8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
March 14, 2007

	VIEWPOINT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware	0-27168	95-4102687
(state or other juris-	(Commission	(I.R.S. Employer
diction of incorporation)	File Number)	(Identification No.)
498 Seventh Avenue, Suite 1810, New York, NY		10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 201-0800

______________________________N/A______________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (se General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02   Results of Operations and Financial Condition

On March 14, 2007, the Registrant issued a press release regarding its results of operations for its fiscal fourth quarter and full year ended December 31, 2006. A copy of the press release issued by the Registrant is furnished herewith as Exhibit 99.1.

Item 9.01   Exhibits.

(c)	Exhibits
99.1	Press release issued by Viewpoint Corporation on March 14, 2007.

The information furnished herein and in the accompanying exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any other filing with the Securities and Exchange Commission except as is expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   

VIEWPOINT CORPORATION

__/s/ Christopher C. Duignan
Christopher C. Duignan
Interim Chief Financial Officer

Dated: March 14, 2007

EX-99.1

Exhibit 99.1

Contact: Investor Relations:
212-201-0800
ir@viewpoint.com

Viewpoint Corporation Announces Fourth Quarter and Full Year 2006 Financial Results

New York, NY – March 14, 2007 – Viewpoint Corporation (NASDAQ: VWPT), a leading internet marketing technology company, today announced financial results for the fourth quarter and full year ended December 31, 2006.

Viewpoint reported total revenue of $4.3 million for the fourth quarter 2006, a 33 percent increase as compared to $3.2 million in the third quarter 2006 and a 41 percent decrease as compared to $7.2 million in the fourth quarter 2005. Gross profit was $3.1 million for the fourth quarter of 2006, an increase of 35 percent compared to $2.3 million in the third quarter of 2006, and a decrease of 31 percent as compared to $4.5 million for the fourth quarter of 2005.

Patrick Vogt, President and Chief Executive Officer, commented, “We are pleased with our results for the fourth quarter given the softness in the automotive sector which negatively impacted our financial performance in the second half of 2006. During the year, we built an Internet marketing technology platform with a mission to help marketers improve their costs, increase their response and conversion rates by leveraging our technology to rich media-enable everything in the market. In 2007, we are continuing our focus on achieving sustainable long term profitable growth. This growth includes both organic expansion as well as augmentation through key acquisitions which will round out our customer offerings and allow us to efficiently scale our business. With the acquisition of Makos, which we announced this week, we are executing on this, shifting from a production-centric model to a more balanced full-service approach, encompassing more creative work. We are excited about our future and confident that we are well positioned to compete effectively in the search and rich media market place.”

Operating loss for the fourth quarter of 2006 was $1.1 million, compared to operating loss of $13.2 million in the third quarter of 2006 and operating loss of $7.9 million for the fourth quarter of 2005. The $13.2 million loss in the third quarter of 2006 included a non-recurring $10.7 million non-cash goodwill impairment charge. Net loss for the fourth quarter of 2006 was $0.6 million or $(0.01) per share compared to a net loss of $12.3 million, or $(0.18) per share in the third quarter 2006 and a net loss of $8.0 million or $(0.13) per share, in the fourth quarter 2005.

For the year ended December 31, 2006, the Company reported revenue of $17.2 million, compared to $25.3 million for 2005. Gross margin of $10.5 million for 2006 decreased 41 percent from $17.7 million in 2005. Viewpoint’s adjusted operating loss for 2006 was $5.5 million compared to an adjusted operating income of $0.3 million in 2005.

The Company recorded a net loss for the twelve months ended December 31, 2006 of $19.7 million, or $(0.30) per share. This compares to a net loss for the twelve months ended December 31, 2005 of $10.6 million, or $(0.18) per share.

Viewpoint’s cash, cash equivalents, and marketable securities as of December 31, 2006 were $4.3 million. This can be compared to cash, cash equivalents, and marketable securities of $9.1 million as of December 31, 2005 and $6.3 million as of September 30, 2006.

In reporting its results for the year, Viewpoint also noted that PricewaterhouseCoopers LLP, its independent registered public accounting firm, will include a going concern explanatory paragraph in its audit report for 2006, due to the significant recurring losses and cash outflows from operations that raise substantial doubt about the Company’s ability to continue as a going concern. Management will continue to implement its plan to increase revenue, increase gross margin, reduce expenses, potentially sell assets, and may raise additional capital in order to increase its cash balance; however there are no assurances that the Company will be successful in achieving its goals.

