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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sonic Foundry Inc (CE) | USOTC:SOFO | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0003 | 0.00 | 01:00:00 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MARYLAND
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39-1783372
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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222 W. Washington Ave, Madison, WI 53703
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(608) 443-1600
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(Address of principal executive offices)
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(Issuer’s telephone number)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Emerging growth company
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¨
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PAGE NO.
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Improve learners’ academic and professional success
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Keep geographically-dispersed audiences and mobile teams connected
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Boost productivity and overall organizational knowledge
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Reduce logistical and financial impacts of day-to-day communications
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Stream live and on-demand video to any device
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Create an enterprise or campus YouTube
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Automatically publish video to their learning management system (LMS), content management system (CMS), training portal or any website
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Deepen engagement and improve learning with quizzing, annotations, comments, polls, surveys and other interactive tools
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Search everything with fully indexed audio, video and slide content
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Analyze who is watching what videos when to measure learner engagement and outcomes
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Centrally manage and secure any video
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•
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My Mediasite: My Mediasite makes it a snap for instructors, employees and students to create great looking videos, screencasts and slideshows from their computers or mobile devices. From demos and video training to flipped classes, lectures and assignments, everything to record, upload, manage and publish personal videos is in one simple-to-use tool, requiring no pro video skills.
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Mediasite RL Recorders: The RL Series of built-in room appliances uses schedule-based capture and advanced audio/video integration to fully automate video and content recording in lecture halls, training rooms, simulation labs and auditoriums. Instructors and speakers teach and present as they are most comfortable, free from technology worries and confident that everything they say and show is captured.
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Mediasite RL Mini: The Mini provides the automation and high-quality capture Mediasite is known for in a compact, affordable device, ensuring even more students never miss a lecture. With the Mini, there’s no need for AV in the room. Instructors simply plug in their laptop and camera and start teaching. The plug-and-play device makes it easy to build or expand an automated lecture capture programs in community colleges, vocational-tech schools, small departments and even K12 classrooms.
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Mediasite Catch: Mediasite Catch provides a scalable, economical solution to extend video capture to any classrooms on campus, even if they’re not equipped with extensive audio/video capabilities. Combining the reliability of Mediasite’s recorder-based scheduling automation with the affordability and simplicity of podium-based software, Mediasite Catch provides faculty a worry-free classroom recording experience.
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Mediasite ML Recorders: Anyone can be a video producer with the ML Series of portable recording solutions to capture and stream broadcast-quality video. Designed for on-the-go webcasting, hybrid events, guest speakers and conferences, Mediasite ML’s lightweight design moves easily from location to location and can be set up and ready to record in only a few minutes.
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Mediasite Join: Real-time video is how today’s best teams, businesses and schools collaborate, exchange ideas and get things done. But too often great ideas, subject matter expertise and important details are forgotten or left behind when a video call ends. Mediasite Join automatically records video and web conferences, transforming them into valuable, searchable video on demand.
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Expand their audience reach by streaming to those that cannot attend in person
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Maximize event ROI by generating additional revenue streams from video recordings
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Differentiate themselves from competing events
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Bolster training and communication effectiveness with interactive video and audience engagement tools
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Build stronger teams and deepen morale
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Save travel time and money
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Improve retention and learning outcomes
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Advanced Integration Services: The value of Mediasite grows when customers’ video assets and streaming workflows seamlessly integrate with the systems that drive their online learning, training or communication strategies. Mediasite Advanced Integration Services provides the resources and expertise to incorporate Mediasite video creation, management and delivery processes into existing or planned application platforms, infrastructures and workflows. Leveraging Mediasite’s open architecture and application programming interfaces (APIs), Sonic Foundry developers collaborate with customers to scope, design and implement a Mediasite solution tailored to their unique requirements.
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Installation Services: Sonic Foundry provides on-site consulting and installation services to help customers optimize deployments and efficiently integrate Mediasite within existing AV and IT infrastructures, processes and workflows.
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Training Services: Expert Sonic Foundry trainers provide the necessary knowledge transfer so organizations feel confident in using, managing and leveraging Mediasite’s capabilities. On-site training is customized to specific requirements and skill levels, while online training provides convenient anytime access to a web-based catalog of training modules.
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Mediasite Monitoring Service: Customers get near real time monitoring of all Mediasite assets, proactive incident notification and Sonic Foundry support response for critical issues, exceptions and anticipated issues that may impact day-to-day Mediasite operations.
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Software upgrades and updates for Mediasite Video Platform and Mediasite Capture Solutions
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Unlimited technical support assistance
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Mediasite Recorder hardware warranty extension
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Advanced Mediasite Recorder replacement
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Authorized access to the Mediasite Customer Care Portal for 24/7 case management, software downloads, documentation, the Mediasite Knowledge Base and other technical resources
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Authorized access to the Mediasite Community for online training videos, customer-exclusive webcasts, peer-to-peer best practice sharing and more
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Priority technical support with queue bypass and support case escalation
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Proactive Mediasite version administration and management
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Mediasite roadmap discussions with Sonic Foundry’s executive team
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Exclusive training and an annual call with a Mediasite consultant
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Complete platform addressing the entire video lifecycle - From content creation and delivery to retention and management. Mediasite’s portfolio of video solutions provides customers maximum flexibility and scalability to develop a comprehensive enterprise video strategy.
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Interactive, consistent playback experiences across devices - Mediasite involves the viewer in their online video experience with polls, quizzing, chat, bookmarks, sharing, ask-a-question, resource links and more. Plus, Mediasite’s consistent playback experience across all devices significantly reduces learning curves and accelerates adoption and content mastery.
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Auto-indexing and powerful video search - As a video search pioneer for over a decade, we have substantial experience in search precision. Mediasite search automatically makes all videos as searchable as text, so keywords can be found anywhere - in audio, slides, handwriting, video or tags.
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Deep viewership analytics - Mediasite’s powerful video analytics and built-in reports show exactly who is watching what and when. It’s the deep insight users need to understand viewing behaviors and engagement, to measure video’s impact and value and make informed decisions.
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Unmatched support network - Sonic Foundry and the growing Mediasite Community provide a reliable, collaborative support network for all Mediasite customers. Our worldwide network of field-based system engineers and responsive customer care ensure that customers have resources committed to their success. Plus, with nearly 2,000 active customers, the Mediasite Community is one of the most vibrant and growing user communities for video, webcasting, lecture capture and e-learning. Members share ideas and get feedback year-round from community experts through a private online portal, customer-exclusive webcasts and unrivaled networking and learning opportunities at the global Mediasite user conference and other regional customer events.
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Lecture capture
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Flipped classroom instruction: students view lectures from home and use classroom time for discussion
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Blended, hybrid and distance learning
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Continuing education
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Campus YouTube
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Special events: commencement, guest speakers, sporting events, etc.
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Faculty training and development
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Student video projects
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Recruitment and admissions
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University business: leadership meetings, alumni relations, outreach
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Improves student learning outcomes
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Keeps their institution competitive by supporting higher enrollment and/or tuition without new classrooms
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Empowers faculty with technology supporting new teaching pedagogies both in the classroom and online
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Boosts campus outreach, recruitment efforts and awareness of campus events
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Helps campuses manage, secure and search all campus video
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Executive communications: town hall meetings, all-hands meetings
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Unified communications and meetings
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Workforce development: onboarding and training, HR communications, policy documentation
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Secure corporate YouTube
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Sales, marketing and customer support
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Investor relations: earnings calls, analyst briefings, annual reports
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Conferences and events: user group, sales and annual meetings
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Continuing medical education, medical conferences and seminars
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Grand rounds, simulations and procedural training
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Pharmaceutical and new product education
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Caregiver and patient education
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Emergency response coordination and public health announcements
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Research and collaboration
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Training and compliance
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Inter- and intra-agency communications
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Legislative proceedings
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Constituent outreach, committee meetings, public safety announcements
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Relief work, military coordination, emergency preparedness
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Expands training and communications opportunities
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Cuts travel and meeting expenses
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Boosts efficiency by allowing participants to watch when it’s convenient to avoid interruptions and increase retention
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Helps build stronger teams through direct management and employee communications
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Advancing enterprise video content management to accommodate organizations’ existing digital video assets, content generated from third-party video sources and the corresponding metadata associated with those video assets.
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Introducing new applications to easily publish, search and retrieve videos from a video library as well as expanding and automating Mediasite’s powerful multi-modal search capabilities.
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Offering the industry’s widest variety of content capture solutions capable of scaling economically across entire organizations and allowing anyone, on any device, to capture and share their knowledge or expertise.
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Delivering content capture solutions that test the limits of recording, synchronizing and playing back multiple high definition video sources.
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Supporting consistent, interactive content playback experiences across all viewing devices.
