ViewCast Announces Conversion and Restructuring of Preferred Shares

PLANO, Texas, May 5, 2011 /PRNewswire/ -- ViewCast Corporation (OTCBB: VCST), a developer of industry-leading solutions for the transformation, management and delivery of digital media over enterprise, broadband, and mobile networks, today reported that it had signed a Preferred Stock Exchange Agreement with the holders of Series B, C and E Preferred Stock of ViewCast that will result in the conversion of the majority of the Preferred Stock and eliminate accumulated and future dividends.  

The agreement calls for the holders of B and C series of preferred stock to immediately convert their holdings into approximately 16.7 million shares of ViewCast Common Stock, representing an exchange value of $0.60 per share.  

The E series (non-dividend bearing) holder will have the right for the next twelve months to convert its preferred shares for 16 million shares of common stock, an exchange value of $0.50 per share.  The E series holder will be compelled to exchange its shares for Common Stock at an exchange value of $0.50 per share if at any time in the next 12 months the Company successfully raises net proceeds of $7 million in one or a series of common stock offerings.  

ViewCast President and Chief Executive Officer Dave Stoner said, "It would be difficult to overstate the importance of this agreement and the significance of this milestone for ViewCast, its stockholders and all of its constituents.  The two classes of preferred stock that were converted at a substantial premium to ViewCast's share price were a necessary tool when they were issued many years ago as the Company was in its early stages.  We are grateful to the Ardinger family and the other participants in those rounds, and we believe that their commitment to the Company during that period ensured the continuation and growth of the organization."

ViewCast's Chief Financial Officer Laurie Latham added, "In today's environment, the structure of the preferred securities has become an impediment to the Company and its common shareholders.  The conversion of these shares will eliminate an overhang that inhibits new investment, share liquidity, financial results and the ability of the Company to list its securities on a national exchange."

With the conversion of the B and C series of preferred stock, the cumulative dividends are cancelled and ViewCast's earnings per share will no longer be impacted by the related stated dividends.  If 12 months pass and the holder of the E Class preferred stock has not either chosen or been compelled to exchange its holdings for common stock, conversion feature for the Series E will lapse.

For more information on the transaction and to access a copy of the agreement, please see the Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission.  

About ViewCast Corporation

ViewCast develops industry-leading hardware and software for the transformation, management and delivery of professional quality video over broadband, enterprise and mobile networks. ViewCast's award-winning solutions simplify the complex workflows required for the Web-based streaming of news, sports, music, and other video content to computers and mobile devices, empowering broadcasters, businesses, and governments to easily and effectively reach and expand their audiences. With more than 400,000 video capture cards deployed globally, ViewCast sets the standard in the streaming media industry. ViewCast Niagara® streaming appliances, Osprey® video capture cards and VMp™ video and digital asset management software provide the highly reliable technology required to deliver the multi-platform experiences driving today's digital media market.

ViewCast (www.viewcast.com) is headquartered in Plano, Texas, USA, with sales and distribution channels located globally.

ViewCast, VMp, Osprey, Niagara and Niagara SCX are trademarks or registered trademarks of ViewCast Corporation or its subsidiaries.

Safe Harbor Statement

Certain statements in this release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and reflect the Company's current outlook. Such statements apply to future events and are therefore subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, changes in market and business conditions, demand for the Company's products and services, technological change, the ability of the Company to develop and market new products, increased competition, the ability of the Company to obtain and enforce its patent and avoid infringing other parties' patents, and changes in government regulations.  All written and verbal forward-looking statements attributable to ViewCast and any person acting on its behalf are expressly qualified in their entirety by the cautionary statements set forth herein. ViewCast does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statements are made. For a detailed discussion of these and other cautionary statements and factors that could cause actual results to differ from the Company's forward-looking statements, please refer to the Company's reports on Form 10-K and 10-Q on file with the U.S. Securities and Exchange Commission.

SOURCE ViewCast Corporation