,842,660
Net loss	(1,521,522)						(1,521,522)
Ending Balances at Dec. 31, 2012	$ (3,351,819)			$ 8	$ 6,265	$ 73,609,283	$ (76,955,469)	$ (11,906)
Ending Balances, Shares at Dec. 31, 2012				80,000	62,647,987

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Income Taxes (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets (liability):
Net operating loss carryforwards	$ 24,182,000	$ 23,741,000
Deferred revenue	192,000	176,000
Goodwill and other intangibles	(53,000)	(30,000)
Stock based Compensation	281,000	251,000
Inventory	167,000	177,000
Allowance for Doubtful accounts	14,000	8,000
Accrued liabilities	101,000	104,000
Property and equipment	159,000	80,000
Software development costs	(20,000)	(36,000)
Total deferred tax assets	25,023,000	24,471,000
Less: valuation allowance	(25,023,000)	(24,471,000)
Net deferred taxes

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Future minimum operating lease payments

	Operating Leases
Year ended December 31:
2013	$	304,298
2014		333,445
2015		345,997
2016		345,997
Thereafter		1,226,555
Total minimum lease payments	$	2,556,292

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Stockholders' Equity (Details Textual) (USD $)	12 Months Ended						12 Months Ended			12 Months Ended				12 Months Ended		12 Months Ended				1 Months Ended	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Jan. 31, 2012	Dec. 27, 2011	Dec. 31, 2011 Private Placement [Member]	Dec. 27, 2011 Private Placement [Member]	Dec. 31, 2012 Employee Stock [Member]	Dec. 31, 2011 Employee Stock [Member]	Dec. 31, 2012 Minimum [Member] Employee Stock [Member]	Dec. 31, 2012 2005 Employee Stock Purchase Plan [Member]	Dec. 31, 2011 2005 Employee Stock Purchase Plan [Member]	Dec. 31, 2012 Series B - Preferred Stock [Member]	May 04, 2011 Series B - Preferred Stock [Member]	Dec. 31, 2012 Series C - Preferred Stock [Member]	May 04, 2011 Series C - Preferred Stock [Member]	Dec. 31, 2006 Series E - Preferred Stock - [Member]	Dec. 31, 2012 Series E - Preferred Stock - [Member]	Dec. 31, 2011 Series E - Preferred Stock - [Member]	May 04, 2011 Series E - Preferred Stock - [Member]	Jan. 31, 2012 Common Stock [Member]	Dec. 31, 2011 Common Stock [Member]	Dec. 27, 2011 Common Stock [Member]
Stockholders' Equity (Additional Textual) [Abstract]
Number of shares to be retired																80,000
Liquidation preference for preferred shares																107.00%
Net proceeds from the exercise of common stock	$ 0	$ 566								$ 3,306	$ 8,623
Outstanding employee stock options		3,333								36,481	45,624
Purchase price of the Common Stock							95.00%		85.00%
Conversion of Preferred Stock into common stock	$ 0.0001	$ 0.0001
Common stock shares issued	62,647,987	59,768,846	2,842,660		3,775,408	6,618,068	36,481	45,624
Purchase price of Common Stock	425,000		320,000
Preferred stock, liquidation value																$ 100	$ 107	$ 107
Common Stock reserved for issuance							1,000,000
Amount of authorized payroll deductions							25,000
Preferred stock outstanding, shares													800,000		200,000		80,000	80,000
Share based compensation, Maximum employee subscription rate							10.00%
Modified price of convertible preferred stock													$ 0.60
Preferred stock outstanding, stated value	$ 0.0001	$ 0.0001											$ 10		$ 10	$ 100
Warrants to purchase shares of Common Stock	3,775,408	0		6,618,068																2,842,660	3,775,408	6,618,068
Common stock issued upon conversion				6,618,068									13,333,333		3,333,333
Preferred shares held by principal stakeholder													400,000
Warrant expiration date	Dec. 31, 2014
Cumulative dividends on preferred stock												8.00%		9.00%
Fixed price of convertible preferred stock													$ 3.625		$ 0.60
Net proceeds from the private placement		745,000																		320,000	425,000
Preferred Stock indirectly held by Ardinger																			80,000
Stockholders' Equity (Textual) [Abstract]
Weighted- Average Exercise Price Per Share, Exercised		$ 0.17
Purchase price of a private placement unit	$ 0.1125707
Warrants exercise price per Common Share	$ 0.1238278
Weighted average closing trading period				5 days
Maximum number of shares available for grant	6,000,000
Stock based compensation expense	80,896	131,858
Number of Shares, Granted	2,105,000	2,565,000
Unearned stock-based compensation	179,000
Weighted-average grant date fair value for options granted	$ 0.09	$ 0.26
Weighted-average period over which the unearned stock-based compensation is expected to be recognized	3 years
Weighted average closing price of Common Stock				110.00%
Common stock shares issued	62,647,987	59,768,846	2,842,660		3,775,408	6,618,068	36,481	45,624
Class of warrant or right aggregate purchase price of warrants				$ 745,000
Outstanding warrants to purchase shares of Common Stock	6,618,068	3,775,408

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

14. Related Party Transactions

As discussed in Note 9, the Company has two outstanding notes payable to an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger. See Note 11 for prefer stock activities.

Other than as permitted in the Exchange Agreement, from May 4, 2011 through July 31, 2011, the holders of the shares of Common Stock issued pursuant to the Series B/C Conversion have agreed not to sell or otherwise transfer such shares of Common Stock. Additionally, from August 1, 2011 through January 27, 2012, such holders agreed to limit any sales or transfers of such Common Stock in accordance with the volume limitations of Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), as if such holders were affiliates of the Company. If during the Temporary Conversion Period, a change in control of the Company occurs, these transfer restrictions shall terminate.

Ardinger is the largest stockholder of the Company and the sole general partner of the Ardinger Partnership. Immediately prior to the Series B/C Conversion, Ardinger: (i) directly beneficially held (a) 400,000 shares of Series B Preferred Stock and (b) 200,000 shares of Series C Preferred Stock and (ii) indirectly beneficially held, as sole general partner of the Ardinger Partnership, 80,000 shares of Series E Preferred Stock. The Company reimbursed the Ardinger Partnership $10,000 for their legal expenses related to this transaction.

On December 27, 2011, ViewCast entered into the Subscription Agreements with the Investors for the purchase of private placement units consisting of an aggregate 6,618,068 shares of Common Stock and Warrants to purchase 6,618,068 shares of Common Stock for an aggregate purchase price of $745,000, of which $425,000 was received in December 2012 and the remaining $320,000 was received in January 2012. The purchase price per private placement unit was $0.1125707, which was the weighted average closing price for the five trading days immediately prior to December 27, 2011. Pursuant to the Subscription Agreements, the Warrants are exercisable into shares of Common Stock at an exercise price of $0.1238 per share of Common Stock which was 110% of the weighted average closing price for the five trading days immediately prior to December 27, 2011. The Warrants will expire on December 31, 2014.