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Deepening integration with core enterprise platforms including collaborative platforms like video and web conferencing, learning and course management systems (LMS/CMS), content management systems and student information systems (SIS).
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Introducing market-driven innovations to our Mediasite Video Cloud offering.
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Customer success stories regularly shared through our best practices webinar series, speaking placements at industry events, email marketing, industry guest columns and blog
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Thought leadership content created and curated from customer successes, Sonic Foundry subject matter experts (SMEs) and industry experts in the form of ebooks, whitepapers, videos, best practice toolkits and more
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The Mediasite Community, a vibrant online community of 2000+ users and its companion community events including the global Mediasite User Conference, Unleash; Mediasite Summits in Europe and Australia/New Zealand; and year-round regional chapter meetings
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Appliance- or room-based lecture capture provides a fully integrated system with complete recording automation for live or on-demand content. The automated, pre-scheduled workflow results in the greatest faculty and staff adoption and largest volumes of recorded content in the shortest amount of time.
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Software-based lecture capture that resides on a podium or computer in the classroom also captures and publishes rich media content, but relies on campus- or user-supplied hardware.
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Desktop capture tools reside on individual users’ laptops or computers allowing them to record user-generated content.
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Appliance- or room-based lecture capture provides a fully integrated system with complete recording automation for live or on-demand content. The automated, pre-scheduled workflow results in the greatest faculty and staff adoption and largest volumes of recorded content in the shortest amount of time.
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Software-based lecture capture that resides on a podium or computer in the classroom also captures and publishes rich media content, but relies on campus- or user-supplied hardware.
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Desktop capture tools reside on individual users’ laptops or computers allowing them to record user-generated content.
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Difficulties in establishing and managing international subsidiaries, distribution channels and operations;
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Difficulties in selling, servicing and supporting overseas products, translating products into foreign languages and compliance with local hardware requirements;
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Difficulties in managing the demands of large international deployments, many of which distract key sales personnel from opportunities in other parts of the world;
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Challenges associated with management transition;
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Challenges related to language or cultural differences;
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The uncertainty of laws and enforcement in certain countries, such as China, relating to the protection of intellectual property or requirements for product certification, protection of personal data or other restrictions;
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Competitive pressure impacting other parts of the world;
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Multiple and possibly overlapping tax structures;
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Currency and exchange rate fluctuations and imposition of tariffs or quotas;
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Difficulties in collecting accounts receivable in foreign countries, including complexities in documenting letters of credit;
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Economic or political changes in international markets;
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Restrictions on access to the Internet; and
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Difficulty in complying with international employment related requirements
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Damage our reputation;
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Cause our customers to initiate product liability suits against us;
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Increase our product development resources;
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Cause customers to cancel orders, ask for partial refunds or potential customers to purchase competitive products or services;
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Delay release or market acceptance of our products, or otherwise adversely impact our relationships with our customers; and/or
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Cause us to allocate valuable engineering resources to fix our existing products, which may cause us to allocate fewer resources toward developing new products, or toward adding features to our existing products.
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Variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue and other financial metrics and non-financial metrics, and how those results compare to investor expectations;
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Our announcement of actual results for a fiscal period that are higher or lower than expected results;
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Changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;
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Announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;
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Announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;
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Announcements of customer additions and customer cancellations or delays in customer purchases;
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Recruitment or departure of key personnel;
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Disruptions in our service due to computer hardware, software, network or data center problems;
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The economy as a whole, market conditions in our industry and the industries of our customers;
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The issuance of shares of common stock and preferred stock by us, whether in connection with an acquisition or a capital raising transaction;
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Low trading volumes of our shares and inconsistent trading activity;
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Issuance of debt, changes to, defaults or non-renewal of debt facilities and other convertible securities;
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Failure to meet OTC market requirements; and
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Any other factors discussed herein.
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Any patents acquired by or issued to us may not be broad enough to protect us.
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Any issued patent could be successfully challenged by one or more third parties, which could result in our loss of the right to prevent others from exploiting the inventions claimed in those patents.
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Current and future competitors may independently develop similar technology, duplicate our services or design around any of our patents.
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Effective patent protection, including effective legal-enforcement mechanisms against those who violate our patent-related assets, may not be available in every country in which we do or plan to do business.
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We may not have the resources to enforce our patents or may determine the potential benefits are not worth the cost and risk of ultimately being unsuccessful.
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Third parties may infringe or misappropriate our copyrights, trademarks and similar proprietary rights.
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Laws and contractual restrictions may not be sufficient to prevent misappropriation of our technology or to deter others from developing similar technologies, particularly in foreign countries where the laws may not protect our proprietary rights as fully or as readily as Unites States laws. Our recent growth in activities in China will likely increase this risk.
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There have been attacks on certain patent systems, increasing the likelihood of changes to established laws, including in the United States. We cannot predict the long-term effects of any potential changes, which could be detrimental to our licensing program.
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Effective trademark, copyright and trade secret protection, including effective legal-enforcement mechanisms against those who violate our trademark, copyright or trade secret assets, may be cost prohibitive or unavailable or limited in foreign countries.
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Contractual agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information.
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Other companies may claim common law trademark rights based upon state or foreign laws that precede the federal registration of our marks.
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Policing unauthorized use of our services and trademarks is difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use.
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The potential failure to achieve the expected benefits of the combination or acquisition;
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Difficulties in and the cost of integrating operations, technologies, services and personnel;
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Diversion of financial and managerial resources from existing operations;
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Risk of entering new markets in which we have little or no experience or where competitors may have stronger market positions;
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Potential write-offs of acquired assets or investments, and potential financial and credit risks associated with acquired customers;
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Potential loss of key employees;
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Inability to generate sufficient revenue to offset acquisition or investment costs;
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The inability to maintain relationships with customers and partners of the acquired business;
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The difficulty of transitioning the acquired technology onto our existing platforms and maintaining the security standards consistent with our other services for such technology;
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Potential unknown liabilities associated with the acquired businesses;
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Unanticipated expenses related to acquired technology and its integration into existing technology;
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Negative impact to our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed assets and deferred compensation, and the loss of acquired deferred revenue and unbilled deferred revenue;
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Delays in customer purchases due to uncertainty related to any acquisition;
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The need to implement controls, procedures and policies at the acquired company;
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Challenges caused by distance, language and cultural differences;
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In the case of foreign acquisitions, the challenges associated with integrating operations across different cultures and languages and currency, technological, employee and other regulatory risks and uncertainties in the economic, social and political conditions associated with specific countries; and
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The tax effects of any such acquisitions.
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High
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Low
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||
Year Ended September 30, 2020:
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First Quarter (through November 26, 2019)
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1.22
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|
0.92
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Year Ended September 30, 2019:
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First Quarter
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1.71
|
|
|
0.60
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Second Quarter
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1.77
|
|
|
0.62
|
|
Third Quarter
|
1.17
|
|
|
0.72
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Fourth Quarter
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1.44
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|
|
0.86
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Year Ended September 30, 2018:
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First Quarter
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3.87
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|
|
2.05
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Second Quarter
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3.18
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2.20
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Third Quarter
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2.91
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2.01
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Fourth Quarter
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2.32
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1.51
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Plan category
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Number of securities
to be issued upon
exercise of
outstanding options
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Weighted average
exercise price of
outstanding
options
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Number of
securities
remaining
available for
future issuance
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(a)
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(b)
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(c)
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Equity compensation plans approved by security holders (1)
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1,654,429
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|
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$
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5.62
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|
|
1,058,201
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Equity compensation plans not approved by security holders (2)
|
—
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|
|
—
|
|
|
—
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|
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Total
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1,654,429
|
|
|
$
|
5.62
|
|
|
1,058,201
|
|
(1)
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Consists of the 2009 Stock Incentive Plan, Employee Incentive Stock Option Plan and the Directors Stock Option Plans. For further information regarding these plans, reference is made to Note 5 of the financial statements.
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(2)
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Consists of the Non-Qualified Stock Option Plan. For further information regarding this plan, reference is made to Note 5 of the financial statements.
