SecProbe.io

CORRESP
1
filename1.htm

corresp

ViewCast Letterhead

October 5, 2005

Mr. Larry Spirgel

Assistant Director

U.S. Securities and Exchange Commission

Mail Stop 3561

CF/AD11

100 F Street, NE

Washington, DC 20549-3561

    RE:

    ViewCast.com, Inc.

Form 10-KSB/A for Fiscal Year Ended December 31, 2004

Filed May 2, 2005 — File No. 0-29020

Dear Mr. Spirgel,

This letter is submitted with respect to the letter dated September 15, 2005 from the staff of the
Securities and Exchange Commission transmitting their comments to the above referenced filing and
requesting supplemental information.

Form 10-KSB/A

Financial Statements, page F-1

Intangible Assets and Amortization, page 29

    1.

    Please reconcile for us the carrying value of DCi of $2,420,000 at December 31, 2004,
reported in you response to comment 1, and the total amount of DCi assets of $5,113,777
reported in Note 13.

Response to Comment #1.

     The following schedule summarizes the carrying values of DCi’s assets as of December 31, 2004.

    IT Services,

    Assets as of December 31, 2004

    Products

    Intangible Assets

    Goodwill

    $
    1,041,430

    Customer Contracts, net

    241,389

    Property & Equipment

    1,074,905

    Deposits

    65,619

    Total in response to comment 1 in prior letter

    2,423,343

    Cash

    125,054

    Accounts Receivable, net

    2,475,216

    Inventory

    62,889

    Prepaid Expenses

    27,275

    Total in Note 13

    $
    5,113,777

    2.

    Please explain to us the nature and facts and circumstances of the October 2004 written
purchase offer. Tell us the extent of negotiations, whether the offer was preliminary and,
how the purchaser determined the amount of the $5 million offer if known by management.
Also, please explain to us specifically what they offered to purchase. If this offer
contemplated the acquirer assuming liabilities, please explain the nature of these
liabilities in quantified detail. If the offer did not contemplate the assumption of
liabilities, please explain how management considered this fact when performing step 1 of
its goodwill impairment test.

Response to Comment #2.

     As mentioned in our previous response, the Company has received various offers and inquires
from parties who had interest in purchasing the operations and business of DCi. In October 2004,
we had entered into a standstill and confidentiality agreement with one particular party that
included a summary of principal terms. Based on this non-binding agreement, the potential buyer
was allowed to proceed with their due diligence with the intention of completing an asset purchase
transaction based on the principal terms.

     The due diligence process was ongoing through the end of 2004 and into early 2005. The
principal terms included cash payments of $3.95 million plus assumption of certain liabilities in
return for the purchase of certain assets and operations. If the potential transaction closed as
of December 31, 2004, the liabilities that management understood would have been assumed by the
buyer totaled in excess of $2 million and consisted of trade payables, accrued liabilities,
deferred revenues, short-term and long-term debt (virtually all the DCi liabilities excluding an
inter-company payable). Therefore, the $3.95 million in cash plus the $2 million in assumed
liabilities equaled $5.95 million, which exceeds the $5,113,777 in total DCi assets reported in
Note 13 and exceeds the carrying value of DCi of $2.9 million (liabilities of DCi were $2.2 million
at December 31, 2004). Our management is not privy to the potential buyer’s method of determining
the price of their offer.

     As a Company, we seriously considered the merits of this offer. Later in 2005, after delays
and concerns regarding the potential buyer’s wherewithal to complete the transaction, our Board of
Directors decided to disengage from this potential buyer. Nevertheless, the Company believes this
unsolicited offer is the appropriate measure for the minimum fair value of the asset as of the time
of our testing related to the December 31, 2004 financial statements.

     In response to your additional request, the Company acknowledges to the SEC that:

    •

    the Company is responsible for the adequacy and accuracy of the disclosure in its
required filings under the Securities Exchange Act of 1934;

    •

    staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filings; and

    •

    the Company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

Sincerely,

/s/ Laurie L. Latham

Laurie L. Latham, CFO

    cc:

    Robert S. Littlepage, Accountant Branch Chief

Joseph M. Kempf, Senior Staff Accountant