Concurrent Computer Corp (CCUR) SEC Annual Report (10-K) for 2010

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934

(Mark One)

For the fiscal year ended June 30, 2010

OR

For the transition period from                      to

Commission File Number: 0-13150

Concurrent Computer Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State of Incorporation)

04-2735766

(I.R.S. Employer Identification No.)

4375 River Green Parkway, Suite 100, Duluth, Georgia 30096

(Address of principal executive offices, including zip code)

(678) 258-4000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:    Common Stock, $0.01 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ¨      No   T

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes   ¨     No   T

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   T      No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  o      No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     T

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   T

The aggregate market value of the common equity held by non-affiliates of the registrant as of December 31, 2009 was approximately $34.1 million based on the closing price of $3.96 of our common stock as reported by the NASDAQ Global Market on December 31, 2009.  There were 8,894,000 shares of common stock outstanding as of August 27, 2010.

Certain portions of the Registrant's Proxy Statement to be used in connection with Registrant's 2010 Annual Meeting of Stockholders scheduled to be held on October 26, 2010 are incorporated by reference in Part III hereof.

Concu rrent Computer Corporation

2010 Form 10-K Annual Report

Table of Contents

PART I

Certain statements made or incorporated by reference in this Annual Report on Form 10-K may constitute "forward-looking statements" within the meaning of the federal securities laws.  All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected.  The risks and uncertainties which could affect our financial condition or results are discussed below under the heading "Risk Factors".  Our forward-looking statements are based on current expectations and speak only as of the date of such statements.  When we use the terms "Concurrent," "we," "our," and "us," we mean Concurrent Computer Corporation and its subsidiaries.

Item 1. Business.

Overview

We are a provider of software, hardware and professional services for the video market, the media industry, and the high-performance, real-time market.  Our business is comprised of two segments for financial reporting purposes: products and services.  We provide products and services for each of these markets.

Our video solutions consist of software, hardware, and services for intelligently streaming video and collecting video consumption media data for advanced interactive video services and advertising.  Our solutions and services are sold to broadband and content providers around the world.

Our real-time products consist of Linux ® and other real-time operating systems and software development tools combined, in most cases, with off-the-shelf hardware and services sold to a wide variety of companies seeking high-performance, real-time computer solutions.  These solutions are typically used in applications requiring low-latency response and determinism such as simulation, image generation, testing, process control and data acquisition.  Our real-time products are specially designed for use with applications that acquire, process, store, analyze and display large amounts of rapidly changing information in real time – that is, with microsecond response times as changes occur.  Our systems and software support applications in the military, aerospace, financial and automotive markets.

We were incorporated in Delaware in 1981 under the name Massachusetts Computer Company.

As soon as reasonably practicable after filing with the Securities and Exchange Commission ("SEC"), we make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports available, free of charge, on our website located at www.ccur.com .  We have adopted a code of ethics that is applicable to all employees as well as a code of ethics applicable to our principal executive, financial, and accounting officers.  Both of these ethics policies are posted on our website located at www.ccur.com .  Copies will be furnished upon written request at the following address:  Attn:  Secretary, 4375 River Green Parkway, Suite 100, Duluth, Georgia  30096.  If we amend or change our code of ethics applicable to our principal executive, financial and accounting officers or grant a waiver under such code, we will disclose these events through our website and by distributing a press release.

The Video Market

The market for video consumption, audience measurement, and advertising is changing rapidly as consumers demand flexibility in their viewing options.  Fundamental shifts, similar to how digital file delivery dramatically altered how we purchase and listen to music, are occurring in the video market and moving it to a completely on-demand model across multiple screens.  With the proliferation of smart devices and digital video recorders (DVRs) as well as content repositories like YouTube or Hulu.com, consumers have more and more choices of how, when and where to watch their favorite programming.  Whether content is professionally created or user-generated, viewers are only a few clicks away and are adapting quickly to follow it from channel to channel and screen to screen.

We believe we are positioned to build and deliver the solutions broadband providers require to address this fundamental market shift.  Our 100% standard commercial hardware infrastructure enables seamless, multi-platform delivery of video to any device, anytime, over any network.  Concurrent has over a decade of recognized leadership in delivering innovative, Emmy ® -winning video solutions like video-on-demand ("VOD") and time-shifted television to broadband markets around the world.  SNL Kagan estimates that in calendar year 2009 U.S. cable subscribers viewed over 7.1 billion on-demand videos, an increase of over 10% from 2008, generating an estimated over $1.4 billion for the U.S. cable operators (SNL Kagan, The State of Home Video, 2009).  As of June 30, 2010, Concurrent has 205 distinct video systems deployed in cable and telecom markets worldwide that represent over 25.0 million basic subscribers.  Our Media Data and Advertising Solutions (MDAS) software provides valuable operational reporting and data collection services and has been deployed in 280 distinct video systems worldwide, servicing over 36 million digital subscribers.

Consumers increasingly want to watch interactive video on their web-enabled personal computers and consumer electronics devices.  On a per subscriber basis, Nielsen Online reported that Americans watched an average 3 hours, 10 minutes per month of on-line video in the first calendar quarter of 2010 compared to 3 hours in the first calendar quarter of 2009, a 5.9% increase.  Twelve percent of internet time in the U.S. is spent watching video (Nielsen NetView, June 2010).  Therefore, we believe video consumption over the Internet on the personal computer is clearly showing growth.

The mobile video market is also growing.  The Nielson Three Screen Report for the first calendar quarter of 2010 reported that 20.3 million Americans watched videos on their mobile devices an increase of over 51% compared to the first calendar quarter of the prior year.  The mobile video viewers watched an average of 3 hours, 37 minutes per user per month (Nielson Three Screen Report).  Adults aged 25 to 49 made up 55% of the mobile video audience each month (Nielsen Three Screen Report).

Consumer demand for multi-screen video is growing, yet the business model is still evolving .  In order to address these markets, we believe video solutions need to have the following characteristics:

The Real-Time Computing Markets

Our real-time products offer unique solutions for a wide-range of applications that require state-of-the-art, time-critical software and hardware technology.  The Linux and other real-time operating systems we provide typically offer high-performance computation and high data throughput with predictable and repeatable responses to time-critical events.  Our real-time products are currently used in host, client-server, embedded and distributed computing solutions.  Applications that utilize our operating systems and development tools include the following:

Business Strategy

Video Solutions Product Line

Our video strategy is comprised of the following primary initiatives:

Real-Time Product Line

Our real-time strategy is comprised of the following primary initiatives:

Products and Services

Our products fall into two principal groups, video solutions and real-time systems.  In addition, we provide technical support for our products to our customers.  The percentage of total revenue contributed by our video and our real-time products and service offerings are discussed in Management's Discussion and Analysis of Financial Condition and Results of Operation in this Annual Report on Form 10-K.

Video Solutions Products

Our video solutions are typically located within a network with a small software module residing on the subscriber's device.  When a subscriber selects a video, a video stream is sent from our video server to the customer's device.  The consumer selection is typically captured by the back-office software, creating a billing and royalty record.  Our media data and advertising products integrate with video delivery systems and capture information on video consumption and organize and report that information.

MediaHawk ® Video Platform.   Our MediaHawk  and VX video solutions combine standard commercial hardware sourced from leading original equipment manufacturers with our own software.  We believe our modular approach provides our customers with the ability to successfully manage initial deployments, expand those deployments, and add new services.  In fiscal year 2010, we shipped video servers that increased the capacity of our cumulative solutions shipped to over 2.1 million standard streams.  Our design goal is to provide seamless end-user viewing of the highest quality.  Our video solutions allow our customers to automate the movement of content from one storage location to another based upon demand and other network requirements.  We believe this feature enables the most efficient streaming and storage of content.  We have applied for multiple patents to protect the architecture and design of our video platform.