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Years Ended September 30,
|
||||||||||||||||||
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2019
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2018
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2017
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2016
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2015
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||||||||||
Statement of Operations Data:
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Revenue
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$
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34,781
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|
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$
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34,544
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|
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$
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36,000
|
|
|
$
|
37,975
|
|
|
$
|
36,459
|
|
Cost of revenue
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9,280
|
|
|
9,656
|
|
|
9,867
|
|
|
9,985
|
|
|
10,635
|
|
|||||
Gross margin
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25,501
|
|
|
24,888
|
|
|
26,133
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|
|
27,990
|
|
|
25,824
|
|
|||||
Operating expenses
|
28,009
|
|
|
29,118
|
|
|
30,091
|
|
|
30,266
|
|
|
29,916
|
|
|||||
Impairment of goodwill & intangible assets
|
—
|
|
|
11,809
|
|
|
600
|
|
|
—
|
|
|
—
|
|
|||||
Loss from operations
|
(2,508
|
)
|
|
(16,039
|
)
|
|
(4,558
|
)
|
|
(2,276
|
)
|
|
(4,092
|
)
|
|||||
Other income (expense), net
|
(117
|
)
|
|
142
|
|
|
(65
|
)
|
|
(178
|
)
|
|
46
|
|
|||||
Interest expense, net
|
(897
|
)
|
|
(601
|
)
|
|
(495
|
)
|
|
(594
|
)
|
|
(372
|
)
|
|||||
Benefit (provision) for income taxes
|
(90
|
)
|
|
4,332
|
|
|
79
|
|
|
(269
|
)
|
|
(107
|
)
|
|||||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
(12,166
|
)
|
|
$
|
(5,039
|
)
|
|
$
|
(3,317
|
)
|
|
$
|
(4,525
|
)
|
Dividends on preferred stock
|
$
|
(122
|
)
|
|
$
|
(257
|
)
|
|
$
|
(169
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss attributable to common shareholders
|
$
|
(3,734
|
)
|
|
$
|
(12,423
|
)
|
|
$
|
(5,208
|
)
|
|
$
|
(3,317
|
)
|
|
$
|
(4,525
|
)
|
Basic net loss per common share
|
$
|
(0.64
|
)
|
|
$
|
(2.67
|
)
|
|
$
|
(1.17
|
)
|
|
$
|
(0.76
|
)
|
|
$
|
(1.04
|
)
|
Diluted net loss per common share
|
$
|
(0.64
|
)
|
|
$
|
(2.67
|
)
|
|
$
|
(1.17
|
)
|
|
$
|
(0.76
|
)
|
|
$
|
(1.04
|
)
|
Weighted average common shares:
– Basic
|
5,833,301
|
|
|
4,655,520
|
|
|
4,436,333
|
|
|
4,389,421
|
|
|
4,332,576
|
|
|||||
– Diluted
|
5,833,301
|
|
|
4,655,520
|
|
|
4,436,333
|
|
|
4,389,421
|
|
|
4,332,576
|
|
|||||
Balance Sheet Data at September 30:
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Cash and cash equivalents
|
$
|
4,295
|
|
|
$
|
1,189
|
|
|
$
|
1,211
|
|
|
$
|
1,794
|
|
|
$
|
1,976
|
|
Working capital (deficit)
|
(847
|
)
|
|
(5,765
|
)
|
|
(4,833
|
)
|
|
(3,720
|
)
|
|
(618
|
)
|
|||||
Total assets
|
15,180
|
|
|
13,583
|
|
|
28,356
|
|
|
33,082
|
|
|
34,803
|
|
|||||
Long-term liabilities
|
7,602
|
|
|
3,451
|
|
|
8,147
|
|
|
7,249
|
|
|
8,435
|
|
|||||
Stockholders’ equity (deficit)
|
(6,253
|
)
|
|
(6,458
|
)
|
|
3,118
|
|
|
6,516
|
|
|
7,803
|
|
•
|
Revenue recognition, allowance for doubtful accounts and reserves;
|
•
|
Impairment of long-lived assets;
|
•
|
Asset retirement obligations;
|
•
|
Valuation allowance for net deferred tax assets; and
|
•
|
Accounting for stock-based compensation.
|
•
|
Product and other revenue from the sale of Mediasite recorder units and server software decreased from $12.3 million in fiscal 2018 to $11.6 million in fiscal 2019. Mediasite recorder revenue was negatively impacted in fiscal 2019 by approximately $1.3 million due to the decision to eliminate the stocking of recorder units at distributors. Distributors held 238 recorder units in inventory at September 30, 2018 while no recorders were held in inventory at September 30, 2019. The average sales price per unit decreased in fiscal 2019 primarily due to an increase in sales of refresh units as compared to the prior year. Refresh units are sold at a discounted price to existing customers.
|
|
2019
|
|
2018
|
Units sold
|
1,269
|
|
1,507
|
Rack to mobile ratio
|
8.2 to 1
|
|
13.9 to 1
|
Average sales price, excluding support (000’s)
|
$5.3
|
|
$5.9
|
Refresh Units
|
547
|
|
421
|
•
|
Services revenue represents the portion of fees charged for Mediasite customer support contracts amortized over the length of the contract, typically 12 months, as well as training, installation, event and content hosting services. Services revenue increased from $22.2 million in fiscal 2018 to $23.2 million in fiscal 2019 primarily due to increases in hosting and customer support contract revenues as compared to fiscal 2018.
|
•
|
At September 30, 2019, $11.5 million of revenue was deferred, of which we expect to recognize $9.6 million in the next twelve months, including approximately $4.0 million in the quarter ending December 31, 2019. At September 30, 2018, $13.3 million of revenue was deferred. The decrease in deferred revenue is largely a result of the ASC 606 adjustment upon adoption. See Note 9 - Revenue for further details.
|
•
|
Other revenue relates to freight charges billed separately to our customers.
|
•
|
Material and freight costs for Mediasite recorders. Costs for fiscal 2019 Mediasite recorder hardware and other costs totaled $2.5 million compared to $3.2 million in fiscal 2018 as result of the decrease in unit sales year over year. Freight costs were $244 thousand, and labor and allocated costs were $1.6 million in fiscal 2019 compared to $262 thousand and $1.5 million, respectively, in fiscal 2018. The remaining $34 thousand in fiscal 2019 and $217 thousand in fiscal 2018 relate to material and freight costs for Sonic Foundry International and MSKK. The decrease in material and freight costs for Sonic Foundry International and MSKK is a result of a shift in mix toward greater services revenue resulting in a $885 thousand increase in services revenues for the subsidiaries year over year.
|
•
|
Services costs. Staff wages and other costs allocated to cost of service revenues were $2.0 million in fiscal 2019 and $1.9 million in fiscal 2018, resulting in gross margin on services of 79% in fiscal 2019 and 80% in fiscal 2018. The remaining $2.9 million in fiscal 2019 and $2.5 million in fiscal 2018 relate to costs of providing content hosting, events and technical support services at Sonic Foundry International and MSKK. The increase in services costs for Sonic Foundry International and MSKK is a result of a $885 thousand increase in services revenues for the subsidiaries year over year.
|
•
|
Public relations expense decreased by $23 thousand.
|
•
|
Salary, commissions and benefits expenses decreased by $648 thousand as a result of reduced headcount compared to fiscal 2018.
|
•
|
Expenses related to business meetings increased by $34 thousand.
|
•
|
Selling and marketing expenses for Sonic Foundry International and MSKK accounted for $563 thousand and $2.7 million, respectively in fiscal 2019, an aggregate increase of $314 thousand from the prior year, primarily as a result of an increase in revenue.
|
•
|
Increase in compensation and benefits of $188 thousand due to severance expense for certain executives, partially offset by a reduction in base wages prior to their separation.
|
•
|
Severance expense for two executives of $560 thousand recorded in fiscal 2019.
|
•
|
Decrease of $48 thousand related to travel and entertainment.
|
•
|
Bad debt expense decreased by $370 thousand due to certain large accounts that were fully written off in fiscal 2018.
|
•
|
Depreciation decreased $304 thousand compared to fiscal 2018.
|
•
|
G&A expenses for Sonic Foundry International and MSKK accounted for $288 thousand and $1.1 million, respectively in fiscal 2019, an aggregate increase of $291 thousand from the prior year.
|
•
|
Increase in compensation and benefits of $472 thousand related primarily to severance expense for certain senior managers.
|
•
|
Severance expense for two senior level managers of $346 thousand recorded in fiscal 2019.
|
•
|
Professional services decreased by $198 thousand due to decreased use of outsourced development.
|
•
|
Product development expenses for Sonic Foundry International and MSKK accounted for $482 thousand and $288 thousand, respectively, for fiscal 2019, an aggregate increase of $60 thousand from the prior year related to the subsidiaries.
