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New words:
cancelation, canceled, lack
Financial report summary
?Risks
- We have a history of losses and there are no assurances that such losses may not continue.
- Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.
- We depend on an acceptance of our products for ongoing revenue.
- Economic conditions could adversely affect our revenue growth and cause us not to achieve desired revenue.
- Our ability to compete may be subject to factors outside our control.
- The markets for our products are characterized by rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles.
- The reputation of our software may be damaged and we may face a loss of revenue if our software products fail to perform as intended or contain significant defects.
- Our business may be adversely impacted if we do not provide professional services to implement our solutions.
- Our business may be adversely impacted by cyber security breach.
- Because our software could interfere with the operations of customers, we may be subject to potential product liability and warranty claims by these customers.
- The so-called “penny stock rule” could make it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid which could cause the price of our stock to decline.
- We have not paid any dividends on our common stock and it is likely that no dividends will be paid in the future.
- Provisions of our charter and Bylaws could deter takeover attempts.
Management Discussion
- Revenue. The Company has three categories of revenue: software products, maintenance, and services. Software products revenue is comprised primarily of fees from licensing the Company's proprietary software products. Maintenance revenue is comprised of fees for maintaining, supporting, and providing periodic upgrades to the Company's software products. Services revenue is comprised of fees for consulting and training services related to the Company's software products.
- The Company's revenues vary from quarter to quarter, due to market conditions, the budgeting and purchasing cycles of customers and the effectiveness of the Company’s sales force. The Company typically does not have any material backlog of unfilled software orders and product revenue in any quarter is substantially dependent upon orders received in that quarter. Because the Company's operating expenses are relatively fixed over the short term, variations in the timing of the recognition of revenue can cause significant variations in operating results from quarter to quarter.
- On January 1, 2018, we adopted the new accounting standard Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers and all the related amendments (“the new revenue standard”) and applied it to all contracts using the modified retrospective method. According to the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration for which the Company expects to be entitled in exchange for those goods or services. We completed our review of contracts with our customers and did not need to record a cumulative effect adjustment to accumulated deficit upon adoption of the new revenue standard as of January 1, 2018. Based on the evaluation the Company performed on its customer contracts, the adoption has not and will not have a material impact on the Company’s financial position, results of operations, cash flow, accounting policies, business processes, internal controls or disclosures.