FINANCIAL INFORMATION

Management prepares and is responsible for the Company’s consolidated financial statements which are prepared in accordance with accounting principles generally accepted in the United States. The financial information contained in this press release, which is unaudited, is subject to revision and should not be considered final until the Company files its Annual Report on Form 10-K. At the present time, the Company has no reason to believe that there will be changes to the financial information contained herein.

FINANCIAL MEASURES

In addition to the results presented above in accordance with generally accepted accounting principles, or GAAP, the Company presents financial measures that are non-GAAP measures, specifically adjusted operating income. The Company believes that this non-GAAP measure, viewed in addition to and not in lieu of the Company's reported GAAP results, provides useful information to investors regarding its performance and overall results of operations. These metrics are an integral part of the Company's internal reporting to measure the performance of the Company and the overall effectiveness of senior management. Reconciliations to comparable GAAP measures are available in the accompanying schedules and on the Company's website. The financial measures presented are consistent with the Company's historical financial reporting practices. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies, and are not identical to corresponding measures used in our various agreements or public filings.

CONFERENCE CALL

The Company will host a conference call on March 14, 2007 at 9 A.M. (Eastern Time) to discuss fourth quarter and full year 2006 financial results.

The conference call will be available via the Internet in the Investor Relations section of Viewpoint’s Web site at http://www.viewpoint.com, as well as through Thomson/CCBN at www.earnings.com. If you are not able to access the live Web cast, dial in information is as follows:

Toll-Free Telephone Number:		(800)	603-7883
International Telephone Number:		(706)	643-1946
Pass code:	1382321

Participants should call at least 10 minutes prior to the start of the call.

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A complete replay of the conference call will be available approximately one hour after the completion of the call by dialing (800) 642-1687 through Wednesday, March 21, 2007. Callers should enter the pass code above to access the recording.

ABOUT VIEWPOINT

Viewpoint is a leading Internet marketing technology company, offering Internet marketing and online advertising solutions through the powerful combination of its proprietary visualization technology and a full range of campaign management services including TheStudio, Viewpoint's creative services group, Unicast, Viewpoint's online advertising group, and KeySearch, Viewpoint's search engine marketing consulting practice. Viewpoint's technology and services are behind the online presence of some of the world's most esteemed brands, including AOL, GE, Sony, Toyota and Yahoo. More information on Viewpoint can be found at www.viewpoint.com.

The company has approximately 90 employees principally at its headquarters in New York City and in Los Angeles.

FORWARD LOOKING STATEMENTS

This press release contains "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and similar expressions that reflect Viewpoint's current expectations about its future performance. These statements and expressions are subject to risks, uncertainties and other factors that could cause Viewpoint's actual performance to differ materially from those expressed in, or implied by, these statements and expressions. Such risks, uncertainties and factors include short-term liquidity shortfalls and others as described in Viewpoint's filings and reports on file with the Securities and Exchange Commission.

Copyright © 2007 Viewpoint Corporation. All Rights Reserved. Viewpoint, Unicast, TheStudio by Viewpoint and KeySearch are trademarks or registered trademarks of Viewpoint Corporation.

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VIEWPOINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

			Three Months Ended
		December 31,						September 30,
		2006			2005			2006
Revenue:
Advertising Systems	$	1,683		$	2,987		$	961
Search		1,485			2,353			1,460
Services		1,040			718			786
Related party services		-			154			-
Licenses		66			102			4
Related party licenses		-			872			-
Total revenue		4,274			7,186			3,211
Cost of revenue:
Advertising Systems		538			1,814			399
Search		41			39			39
Services		571			783			455
Licenses		-			1			0
Total cost of revenue		1,150			2,637			893
Gross profit		3,124			4,549			2,318
Operating expenses:
Sales and marketing		1,310			1,287			1,350
Research and development		721			1,000			915
General and administrative		1,543			2,050			1,855
Non-cash stock-based compensation charges		397			39			418
Depreciation		129			149			113
Amortization of intangible assets		127			121			222
Impairment of goodwill		-			7,778			10,655
Total operating expenses		4,227			12,424			15,528
Loss from operations		(1,103	)		(7,875	)		(13,210	)
Other income (expense):
Interest and other income, net		68			45			95
Interest expense		(217	)		(235	)		(213	)
Changes in fair values of warrants to purchase common stock
and conversion feature of convertible notes		666			167			1,021
Total other income (expense)		517			(23	)		903
Loss before provision for income taxes		(586	)		(7,898	)		(12,307	)
Provision for income taxes		22			52			30
Net loss	$	(608	)	$	(7,950	)	$	(12,337	)
Basic and diluted net loss per common share:	$	(0.01	)	$	(0.13	)	$	(0.18	)
Weighted average number of shares outstanding-basic and diluted		67,670			59,693			67,361