The following Investors have a relationship to the Company and subscribed for the following number of shares of Common Stock and Warrants exercisable into the same number of shares of Common Stock:

David W. Brandenburg RIRA – 888,331 shares

Diana L. Brandenburg RIRA – 888,331 shares

John C. Hammock – 888,331 shares

Laurie L. Latham – 888,331 shares

Lance E. Ouellette – 888,331 shares

Christina K. Hanger – 222,083 shares

George C. Platt – 177,667 shares

Messrs. Brandenburg, Hammock, Ouellette and Platt are directors of the Company, Ms. Hanger was director of the Company until November 28, 2012. Mr. Hammock is the President and Chief Executive Officer of the Company and Ms. Latham was, until August 21, 2012, the Chief Financial Officer and Senior Vice President of Finance and Administration of the Company. They acquired the shares of Common Stock on the same terms as the other five Investors. Mr. Ouellette is the stepson of H.T. Ardinger, Jr., a principal stockholder of the Company. There are no additional material relationships between the Company and the Investors aside from entering into the Subscription Agreements. Each of the Investors is an “accredited investor” as defined under Rule 501 promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”), and the shares of Common Stock and the Warrants are being issued pursuant to Rule 506 promulgated pursuant to the Securities Act.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Measurements [Abstract]

Fair value measurement of assets and liabilities measured at fair value on a non-recurring basis

			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Goodwill	$	—	$	—	$	—	$	—
Customer List		—		—		—		—
Software		442,775		—		—		442,775
	$	442,775	$	—	$	—	$	442,775

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Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

16. Fair Value Measurements

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheet, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Goodwill and Other Intangible Assets

The fair value is estimated using discounted cash flows that are unobservable or that cannot be corroborated by observable market data and, therefore, are classified within Level 3 of the valuation hierarchy.

The following table presents the fair value measurement of assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2011 for the Ancept Assets:

			Fair Value Measurements Using
	Fair Value		Level 1		Level 2		Level 3
Goodwill	$	—	$	—	$	—	$	—
Customer List		—		—		—		—
Software		442,775		—		—		442,775
	$	442,775	$	—	$	—	$	442,775

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Commitments and Contingencies (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Commitments and Contingencies (Textual) [Abstract]
Rent expense	$ 402,599	$ 458,734

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Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Operating activities:
Net loss	$ (1,521,522)	$ (3,021,421)
Net loss from discontinued operations	(161,594)	(1,628,258)
Net loss from continuing operations	(1,359,928)	(1,393,163)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense	22,634	(45,144)
Depreciation of property and equipment	182,228	260,069
Amortization of software and intangible assets	208,940	406,168
Impairment of goodwill and intangible assets		713,842
Stock based compensation expense	80,896	131,858
Loss (Gain) on sale of assets	2,718	(2,398)
Changes in operating assets and liabilities:
Accounts receivable	(705,019)	560,551
Inventories	584,702	(492,832)
Prepaid expenses	10,941	132,472
Deposits	54,726	(52,133)
Assets and liabilities held for sales, net	107,935	(164,226)
Accounts payable	170,141	(201,489)
Accrued expenses and other current liabilities	(127,229)	573,851
Deferred revenue	44,389	(166,291)
Net cash used in operating activities	(883,520)	(1,367,123)
Investing activities:
Capitalized software development costs and patents	(247,490)	(172,708)
Purchase of property and equipment	(66,263)	(138,146)
Proceeds from sale of assets	47,026	2,398
Net cash used in investing activities	(266,727)	(308,456)
Financing activities:
Net proceeds from stockholder line of credit		700,000
Proceeds from sale of common stock and warrants	323,306	433,623
Proceeds from exercise of employee stock options	0	566
Net proceeds (payment) from (to) line of credit	808,279	(705,836)
Repayments of long-term debt including $42,845 to related party in 2011	(42,987)	(81,342)
Net cash provided by financing activities	1,088,598	347,011
Net decrease in cash and cash equivalents	(61,649)	(1,328,568)
Cash and cash equivalents, beginning of year	319,908	1,648,476
Cash and cash equivalents, end of year	258,259	319,908
Supplemental cash flow information:
Cash paid for interest	166,673	199,128
Non-cash items:
Acquisition of property and equipment under capital leases		$ 59,720

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Series E Convertible Preferred Stock	Dec. 31, 2011 Series E Convertible Preferred Stock
Allowance for doubtful accounts	$ 39,018	$ 22,292
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares issued			80,000	80,000
Preferred stock, shares outstanding			80,000	80,000
Preferred stock, liquidation value			$ 107	$ 107
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock shares issued	62,647,987	59,768,846
Treasury stock, shares	261,497	261,497

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Long-term Debt

12 Months Ended

Dec. 31, 2012

Long-term Debt [Abstract]

Long-term Debt

9. Long-term Debt

Stockholder Term Notes

Since October 1998, the Company has maintained a credit facility with an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger. Most recently, ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (jointly and severally, “the Borrower”) amended the terms and conditions of the loan and security agreement with the Ardinger Family Partnership, Ltd. on December 30, 2011, to be effective as of October 1, 2011. Under the amended terms any amounts outstanding of the primary principal amount and secondary principal amount mature December 31, 2014, subject to certain earlier payment conditions. The interest on the primary principal amount will accrue based on an interest rate per annum which is the greater of 5.0% or the effective prime rate plus 0.75% (5.00% as of December 31, 2011 and 2012). Interest on the secondary principal shall accrue based on the effective Applicable Federal Rate, as defined in the agreement, (1.27% and 0.21%) as of December 31, 2011 and 2012, respectively). The amendment defers the payment of the accrued interest on the unpaid primary and secondary principal amounts from October 1, 2011 through March 31, 2012. Beginning April 30, 2012 payment of such accrued interest was paid in three approximately equal monthly payments. The amended terms call for interest accruing after March 31, 2012 to be paid monthly; and beginning July 31, 2013, minimum monthly principal payments of $21,422, in addition to the monthly interest payments. The amended note agreement is secured by all the assets of the Borrower.

Long-term debt consists of the following:

	December 31,
	2011			2012
Outstanding Primary Principal Amount	$	1,078,621		$	1,078,621
Outstanding Secondary Principal Amount		4,591,361			4,591,361
Other debt		75,143			32,156
Total long-term debt		5,745,125			5,702,138
Less current maturities		(171,525	)		(150,870	)
Total long-term debt, less current maturities	$	5,573,600		$	5,551,268

The following are the scheduled maturities of long-term debt at December 31, 2012:

	Long Term Debt
Year ended December 31,
2013	$	150,870
2014		5,550,377
2015		891
	$	5,702,138

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 15, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	VIEWCAST COM INC
Entity Central Index Key	0000921313
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		62,386,490
Entity Public Float			$ 3,484,471

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

10. Income Taxes

The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In the opinion of management, realization of the Company’s net operating loss carryforward is not reasonably assured, and a valuation allowance of $24,471,000 and $25,023,000 has been provided against deferred tax assets in excess of deferred tax liabilities in the accompanying consolidated financial statements at December 31, 2011 and 2012, respectively.