Our video software is installed into and integrated with standard commercial hardware components such as servers, disk arrays, solid state storage arrays, and network switching equipment.  Our video solutions are compatible with a wide range of equipment and software employed by broadband companies to deliver digital television service, including digital set-top boxes from Cisco Systems Inc., Motorola, Pioneer, Sony, Pace Micro, Samsung, Humax, and Matsushita and transport topologies such as IP, DSL, Gigabit Ethernet, DVB-ASI, ATM, and 64 and 256 QAM IF or RF.  Our solutions are also compatible with multi-screen capable video players developed by Microsoft, Adobe, and Apple.

Media Data and Advertising Solutions.   Our MDAS portfolio of managed service solution is based upon media management, video operational reporting, interactivity and advanced advertising.  These solutions are focused on driving revenues or optimizing video operations across multiple screens.  Our solutions portfolio is aligned with these segments and includes:

Data Suite TM .  Data Suite is our data collection solution that is currently deployed at 5 of the top 6 major U.S. cable operators, managing the data of over 36 million subscribers.  It consists of two components:

Our DataSuite product captures media data from our customers' diverse networks, leveraging, correlating, and interpreting it to empower marketing, programming, advertising, and operations teams to seamlessly analyze usage, revenue, and quality of services.  This intelligence provides new ways to compete by quickly identifying opportunities for revenue growth, operational efficiencies, and reduction of subscriber churn.  This information can be utilized by the following modules:

Real-Time Products

Our principle real-time products are:

Services

Customer Support.   We typically offer worldwide hardware and software maintenance and support services for our products.  Services may include installation, integration, training, on-site maintenance, 24x7 telephone support, return-to-factory warranty, depot repair, and software support update service.  A video solution has multiple interface points with other network elements, e.g., transport equipment, subscriber device, conditional access, clients, navigators (electronic program guides), billing systems, content receivers, other applications and back office systems.  Our system engineers are able to integrate these diverse elements, creating seamless video solutions.  Typically, we charge for the services under maintenance agreements after the initial warranty period.  In addition to these basic service and support options, we also offer, for additional fees, software upgrades and additional onsite services, as well as other professional services related to our products.

Managed Services.   We offer a comprehensive set of professional services to customers using our MDAS solutions, often customized to fit the specific needs of the individual customer.  Services include monitoring of data transmissions, confirmation of data integrity, system maintenance, installation of updates and monitoring of data delivery between customer systems.  The fees for managed services vary depending on the number of subscribers or markets served by our solution, the operational challenges posed by the customer configuration and the specific services and service levels provided.

Custom Engineering and Integration Services.   We provide custom engineering and integration services in the design of special hardware and software to help our customers with their specific applications.  This may include custom modifications to our products or integration of third-party interfaces or devices into our systems.  Many customers use these services to migrate existing applications from earlier generations of our systems or our competitors' systems to our state-of-the-art systems running Linux.

Sales and Marketing

We sell our systems primarily in the U.S. through our direct field sales team supported by consultants and our technical support group and have recently expanded our efforts to work with resellers and distributors worldwide.  As of June 30, 2010, we had 74 employees in sales and marketing, which includes sales, sales support, marketing, strategic communications, product-line management, program management, and business development.  Our sales force has significant experience in video solutions and real-time operating systems.  Outside North America, we utilize a direct sales force out of our facilities in France, Germany, Hong Kong, Japan, Beijing and the United Kingdom, augmented by our channel partners (resellers and system integrators).

Customers

We derive revenue from a limited number of customers.  Our products are typically manufactured and shipped in the same quarter the purchase order is received.  Accordingly, we do not believe backlog is a meaningful indicator of future level of sales.   Our backlog for real-time systems and video solutions at June 30, 2010 and 2009 totaled $4.0 million and $1.5 million, respectively.  In addition, we had deferred revenue of $15.4 million and $8.9 million at June 30, 2010 and 2009, respectively, which resulted primarily from prepaid services and shipments of systems where the revenue had not yet been recognized. The year -over-year increase in deferred revenue was primarily attributable to prepayments from two of our video customers for multi-year maintenance and service contracts.

We have purchase agreements with many customers, but these agreements typically do not require minimum purchases of our products.  As a result, sales to specific customers tend to, and are expected to continue to, vary from year-to-year, depending on such customers' budgets for capital expenditures and new product introductions.

A significant portion of our video revenue has come from, and is expected to continue to come from, sales to broadband companies.  For the fiscal year ended June 30, 2010, Cox Communications, Inc. ("Cox") represented 20% of our total revenue.  For the fiscal year ended June 30, 2009, Cox represented 19% and Time Warner, 18%. And for the fiscal year ended June 30, 2008, Cox represented 12% and Time Warner, 10%.  No other customer of our video solutions accounted for more than 10% of our total revenue during the last three fiscal years.

Although we sell our real-time products to large customers, the customer base is generally more diversified than our video solutions business.  For the fiscal year ended June 30, 2010, Lockheed Martin Corporation ("Lockheed") accounted for 11% of our total revenue.  No customer accounted for more than 10% of our total revenues during the fiscal years ending on June 30, 2009 and June 30, 2008.

We derive a significant portion of our revenues from the supply of products to U.S. government prime contractors and agencies of the U.S. government.  The supplied systems include iHawk, ImaGen, PowerMAXION, Power Hawk, 3200-2000 product lines, and other configurations from RedHawk Linux, with certain systems incorporating custom enhancements requested by the customer.  We sell these integrated computer systems to prime contractors, including Lockheed, Boeing, Northrop Grumman, Raytheon and other Fortune 500 companies.  We also supply spare parts, upgrades, engineering consulting services and both hardware and software maintenance.  For the fiscal years ended June 30, 2010 and 2009, we recorded $13.6 million and $9.4 million, respectively, in revenues to U.S. government prime contractors and agencies of the U.S. government.  Government business is subject to many risks, such as delays in funding, reduction or modification of contracts or subcontracts, failure to exercise options, changes in government policies and the imposition of budgetary constraints.  A loss of government contract revenues could have a material adverse effect on our business, financial condition and results of operations.

New Product Development

We are committed to the development of new technology and rapid innovation in the evolving markets in which we compete.  Research and development costs are expensed when incurred and aggregated $12.5 million, $13.8 million, and $16.6 million in fiscal years 2010, 2009, and 2008 respectively.  See Part II, Management's Discussion and Analysis of Financial Condition and Results of Operations, for explanations of changes in research and development expenses.

Our research and development strategies for our video solutions are based on market demands and are focused on the following:

Our research and development strategies for our real-time products are based on market demands and are focused on the following:

Competition

Our video solutions and real-time products are sold into highly-competitive environments, driven by rapid technological innovation.  Both product groups compete based upon features, reliability, scalability, service, and price.  Due in part to the range of performance and applications capabilities of our products, we compete in various markets against a number of companies.

The major competitors of our video solutions currently include the following:  Arris Group Inc., Cisco Systems, Inc., Edgeware, Harmonic Inc., Microsoft, MobiTV, Inc., Motorola, Inc., Netflix, Inc.,  OpenNet, RealNetworks, Inc., SeaChange International, Inc., Verivue and Wowza Media Systems.  We believe that we and SeaChange International Inc. are the leaders in the North American cable and international video delivery markets based on the number of subscribers in the markets served.  Typically, in opportunities for our MDAS products, we also compete against in-house development or customer offerings from consulting entities such as Accenture.