|
Contractual Obligations:
|
Total
|
|
Less than
1 Year
|
|
Years
2-3
|
|
Years
4-5
|
|
Over
5 years
|
||||||||||
Product purchase commitments
|
$
|
464
|
|
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease obligations
|
2,437
|
|
|
1,289
|
|
|
1,148
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations (a)
|
401
|
|
|
210
|
|
|
179
|
|
|
12
|
|
|
—
|
|
|||||
Notes payable (a)
|
8,444
|
|
|
1,801
|
|
|
3,775
|
|
|
2,868
|
|
|
—
|
|
(a)
|
Includes fixed and determinable interest payments
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,295
|
|
|
$
|
1,189
|
|
Accounts receivable, net of allowances of $135 and $524
|
6,532
|
|
|
7,418
|
|
||
Financing receivables, current, net of allowances of $526
|
—
|
|
|
100
|
|
||
Inventories
|
558
|
|
|
1,027
|
|
||
Investment in sales-type lease, current
|
163
|
|
|
150
|
|
||
Capitalized commissions, current
|
464
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
972
|
|
|
941
|
|
||
Total current assets
|
12,984
|
|
|
10,825
|
|
||
Property and equipment:
|
|
|
|
||||
Leasehold improvements
|
1,121
|
|
|
1,105
|
|
||
Computer equipment
|
5,610
|
|
|
5,718
|
|
||
Furniture and fixtures
|
1,233
|
|
|
1,099
|
|
||
Total property and equipment
|
7,964
|
|
|
7,922
|
|
||
Less accumulated depreciation and amortization
|
6,396
|
|
|
6,009
|
|
||
Property and equipment, net
|
1,568
|
|
|
1,913
|
|
||
Other assets:
|
|
|
|
||||
Financing receivables, long-term
|
—
|
|
|
181
|
|
||
Investment in sales-type lease, long-term
|
134
|
|
|
249
|
|
||
Capitalized commissions, long-term
|
106
|
|
|
—
|
|
||
Other long-term assets
|
388
|
|
|
415
|
|
||
Total assets
|
$
|
15,180
|
|
|
$
|
13,583
|
|
Liabilities and stockholders’ equity (deficit)
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Revolving lines of credit
|
$
|
—
|
|
|
$
|
885
|
|
Accounts payable
|
843
|
|
|
1,610
|
|
||
Accrued liabilities
|
2,216
|
|
|
1,609
|
|
||
Unearned revenue
|
9,610
|
|
|
11,645
|
|
||
Current portion of capital lease and financing arrangements
|
194
|
|
|
248
|
|
||
Current portion of notes payable and warrant debt, net of discounts
|
968
|
|
|
593
|
|
||
Total current liabilities
|
13,831
|
|
|
16,590
|
|
||
Long-term portion of unearned revenue
|
1,842
|
|
|
1,691
|
|
||
Long-term portion of capital lease and financing arrangements
|
179
|
|
|
187
|
|
||
Long-term portion of notes payable and warrant debt, net of discounts
|
5,429
|
|
|
1,357
|
|
||
Derivative liability, at fair value
|
9
|
|
|
14
|
|
||
Other liabilities
|
143
|
|
|
202
|
|
||
Total liabilities
|
21,433
|
|
|
20,041
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity (deficit):
|
|
|
|
||||
Preferred stock, $.01 par value, authorized 500,000 shares; none issued
|
—
|
|
|
—
|
|
||
9% Preferred stock, Series A, voting, cumulative, convertible, $.01 par value (liquidation preference of $1,000 per share), authorized 4,500 shares; zero and 2,678 shares issued and outstanding, respectively, at amounts paid in
|
—
|
|
|
1,651
|
|
||
5% Preferred stock, Series B, voting, cumulative, convertible, $.01 par value (liquidation preference at par), authorized 1,000,000 shares, none issued
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, authorized 10,000,000 shares; 6,749,359 and 5,113,400 shares issued and 6,736,643 and 5,100,684 shares outstanding
|
67
|
|
|
51
|
|
||
Additional paid-in capital
|
203,735
|
|
|
200,130
|
|
||
Accumulated deficit
|
(209,340
|
)
|
|
(207,419
|
)
|
||
Accumulated other comprehensive loss
|
(546
|
)
|
|
(676
|
)
|
Receivable for common stock issued
|
—
|
|
|
(26
|
)
|
||
Treasury stock, at cost, 12,716 shares
|
(169
|
)
|
|
(169
|
)
|
||
Total stockholders’ equity (deficit)
|
(6,253
|
)
|
|
(6,458
|
)
|
||
Total liabilities and stockholders’ equity (deficit)
|
$
|
15,180
|
|
|
$
|
13,583
|
|
|
Years Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Revenue:
|
|
|
|
||||
Product and other
|
$
|
11,631
|
|
|
$
|
12,311
|
|
Services
|
23,150
|
|
|
22,233
|
|
||
Total revenue
|
34,781
|
|
|
34,544
|
|
||
Cost of revenue:
|
|
|
|
||||
Product and other
|
4,387
|
|
|
5,231
|
|
||
Services
|
4,893
|
|
|
4,425
|
|
||
Total cost of revenue
|
9,280
|
|
|
9,656
|
|
||
Gross margin
|
25,501
|
|
|
24,888
|
|
||
Operating expenses:
|
|
|
|
||||
Selling and marketing
|
14,727
|
|
|
15,622
|
|
||
General and administrative
|
5,929
|
|
|
6,354
|
|
||
Product development
|
7,353
|
|
|
7,142
|
|
||
Impairment of goodwill and intangible assets
|
—
|
|
|
11,809
|
|
||
Total operating expenses
|
28,009
|
|
|
40,927
|
|
||
Loss from operations
|
(2,508
|
)
|
|
(16,039
|
)
|
||
Non-operating income (expenses):
|
|
|
|
||||
Interest expense, net
|
(897
|
)
|
|
(601
|
)
|
||
Other income (expense), net
|
(117
|
)
|
|
142
|
|
||
Total non-operating expenses
|
(1,014
|
)
|
|
(459
|
)
|
||
Loss before income taxes
|
(3,522
|
)
|
|
(16,498
|
)
|
||
Income tax benefit (provision)
|
(90
|
)
|
|
4,332
|
|
||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
(12,166
|
)
|
Dividends on preferred stock
|
(122
|
)
|
|
(257
|
)
|
||
Net loss attributable to common stockholders
|
$
|
(3,734
|
)
|
|
$
|
(12,423
|
)
|
Loss per common share:
|
|
|
|
||||
Basic net loss per common share
|
$
|
(0.64
|
)
|
|
$
|
(2.67
|
)
|
Diluted net loss per common share
|
$
|
(0.64
|
)
|
|
$
|
(2.67
|
)
|
Weighted average common shares – Basic
|
5,833,301
|
|
|
4,655,520
|
|
||
– Diluted
|
5,833,301
|
|
|
4,655,520
|
|
|
Years Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
(12,166
|
)
|
Foreign currency translation adjustment
|
130
|
|
|
(81
|
)
|
||
Comprehensive loss
|
$
|
(3,482
|
)
|
|
$
|
(12,247
|
)
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, September 30, 2017
|
$
|
1,280
|
|
|
$
|
45
|
|
|
$
|
197,836
|
|
|
$
|
(195,253
|
)
|
|
$
|
(595
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,118
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
476
|
|
||||||||
Issuance of preferred stock
|
1,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,531
|
|
||||||||
Conversion of preferred stock
|
(1,390
|
)
|
|
4
|
|
|
1,386
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock
|
—
|
|
|
2
|
|
|
592
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
||||||||
Beneficial conversion feature on convertible debt
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
||||||||
Preferred stock dividends
|
230
|
|
|
—
|
|
|
(230
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,166
|
)
|
||||||||
Balance, September 30, 2018
|
$
|
1,651
|
|
|
$
|
51
|
|
|
$
|
200,130
|
|
|
$
|
(207,419
|
)
|
|
$
|
(676
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,458
|
)
|
Cumulative effect of ASC 606 adoption Note 9
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691
|
|
||||||||
Adjusted balance, October 1, 2018
|
1,651
|
|
|
51
|
|
|
200,130
|
|
|
(205,728
|
)
|
|
(676
|
)
|
|
(26
|
)
|
|
(169
|
)
|
|
(4,767
|
)
|
||||||||
Stock compensation
|
—
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
||||||||
Conversion of preferred stock
|
(1,773
|
)
|
|
6
|
|
|
1,767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock and warrants
|
—
|
|
|
10
|
|
|
1,109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,119
|
|
||||||||
Warrants issued in connection with subordinated notes payable
|
—
|
|
|
—
|
|
|
674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
674
|
|
||||||||
Preferred stock dividends
|
122
|
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Cancellation of receivable for common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
130