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

	Year ended December 31,
	2011			2012
Deferred tax assets (liability):
Net operating loss carryforwards	$	23,741,000		$	24,182,000
Deferred revenue		176,000			192,000
Goodwill and other intangibles		(30,000	)		(53,000	)
Stock based Compensation		251,000			281,000
Inventory		177,000			167,000
Allowance for Dobtful accounts		8,000			14,000
Accrued liabilities		104,000			101,000
Property and equipment		80,000			159,000
Software development costs		(36,000	)		(20,000	)
Total deferred tax assets		24,471,000			25,023,000
Less: valuation allowance		(24,471,000	)		(25,023,000	)
Net deferred taxes	$	—		$	—

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

	Year ended December 31,
	2011			2012
U.S. federal statutory rate applied to pretax income	$	(1,027,000	)	$	(521,058	)
Change in valuation allowance		(2,868,000	)		552,000
Expiration of net operating loss carryforwards		4,218,000			—
Permanent Differences & Other		(323,000	)		(30,942	)
	$	—		$	—

At December 31, 2012 the Company has federal income tax net operating loss carryforwards of approximately $65,000,000, which expire at various dates beginning in 2017. 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.

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Consolidated Statements of Operations (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements of Operations [Abstract]
Net revenue	$ 12,140,697	$ 14,110,797
Cost of revenue	4,566,339	5,315,318
Gross profit	7,574,358	8,795,479
Operating expenses:
Selling, general and administrative	5,429,547	6,385,898
Research and development	2,954,991	3,067,808
Depreciation and amortization	391,170	510,828
Total operating expenses	8,775,708	9,964,534
Operating loss	(1,201,350)	(1,169,055)
Other income (expense):
Interest expense (including $116,441 and $64,002 to related parties)	(160,131)	(227,034)
Interest income	60	2,403
Other	1,493	523
Total other expense, net	(158,578)	(224,108)
Loss from continuing operations	(1,359,928)	(1,393,163)
Net loss from discontinued operations	(161,594)	(1,628,258)
NET LOSS	(1,521,522)	(3,021,421)
Preferred stock dividends		(282,444)
Preferred stock redemption		5,586,666
Net income (loss) applicable to common stockholders	$ (1,521,522)	$ 2,282,801
Net loss per common share (basic and diluted):
Continuing operations	$ (0.02)	$ 0.08
Discontinued operations	$ 0.00	$ (0.03)
Net income (loss)	$ (0.02)	$ 0.05
Weighted average number of common shares outstanding
Basic and Diluted	62,125,538	50,080,639

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Discontinued operations

12 Months Ended

Dec. 31, 2012

Sale of Ancept Assets and Contingent Consideration/Discontinued Operations[Abstract]

Discontinued operations

4. Discontinued operations

As described in Note 3, the assets of Ancept were sold effective January 15, 2012, and were classified as held for sale at December 31, 2011. The table below calculates the $656,329 impairment based upon the difference between the value of proceeds received from the transaction in January 2012 and the carrying amount of the Ancept Assets, including the goodwill prior to any impairment adjustment:

	Held for sale as of 1/15/12
Assets (exclude goodwill)	$	911,397
Less: liabilities		(318,420	)
Net assets before goodwill		592,977
Goodwill		—
Net assets	$	592,977
Value of proceeds received		650,490
Impairment expense	$	713,842
Goodwill		(620,002	)
Customer List, net		(26,419	)
Software		(67,421	)
Total Asset Impairment	$	(713,842	)

Goodwill of $620,002 is solely related to Ancept was adjusted for impairment of $620,002 along with $93,840 impairment to intangible assets and capitalized software.

The net loss from discontinued operations related to the Ancept for years ended December 31, 2011 and 2012 are as follows:

	Years ended December 31,
	2011			2012
Net revenue	$	1,111,559		$	22,255
Cost of revenue		885,879			39,057
Gross profit		225,680			(16,802	)
Operating expenses		1,140,096			64,792
Impairment of goodwill and other intangible assets		713,842			—
Impairment of Earn-out receivable		—			80,000
Net loss from net assets held for sale	$	(1,628,258	)	$	(161,594	)

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Sale of Ancept Assets and Contingent Consideration

12 Months Ended

Dec. 31, 2012

Sale of Ancept Assets and Contingent Consideration/Discontinued Operations[Abstract]

Sale of Ancept Assets and Contingent Consideration

3. Sale of Ancept Assets and Contingent Consideration

On January 15, 2012, ViewCast completed the sale of certain assets from Ancept Corporation (the “Ancept Assets”) related to the development and licensing of the VMp software products that provide the management of the life cycle phases of digital media pursuant to the terms of the Asset Purchase Agreement dated January 13, 2012, by and between ViewCast, Ancept Corporation, Genus Technologies LLC and its subsidiary. ViewCast’s wholly-owned subsidiary, Ancept Corporation, was renamed ViewCast Solutions, Inc. (“VSI”) and no longer operates this business. The Ancept Assets are classified as held for sale at December 31, 2011, and the assets and liabilities are included in the respective current assets and liabilities sections of the Consolidated Balance Sheet.

Upon the terms and subject to the conditions of the purchase agreement, the buyer has agreed to pay an earn-out payment as follows: until the earlier of paying VSI $650,000 or January 15, 2017 (the “Earn-Out Period”), the buyer shall pay VSI on a quarterly basis a percentage of the net license fees, subscription fees and similar revenues paid or payable to the buyer or otherwise earned by buyer with respect to the software sold from Ancept to the buyer (“Net Software License Revenue”). The buyer agreed to pay VSI (i) 20% of the Software License Revenue from sales opportunities in the pipeline on January 15, 2012 and from post-closing referrals from ViewCast plus (ii) 10% of Net Software License Revenue, up to a maximum of $400,000, generated from buyer’s customers not derived from ViewCast. Prior to January 15, 2014, the buyer may terminate the earn-out payment obligations by paying VSI $400,000 which amount shall not be reduced by any prior earn-out payments. On or after January 15, 2014 until the end of the Earn-Out Period, Buyer may terminate the earn-out payment obligations by paying Ancept $650,000 less any prior earn-out payments. The buyer also (i) assumed specified liabilities related to the Ancept Assets, and (ii) paid $47,026 in cash to VSI.

Proceeds from the sale totaled $592,976 and were comprised of the following: cash of $47,026, receivable for future earn out consideration having a fair value of $227,531, and liabilities assumed by the buyer of $318,419. The carrying value of the reporting unit approximated the proceeds received on the date of the transaction; as a result, a loss of $2,047 was recorded on the sale. Management recorded the contingent earn out consideration at estimated fair value determined using discounted estimated future cash flows. Subsequent to the sale, proceeds received under the arrangement will be applied to the carrying value of the asset. Subsequently, earn-out receivable was decreased by $80,000 in 4^th quarter of 2012.