Our real-time product line competes with a number of companies.  We categorize our major competitors as follows:

Additional competitors with significant market presence and financial resources, including computer hardware and software companies, content providers and television equipment manufacturers, including digital set-top-box manufacturers, may enter our markets, thereby further intensifying competition.  Potential future competitors may also include one or more of the parties with whom we currently have a strategic relationship.  Although we have proprietary rights with respect to much of the technology incorporated in our video solutions and real-time systems, our strategic partners have not agreed to refrain from competing against us. Increased competition could result in price reductions that would adversely affect our business, financial condition and results of operations. Many of our current and potential future competitors have significantly greater financial, technical, sales, marketing and other resources than us, and greater brand name recognition.  In addition, many of our competitors have well-established relationships with our current and potential customers and have extensive knowledge of our markets.

Intellectual Property

We rely on a combination of contracts and copyright, trademark, patent and trade secret laws to establish and protect our proprietary rights in our technology.  We distribute our products under software license agreements that typically grant customers perpetual licenses to our products, which contain various provisions protecting our ownership and confidentiality of the licensed technology.  The source code of our products is protected as a trade secret and as an unpublished copyright work.  However, some of our products utilize open source that provides limited copyright protection.  In addition, in certain instances, we license our products under licenses that give licensees limited access to the source code of certain of our products, particularly in connection with our strategic alliances.

Despite the precautions we have taken, there can be no assurance that our products or technology will not be copied or otherwise obtained and used without authorization.  In addition, effective copyright and trade secret protection may be unavailable or limited in certain foreign countries and with respect to open source code utilized in certain of our products.  We believe that, due to the rapid pace of innovation within our industry, factors such as the technological and creative skills of our personnel are more important in establishing and maintaining a technology leadership position within the industry than are the various legal protections for our technology.

We own three U.S. patents and multiple foreign counterparts covering targeted advertising across any type of network.  These U.S. patents are Nos. 5,931,901; 6,038,591; and 6,161,142.  In addition, these U.S. patents have foreign counter-parts issued in various foreign jurisdictions.  Additionally, we have patent applications pending in the United States and abroad.  We have also obtained a patent license to a patent portfolio (13 patents, 29 patent applications, and all additions, divisionals, continuations, continuations-in-part, extensions, reissues, and foreign counterparts thereof) which is now owned by Alcatel-Lucent.  These patents cover multiple interactive television, targeted advertising, and on-demand technologies.  The portfolio includes U.S. Patent Nos. 5,623,595 and 5,805,804 ("Subject Patents").  In addition to our original license, on September 28, 2007, Concurrent obtained a separate Patent License to the Subject Patents from Broadband Royalty Corporation ("BBR"), with assurances from its parent company, C-COR Incorporated.  BBR co-owns the Subject Patents with Alcatel-Lucent.  The Patent License provides a license to the Subject Patents that may be transferred to an acquirer of Concurrent or Concurrent's video streaming business, so long as the acquirer has not been formally identified as an actual or potential Alcatel-Lucent licensee.

We have entered into licensing agreements with several third-party software developers and suppliers.  Generally, such agreements grant us non-exclusive, worldwide licenses with respect to certain software provided as part of computers and systems we market and terminate on varying dates.

Suppliers

We sometimes purchase product components from a single supplier in order to obtain the required technology and the most favorable price and delivery terms.  These components include systems, system boards, memory, CPUs, mother boards, storage devices, software, and chassis.  We purchase product components from the following single suppliers: Dell, Xyratex, Qlogic, STEC, Curtis-Wright, Oracle, Kardios, KMA Systems, Supermicro, Tyan, GE Intelligent Platforms, General Standards, Data Device Corporation, Myricom, Pentair, and North Atlantic Industries.  In most cases, comparable products are available from other sources, but would require significant reengineering to conform to our system specifications.  Single-source suppliers accounting for 10% or more of these purchases were Xyratex (20%) and Dell (19%) for the fiscal year ended June 30, 2010.  For the fiscal year ended June 30, 2009, Xyratex accounted for 22%, Dell accounted for 16% and Bell Micro Products accounted for 16%.

Seasonality

We have experienced variations in revenue, expenses and operating results from quarter to quarter, and it is probable that these variations will continue.  We believe that fluctuations in the number of orders for our video solutions being placed from quarter to quarter are principally attributable to the buying patterns and budgeting cycles of broadband companies.  We believe that orders for real-time products are dictated by buying cycles of the government and large government contractors.  In addition, for both product lines, orders are often not finalized until the end of a quarter.  However, we do not believe seasonality is a significant factor at this time.

Governmental Regulation

We are subject to various international, U.S. federal, state and local laws affecting our business.  Any finding that we have been or are in noncompliance with such laws could result in, among other things, governmental penalties.  Further, changes in existing laws or new laws may adversely affect our business.

In connection with orders from the U.S. federal government and government contractors, we are in some circumstances subject to the U.S. federal government procurement regulations that may provide the buyer with the right to audit and review our performance, as well as our compliance with applicable laws and regulations. In addition, our business is subject to government regulation based on the products we sell that may be subject to government requirements, such as obtaining an export license or an end-use certificate from the buyer, in certain circumstances. In the United States, these requirements include, among others, the U.S. Export Administration Regulations, International Traffic in Arms Regulations and the economic sanctions and embargo laws enforced by the Office of Foreign Assets Control Regulations. If a government audit uncovers improper or illegal activities, or if we are alleged to have violated any laws or regulations governing the products we sell under our government contracts, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with U.S. federal government agencies.

Recently, several countries where our systems are shipped have adopted rules and regulations governing the labeling of computer hardware which apply to our products.  Specifically, we must comply with the Waste of Electronic and Electrical Equipment (WEEE) and Restriction of Hazardous Substances Directive (RoHS) enacted in the European Union and the Ministry of Information Order No. 39 in China.

The television industry is subject to extensive regulation in the United States and other countries.  Our video solutions business is dependent upon the continued growth of the digital television industry in the United States and internationally.  Broadband companies are subject to extensive government regulation by the Federal Communications Commission ("FCC") and other federal and state regulatory agencies.  Recently, the FCC has attempted to expand its regulation of the cable industry pursuant to the Cable Communications Policy Act of 1984 (the "1984 Cable Act"), which amended the Communications Act of 1934. The 1984 Cable Act established policies in the areas of ownership, channel usage, franchise provisions and renewals, subscriber rates and privacy, obscenity and lockboxes, unauthorized reception of services, equal employment opportunity, and pole attachments. The 1984 Cable Act also defined jurisdictional boundaries among federal, state and local authorities for regulating cable television systems which, among other provisions, allow for expanded regulatory powers when domestic cable penetration exceeds a threshold of 70% of all U.S. households.  Additional regulations could have the effect of limiting capital expenditures by broadband companies and thus could have a material adverse effect on our business, financial condition and results of operations.  The enactment by federal, state or international governments of new laws or regulations could adversely affect our broadband customers, and thereby materially adversely affect our business, financial condition and results of operations.

Environmental Matters

We purchase, use, and arrange for certified disposal of chemicals used in the manufacturing process at our Pompano Beach, Florida facility.  As a result, we are subject to federal and state environmental protection and community right-to-know laws.  Additionally, we export our products around the world where there are additional environmental regulations.  These laws could have the effect of limiting our capital expenditures and thus could have a material adverse effect on our business, financial condition and results of operations.  Violations of such laws can result in the imposition of substantial remediation costs and penalties.  We believe we are in compliance with all material environmental laws and regulations.

Employees

As of June 30, 2010, we had 302 full-time employees worldwide.  Of these employees, 247 were located in the United States and 55 were located internationally.  Our employees are not unionized.

Financial Information About Foreign And Domestic Operations And Export Sales

A summary of net sales (consolidated net sales reflects sales to unaffiliated customers) attributable to our foreign and domestic operations for the fiscal years ended June 30, 2010, 2009, and 2008 is presented in Note 10 to the consolidated financial statements included herein.

Item 1A.   Risk Factors.

The following are some of the risk factors we face.