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,612
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,612
|
)
|
||||||||
Balance, September 30, 2019
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
203,735
|
|
|
$
|
(209,340
|
)
|
|
$
|
(546
|
)
|
|
$
|
—
|
|
|
$
|
(169
|
)
|
|
$
|
(6,253
|
)
|
|
Years Ended
September 30, |
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
(12,166
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Amortization of other intangibles
|
307
|
|
|
621
|
|
||
Depreciation and amortization of property and equipment
|
970
|
|
|
1,118
|
|
||
Impairment of goodwill and intangible assets
|
—
|
|
|
11,809
|
|
||
Loss on sale of fixed assets
|
8
|
|
|
—
|
|
||
Provision for doubtful accounts - including financing receivables
|
116
|
|
|
475
|
|
||
Deferred taxes
|
—
|
|
|
(4,450
|
)
|
||
Stock-based compensation expense related to stock options and warrants
|
177
|
|
|
476
|
|
||
Stock issued for board of director's fees
|
246
|
|
|
—
|
|
||
Deferred loan interest to related party
|
259
|
|
|
—
|
|
||
Conversion of accrued interest to preferred stock
|
—
|
|
|
31
|
|
||
Beneficial conversion feature recognized on debt converted to preferred stock
|
—
|
|
|
70
|
|
||
Remeasurement gain on derivative liability
|
(8
|
)
|
|
(28
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
950
|
|
|
348
|
|
||
Financing receivables
|
293
|
|
|
1,630
|
|
||
Inventories
|
472
|
|
|
(41
|
)
|
||
Investment in lease
|
120
|
|
|
158
|
|
||
Capitalized commissions
|
123
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
15
|
|
|
132
|
|
||
Accounts payable and accrued liabilities
|
(204
|
)
|
|
268
|
|
||
Other long-term liabilities
|
(68
|
)
|
|
(169
|
)
|
||
Unearned revenue
|
(900
|
)
|
|
(920
|
)
|
||
Net cash used in operating activities
|
(736
|
)
|
|
(638
|
)
|
||
Investing activities
|
|
|
|
||||
Purchases of property and equipment
|
(433
|
)
|
|
(840
|
)
|
||
Net cash used in investing activities
|
(433
|
)
|
|
(840
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from notes payable
|
5,500
|
|
|
3,000
|
|
||
Proceeds from lines of credit
|
9,199
|
|
|
22,236
|
|
||
Payments on notes payable
|
(833
|
)
|
|
(815
|
)
|
||
Payments on lines of credit
|
(10,098
|
)
|
|
(23,422
|
)
|
||
Payments of debt issuance costs
|
(110
|
)
|
|
(97
|
)
|
||
Payments to settle put on term debt
|
—
|
|
|
(200
|
)
|
||
Proceeds from issuance of preferred stock and common stock
|
873
|
|
|
1,094
|
|
||
Payments on capital lease and financing arrangements
|
(250
|
)
|
|
(298
|
)
|
||
Net cash provided by financing activities
|
4,281
|
|
|
1,498
|
|
||
Changes in cash and cash equivalents due to changes in foreign currency
|
(6
|
)
|
|
(42
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
3,106
|
|
|
(22
|
)
|
||
Cash and cash equivalents at beginning of year
|
1,189
|
|
|
1,211
|
|
||
Cash and cash equivalents at end of year
|
$
|
4,295
|
|
|
$
|
1,189
|
|
Supplemental cash flow information:
|
|
|
|
Interest paid
|
$
|
618
|
|
|
$
|
409
|
|
Income taxes paid, foreign
|
99
|
|
|
112
|
|
||
Non-cash financing and investing activities:
|
|
|
|
||||
Property and equipment financed by capital lease or accounts payable
|
186
|
|
|
460
|
|
||
Debt discount and warrant
|
679
|
|
|
127
|
|
||
Deemed dividend for beneficial conversion feature of preferred stock
|
—
|
|
|
28
|
|
||
Preferred stock dividend paid in additional shares
|
122
|
|
|
230
|
|
||
Subordinated note payable converted to preferred stock
|
—
|
|
|
1,000
|
|
||
Conversion of preferred shares to common shares
|
1,773
|
|
|
1,390
|
|
1.
|
Identify the contract with a customer. A contract with a customer exists when: (1) we and the customer have approved the contract and both parties are committed to perform their respective obligations; (2) we can identify each party’s rights regarding the products or services to be transferred; (3) we can identify the payment terms for the products or services to be transferred; (4) the contract has commercial substance as our future cash flows are expected to change; and (5) it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the products or services. Any subsequent contract modifications are analyzed to determine the treatment of the contract modification as a separate contract, prospectively or through a cumulative catch-up adjustment.
|
2.
|
Identify the performance obligations in the contract. Performance obligations are promises to transfer a good or service to the customer. Performance obligations may be each individual promise in a contract, or may be groups of promises within a contract that significantly affect one another. To the extent a contract includes multiple promises, we must apply judgment to determine whether promises are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promises are accounted for as a combined performance obligation.
|
3.
|
Determine the transaction price. The transaction price is the total amount of consideration to which we expect to be entitled in exchange for transferring promised products and services to a customer.
|
4.
|
Allocate the transaction price to performance obligations in the contract. The allocation of the transaction price to performance obligations is generally done in proportion to their standalone selling prices (“SSP”). SSP is the price that we would sell a distinct product or service separately to a customer and is determined at contract inception.
|
5.
|
Recognize revenues when or as the company satisfies a performance obligation. We recognize revenues when, or as, distinct performance obligations are satisfied by transferring control of the product or service to the customer. A performance obligation is considered transferred when the customer obtains control of the product or service. Transfer of control is typically evaluated from the customer's perspective. At contract inception, we determine whether we satisfy the performance obligation over time or at a point in time. Revenue is recognized when performance obligations are satisfied.
|
|
|
||
Investment in sales-type lease, gross:
|
|
|
|
2020
|
$
|
167
|
|
2021
|
134
|
|
|
Gross investment in sales-type lease
|
301
|
|
|
Less: Unearned income
|
(4
|
)
|
|
Total investment in sales-type lease
|
$
|
297
|
|
|
|
||
Current portion of total investment in sales-type lease
|
$
|
163
|
|
Long-term portion of total investment in sales-type lease
|
134
|
|
|
|
$
|
297
|
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Raw materials and supplies
|
$
|
163
|
|
|
$
|
358
|
|
Finished goods
|
395
|
|
|
669
|
|
||
|
$
|
558
|
|
|
$
|
1,027
|
|
|
Years
|
Leasehold improvements
|
5 to 15 years
|
Computer equipment
|
1.5 to 5 years
|
Furniture and fixtures
|
3 to 15 years
|
Asset retirement obligation at September 30, 2017
|
$
|
120
|
|
Accretion expense
|
1
|
|
|
Asset retirement obligation at September 30, 2018
|
121
|
|
|
Accretion expense
|
2
|
|
|
Foreign currency changes
|
6
|
|
|
Asset retirement obligation at September 30, 2019
|
$
|
129
|
|
September 30, 2019
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
September 30, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
Years Ending September 30,
|
||
|
2019
|
|
2018
|
Expected life
|
4.3 - 4.5 years
|
|
4.3 - 4.4 years
|
Risk-free interest rate
|
1.43%-2.93%
|
|
1.79%-2.75%
|
Expected volatility
|
60.19%-70.63%
|
|
60.62%-63.49%
|
Expected forfeiture rate
|
13.51%-14.79%
|
|
12.53%-14.58%
|
Expected exercise factor
|
1.2
|
|
1.00-1.17
|
Expected dividend yield
|
—%
|
|
—%
|
|
Years Ending