The following table provides a detail of the net assets held for sale as of December 31, 2011:

	December 31,
	2011
Assets:
Accounts receivable	$	67,086
Prepaid expenses		4,381
Property and equipment, net		17,415
Deposit		3,250
Capitalized software development cost, net		442,775
Total assets		534,907
Liabilities related to assets held for sale		250,837
Net assets held for sale	$	284,070

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Current Economic Conditions

12 Months Ended

Dec. 31, 2012

Current Economic Conditions [Abstract]

Current Economic Conditions

15. Current Economic Conditions

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

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

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

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Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

11. Stockholders’ Equity

Preferred Stock

On May 4, 2011, the Company entered into a Preferred Stock Exchange Agreement (the “Exchange Agreement”) with Ardinger, Ardinger Partnership (the “Ardinger Partnership”), Adkins Family Partnership, Ltd. and RDB Limited, p/k/a Baker Family Partnership, Ltd. to convert the outstanding shares of its Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and to restructure Series E Convertible Redeemable Preferred Stock (the “Series E Preferred Stock), collectively the “Preferred Stock”. The Exchange Agreement and all related changes to the Preferred Stock (collectively the “Preferred Stock Redemption”) have been accounted for as an extinguishment of Preferred Stock.

As of May 4, 2011, 800,000 shares of Series B Preferred Stock were outstanding at a stated value of $10 per share. Ardinger, a principal stockholder of the Company, held 400,000 shares of Series B Preferred Stock, with the remainder held by other stockholders. The Series B Preferred Stock was convertible into common stock of the Company (“Common Stock”) at a fixed price of $3.625 per share, subject to certain requirements, which was modified under the Exchange Agreement to $0.60 per share of underlying Common Stock and was converted on May 4, 2011 into a total of 13,333,333 shares of Common Stock.

As of May 4, 2011, 200,000 shares of Series C Preferred Stock were outstanding at a stated value of $10 per share held by Ardinger. The Series C Preferred Stock was convertible into Common Stock at a fixed price of $0.60 per share, subject to certain requirements, which remained the conversion price under the Exchange Agreement and was converted on May 4, 2011 into a total of 3,333,333 shares of Common Stock.

Holders of Series B Preferred Stock and Series C Preferred Stock had no voting rights except on amendments to the Company’s Certificate 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. The Series B Preferred Stock and Series C Preferred Stock carried cumulative dividends of 8% and 9% per year, respectively, and were generally payable semi-annually in arrears in cash or Common Stock, at the Company’s option. On May 4, 2011, under the Exchange Agreement, when the Series B Preferred Stock and Series C Preferred Stock were converted into Common Stock, any and all dividends, owed or owing on the Preferred Stock, were cancelled.

In December 2006, the Company retired certain debt from the Ardinger Partnership in exchange for certain Company securities, including 80,000 shares of Series E Preferred Stock with each share having a stated value of $100 with voting rights on an “as converted’ basis with the Common Stock and accrues no dividends. The liquidation preference on the Series E Preferred Stock is the $100 per share stated value multiplied by 107% if the liquidation event occurs after December 11, 2010.

The Company has also agreed under the Exchange Agreement, among other things: (i) that the definition of registrable securities under that certain Registration Rights Agreement, dated December 11, 2006, between the Company and the Ardinger Partnership (the “Registration Rights Agreement”) shall include any shares of Common Stock issued in exchange for the shares of Preferred Stock previously held by Ardinger or the Ardinger Partnership, (ii) that Ardinger shall be a party to the Registration Rights Agreement, and (iii) to use commercially reasonable efforts to: (a) meet the applicable listing requirements of the NASDAQ Stock Market and (b) upon meeting such requirements, list its Common Stock on the NASDAQ Stock Market.

The Company accounted for the changes made to its Preferred Stock in connection with the exchange agreement as an extinguishment in accordance with FASB’s Codification at ASC 260-10-S99-2. Therefore, in calculating the net income (loss) applicable to common shareholders, the Company has recognized an imputed amount for the extinguishment which represents the carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities and other consideration transferred in the transaction.

Preferred stock redemption	Carrying amount of Preferred Stock		Fair value as of May 4, 2011		Change of value as of May 4, 2011
Series B—Preferred Stock		8,000,000		5,066,667		2,933,333
Series C—Preferred Stock		2,000,000		1,266,667		733,333
Series E—Preferred Stock		8,000,000		6,080,000		1,920,000
Preferred stock redemption		18,000,000		12,413,334		5,586,666

The Preferred Stock extinguishment value results in an adjustment to the net loss, which is a reconciling adjustment in calculating the net income (loss) applicable to common shareholders.

Common Stock

During 2012, the Company had no proceeds from the exercise of its outstanding employee stock options. During 2011, the Company received $567 in proceeds from the exercise of 3,333 of its outstanding employee stock options, with a weighted-average exercise price of approximately $0.17 per share.

During 2011 and 2012, the Company received $8,623 and $3,306 in proceeds from the purchase of 45,624 and 36,481 shares of Common Stock by employees through the 2005 Employee Stock Purchase Plan.

On December 27, 2011, ViewCast entered into the Subscription Agreements with investors for the purchase of private placement units consisting of an aggregate 6,618,068 shares of Common Stock and warrants to purchase 6,618,068 shares of Common Stock for an aggregate purchase price of $745,000. In December 2011, $425,000 was received for 3,775,408 shares of Common Stock and warrants to purchase 3,775,408 shares of Common Stock, and in January 2012, the remaining $320,000 was received for 2,842,660 shares of Common Stock and warrants to purchase 2,842,660 shares of Common Stock. The purchase price per private placement unit was $0.1125707, which was the weighted average closing price for the five trading days immediately prior to December 27, 2011. Pursuant to the Subscription Agreements, the warrants are exercisable into shares of Common Stock at an exercise price of $0.1238278 per share of Common Stock which was 110% of the weighted average closing price for the five trading days immediately prior to December 27, 2011.

Warrants

At December 31, 2011 and December 31, 2012, the Company had outstanding warrants to purchase 3,775,408 and 6,618,068 shares of Common Stock, respectively, with an exercise price of $0.1238278 per share of Common Stock that will expire on December 31, 2014.

Stock Option Plan

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

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

Following is a summary of stock option activity from January 1, 2011 through December 31, 2012:

	Stock Options
	Number of Shares			Exercise Price Per Share	Weighted- Average Exercise Price Per Share
Outstanding at January 1, 2010		4,787,085		$0.17 – $1.09	$	0.41
Granted		2,565,000		0.13 – 0.36		0.31
Exercised		(3,333	)	0.17		0.17
Canceled/forfeited		(2,925,417	)	0.13 – 1.09		0.47
Outstanding at December 31, 2011		4,423,335		$0.13 – $0.62	$	0.31
Granted		2,105,000		0.11 – 0.21		0.11
Canceled/forfeited		(2,998,250	)	0.11 – 0.49		0.29
Outstanding at December 31, 2012		3,530,085		$0.11 – $0.62	$	0.24

The weighted-average grant-date fair value of options granted was $0.26 and $0.09 for the years ended December 31, 2011 and 2012, respectively.