You should carefully consider each of the following risk factors and all of the other information in this Annual Report on Form 10-K.  These risks are not the only ones we face.  Our business operations could also be impaired by additional risks and uncertainties that, at present, are not known to us, or that, at present, are considered immaterial.

If any of the following risks and uncertainties develops into actual events, our business, financial condition and results of operations could be materially and adversely affected.  If that happens, the trading prices of our common stock and other securities we may issue in the future could decline significantly.

The risk factors below contain forward-looking statements regarding Concurrent.  Actual results could differ materially from those set forth in the forward-looking statements.  See "Cautionary Statements Regarding Forward-Looking Statements" on page 38.

Risks Related to Our Business

Continuing uncertainties in the domestic and global economies may reduce demand for our products and services.

A recession in the domestic and global economy may negatively affect our operating results.  The uncertainty in economic conditions in many of our markets may impact demand for our products and render budgeting and forecasting difficult. The difficulty in forecasting demand increases the difficulty in anticipating our inventory requirements, which may cause us to over-produce finished goods, resulting in inventory write-offs, or under-produce finished goods, affecting our ability to meet customer requirements.

Our operating results may vary based on changes in our customers' capital expenditures caused by uncertain conditions in the domestic and global economy. We sell our solutions primarily to large organizations whose businesses fluctuate with general economic and business conditions. As a result, decreased demand for our solutions and services caused by a weakening global economy may cause a decline in our revenue. Historically, economic downturns have resulted in overall reductions in corporate spending.  In the future, potential customers may decide to reduce their budgets for capital expenditures by deferring or reconsidering product purchases, which would negatively impact our operating results.

If content providers, such as movie studios, limit the scope of content licensed for use in the digital video market, our business, financial condition and results of operations could be negatively affected because the potential market for our products would be more limited than we currently believe.

The success of the video market is contingent on content providers, such as movie studios, continuing to permit their content to be licensed for distribution in this market. Content providers may, due to concerns regarding marketing or illegal duplication of the content, limit the extent to which they provide content to the markets served by our customers and potential customers. A limitation of available content would indirectly limit the demand for our video systems.

A significant portion of our revenue has been, and is expected to continue to be, concentrated in a small number of customers.  If we are unsuccessful in maintaining and expanding relationships with these customers or lose any of these customers, our business will be adversely affected.

For the fiscal year ended June 30, 2010, Cox and Time Warner accounted for approximately 20% and 8% of our total revenues, respectively, and approximately 37% and 15% of our video solutions revenue, respectively.  For the fiscal year ended June 30, 2009, Cox and Time Warner accounted for approximately 19% and 18% of our total revenues, respectively, and approximately 30% and 28% of our video solutions revenue, respectively.  If we are unsuccessful in maintaining and expanding key relationships with these and other existing customers or if these customers' purchasing levels are reduced, our business will be materially adversely affected.  Further, if we are unsuccessful in establishing relationships with other large companies or experience problems in any of our systems, our ability to attract new customers and sell additional products to existing customers will be materially adversely affected.

Our broadband customers sometimes swap sites or purchase sites from other broadband customers.  If we already have products deployed at a swapped site, the new owner may replace our products or discontinue maintenance with respect to such site.  Alternatively, forecasted revenues could be negatively impacted because the new owner of the site may not need to purchase products from us due to their existing agreement with us.

Due to our limited customer base and the relative size of each customer compared to Concurrent, our customers may make extensive demands upon our business.  Such demands may include high levels of contractual service, product-improvement obligations and severe price pressure.  In addition, our failure to adequately perform under these contracts could result in liquidated damages.  The payment of any liquidated damages or failure to meet our customers' expectations could substantially harm our future business prospects.

We typically do not have written agreements that require customers to purchase fixed minimum quantities of our products.  Our sales to specific customers tend to, and are expected to continue to, vary from year-to-year, depending on such customers' budgets for capital expenditures and new product introductions.  Further, such expenditures may be reduced, delayed or cancelled as a result of the continuing global economic slowdown on each of these customers' businesses.

In North America, broadband companies have widely adopted video solutions over the past decade.  Many will be reluctant to change vendors as systems are upgraded, due to the integration into their network.  As a result, future opportunities for new sales of video servers into these markets may be limited.

We are transforming the video business and seeking to broaden from cable- and IPTV-based VOD solutions to video-to-any-screen.  The transformation will require additional resources, especially in research and development, and will require us to develop and sell new products to new customers.  A failure to transition the business will be costly.

Our video expertise for the last ten years has been focused on the VOD market.  Although we have been successful in VOD, we recognize it is a relatively small market and, as such, we plan to transition the business to serve video to all devices.  In order to accomplish this transformation, we have rolled-out a new strategic plan and we have begun executing against that plan.  We are currently investing in research and development resources to develop the products necessary to serve these new markets.  We have also invested in new sales professionals to help us sell our existing and new products to a wide customer set.  We believe that these steps are necessary, but they are expensive.  We are making these investments in a challenging macro-economic environment and may be unable to develop or sell any new marketable products.   In addition, we may face robust competition both from internally-developed solutions and from larger and better-positioned companies.  If we are not successful in establishing new products and new customers, we will have expended considerable effort and capital to transition the business and will not have received any economic benefit.

We utilize open source software, which could enable our customers or competitors to gain access to our source code and distribute it without paying any license fee to us.

Key components of both our real-time and on-demand products utilize open source software on Linux platforms.  Some open source software, especially that provided under the GNU Public License, is provided pursuant to licenses that limit the restrictions that may be placed on the distribution and copying of the provided code.  Thus, it is possible that customers or competitors could copy our software and freely distribute it.  This could substantially impact our business and our ability to protect our products and future business.

We incurred net losses in the past and may incur further losses in the future.

We incurred net losses of $1.0, $14.5, $12.2, $9.3 and $7.7 million in fiscal years ended June 30, 2010, 2009, 2007, 2006 and 2005, respectively.  Our $14.5 million net loss in fiscal 2009 included a one-time $17.1 million non-cash impairment of intangibles.  As of June 30, 2010, we had an accumulated deficit of approximately $173.0 million.  We may incur additional net losses in the future.

Future issuances or repurchases of our equity, or transfers of our equity by third parties, may impair our future ability to use a substantial amount of our existing net operating loss carryforwards.

Future transactions and the timing of such transactions could cause an additional ownership change for income tax purposes under Section 382 of the Internal Revenue Code. Such transactions may include, but are not limited to, additional repurchases or issuances of common stock, or acquisitions or sales of shares of Concurrent stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account. Many of these transactions are beyond our control. If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate a new annual restriction on the use of our net operating loss carryforwards to offset future taxable income, but we would be able to continue to carry forward unused amounts from prior years.

We rely on a combination of contracts and copyright, trademark, patent and trade secret laws to establish and protect our proprietary rights in our technology.  If we are unable to protect our intellectual property rights, our competitive position could be harmed or we could be required to incur expenses to enforce our rights.  Our business could also be adversely affected if we are found to be infringing on the intellectual property of others.

We typically enter into confidentiality or license agreements with our employees, consultants, customers and vendors, in an effort to control access to and distribution of our proprietary information.  Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary technology without authorization.  The steps we take may not prevent misappropriation of our intellectual property, and the agreements we enter into may not be enforceable.  In addition, effective copyright and trade secret protection may be unavailable or limited in some foreign countries.

Other companies, such as Acacia Technologies Group, Personalized Media Communication L.L.C., Vtran Media Technologies, the SCO Group, and our competitors, may currently own or obtain patents or other proprietary rights that might prevent, limit or interfere with our ability to make, use or sell our products.  Further, we have indemnification obligations with numerous customers that could require us to become involved in intellectual property litigation.  As a result, we may be found to be infringing on the intellectual property rights of others.  In the event of a successful claim of infringement against us or against a customer to which we have an indemnification obligation, our business and operating results could be adversely affected.