September 30, |
||||
|
2019
|
|
2018
|
||
Denominator for basic earnings (loss) per share
|
|
|
|
||
-weighted average common shares
|
5,833,301
|
|
|
4,655,520
|
|
Effect of dilutive options and warrants (treasury method)
|
—
|
|
|
—
|
|
Denominator for diluted earnings (loss) per share
|
|
|
|
||
-adjusted weighted average common shares
|
5,833,301
|
|
|
4,655,520
|
|
Options and warrants outstanding during each year, but not included in the computation of diluted earnings (loss) per share because they are antidilutive
|
2,024,589
|
|
|
2,399,901
|
|
Fiscal Year (in thousands)
|
Capital
|
||
2020
|
$
|
210
|
|
2021
|
116
|
|
|
2022
|
63
|
|
|
2023
|
7
|
|
|
2024
|
5
|
|
|
Total payments
|
401
|
|
|
Less interest
|
(28
|
)
|
|
Total
|
$
|
373
|
|
Fiscal Year (in thousands)
|
Operating
|
||
2020
|
$
|
1,289
|
|
2021
|
939
|
|
|
2022
|
209
|
|
|
Total
|
$
|
2,437
|
|
|
PFG V Debt, Net
of Discount |
|
Warrant
Debt. PFG V |
|
Burish Notes, Net of Discount
|
||||||
Balance as of September 30, 2018
|
$
|
1,905
|
|
|
$
|
103
|
|
|
$
|
—
|
|
Activity during the period:
|
|
|
|
|
|
||||||
Disbursement of Tranche 2, net of discount
|
471
|
|
|
26
|
|
|
—
|
|
|||
Disbursement of Tranches 1-5
|
—
|
|
|
—
|
|
|
5,000
|
|
|||
Fair value of warrants issued
|
—
|
|
|
—
|
|
|
(674
|
)
|
|||
Payments
|
(833
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred accrued interest
|
—
|
|
|
—
|
|
|
259
|
|
|||
Amortization and accretion expense
|
180
|
|
|
20
|
|
|
66
|
|
|||
Balance as of September 30, 2019
|
$
|
1,723
|
|
|
$
|
149
|
|
|
$
|
4,651
|
|
|
|
|
|
|
|
||||||
Loan origination fees
|
(35
|
)
|
|
—
|
|
|
(91
|
)
|
|||
Total notes payable and warrant debt, net of discounts
|
$
|
1,688
|
|
|
$
|
149
|
|
|
$
|
4,560
|
|
Fiscal Year (in thousands)
|
|
||
2020
|
$
|
1,200
|
|
2021
|
1,867
|
|
|
2022
|
1,200
|
|
|
2023
|
1,200
|
|
|
2024
|
1,459
|
|
|
Thereafter
|
—
|
|
|
Total principal payments
|
6,926
|
|
|
Less: Discount on notes payable and debt issuance costs
|
(529
|
)
|
|
Total notes payable, net of discount
|
$
|
6,397
|
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Prepaid expenses
|
$
|
855
|
|
|
$
|
699
|
|
Prepaid insurance
|
89
|
|
|
84
|
|
||
Other current assets
|
28
|
|
|
158
|
|
||
Total
|
$
|
972
|
|
|
$
|
941
|
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Accrued compensation
|
$
|
1,419
|
|
|
$
|
972
|
|
Accrued expenses
|
480
|
|
|
359
|
|
||
Accrued interest & taxes
|
269
|
|
|
223
|
|
||
Other accrued liabilities
|
48
|
|
|
55
|
|
||
Total
|
$
|
2,216
|
|
|
$
|
1,609
|
|
|
Qualified
Employee
Stock Option
Plans
|
|
Director
Stock Option
Plans
|
||
Shares available for grant at September 30, 2017
|
1,008,390
|
|
|
48,000
|
|
Options granted
|
(398,749
|
)
|
|
(14,500
|
)
|
Options forfeited
|
86,118
|
|
|
10,000
|
|
Shares available for grant at September 30, 2018
|
695,759
|
|
|
43,500
|
|
Options granted
|
(218,850
|
)
|
|
(10,500
|
)
|
Options forfeited
|
536,292
|
|
|
12,000
|
|
Shares available for grant at September 30, 2019
|
1,013,201
|
|
|
45,000
|
|
|
Years Ended September 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
||||||||
Outstanding at beginning of year
|
2,029,741
|
|
|
$
|
7.04
|
|
|
1,805,443
|
|
|
$
|
8.33
|
|
||
Granted
|
229,350
|
|
|
0.73
|
|
|
413,249
|
|
|
2.49
|
|
||||
Exercised
|
—
|
|
|
—
|
|
|
(14,332
|
)
|
|
4.75
|
|
||||
Forfeited
|
(604,662
|
)
|
|
8.53
|
|
|
(174,619
|
)
|
|
9.82
|
|
||||
Outstanding at end of year
|
1,654,429
|
|
|
$
|
5.62
|
|
|
2,029,741
|
|
|
$
|
7.04
|
|
||
Exercisable at end of year
|
1,297,315
|
|
|
|
|
1,349,021
|
|
|
|
||||||
Weighted average fair value of options granted during the year
|
$
|
0.28
|
|
|
|
|
$
|
0.95
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Exercise Prices
|
Options
Outstanding at September 30, 2019 |
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
Options
Exercisable at September 30, 2019 |
|
Weighted
Average
Exercise
Price
|
||||||
$0.66 to $4.88
|
848,136
|
|
|
5.60
|
|
$
|
2.71
|
|
|
493,189
|
|
|
$
|
3.37
|
|
5.00 to 9.81
|
614,533
|
|
|
4.23
|
|
7.80
|
|
|
612,866
|
|
|
7.80
|
|
||
$10.00 to $15.00
|
191,760
|
|
|
3.60
|
|
11.46
|
|
|
191,260
|
|
|
11.46
|
|
||
|
1,654,429
|
|
|
|
|
|
|
1,297,315
|
|
|
|
|
Options
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Non-vested options at October 1, 2017
|
544,834
|
|
|
$
|
2.42
|
|
Granted
|
413,249
|
|
|
0.95
|
|
|
Vested
|
(258,938
|
)
|
|
2.47
|
|
|
Forfeited
|
(18,425
|
)
|
|
1.73
|
|
|
Non-vested options at September 30, 2018
|
680,720
|
|
|
1.46
|
|
|
Granted
|
229,350
|
|
|
0.28
|
|
|
Vested
|
(508,998
|
)
|
|
1.46
|
|
|
Forfeited
|
(43,958
|
)
|
|
1.06
|
|
|
Non-vested options at September 30, 2019
|
357,114
|
|
|
$
|
0.77
|
|
|
Years Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Current income tax expense U.S.
|
$
|
—
|
|
|
$
|
—
|
|
Current income tax expense foreign
|
67
|
|
|
101
|
|
||
Deferred income tax (benefit) provision
|
23
|
|
|
(4,433
|
)
|
||
(Benefit) provision for income taxes
|
$
|
90
|
|
|
$
|
(4,332
|
)
|
|
Years Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
U.S.
|
$
|
(3,576
|
)
|
|
$
|
(16,934
|
)
|
Foreign
|
54
|
|
|
436
|
|
||
Loss before income taxes
|
$
|
(3,522
|
)
|
|
$
|
(16,498
|
)
|
|
Years Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Income tax benefit at statutory rate
|
$
|
(751
|
)
|
|
$
|
(4,111
|
)
|
State income tax benefit
|
(198
|
)
|
|
(823
|
)
|
||
Foreign tax activity
|
67
|
|
|
101
|
|
||
Permanent differences, net
|
44
|
|
|
771
|
|
||
Change in valuation allowance
|
1,569
|
|
|
1,285
|
|
||
Tax rate change
|
—
|
|
|
(1,545
|
)
|
||
Return to provision true-up
|
(1,053
|
)
|
|
—
|
|
||
Other
|
412
|
|
|
(10
|
)
|
||
Income tax expense (benefit)
|
$
|
90
|
|
|
$
|
(4,332
|
)
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss and other carryforwards
|
$
|
25,347
|
|
|
$
|
24,262
|
|
Common stock options
|
946
|
|
|
919
|
|
||
Unearned revenue
|
477
|
|
|
510
|
|
||
Interest expense limitation
|
262
|
|
|
—
|
|
||
Other
|
544
|
|
|
369
|
|
||
Total deferred tax assets
|
27,576
|
|
|
26,060
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Other
|
(97
|
)
|
|
(103
|
)
|
||
Total deferred tax liabilities
|
(97
|
)
|
|
(103
|
)
|
||
|
|
|
|
||||
Net deferred tax asset
|
27,479
|
|
|
25,957
|
|
||
Valuation allowance
|
(27,443
|
)
|
|
(25,881
|
)
|
||
Net deferred tax asset
|
$
|
36
|
|
|
$
|
76
|
|
Balance as of October 1, 2017
|
$
|
10,455
|
|
Impairment losses
|
(10,423
|
)
|
|
Foreign currency translation adjustment
|
(32
|
)
|
|
Balance as of September 30, 2018
|
$
|
—
|
|
(in thousands)
|
Life
(years)
|
|
Gross
|
|
Accumulated
Amortization at September 30, 2018 |
|
Balance at
September 30, 2018 |
||||||
Amortizable:
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
10
|
|
$
|
1,256
|
|
|
$
|
1,256
|
|
|
$
|
—
|
|
Software development costs
|
3
|
|
533
|
|
|
533
|
|
|
—
|
|
|||
Product rights
|
6
|
|
534
|
|
|
534
|
|
|
—
|
|
|||
Total
|
|
|
$
|
2,323
|
|
|
$
|
2,323
|
|
|
$
|
—
|
|
|
Fiscal Year Ended September 30, 2019
|
||||||||||||||||||
|
SOFO
|
|
SFI
|
|
MSKK
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Hardware
|
$
|
6,710
|
|
|
$
|
598
|
|
|
$
|
950
|
|
|
$
|
(808
|
)
|
|
$
|
7,450
|
|
Software
|
3,316
|
|
|
417
|
|
|
542
|
|
|
(430
|
)
|
|
3,845
|
|
|||||
Shipping
|
840
|
|
|
5
|
|
|
—
|
|
|
(509
|
)
|
|
336
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Product and other total
|
10,866
|
|
|
1,020
|
|
|
1,492
|
|
|
(1,747
|
)
|
|
11,631
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Support