The following information applies to options outstanding at December 31, 2012:

Range of Exercise Prices	Outstanding at December 31, 2012		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Exercisable at December 31, 2012		Weighted- Average Exercise Price
$0.01 – 0.19		1,485,000		6.0	$	0.12		370,278	$	0.16
0.20 – 0.29		886,335		4.2	$	0.25		626,613	$	0.25
0.30 – 0.39		772,500		4.3	$	0.35		576,528	$	0.35
0.40 – 0.49		376,250		2.1	$	0.46		376,250	$	0.46
0.60 – 0.69		10,000		1.0	$	0.62		10,000	$	0.62
		3,530,085		4.8	$	0.24		1,959,669	$	0.31

Stock-based compensation expense was $131,858 and $ 80,896 for the years ended December 31, 2011 and December 31, 2012, respectively. At December 31, 2012, the balance of unearned stock-based compensation to be expensed in future periods related to unvested share-based awards, as adjusted for expected forfeitures, is approximately $179,000. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately three years.

Employee Stock Purchase Plan

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

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

During 2011 and 2012, 45,624 and 36,481 shares of common stock were issued under the ESPP.

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Accrued expenses and other current liabilities

12 Months Ended

Dec. 31, 2012

Accrued expenses and other current liabilities [Abstract]

Accrued expenses and other current liabilities

7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	December 31,
	2011		2012
Accrued interest	$	27,906	$	10,769
Accrued compensation		310,500		320,251
Accrued warranty		135,708		115,566
Accrued inventory purchases		59,577		81,146
Customer deposits		135,597		5,841
Deferred rent		25,341		65,380
Accrued taxes and other		155,671		124,118
	$	850,300	$	723,071

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Income Taxes (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Reconciliation between the income tax expense (benefit) calculated by applying statutory rates to net loss and the income tax benefit
U.S. federal statutory rate applied to pretax income	$ (521,058)	$ (1,027,000)
Change in valuation allowance	(552,000)	(2,868,000)
Expiration of net operating loss carryforwards		4,218,000
Permanent Differences & Other	(30,942)	(323,000)
Total

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Inventories

12 Months Ended

Dec. 31, 2012

Inventories [Abstract]

Inventories

5. Inventories

Inventories consist of the following:

	December 31,
	2011			2012
Purchased materials	$	1,369,041		$	1,013,492
Finished goods		1,596,877			1,561,043
Inventory obsolescence reserve		(257,837	)		(451,156	)
	$	2,708,081		$	2,123,379

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Property and Equipment

12 Months Ended

Dec. 31, 2012

Property and Equipment [Abstract]

Property and Equipment

6. Property and Equipment

Property and equipment, consists of the following:

	Estimated
	Useful Life		December 31,
	(Years)		2011			2012
Computer equipment		2 to 7	$	568,899		$	574,096
Software		3 to 5		104,500			104,500
Leasehold improvements		1 to 5		174,429			174,429
Office furniture and equipment		5 to 7		1,405,559			1,452,675
				2,253,387			2,305,700
Less accumulated depreciation and amortization				(2,001,539	)		(2,170,488	)
			$	251,848		$	135,212

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Line of Credit

12 Months Ended

Dec. 31, 2012

Line of Credit [Abstract]

Line of Credit

8. Line of Credit

On June 29, 2007, the Company entered into a Purchase and Sale Agreement/Security Agreement with Amegy Bank National Association (“Amegy”), a national banking association. This agreement provides the Company with an accounts receivable loan facility to provide a source of working capital with advances generally limited to 85% of submitted accounts receivable. Upon collection of an account receivable, the remaining fifteen percent is rebated to the Company less the Amegy fixed and variable discounts. The Amegy fixed discount equals 0.2% of the account receivable for the first 15 days the account receivable is outstanding plus an additional 0.2% for each additional 15 day period, up to 1.2% for receivables 76 to 90 days outstanding. The variable discount is calculated for each day that the amount advanced by Amegy is outstanding until repaid by collection of the account receivable and equals the prime rate plus 1.5% divided by 360 multiplied by the advance amount for each account receivable. The general borrowing availability under this facility is $1,000,000, reviewed as growth of business dictates. However, this may be exceeded without penalty. To secure the amounts due under the agreement, the Company granted Amegy a security interest in all of its assets owned as of the date of the agreement or thereafter acquired. The Company had $335,641 outstanding as of December 31, 2011 and $1,143,920 outstanding as of December 31, 2012 under this facility based on the outstanding accounts receivable at year end.

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Stockholders' Equity (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Options outstanding
Outstanding at December 31, 2012	3,530,085	4,423,335	4,787,085
Weighted-Average Remaining Contractual Life	4 years 9 months 18 days
Weighted-Average Exercise Price	$ 0.24	$ 0.31	$ 0.41
Exercisable at December 31, 2012	1,959,669
Weighted-Average Exercise Price	$ 0.31
0.01 - 0.19 [Member]
Options outstanding
Range of Exercise Prices, lower limit	$ 0.01
Range of Exercise Prices, upper limit	$ 0.19
Outstanding at December 31, 2012	1,485,000
Weighted-Average Remaining Contractual Life	6 years
Weighted-Average Exercise Price	$ 0.12
Exercisable at December 31, 2012	370,278
Weighted-Average Exercise Price	$ 0.16
0.20 - 0.29 [Member]
Options outstanding
Range of Exercise Prices, lower limit	$ 0.20
Range of Exercise Prices, upper limit	$ 0.29
Outstanding at December 31, 2012	886,335
Weighted-Average Remaining Contractual Life	4 years 2 months 12 days
Weighted-Average Exercise Price	$ 0.25
Exercisable at December 31, 2012	626,613
Weighted-Average Exercise Price	$ 0.25
0.30 - 0.39 [Member]
Options outstanding
Range of Exercise Prices, lower limit	$ 0.30
Range of Exercise Prices, upper limit	$ 0.39
Outstanding at December 31, 2012	772,500
Weighted-Average Remaining Contractual Life	4 years 3 months 18 days
Weighted-Average Exercise Price	$ 0.35
Exercisable at December 31, 2012	576,528
Weighted-Average Exercise Price	$ 0.35
0.40 - 0.49 [Member]
Options outstanding
Range of Exercise Prices, lower limit	$ 0.40
Range of Exercise Prices, upper limit	$ 0.49
Outstanding at December 31, 2012	376,250
Weighted-Average Remaining Contractual Life	2 years 1 month 6 days
Weighted-Average Exercise Price	$ 0.46
Exercisable at December 31, 2012	376,250
Weighted-Average Exercise Price	$ 0.46
0.60 - 0.69 [Member]
Options outstanding
Range of Exercise Prices, lower limit	$ 0.60
Range of Exercise Prices, upper limit	$ 0.69
Outstanding at December 31, 2012	10,000
Weighted-Average Remaining Contractual Life	1 year
Weighted-Average Exercise Price	$ 0.62
Exercisable at December 31, 2012	10,000
Weighted-Average Exercise Price	$ 0.62