Any litigation or claims brought against us, whether or not valid, could result in substantial costs and diversion of our resources.  Intellectual property litigation or claims brought against us could force us to do one or more of the following:

If we are forced to take any of the foregoing actions, we could face substantial costs and our business could be seriously harmed.  Although we carry general liability insurance, our insurance may not cover potential claims of this type or be adequate to indemnify us for all liability that may be imposed.

In addition, we may initiate claims or litigation against third parties in the future for infringement of our proprietary rights or to determine the scope and validity of our proprietary rights or the proprietary rights of competitors.  These claims could result in costly litigation and the diversion of our technical and management personnel and there can be no guarantee of success in any such action.  As a result, our operating results could suffer and our financial condition could be harmed.

The markets in which we operate are highly competitive, and we may be unable to compete successfully against our current and future competitors, which would adversely affect our business.

The markets for video solutions and real-time products are extremely competitive.  Our primary on-demand competitor, SeaChange International, Inc., is well funded and has been successful in the VOD market.  Other competitors are divisions of larger public companies with an established presence in the industry.  Further, as we expand our product offerings to additional delivery devices, we encounter a different set of competitors for each new product line.  This intense competition has negatively impacted our VOD revenues and may severely impact our success and ability to earn additional revenue through expanding our video solutions offerings.

Although we currently enjoy a leadership position in providing media data and advertising solutions and services, this is also a very competitive field.  We could be displaced by some competitors or internally-developed solutions.

The market for our real-time products is ever changing.  Although we currently enjoy a leadership position in high-performance, highly deterministic computing solutions, a number of well-funded competitors such as Novell, Oracle, IBM, and Red Hat, among others, could displace us.  As demand shifts, we may be unable to adequately respond to customer demands or technology changes.  There may be new entrants into the real-time market with better, more appropriate products.  We may also experience decreasing prices for our products and services due to competition, the purchasing leverage of our customers and other factors.

A list of the competitors we face in both of our markets and a categorization of our competitors is included under the Competition heading in the Business section in this Annual Report on Form 10-K for the year ended June 30, 2010.

The introduction of broadband Internet video services for televisions may gain traction, thus replacing current VOD services and causing a negative impact on Concurrent's on-demand revenue.

We believe a number of well-funded companies such as Amazon, Apple, Blockbuster, Google, Netflix, and Yahoo are capable of delivering broadband Internet video services for home television viewing.  If these products are developed, successfully deployed and embraced by consumers, our customers may discontinue purchases of our video products.

We may experience competitive pricing pressure for our products and services, which may impair our revenue growth and our ability to achieve profitability.

We may experience decreasing prices for our products and services due to competition, the purchasing leverage of our customers and other factors.  If we are required to decrease prices, our results of operations will be adversely affected.  We may reduce prices in the future to respond to competition and to generate increased sales volume.

We have a significant base of deployed video solutions products that our customers, over time, may decide to swap for products from other companies.

Although the VOD market is evolving in the view of most subscribers, a significant number of our on-demand products have been deployed for several years and may be replaced with newer products.  When our customers evaluate replacing those older products, they may choose to try a different vendor.  If that were to occur, we would lose future revenue opportunities from expansion as well as maintenance.

A loss of our government contracts and/or orders would have a material adverse effect on our business.

We derive a significant portion of our real-time revenues from the supply of systems under government contracts and/or orders.  For the fiscal year ended June 30, 2010, we recorded $13.6 million in sales to U.S. government prime contractors and agencies of the U.S. government, up $4.2 million, or 45% from the year ended June 30, 2009.  These sales represent approximately 23% and 13% of our total sales in the fiscal years ended June 30, 2010 and 2009, respectively.  Government business is subject to many risks, such as delays in funding, reduction or modification of contracts or subcontracts, changes in governmental policies or regulations which could significantly increase the cost of doing business with the government and the imposition of budgetary constraints.  Many governments are struggling to balance their budgets which could further reduce funding for contracts.  A loss of government contract revenues would have a material adverse effect on our business, results of operations and financial condition.

If we fail to develop and market new products and product enhancements in a timely manner, our business could be adversely affected.

Our future success is dependent on our development and marketing of additional products that achieve market acceptance and enhance our current products.  In addition, services, products or technologies developed by others may render one or more of our products or technologies uncompetitive, unmarketable or obsolete.  Our future success will depend on our ability to continue to enhance our existing products, including development of new applications for our technology, and to develop and introduce new products to meet and adapt to changing customer requirements and emerging technologies.  Our failure to respond to rapidly changing technologies could adversely affect our business, financial condition and results of operations. Our efforts to trim expenses in research and development could have the unintended consequence of impacting our delivery of new products or enhancements to existing products. Our inability to develop, on a timely basis, new products or enhancements to existing products, or the failure of such new products or enhancements to achieve market acceptance could have a material adverse effect on our business, financial condition and results of operations.  There can be no assurance that we will be successful in pursuing any new products or enhancements to existing products.

In some cases, we rely on a limited number of suppliers, which entails several risks, including the possibility of defective parts, a shortage of components, an increase in component costs, and reduced control over delivery schedules.

We sometimes purchase product components from a single supplier in order to obtain the required technology and the most favorable price and delivery terms.  These components include systems, system boards, memory, CPUs, mother boards, storage devices, software, and chassis.  We purchase product components from the following single suppliers: Dell, Xyratex, Qlogic, STEC, Curtis-Wright, Oracle, Kardios, KMA Systems, Supermicro, GE Fanuc, Data Device Corporation, Myricom, Pentair, and North Atlantic Industries.  In most cases, comparable products are available from other sources but would require significant reengineering to conform to our system specifications.  Single-source suppliers accounting for 10% or more of these purchases were Xyratex (20%) and Dell (19%) for the fiscal year ended June 30, 2010.  For the fiscal year ended June 30, 2009, Xyratex (22%), Dell (16%) and Bell Micro Products (16%) were the only suppliers that accounted for more than 10% of Concurrent's purchases.

Our reliance on single suppliers entails a number of risks, including the possibility of defective parts, a shortage of components, increase in components costs, and reduced control over delivery schedules.  Any of these events could adversely affect our business, results of operations and financial condition. We estimate that a lead-time of 16-24 weeks may be necessary to switch to an alternative supplier of certain custom application specific integrated circuit and printed circuit assemblies.  A change in the supplier of these components, without the appropriate lead-time, could result in a material delay in shipments by us of certain products.  Where alternative sources are available, qualification of the alternative suppliers and establishment of reliable supplies of components from such sources may also result in delays.  Shipping delays may also result in a delay in revenue recognition, possibly outside the fiscal year period originally planned, and, as a result, may adversely affect our financial results for that particular period.

We provide maintenance for a large number of legacy systems owned by customers in the real-time market.

A large percentage of the services we provide is to customers who run our legacy hardware and systems.  Over time, these systems will be replaced and the customers may not choose to purchase replacement systems from us.   In such a case, our service revenue will be materially negatively impacted.

Sales by our international subsidiaries accounted for approximately 23%, 23% and 25% of our revenue in fiscal years 2010, 2009 and 2008, respectively.  Accordingly, our business is susceptible to numerous risks associated with international operations.  Further, sales by our U.S. operation to international customers range from 8% to 12% of total revenue per year.

We are subject to a number of risks associated with international business activities that could increase our costs, lengthen our sales cycle and require significant management attention.  These risks include:

Product failures or interruptions could cause delays in shipments, require design modifications or field replacement, which may have a negative impact on our business and damage our reputation and customer relationships.