|
7,717
|
|
|
672
|
|
|
2,137
|
|
|
(803
|
)
|
|
9,723
|
|
|||||
Hosting
|
4,258
|
|
|
544
|
|
|
1,649
|
|
|
—
|
|
|
6,451
|
|
|||||
Events
|
3,785
|
|
|
167
|
|
|
2,741
|
|
|
—
|
|
|
6,693
|
|
|||||
Installs & training
|
258
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
283
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Services total
|
16,018
|
|
|
1,408
|
|
|
6,527
|
|
|
(803
|
)
|
|
23,150
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
26,884
|
|
|
$
|
2,428
|
|
|
$
|
8,019
|
|
|
$
|
(2,550
|
)
|
|
$
|
34,781
|
|
|
As reported
|
|
ASC 606 adoption
|
|
Adjusted
|
||||||
|
September 30, 2018
|
|
adjustments
|
|
October 1, 2018
|
||||||
Capitalized commissions, current
|
$
|
—
|
|
|
$
|
580
|
|
|
$
|
580
|
|
Total current assets
|
10,825
|
|
|
580
|
|
|
11,405
|
|
|||
|
|
|
|
|
|
||||||
Capitalized commissions, long-term
|
—
|
|
|
112
|
|
|
112
|
|
|||
Total assets
|
$
|
13,583
|
|
|
$
|
692
|
|
|
$
|
14,275
|
|
|
|
|
|
|
|
||||||
Accrued liabilities
|
$
|
1,609
|
|
|
$
|
2
|
|
|
$
|
1,611
|
|
Unearned revenue
|
11,645
|
|
|
(924
|
)
|
|
10,721
|
|
|||
Total current liabilities
|
16,590
|
|
|
(922
|
)
|
|
15,668
|
|
|||
|
|
|
|
|
|
||||||
Other long-term liabilities
|
202
|
|
|
(2
|
)
|
|
200
|
|
|||
Long-term portion of unearned revenue
|
1,691
|
|
|
(75
|
)
|
|
1,616
|
|
|||
Total liabilities
|
20,041
|
|
|
(999
|
)
|
|
19,042
|
|
|||
|
|
|
|
|
|
||||||
Accumulated deficit
|
(207,419
|
)
|
|
1,691
|
|
|
(205,728
|
)
|
|||
Total stockholders' equity (deficit)
|
(6,458
|
)
|
|
1,691
|
|
|
(4,767
|
)
|
|||
Total liabilities and stockholders' equity (deficit)
|
$
|
13,583
|
|
|
$
|
692
|
|
|
$
|
14,275
|
|
|
|
|
|
|
Amounts without
|
||||||
|
As reported
|
|
ASC 606 adoption
|
|
ASC 606 impact
|
||||||
|
September 30, 2019
|
|
impact
|
|
September 30, 2019
|
||||||
Capitalized commissions, current
|
$
|
464
|
|
|
$
|
(464
|
)
|
|
$
|
—
|
|
Total current assets
|
12,984
|
|
|
(464
|
)
|
|
12,520
|
|
|||
|
|
|
|
|
|
||||||
Capitalized commissions, long-term
|
106
|
|
|
(106
|
)
|
|
—
|
|
|||
Total assets
|
$
|
15,180
|
|
|
$
|
(570
|
)
|
|
$
|
14,610
|
|
|
|
|
|
|
|
||||||
Accrued liabilities
|
$
|
2,216
|
|
|
$
|
(2
|
)
|
|
$
|
2,214
|
|
Unearned revenue
|
9,610
|
|
|
785
|
|
|
10,395
|
|
|||
Total current liabilities
|
13,831
|
|
|
783
|
|
|
14,614
|
|
|||
|
|
|
|
|
|
||||||
Other long-term liabilities
|
143
|
|
|
2
|
|
|
145
|
|
|||
Long-term portion of unearned revenue
|
1,842
|
|
|
68
|
|
|
1,910
|
|
|||
Total liabilities
|
21,433
|
|
|
853
|
|
|
22,286
|
|
|||
|
|
|
|
|
|
||||||
Accumulated deficit
|
(209,340
|
)
|
|
(1,423
|
)
|
|
(210,763
|
)
|
|||
Total stockholders' equity (deficit)
|
(6,253
|
)
|
|
(1,423
|
)
|
|
(7,676
|
)
|
|||
Total liabilities and stockholders' equity (deficit)
|
$
|
15,180
|
|
|
$
|
(570
|
)
|
|
$
|
14,610
|
|
|
As reported
|
|
|
|
Amounts without
|
||||||
|
Year Ended
|
|
ASC 606 adoption
|
|
ASC 606 impact
|
||||||
|
September 30, 2019
|
|
impact
|
|
September 30, 2019
|
||||||
Product and other revenue
|
$
|
11,631
|
|
|
$
|
145
|
|
|
$
|
11,776
|
|
Total revenue
|
34,781
|
|
|
145
|
|
|
34,926
|
|
|||
|
|
|
|
|
|
||||||
Product and other cost of revenue
|
4,387
|
|
|
—
|
|
|
4,387
|
|
|||
Total cost of revenue
|
9,280
|
|
|
—
|
|
|
9,280
|
|
|||
|
|
|
|
|
|
||||||
Gross margin
|
25,501
|
|
|
145
|
|
|
25,646
|
|
|||
|
|
|
|
|
|
||||||
Selling and marketing (operating expenses)
|
14,727
|
|
|
(123
|
)
|
|
14,604
|
|
|||
Loss from operations
|
(2,508
|
)
|
|
268
|
|
|
(2,240
|
)
|
|||
Loss before income taxes
|
(3,522
|
)
|
|
268
|
|
|
(3,254
|
)
|
|||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
268
|
|
|
$
|
(3,344
|
)
|
Net loss attributable to common stockholders
|
$
|
(3,734
|
)
|
|
$
|
268
|
|
|
$
|
(3,466
|
)
|
|
|
|
|
|
|
||||||
Loss per common share
|
|
|
|
|
|
||||||
-basic
|
$
|
(0.64
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.59
|
)
|
-diluted
|
$
|
(0.64
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.59
|
)
|
|
|
|
|
|
Amounts without
|
||||||
|
As reported
|
|
ASC 606 adoption
|
|
ASC 606 impact
|
||||||
|
September 30, 2019
|
|
impact
|
|
September 30, 2019
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(3,612
|
)
|
|
$
|
268
|
|
|
$
|
(3,344
|
)
|
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Capitalized commissions
|
123
|
|
|
(123
|
)
|
|
—
|
|
|||
Unearned revenue
|
(900
|
)
|
|
(145
|
)
|
|
(1,045
|
)
|
|||
Net cash used in operating activities
|
$
|
(736
|
)
|
|
$
|
—
|
|
|
$
|
(736
|
)
|
|
Years Ended
September 30,
|
||||||
|
2019
|
|
2018
|
||||
United States
|
$
|
19,680
|
|
|
$
|
21,152
|
|
Europe and Middle East
|
5,718
|
|
|
4,482
|
|
||
Asia
|
7,822
|
|
|
7,418
|
|
||
Other
|
1,561
|
|
|
1,492
|
|
||
Total
|
$
|
34,781
|
|
|
$
|
34,544
|
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, September 30, 2017
|
$
|
1,280
|
|
|
$
|
45
|
|
|
$
|
197,836
|
|
|
$
|
(195,253
|
)
|
|
$
|
(595
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,118
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
245
|
|
||||||||
Issuance of preferred stock
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||||||
Preferred stock dividends
|
44
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
||||||||
Balance, December 31, 2017
|
$
|
1,824
|
|
|
$
|
45
|
|
|
$
|
198,037
|
|
|
$
|
(194,933
|
)
|
|
$
|
(575
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
4,203
|
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, December 31, 2017
|
$
|
1,824
|
|
|
$
|
45
|
|
|
$
|
198,037
|
|
|
$
|
(194,933
|
)
|
|
$
|
(575
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
4,203
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||||
Preferred stock dividends
|
50
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
|
—
|
|
|
—
|
|
|
309
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,449
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,449
|
)
|
||||||||
Balance, March 31, 2018
|
$
|
1,874
|
|
|
$
|
45
|
|
|
$
|
198,070
|
|
|
$
|
(196,382
|
)
|
|
$
|
(266
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,146
|
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, March 31, 2018
|
$
|
1,874
|
|
|
$
|
45
|
|
|
$
|
198,070
|
|
|
$
|
(196,382
|
)
|
|
$
|
(266
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,146
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||||
Issuance of preferred stock
|
1,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,031
|
|
||||||||
Conversion of preferred stock
|
(829
|
)
|
|
2
|
|
|
827
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock
|
—
|
|
|
2
|
|
|
498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||||||
Beneficial conversion feature on convertible debt
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
||||||||
Preferred stock dividends
|
67
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,020
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,020
|
)
|
||||||||
Balance, June 30, 2018
|
$
|
2,143
|
|
|
$
|
49
|
|
|
$
|
199,471
|
|
|
$
|
(197,402
|
)
|
|
$
|
(538
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,528
|
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, June 30, 2018
|
$
|
2,143
|
|
|
$
|
49
|
|
|
$
|
199,471
|
|
|
$
|
(197,402
|
)
|
|
$
|
(538
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
3,528
|
|
Stock compensation
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||||||
Conversion of preferred stock
|
(561
|
)
|
|
2
|
|
|
559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock
|
—
|
|
|
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