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Employee Benefit Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2012 Age	Dec. 31, 2011
Employee Benefit Plan (Textual) [Abstract]
Participants contribution subject to statutory limitations	60.00%
Company contribution to employee benefit plan	$ 0	$ 40,906
Minimum age requirement for employee benefit plan	18

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Stockholders' Equity (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Summary of stock option activity
Number of Shares Outstanding, Beginning balance	4,423,335	4,787,085
Weighted- Average Exercise Price Per Share Outstanding, Beginning balance	$ 0.31	$ 0.41
Number of Shares, Granted	2,105,000	2,565,000
Weighted- Average Exercise Price Per Share, Granted	$ 0.11	$ 0.31
Number of Shares, Exercised		(3,333)
Weighted- Average Exercise Price Per Share, Exercised		$ 0.17
Number of Shares, Canceled/forfeited	(2,998,250)	(2,925,417)
Weighted- Average Exercise Price Per Share, Canceled/forfeited	$ 0.29	$ 0.47
Number of Shares Outstanding, Ending balance	3,530,085	4,423,335
Weighted- Average Exercise Price Per Share Outstanding, Ending balance	$ 0.24	$ 0.31
Maximum [Member]
Summary of stock option activity
Exercise Price Per Share Outstanding, Beginning balance	$ 0.62	$ 1.09
Exercise Price Per Share, Granted	$ 0.21	$ 0.36
Exercise Price Per Share, Exercised		$ 0.17
Exercise price per share, Canceled/forfeited	$ 0.49	$ 1.09
Exercise Price Per Share Outstanding, Ending balance	$ 0.62	$ 0.62
Minimum [Member]
Summary of stock option activity
Exercise Price Per Share Outstanding, Beginning balance	$ 0.13	$ 0.17
Exercise Price Per Share, Granted	$ 0.11	$ 0.13
Exercise price per share, Canceled/forfeited	$ 0.11	$ 0.13
Exercise Price Per Share Outstanding, Ending balance	$ 0.11	$ 0.13

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Summary of carrying amount of securities and other consideration issuable pursuant to the original terms in excess of the fair value of all securities

Preferred stock redemption	Carrying amount of Preferred Stock		Fair value as of May 4, 2011		Change of value as of May 4, 2011
Series B—Preferred Stock		8,000,000		5,066,667		2,933,333
Series C—Preferred Stock		2,000,000		1,266,667		733,333
Series E—Preferred Stock		8,000,000		6,080,000		1,920,000
Preferred stock redemption		18,000,000		12,413,334		5,586,666

Summary of stock option activity

	Stock Options
	Number of Shares			Exercise Price Per Share	Weighted- Average Exercise Price Per Share
Outstanding at January 1, 2010		4,787,085		$0.17 – $1.09	$	0.41
Granted		2,565,000		0.13 – 0.36		0.31
Exercised		(3,333	)	0.17		0.17
Canceled/forfeited		(2,925,417	)	0.13 – 1.09		0.47
Outstanding at December 31, 2011		4,423,335		$0.13 – $0.62	$	0.31
Granted		2,105,000		0.11 – 0.21		0.11
Canceled/forfeited		(2,998,250	)	0.11 – 0.49		0.29
Outstanding at December 31, 2012		3,530,085		$0.11 – $0.62	$	0.24

Options outstanding

Range of Exercise Prices	Outstanding at December 31, 2012		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Exercisable at December 31, 2012		Weighted- Average Exercise Price
$0.01 – 0.19		1,485,000		6.0	$	0.12		370,278	$	0.16
0.20 – 0.29		886,335		4.2	$	0.25		626,613	$	0.25
0.30 – 0.39		772,500		4.3	$	0.35		576,528	$	0.35
0.40 – 0.49		376,250		2.1	$	0.46		376,250	$	0.46
0.60 – 0.69		10,000		1.0	$	0.62		10,000	$	0.62
		3,530,085		4.8	$	0.24		1,959,669	$	0.31

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Discontinued Operations (Details Textual) (USD $)	1 Months Ended	12 Months Ended
	Jan. 31, 2012	Dec. 31, 2012
Discontinued Operations (Textual) [Abstract]
Asset impairment	$ 656,329
Goodwill related to Ancept		620,002
Goodwill impairment		620,002
Impairment to intangible assets and capitalized software		$ 93,840

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

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

	Operating Leases
Year ended December 31:
2013	$	304,298
2014		333,445
2015		345,997
2016		345,997
Thereafter		1,226,555
Total minimum lease payments	$	2,556,292

Rent expense was $458,734 and $402,599 for the years ended December 31, 2011 and 2012, respectively.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Changes in the Company's allowance for doubtful accounts

	Year ended December 31,
	2011			2012
Beginning balance	$	67,436		$	22,292
Bad debt expense (recoveries)		(45,144	)		22,634
Uncollectible accounts written off		—			(5,908	)
Ending balance	$	22,292		$	39,018

Intangible assets

		December 31, 2011				December 31, 2012
	Average life (years)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Non-Compete agreements	3		24,000		22,387		—		—
Patents	10		145,897		38,548		145,995		61,302
		$	169,897	$	60,935	$	145,995	$	61,302

Future amortization expense

Year ending December 31, 2013	$	22,754
Year ending December 31, 2014		22,754
Year ending December 31, 2015		22,754
Year ending December 31, 2016		16,431
	$	84,693

Basic and diluted earnings per share

	Year Ended December 31,
	2011			2012
Loss from continuing operations	$	(1,393,163	)	$	(1,439,928	)
Preferred stock dividends		(282,444	)		—
Preferred stock redemption		5,586,666			—
Net income (loss) from continuing operations applicable to common stockholders	$	3,911,059		$	(1,439,928	)
Net loss from discontinued operations		(1,628,258	)		(81,594	)
Net income (loss) applicable to common stockholders—numerator for basic and diluted loss per share	$	2,282,801		$	(1,521,522	)
Weighted—average common shares and dilutive potential common shares outstanding—denominator for dilluted earning per share		50,080,639			62,125,538
Net income (loss) per common share (basic and diluted):
Continuing operations	$	0.08		$	(0.02	)
Discontinued operations	$	(0.03	)	$	(0.00	)
Net income (loss)	$	0.05		$	(0.02	)

Anti-dilutive securities excluded from diluted earnings per share

Anti-dilutive securities excluded from diluted earnings per share:

Stock options	5,146,485	4,330,285
Stock warrants	3,775,408	6,049,536
Convertible preferred stock—Series E	14,933,333	14,400,000

Changes in accrued warranty reserve

	Year ended December 31,
	2011			2012
Beginning balance	$	155,918		$	135,708
Charged to expense		21,955			51,977
Usage		(42,165	)		(72,119	)
Ending balance	$	135,708		$	115,566