Product failures may adversely affect our business, financial condition and results of operations.  Despite our own testing and testing by current and potential customers, all errors or failures may not be found in our products prior to being deployed or, if discovered, successfully corrected in a timely manner. These errors or failures could cause delays in product introductions and shipments or require design modifications that could adversely affect our competitive position.  Further, some errors may not be detected until the systems are deployed.  In such a case, we may have to undertake substantial field replacement programs to correct the problem.  Our reputation may also suffer if our customers view our products as unreliable, whether based on actual or perceived errors or failures in our products.

In addition, a defect, error or performance problem with our video products could cause our customers' offerings to fail for a period of time or be degraded.  Any such failure would cause customer service and public relations problems for our customers.  As a result, we could experience delayed or lost revenue due to adverse customer reaction, negative publicity regarding us and our products and services and claims for substantial damages against us, regardless of our responsibility for such failure.  Any claim could be expensive and require us to spend a significant amount of resources.  In circumstances where third party technology incorporated with or in our systems includes a defect, error or performance problem or fails for any reason, we may have to replace such third party technology at our expense and be responsible to our customers for their corresponding claims.  Such tasks could be expensive and could require us to spend a significant amount of resources.

Trends in our business may cause our quarterly operating results to fluctuate; therefore, period-to-period comparisons of our operating results may not necessarily be meaningful.

We have experienced significant variations in the revenue, expenses and operating results from quarter to quarter in our business, and it is likely that these variations will continue.  We believe that fluctuations in the number of orders for our products being placed from quarter to quarter are principally attributable to the buying patterns and budgeting cycles of our customers.  In addition, sales cycles associated with the purchase of many of our producers are typically lengthy and orders are often not finalized until the end of a quarter.  As a result, our results of operations have fluctuated in the past and will likely continue to fluctuate in accordance with this purchasing activity.  Therefore, period-to-period comparisons of our operating results may not necessarily be meaningful.  In addition, because these factors are difficult for us to forecast, our business, financial condition and results of operations for one quarter or a series of quarters may be adversely affected and below the expectations of securities analysts and investors, which could result in material declines of our stock price.

Our business may be adversely affected if we fail to retain our current key personnel, many of whom would be difficult to replace, or fail to attract additional qualified personnel.

Our future performance depends on the continued service of our senior management and our engineering, sales and marketing and manufacturing personnel.  Competition for qualified personnel is intense, and we may fail to retain our new key employees or to attract or retain other highly qualified personnel.  The loss of the services of one or more of our personnel could seriously impact our business.  Our future success also depends on our continuing ability to attract, hire, train and retain highly skilled managerial, technical, sales, marketing and customer support personnel.  In addition, new employees frequently require extensive training before they achieve desired levels of productivity.  We do not carry key person life insurance on any of our employees.

We could be exposed to legal liability if our products were used to violate copyright laws.

Our products enable recording, storing, and delivering video over commercial broadband networks.  Thus, our customers could use our products without first obtaining permission from content owners to record and deliver copyrighted video.  In such a situation, we could face liability in that our products enabled or assisted in breaching copyright laws.

As our products age, we may not be able to purchase necessary parts to support legacy systems currently deployed or to be deployed.

With the passage of time, suppliers of essential parts may stop producing these parts.  In such cases, we may be required to redesign our products to accommodate the obsolescence.  If that occurs, we will have to spend considerable effort in the redesign and, in some cases, may be forced to have the redesigned products requalified.  Requalification may take several months, thereby delaying expected revenue.

Our facilities, especially our Pompano Beach, Florida facility, could be subject to severe weather that could shut down those facilities and halt production.

All of our facilities are, from time to time, subject to severe weather that could result in a temporary shut-down of the impacted facility.  However, our Pompano Beach, Florida facility is located in south Florida where there have been a number of hurricanes in recent years.  A hurricane could shut-down the Pompano Beach facility for extended periods thereby making it impossible for us to manufacture and ship products since all of our products are shipped out of that facility.  Further, an extended shut-down could slow the release of software products for our real-time business since almost all the developers for those products are located at that facility.

We may engage in future acquisitions that dilute the ownership interest of our stockholders, cause us to incur debt or assume contingent liabilities or present other challenges, such as integration issues, for our business, which if not successfully resolved would adversely affect our business.

As part of our business strategy, we review acquisition prospects that would complement our current product offerings, enhance our technical capabilities or otherwise offer growth opportunities.  We periodically review investments in new businesses, and we may acquire businesses, products or technologies in the future.  In the event of any future acquisitions, we could issue equity securities that would dilute current stockholders' percentage ownership, incur substantial debt, or assume contingent liabilities.  These actions could materially adversely affect our operating results.  Acquisitions also entail numerous risks, including:

We cannot assure that we will be able to successfully integrate any business, products, technologies or personnel that we might acquire in the future.  Our failure to do so could materially adversely affect our business, operating results and financial condition.

Risks Related to Our Industries

The success of our business is dependent upon the success of our three-screen strategy and the growth in the video delivery market, which may not grow as we expect.  Any failure by the market to accept and adopt video delivery in a way that aligns with our stated strategy will have a material adverse effect on our business.

We believe that the business model that will support widespread multi-screen adoption of video delivery is still evolving.  The potential size of the market and timing of market development is uncertain.  We believe our success in these new markets will also depend on the adoption of an advertising based business model by key industry participants and our ability to offer the mix of products that allow these participants to introduce offerings which will support that model.

Our business is subject to governmental regulation.  Any finding that we have been or are currently in noncompliance with such laws could result in, among other things, governmental penalties or class action lawsuits.  Further, changes in existing laws or new laws may adversely affect our business.

We are subject to various international, U.S. federal, state and local laws affecting our on-demand and real-time product lines.  The television industry is subject to extensive regulation in the United States and other countries.  Our on-demand revenue is dependent upon the continued growth of the digital television industry in the United States and internationally.  Broadband companies are subject to extensive government regulation by the FCC and other federal and state regulatory agencies.  Recently, the FCC has attempted to expand its regulation of the cable industry pursuant to the 1984 Cable Act, which amended the Communications Act of 1934. The 1984 Cable Act established policies in the areas of ownership, channel usage, franchise provisions and renewals, subscriber rates and privacy, obscenity and lockboxes, unauthorized reception of services, equal employment opportunity, and pole attachments. The 1984 Cable Act also defined jurisdictional boundaries among federal, state and local authorities for regulating cable television systems which, among other provisions, allow for expanded regulatory powers when domestic cable penetration exceeds a threshold of 70% of U.S. households.  Additional regulations could have the effect of limiting capital expenditures by broadband companies and thus could have a material adverse effect on our business, financial condition and results of operations.  If we were found to be, or believed to be non-compliant with privacy laws, we could face substantial exposure to government fines or privacy litigation.  This risk is especially important for our Media Data and Advertising Solutions since these products monitor set-top-box functions that could be impacted by privacy law protections. Additionally, regulations could have the effect of limiting capital expenditures by broadband companies and thus could have a material adverse effect on our business, financial condition and results of operations.  The enactment by federal, state or international governments of new laws or regulations could adversely affect our broadband customers, and thereby materially adversely affect our business, financial condition and results of operations.  Our real-time revenue is also subject to strict government regulation as the result of the government work we do.  The regulations deal with security clearances, privacy, employment practices, pricing, purchasing, intellectual property and integrity.  If we were ever found in violation or if out of tolerance, our production and resultant revenues could be halted or significantly delayed.

We may be subject to liability if private information supplied to our customers, including broadband companies, is misused.

Our video solutions allow broadband companies to collect and store data that many viewers may consider confidential.  Unauthorized access or use of this information could result in liability to our customers, and potentially us, and might deter potential on-demand viewers.  We have no control over the policy of our customers with respect to the access to this data and the release of this data to third parties.

We cannot guarantee that our products and services will keep pace with technological developments and emerging industry standards, address the changing needs of our customers or achieve market acceptance, any of which could materially adversely affect our business.