||||||||
Preferred stock dividends
|
69
|
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,017
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,017
|
)
|
||||||||
Balance, September 30, 2018
|
$
|
1,651
|
|
|
$
|
51
|
|
|
$
|
200,130
|
|
|
$
|
(207,419
|
)
|
|
$
|
(676
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,458
|
)
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, September 30, 2018
|
$
|
1,651
|
|
|
$
|
51
|
|
|
$
|
200,130
|
|
|
$
|
(207,419
|
)
|
|
$
|
(676
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,458
|
)
|
Cumulative effect of ASC 606 adoption Note 9
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691
|
|
||||||||
Adjusted balance, October 1, 2018
|
1,651
|
|
|
51
|
|
|
200,130
|
|
|
(205,728
|
)
|
|
(676
|
)
|
|
(26
|
)
|
|
(169
|
)
|
|
(4,767
|
)
|
||||||||
Stock compensation
|
—
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
||||||||
Conversion of preferred stock
|
(563
|
)
|
|
2
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Preferred stock dividends
|
53
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,788
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,788
|
)
|
||||||||
Balance, December 31, 2018
|
$
|
1,141
|
|
|
$
|
53
|
|
|
$
|
200,802
|
|
|
$
|
(207,516
|
)
|
|
$
|
(614
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,329
|
)
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, December 31, 2018
|
$
|
1,141
|
|
|
$
|
53
|
|
|
$
|
200,802
|
|
|
$
|
(207,516
|
)
|
|
$
|
(614
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,329
|
)
|
Stock compensation
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||||
Issuance of common stock and warrants
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Warrants issued in connection with subordinated notes payable
|
—
|
|
|
—
|
|
|
674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
674
|
|
||||||||
Preferred stock dividends
|
46
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,486
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,486
|
)
|
||||||||
Balance, March 31, 2019
|
$
|
1,187
|
|
|
$
|
53
|
|
|
$
|
201,490
|
|
|
$
|
(209,002
|
)
|
|
$
|
(631
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(7,098
|
)
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, March 31, 2019
|
$
|
1,187
|
|
|
$
|
53
|
|
|
$
|
201,490
|
|
|
$
|
(209,002
|
)
|
|
$
|
(631
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(7,098
|
)
|
Stock compensation
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||||
Conversion of preferred stock
|
(1,210
|
)
|
|
4
|
|
|
1,206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock and warrants
|
—
|
|
|
10
|
|
|
1,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,106
|
|
||||||||
Preferred stock dividends
|
23
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
89
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
||||||||
Balance, June 30, 2019
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
203,752
|
|
|
$
|
(209,161
|
)
|
|
$
|
(542
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,079
|
)
|
|
Preferred stock
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Receivable
for
common
stock issued
|
|
Treasury
stock
|
|
Total
|
||||||||||||||||
Balance, June 30, 2019
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
203,752
|
|
|
$
|
(209,161
|
)
|
|
$
|
(542
|
)
|
|
$
|
(26
|
)
|
|
$
|
(169
|
)
|
|
$
|
(6,079
|
)
|
Stock compensation
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
||||||||
Issuance of common stock and warrants
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||||
Cancellation of receivable for common stock issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(179
|
)
|
||||||||
Balance, September 30, 2019
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
203,735
|
|
|
$
|
(209,340
|
)
|
|
$
|
(546
|
)
|
|
$
|
—
|
|
|
$
|
(169
|
)
|
|
$
|
(6,253
|
)
|
|
Quarterly Financial Data
|
||||||||||||||||||||||||||||||
(in thousands except per share data)
|
Q4-’19
|
|
Q3-’19
|
|
Q2-’19
|
|
Q1-’19
|
|
Q4-’18
|
|
Q3-’18
|
|
Q2-’18
|
|
Q1-’18
|
||||||||||||||||
Revenue
|
$
|
9,212
|
|
|
$
|
10,068
|
|
|
$
|
7,997
|
|
|
$
|
7,502
|
|
|
$
|
8,490
|
|
|
$
|
8,699
|
|
|
$
|
8,460
|
|
|
$
|
8,895
|
|
Gross margin
|
6,461
|
|
|
7,387
|
|
|
5,993
|
|
|
5,660
|
|
|
6,094
|
|
|
6,395
|
|
|
5,929
|
|
|
6,470
|
|
||||||||
Income (loss) from operations
|
125
|
|
|
144
|
|
|
(1,123
|
)
|
|
(1,654
|
)
|
|
(12,900
|
)
|
|
(914
|
)
|
|
(1,259
|
)
|
|
(966
|
)
|
||||||||
Net income (loss)
|
(179
|
)
|
|
(159
|
)
|
|
(1,486
|
)
|
|
(1,788
|
)
|
|
(10,017
|
)
|
|
(1,020
|
)
|
|
(1,449
|
)
|
|
320
|
|
||||||||
Basic and diluted net income (loss) per share
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(2.16
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
0.06
|
|
(a)
|
The following financial statements are filed as part of this report:
|
1
|
Financial Statements furnished are listed in the Table of Contents provided in response to Item 8.
|
2
|
Exhibits.
|
NUMBER
|
|
DESCRIPTION
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
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|
|
3.3
|
|
|
|
|
|
|
|
3.4
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
|
|
10.6
|
|
|
Forms of Subscription Agreements, Lock-Up Agreements and Warrant Agreements dated December 22, 2014 among Sonic Foundry, Inc. and Mark Burish, and Sonic Foundry, Inc. and Andrew Burish, filed as Exhibits 10.1, 10.2, and 10.3 to the Form 8-K filed on December 30, 2014 and hereby incorporated by reference.
|
|
|
|
|
10.7
|
|
|
|
|
|
|
|
10.8
|
|
|
|
|
|
|
|
10.9
|
|
|
|
|
|
|
|
10.10
|
|
|
|
|
|
|
|
10.11
|
|
|
|
|
|
|
10.12
|
|
|
|
|
|
|
|
10.13
|
|
|
|
|
|
|
|
10.14
|
|
|
|
|
|
|
|
10.15
|
|
|
|
|
|
|
|
10.16
|
|
|
|
|
|
|
10.17
|
|
|
|
|
|
|
|
10.18
|
|
|
|
|
|
|
|
10.19
|
|
|
|
|
|
|
|
10.20
|
|
|
|
|
|
|
|
10.21
|
|
|
|
|
|
|
|
10.22
|
|
|
|
|
|
|
|
10.23
|
|
|
|
|
|
|
|
10.24
|
|
|
|
|
|
|
|
10.25
|
|
|
|
|
|
|
|
10.26
|
|
|
|
|
|
|
|
10.27
|
|
|
|
|
|
|
|
10.28
|
|
|
|
|
|
|
|
10.29
|
|
|
|
|
|
|
|
10.30
|
|
|
|
|
|
|
|
10.31
|
|
|
|
|
|
|
10.32
|
|
|
|
|
|
|
|
10.33
|
|
|
|
|
|
|
|
10.34
|
|
|
|
|
|
|
|
10.35
|
|
|
|
|
|
|
|
10.36
|
|
|
|
|
|
|
|
10.37
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
|
|
|
23.2
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
||
31.2
|
|
|
|
|
|
||
32
|
|
|
|
|
|
||
101
|
|
|
The following materials from the Sonic Foundry, Inc. Form 10-K for the year ended September 30, 2019 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statements of Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements.
|
*
|
Compensatory Plan or Arrangement
|
By:
|
|
/s/ Michael Norregaard
|
|
|
Michael Norregaard
Chief Executive Officer
|
|
|
|
Date:
|
|
December 19, 2019
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Michael Norregaard
|
|
Chief Executive Officer
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Kenneth A. Minor
|
|
Interim Chief Financial Officer
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Mark D. Burish
|
|
Chair and Director
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Frederick H. Kopko, Jr.
|
|
Director
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Brian T. Wiegand
|
|
Director
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Nelson A. Murphy
|
|
Director
|
|
December 19, 2019
|
|
|
|
|
|
/s/ Gary R. Weis
|
|
Director
|
|
December 19, 2019
|
|
|
|
|
|
/s/ David F. Slayton
|
|
Director
|
|
December 19, 2019
|
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