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VIEWPOINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

		Year Ended
		December 31,
		2006			2005
Revenue:
Advertising Systems	$	7,252		$	5,448
Search		6,307			9,424
Services		3,470			5,269
Related party services		-			1,057
Licenses		148			608
Related party licenses		-			3,490
Total revenue		17,177			25,296
Cost of revenue:
Advertising Systems		4,176			3,721
Search		154			173
Services		2,337			3,658
Licenses		8			12
Total cost of revenue		6,675			7,564
Gross profit		10,502			17,732
Operating expenses:
Sales and marketing		5,396			5,115
Research and development		3,598			4,465
General and administrative		7,411			8,287
Non-cash stock-based compensation charges		1,872			1,781
Depreciation		466			645
Amortization of intangible assets		570			491
Restructuring charges		92			-
Impairment of goodwill		10,655			7,778
Total operating expenses		30,060			28,562
Loss from operations		(19,558	)		(10,830	)
Other income (expense):
Interest and other income, net		332			131
Interest expense		(926	)		(1,178	)
Changes in fair values of warrants to purchase common stock
and conversion feature of convertible notes		515			1,204
Total other income (expense)		(79	)		157
Loss before provision for income taxes		(19,637	)		(10,673	)
Provision for income taxes		78			64
Net loss from continuing operations		(19,715	)		(10,737	)
Adjustment to net loss on disposal of discontinued operations		-			145
Net loss	$	(19,715	)	$	(10,592	)
Basic and diluted net loss per common share	$	(0.30	)	$	(0.18	)
Weighted average number of shares outstanding-basic and diluted		66,610			58,631

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VIEWPOINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

		December 31, 2006			December 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	4,154		$	6,437
Marketable securities		113			2,674
Accounts receivable, net		3,037			4,342
Prepaid expenses and other current assets		543			510
Total current assets		7,847			13,963
Restricted cash		190			182
Property and equipment, net		1,023			1,218
Goodwill		14,882			25,537
Intangible assets, net		3,689			4,131
Other assets		56			105
Total assets	$	27,687		$	45,136
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,660		$	2,834
Accrued expenses		401			635
Deferred revenue		70			207
Current portion of notes payable		389			814
Accrued incentive compensation		545			545
Current liabilities related to discontinued operations		231			231
Total current liabilities		3,296			5,266
Accrued expenses - Deferred Rent		232			334
Warrants to purchase common stock		467			982
Subordinate notes		2,456			2,090
Unicast notes		1,541			1,582
Stockholders' equity
Preferred stock		-			-
Common stock		68			65
Paid-in capital		306,215			301,766
Treasury stock		(1,015	)		(1,015	)
Accumulated other comprehensive loss		13			(63	)
Accumulated deficit		(285,586	)		(265,871	)
Total stockholders' equity		19,695			34,882
Total liabilities and stockholders' equity	$	27,687		$	45,136

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VIEWPOINT CORPORATION
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED OPERATING INCOME (LOSS)
(in thousands, except per share amounts)
(Unaudited)

		Three Months Ended
		December 31,					September 30,
		2006			2005			2006
Income (Loss) from Operations	$	(1,103	)	$	(7,875	)	$	(13,210	)
Plus:
Non-cash stock based Compensation:
Cost of Revenues		31			-			35
Operating Expenses		397			39			418
Total Non-Cash stock based compensation included in operating expense		428			39			453
Depreciation		145			204			137
Amortization		155			162			250
Restructuring charges		-			-			-
Impairment of Goodwill		-			7,778			10,655
Adjusted Operating Income (Loss)	$	(375	)	$	308		$	(1,715	)

		Twelve Months Ended
		December 31,
		2006			2005
Income (Loss) from Operations	$	(19,558	)	$	(10,830	)
Plus:
Non-cash stock based Compensation:
Cost of revenues		172			-
Operating Expenses		1872			1781
Total Non-Cash stock based compensation included in operating expense		2044			1781
Depreciation		560			870
Amortization		682			678
Restructuring charges		92			-
Impairment of Goodwill		10,655			7,778
Adjusted Operating Income (Loss)	$	(5,525	)	$	277

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