The markets for our products are characterized by rapidly changing technology, evolving industry standards and new product introductions and enhancements.  There can be no assurance that we will be successful in enhancing our current and planned video solutions and real-time products or developing, manufacturing and marketing new products that satisfy customer needs or achieve market acceptance.  In addition, services, products or technologies developed by others may render one or more of our products or technologies uncompetitive, unmarketable or obsolete.  Future technological advances in the real-time, television and video industries may result in the availability of new products and services that could compete with our solutions or reduce the cost of existing products or services.  Our future success will depend on our ability to continue to enhance our existing products, including development of new applications for our technology, and to develop and introduce new products to meet and adapt to changing customer requirements and emerging technologies.  Further, announcements of currently planned or other new product offerings by our competitors may cause customers to defer purchase decisions or to fail to purchase our existing solutions.  Our failure to respond to rapidly changing technologies could adversely affect our business, financial condition and results of operations.

Other Risks

We have implemented certain anti-takeover provisions that could make it more difficult for a third party to acquire us.

Provisions of Delaware law and our restated certificate of incorporation, amended and restated bylaws, and rights plan could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders.

We are subject to certain Delaware anti-takeover laws regulating corporate takeovers.  These anti-takeover laws prevent a Delaware corporation from engaging in a business combination involving a merger or sale of more than 10% of our assets with any stockholder, including affiliates and associates of the stockholder, who owns 15% or more of the outstanding voting stock, for three years following the date that the stockholder acquired 15% or more of the corporation's stock except under limited circumstances.

There are provisions in our restated certificate of incorporation and our amended and restated bylaws that also may delay, deter or impede hostile takeovers or changes of control.

In addition, we have a rights plan, also known as a poison pill.  The rights plan has the potential effect of significantly diluting the ownership interest in us of any person that acquires beneficial ownership of 15% or more of our common stock or commences a tender offer that would result in a person or group owning 15% or more of our common stock.

Our stock price has been volatile in the past and may be volatile in the future.

Our common stock is traded on the NASDAQ Global Market.  For the twelve months ended June 30, 2010, the high and low prices reported on the NASDAQ Global Market were $6.22 and $3.38, respectively.  Further, as of August 27, 2010, the closing price as reported on the NASDAQ Global Market was $5.00.  The market price of our common stock may fluctuate significantly in the future in response to various factors, some of which are beyond our control, including, among others:

In addition, in recent years the stock market in general, and the NASDAQ Global Market and the market for technology companies in particular, have experienced extreme price and volume fluctuations.  In some cases, these fluctuations have been unrelated or disproportionate to the operating performance of these companies.  These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance.

In the past, class action litigation often has been brought against companies following periods of volatility in the market price of those companies' common stock.  We may become involved in this type of litigation in the future.  Litigation is often expensive and diverts management's attention and resources, which could materially and adversely affect our business, financial condition and results of operations.

A sustained period of low stock price brings with it a risk that our stock will not comply with the minimum trading-price rules of the NASDAQ Global Market, and may be subject to delisting, thus significantly impacting the liquidity of our stock and our access to public capital.

Item 1B .  Unresolved Staff Comments.

None.

Item 2. Properties.

Our principal facilities as of June 30, 2010, are listed below.  All of the principal facilities are leased.  Management considers all facilities listed below to be suitable for the purpose(s) for which they are used, including manufacturing, research and development, sales, marketing, service, and administration.

In addition to the facilities listed above, we also lease space in various domestic and international industrial centers for use as sales and service offices and warehousing.

Item 3. Legal Proceedings.

We are not presently involved in any material litigation.  However, we are, from time to time, party to various routine legal proceedings arising out of our business. We cannot predict the outcome of these lawsuits, legal proceedings and claims with certainty. Nevertheless, we believe that the outcome of any currently existing proceedings, even if determined adversely, would not have a material adverse effect on our business, financial condition and operating results.

Item X. Officers of the Registrant.

Our officers are elected by the Board of Directors to hold office until their successors have been chosen and qualified or until earlier resignation or removal.  Set forth below are the names, positions, and ages of executive officers as of August 31, 2010:

Dan Mondor, President, Chief Executive Officer, and Director.   Mr. Mondor joined Concurrent as Chief Executive Officer and Director on April 23, 2008.  Mr. Mondor has over 30 years of industry experience with leading global corporations in general management, sales, marketing and strategic planning.  Prior to joining Concurrent, Mr. Mondor held a number of senior executive positions with Mitel Networks, Inc., Nortel Networks, Inc. and Siemens Corporation.  Most recently he was president of Mitel Networks, Inc. with responsibility for Mitel's U.S. region.  Prior to joining Mitel, he was vice president of Solutions at Nortel and has held a number of senior executive positions during his 16 year career at Nortel. He was with Siemens AG from 1984 to 1990 and began his career with Bell-Northern Research.  Mr. Mondor has a Masters of Engineering from the University of Ottawa and a BS in Electrical Engineering from the University of Manitoba.

Kirk L. Somers, Executive Vice President, Corporate Affairs.   Mr. Somers has served as Executive Vice President since February 2007.  He served as the Company's General Counsel from November 2001 to February 2007 and was appointed Secretary in August 2004.  He was made a vice president and placed in charge of Investor Relations in January 2005.  He assumed responsibility for Human Resources in July 2010.  Immediately prior to joining Concurrent, from December 1998 to November 2001, Mr. Somers was the Assistant General Counsel for a company within divine, inc. (f.k.a. eshare communication, Inc.), a developer and marketer of enterprise interactive management solutions, where he was responsible for corporate-wide development and enforcement of the company's intellectual property portfolio as well as commercial contracts and other corporate matters.  From December 1995 to December 1998, Mr. Somers was a partner in the law firm of Marshall & Melhorn in Toledo, Ohio practicing in the area of litigation.  Prior to that, he was a JAG in the USAF.

Emory O. Berry, Chief Financial Officer and Executive Vice President of Operations.   On August 1, 2008, we hired Mr. Berry as our Chief Financial Officer and Executive Vice President of Operations.  Mr. Berry had been serving as the Company's Chief Financial Officer through the financial management staffing firm TechCFO, LLC ("TechCFO") since March 9, 2007.  Mr. Berry was an active partner at TechCFO from August 2006 to August 2008.  Beginning in August 1999, Mr. Berry served as the Chief Financial Officer of DVT Corporation, until its acquisition in May 2005 by Cognex Corporation, a publicly traded provider of machine vision systems.  From May 2005 through January 2007, Mr. Berry assisted Cognex with the financial and operational integration of DVT as a consultant.  From June 1998 through March 1999, Mr. Berry served as Chief Financial Officer and Treasurer of Firearms Training Systems, formally, a publicly traded company specializing in simulated weapons training systems.  Mr. Berry also served as the Director of Corporate Accounting of Firearms Training Systems from March 1997 through June 1998.  He is a certified public accountant.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our Common Stock is currently traded under the symbol "CCUR" on the NASDAQ Global Market.  The following table sets forth the high and low sales price for our Common Stock for the periods indicated, as reported by the NASDAQ Global Market.

As of August 27, 2010, there were 8,894,000 shares of Common Stock outstanding, held by approximately 1,505 registered stockholders with a closing price on the NASDAQ Global Market of $5.00.

We have never declared or paid any cash dividends on our capital stock.  We do not anticipate paying a dividend at any time in the immediate future.

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto, which appear elsewhere herein.  Except for the historical financial information, many of the matters discussed in this Item 7 may be considered "forward-looking" statements that reflect our plans, estimates and beliefs.  Actual results could differ materially from those discussed in the forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, elsewhere herein, including in Item 1A. Risk Factors, and in other filings made with the Securities and Exchange Commission.

Overview

We are a provider of software, hardware and professional services for the video market, the media industry, and the high-performance, real-time market.  Our business is comprised of two segments for financial reporting purposes: products and services.  We provide products and services for each of these markets.