Number of customers that accounted annual sales and receivable balances

	Customer Exceeding 10%					Customer Exceeding 10% of Year-End
	of Net Sales					Accounts Receivable Balance
	Number of		Combined			Number of		Combined
Year	Customers		Percent			Customers		Percent
2011		2		34	%		2		36	%
2012		2		33	%		3		51	%

Weighted-average estimated value of employee stock options granted

	Year Ended December 31,
	2011			2012
Expected volatility		127	%		119	%
Risk-free interest rate		2.16	%		1.22	%
Expected dividends		0.0	%		0.0	%
Expected term in years		4.44			4.08

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Discontinued Operations (Details) (USD $)	Jan. 15, 2012
Summary of total asset impairment
Impairment expense	$ (713,842)
Held for sale [Member]
Summary of total asset impairment
Assets (exclude goodwill)	911,397
Less: liabilities	(318,420)
Net assets before goodwill	592,977
Goodwill
Net assets	592,977
Value of proceeds received	650,490
Impairment expense	713,842
Goodwill [Member] | Held for sale [Member]
Summary of total asset impairment
Impairment expense	(620,002)
Customer List, net [Member] | Held for sale [Member]
Summary of total asset impairment
Impairment expense	(26,419)
Software [Member] | Held for sale [Member]
Summary of total asset impairment
Impairment expense	$ (67,421)

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Summary of Significant Accounting Policies (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Basic and diluted earnings per share
Loss from continuing operations	$ (1,359,928)	$ (1,393,163)
Preferred stock dividends		(282,444)
Preferred stock redemption		5,586,666
Net income (loss) from continuing operations applicable to common stockholders	(1,439,928)	3,911,059
Net loss from discontinued operations	(81,594)	(1,628,258)
Net income (loss) applicable to common stockholders
Numerator for basic and diluted loss per share	$ (1,521,522)	$ 2,282,801
Weighted - average common shares and dilutive potential common shares outstanding
Denominator for diluted earnings per share	62,125,538	50,080,639
Net income (loss) per common share (basic and diluted):
Continuing operations	$ (0.02)	$ 0.08
Discontinued operations	$ 0.00	$ (0.03)
Net income (loss)	$ (0.02)	$ 0.05

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Consolidated Statements of Operations (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements of Operations [Abstract]
Related party interest expense	$ 64,002	$ 116,441

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

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

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2012 and 2011, cash equivalents consisted primarily of money market accounts with brokers and certificates of deposit.

At December 31, 2012, the Company’s cash accounts exceeded federally insured limits by approximately $8,000.

Pursuant to legislation enacted in 2010, the FDIC fully insured all noninterest-bearing transaction accounts beginning December 31, 2010, through December 31, 2012, at all FDIC-insured institutions. This legislation expired on December 31, 2012. Beginning January 1, 2013, noninterest-bearing transaction accounts are subject to the $250,000 limit on FDIC insurance per covered institution.

Accounts Receivable

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

Changes in the Company’s allowance for doubtful accounts for the years ended December 31, 2011 and 2012 are as follows:

	Year ended December 31,
	2011			2012
Beginning balance	$	67,436		$	22,292
Bad debt expense (recoveries)		(45,144	)		22,634
Uncollectible accounts written off		—			(5,908	)
Ending balance	$	22,292		$	39,018

Inventories

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

Property and Equipment

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

Capitalized Software Development Costs

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

Intangible Assets and Amortization

Legal fees and similar capitalizable costs relating to patents, copyrights, and trademarks are capitalized as appropriate. Patent costs are generally amortized on a straight-line basis over 10 years. Non-compete agreements are amortized over their estimated useful lives of three years. See Note 3 for capitalized software held as assets for sale as of December 31, 2011, and Note 4 for $93,840 impairment of the discontinued operations’ customer lists and software recognized during 2011. No impairment of any intangible assets was recognized in 2012.

Intangible assets consist of the following:

		December 31, 2011				December 31, 2012
	Average life (years)	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Non-Compete agreements	3		24,000		22,387		—		—
Patents	10		145,897		38,548		145,995		61,302
		$	169,897	$	60,935	$	145,995	$	61,302

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

Year ending December 31, 2013	$	22,754
Year ending December 31, 2014		22,754
Year ending December 31, 2015		22,754
Year ending December 31, 2016		16,431
	$	84,693

The weighted average remaining amortization period for intangible assets at December 31, 2012 is 3.7 years.

Impairment of Long-Lived Assets

Assets that are held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment is recognized when the estimated undiscounted cash flow generated by those assets is less than the carrying amounts of such assets. The amount of impairment is the excess of the carrying amount over the fair value of such assets. Assets held for sale are carried at the lower of carrying amount or fair value less selling costs. See Note 4 for impairment charges.

Goodwill

Goodwill is evaluated annually for impairment. A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the fair value is less than the carrying amount, including goodwill. If, based on the evaluation, it is determined to be more likely than not that the fair value is less than the carrying value, then goodwill is tested further for impairment. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements.

Discontinued Operations / Assets Held for Sale

In accordance with FASB ASC 205-20, “Presentation of Financial Statements—Discontinued Operations”, assets held for sale are reported separately on the balance sheet by class of asset and/or liability, not as a single net amount, and these new line items are reclassified on the face financial statements (Balance Sheet) for the prior year(s). The net income or loss from the operations of the assets held for sale are reported separately on the Income Statement, located below Income from Continuing Operations and above any Extraordinary Items; and similar to the Balance Sheet presentation, the prior year(s) are also reclassified. Additionally, where any of these items affect the Statement of Cash Flow and/or Shareholders’ Equity, those items will be a new line item on the face of those financial statements and they will also be reclassified for prior year(s). The Company recognizes contingent earn-out receivable by using the cost recovery method, based on the present value of the estimated earn-out payments at the time of the sale. The Company applies the quarterly payments towards the carrying value of the earn-out receivable. An assessment of the expected future cash flows of the earn-out receivable is performed annually.

Revenue Recognition

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in financial Statement as revised by SAB 104, Revenue Recognition, FASB ASC 605, “Revenue Recognition” and FASB ASC 985, “Software”. Under these guidelines, the Company recognizes revenue on transactions where persuasive evidence of an arrangement exists, title has transferred, product payment is not contingent upon performance of installation or service obligations, the price is fixed or determinable and payment is reasonably assured. The Company accrues warranty costs and sales allowances for promotional activities at time of shipment based on historical experience.

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

Taxes Collected From Customers and Remitted To Government Authorities

Taxes collected from customers and remitted to governmental authorities are presented in the accompanying statements of operations on a net basis.

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenue in the accompanying statements of operations.

Net Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income or loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by using the weighted-average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued. Dilutive potential shares of common stock include convertible preferred stock, options and warrants which are exercisable based on the average market price during the year. For 2011 and 2012, the computation of diluted loss per share excludes the convertible preferred stock, options and warrants as they are anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share:

	Year Ended December 31,
	2011			2012
Loss from continuing operations	$	(1,393,163	)	$	(1,439,928	)
Preferred stock dividends		(282,444	)		—
Preferred stock redemption		5,586,666			—
Net income (loss) from continuing operations applicable to common stockholders	$	3,911,059		$	(1,439,928	)
Net loss from discontinued operations		(1,628,258	)		(81,594	)
Net income (loss) applicable to common stockholders—numerator for basic and diluted loss per share	$	2,282,801		$	(1,521,522	)
Weighted—average common shares and dilutive potential common shares outstanding—denominator for dilluted earning per share		50,080,639			62,125,538
Net income (loss) per common share (basic and diluted):
Continuing operations	$	0.08		$	(0.02	)
Discontinued operations	$	(0.03	)	$	(0.00	)
Net income (loss)	$	0.05		$	(0.02	)

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

Anti-dilutive securities excluded from diluted earnings per share:

Stock options	5,146,485	4,330,285
Stock warrants	3,775,408	6,049,536
Convertible preferred stock—Series E	14,933,333	14,400,000

Warranty Reserves

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

The following table below shows the roll forward of the warranty reserve for the years ended December 31, 2011 and 2012:

	Year ended December 31,
	2011			2012
Beginning balance	$	155,918		$	135,708
Charged to expense		21,955			51,977
Usage		(42,165	)		(72,119	)
Ending balance	$	135,708		$	115,566

Risk and Uncertainties

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

	Customer Exceeding 10%					Customer Exceeding 10% of Year-End
	of Net Sales					Accounts Receivable Balance
	Number of		Combined			Number of		Combined
Year	Customers		Percent			Customers		Percent
2011		2		34	%		2		36	%
2012		2		33	%		3		51	%

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

Use of Estimates

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

Income Taxes

The Company utilizes the liability method of accounting for income taxes wherein deferred tax assets and liabilities are determined based upon the differences between the financial statement and tax bases of assets and liabilities, as measured by enacted tax rates expected to be in effect when these differences reverse. Deferred tax assets are recognized when it becomes more likely than not that the assets will be realized. The Company files tax returns with the U.S. Federal and various state jurisdictions and is no longer subject to income tax examinations for years before 2007.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2011 and 2012 was $651,195 and $296,183, respectively.

Fair Value of Financial Instruments

The Company believes that the carrying amount of its financial instruments, which include cash and cash equivalents, receivable from sale of assets, and short-term debt, approximate fair value. The Company also has long-term debt with its primary shareholder, of which fair value is not practical to determine. Cash and cash equivalents fall within Level 1 of the valuation hierarchy. Receivable from sale of assets and short-term debt fall within Level 3 of the valuation hierarchy.

Stock-Based Compensation

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

The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) as its method of valuation. The fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the Black-Scholes model is affected by the Company’s stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards, the actual and projected employee stock option exercise behaviors and an estimated forfeiture rate. The weighted-average estimated value of employee stock options granted during the years ended December 31, 2011 and 2012 was estimated using the Black-Scholes model with the following weighted-average assumptions:

	Year Ended December 31,
	2011			2012
Expected volatility		127	%		119	%
Risk-free interest rate		2.16	%		1.22	%
Expected dividends		0.0	%		0.0	%
Expected term in years		4.44			4.08

Reclassifications

Certain reclassifications have been made to the 2012 financial statements to conform to the 2011 financial statement presentation. These reclassifications had no effect on net earnings.

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Long-term Debt (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Long-term Debt (Textual) [Abstract]
Interest rate paid on primary principal amount	Greater of 5.0% or the effective prime rate plus 0.75%
Long-term debt, interest rate minimum	5.00%
Interest rate paid on primary principal amount	0.75%
Effective percentage for primary principal debt	5.00%	5.00%
Effective percentage for secondary principal debt	0.21%	1.27%
Minimum monthly principal payments	$ 21,422

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Related Party Transactions (Details) (USD $)	12 Months Ended							12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Jan. 31, 2012	Dec. 27, 2011	May 04, 2011 Series B - Preferred Stock [Member]	May 04, 2011 Series C - Preferred Stock [Member]	May 04, 2011 Series E - Preferred Stock - [Member]	Dec. 31, 2012 David W. Brandenburg RIRA [Member]	Dec. 31, 2012 Diana L. Brandenburg RIRA [Member]	Dec. 31, 2012 John C. Hammock [Member]	Dec. 31, 2012 Laurie L. Latham [Member]	Dec. 31, 2012 Lance E. Ouellette [Member]	Dec. 31, 2012 Christina K. Hanger [Member]	Dec. 31, 2012 George C. Platt [Member]
Related Party Transactions (Additional Textual) [Abstract]
Preferred Stock directly held by Ardinger					400,000	200,000
Preferred Stock indirectly held by Ardinger							80,000
Number of shares of Common Stock and Warrants exercisable into the same number of shares of Common Stock								888,331	888,331	888,331	888,331	888,331	222,083	177,667
Related Party Transactions (Textual) [Abstract]
Legal expenses	$ 10,000
Net proceeds from the private placement		745,000
Purchase price of Common Stock	425,000		320,000
Warrants purchase	3,775,408	0		6,618,068
Purchase price per private placement unit		0.1125707
Weighted average closing price period		5 days
Warrants are exercisable into shares of Common Stock at an exercise price		0.1238
Warrants are exercisable into shares of Common Stock		110.00%
Warrants expired		Dec. 31, 2014
Purchase price per share of common stock					$ 3.625	$ 0.60
Conversion of Preferred Stock into common stock	$ 0.0001	$ 0.0001
Net proceeds from the exercise of common stock	$ 0	$ 566
Common stock shares issued	62,647,987	59,768,846	2,842,660
Warrants expired	Dec. 31, 2014

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Sale of Ancept Assets and Contingent Consideration (Tables)

12 Months Ended

Dec. 31, 2012

Sale of Ancept Assets and Contingent Consideration/Discontinued Operations[Abstract]

Summary of net assets held for sale

	December 31,
	2011
Assets:
Accounts receivable	$	67,086
Prepaid expenses		4,381
Property and equipment, net		17,415
Deposit		3,250
Capitalized software development cost, net		442,775
Total assets		534,907
Liabilities related to assets held for sale		250,837
Net assets held for sale	$	284,070

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Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Changes in the Company's allowance for doubtful accounts
Beginning balance	$ 22,292	$ 67,436
Bad debt expense (recoveries)	22,634	(45,144)
Uncollectible accounts written off	(5,908)
Ending balance	$ 39,018	$ 22,292

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2012

Employee Benefit Plan [Abstract]

Employee Benefit Plan

12. Employee Benefit Plan

Effective March 1, 1997, the Company adopted a profit sharing plan pursuant to Section 401(k) of the Internal Revenue Code whereby participants may elect to contribute up to sixty percent (60%) of their compensation subject to statutory limitations. The plan provides for discretionary matching and profit sharing contributions by the Company. All employees are eligible to participate in the plan provided they meet minimum age requirement of eighteen. The Company discontinued matching contributions under this plan in December 2011. The Company made $40,906 and $0 matching contributions to this plan for the years ended December 31, 2011 and December 31, 2012, respectively.