Our video solutions consist of software, hardware, and services for intelligently streaming video and collecting video consumption media data for advanced interactive video services and advertising.  Our solutions and services are sold to broadband and content providers around the world.

Our real-time products consist of Linux ® and other real-time operating systems and software development tools combined, in most cases, with off-the-shelf hardware and services sold to a wide variety of companies seeking high-performance, real-time computer solutions.  These solutions are typically used in applications requiring low-latency response and determinism such as simulation, image generation, testing, process control and data acquisition.  Our real-time products are specially designed for use with applications that acquire, process, store, analyze and display large amounts of rapidly changing information in real time – that is, with microsecond response times as changes occur.  Our systems and software support applications in the military, aerospace, financial and automotive markets.

We are implementing our strategy to market our video solutions, including our media data and advertising solutions, for the internet and mobility markets.  We believe this strategy may have a positive impact on our business; however, we cannot assure the success or timing of this initiative.  We expect to continue to review and realign our cost structure as needed, balanced with investing in the business.

Our sales model for media data and advertising solutions products is converting from a one-time perpetual license sale, for which maintenance was sold separately, to two types of commercial models: 1) a term license with maintenance and managed services, or 2) software as a service.  We expect that revenue from these sales generally will be recognized over the term of the various customer contracts.

Application of Critical Accounting Policies

The SEC defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

The following is not intended to be a comprehensive list of all of our accounting policies.  Our significant accounting policies are more fully described in Note 2 to the Consolidated Financial Statements.  In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States of America, with no need for management's judgment in their application.  There are also areas in which management's judgment in selecting an available alternative would not produce a materially different result.

We have identified the following as accounting policies critical to us:

Revenue Recognition and Related Matters

We recognize revenue when (1) persuasive evidence of an arrangement exists, (2) the system has been shipped or the services have been performed, (3) the fee is fixed or determinable and (4) collectibility of the fee is probable.  Determination of criteria (3) and (4) are based on our judgments regarding the fixed nature of the fee charged for products and services delivered and the collectibility of those fees.  Should changes in conditions cause us to determine these criteria are not met for certain future transactions, revenue recognized for any reporting period could be adversely affected.

Software and Hardware Sales

Product revenues are recognized based on the guidance in Accounting Standards Codification ("ASC") Topic 985.  Our standard contractual arrangements with our customers generally include the delivery of a hardware and software system, certain professional services that typically involve installation and training, and ongoing software and hardware maintenance.  The software component of the arrangement is considered to be essential to the functionality of the hardware; therefore, the hardware and the hardware maintenance components are considered software related and the provisions apply to all elements of the arrangement.  Under multiple element arrangements, we allocate revenue to the various elements based on vendor-specific objective evidence ("VSOE") of fair value.  Our VSOE of fair value is determined based on the price charged when the same element is sold separately.  If VSOE of fair value does not exist for all elements in a multiple element arrangement, but does exist for undelivered elements, we recognize revenue using the residual method.  Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement is recognized as revenue.  Where fair value of undelivered elements has not been established, the total arrangement is recognized over the period during which the services are performed.

In certain instances, our customers require significant customization of both the software and hardware products.  In these situations, the design and development is considered essential to the functionality of the software and, therefore, the revenue from these arrangements, with the exception of maintenance, is recognized in conformity with ASC Topic 605.  For long-term contracts, revenue is recognized using the completed contract method, or when costs are dependably estimable, we use the percentage-of-completion method of accounting based on costs incurred on the project compared to the total costs expected to be incurred through completion.

Professional Services

Professional services revenue is primarily generated from integration of third party interfaces, engineer consulting, and hardware installation.  These services are typically completed within 90 days from the receipt of the order.  Under accounting literature governing multiple element arrangements, we allocate revenue to the various elements based on VSOE of fair value, or other acceptable measures of fair value when services are determined to be non-software deliverables.  We determine VSOE for the services based on the standard rate per hour used when similar services are sold separately.  Revenues from these services are recognized when the services are performed.

Managed Services, Software as a Service and Hosting

In fiscal year 2010 we began offering our media data and advertising solutions software to our customers either as: 1) a term license with maintenance and managed services, or 2) software as a service.  In some cases these services are offered under a hosting model.  Revenue from hosting, maintenance fees and the sale of consulting services relating to managed services and software as a service arrangements are recognized ratably over the term of the arrangement. Set-up and implementation revenue is deferred until the solution is delivered and then recognized ratably over the longer of the term of the arrangement or the estimated customer life. Transactions fees from processing transactions for customers are recognized once the transaction is complete.

Hardware and Software Maintenance

We recognize revenue from maintenance services in accordance with ASC 985.  Depending upon the specific terms of the customer agreement, we may include warranty or maintenance as part of the purchase price.  Depending upon the specific terms of the customer agreement, we either accrue the estimated costs to be incurred in performing maintenance services at the time of revenue recognition and shipment of product, or we defer revenue associated with the maintenance services to be provided during the maintenance period based upon the value for which we have sold such services separately when they are renewed by existing customers.  For those arrangements in which the maintenance period is less than or equal to one year and for arrangements whereby the arrangement is a product warranty, we accrue the estimated costs to be incurred in providing services.  In accordance with ASC Topic 985, we have determined that the warranty or maintenance fee is part of the initial license fee, the maintenance period is for one year or less, the estimated cost of providing the services are immaterial, and upgrades and enhancements offered during maintenance arrangements historically have been and are expected to continue to be minimal and infrequent.  Actual costs are then charged against the warranty accrual as they are incurred.  For those arrangements in which the maintenance period is greater than one year, we defer revenue based upon the value for which we have sold such services separately.  This revenue is then recognized on a straight line basis over the warranty period.

Other

We record reimbursable out–of–pocket expenses in both services and maintenance net sales and as a direct cost of services and maintenance.  The reimbursement by customers of shipping and handling costs are recorded in product and other net sales and the associated cost as a cost of sale.  We account for sales taxes on a net basis.

New Revenue Recognition Standards in Fiscal 2011

See Recently Issued Accounting Pronouncements in Part II of this Form 10K for a discussion of new accounting pronouncements impacting revenue recognition for multiple deliverable revenue arrangements effective July 1, 2010, which is the first quarter of our fiscal 2011.

Allowance for Doubtful Accounts

The allowance for doubtful accounts receivable is based on an analysis of our historical charge-off ratio,  our aging of accounts receivable and our assessment of the collectibility of our receivables.  If there is a deterioration of one of our major customer's credit worthiness or actual account defaults are higher than our historical trends, our reserve estimates could be adversely impacted.

Inventory Valuation

We provide for inventory obsolescence based upon assumptions about future demand, market conditions and anticipated timing of the release of next generation products.  If actual market conditions or future demand are less favorable than those projected, or if next generation products are released earlier than anticipated, additional inventory write-downs may be required.  We also review, on a quarterly basis, the value of inventory on hand for which a newer and more advanced technology or product is currently, or will soon be, available.  When we believe that we will not be able to sell the products in inventory at or above cost, we mark the inventory down to fair market value.

Impairment of Goodwill and Trademark

ASC Topic 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (our annual testing date is July 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.  These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition or sale or disposition of a significant portion of a reporting unit.  Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit.  The fair value of each reporting unit is estimated using a discounted cash flow methodology.  This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, the useful life over which cash flows will occur, and determination of our weighted average cost of capital.  Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.  We allocate goodwill to reporting units based on the reporting unit expected to benefit from the combination.  We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach.  During the third quarter of fiscal 2009, we initiated an interim goodwill impairment test, due to our sustained, reduced stock price and market capitalization during the quarter.  As a result of this interim impairment analysis, we fully impaired both our goodwill and trademark as of March 31, 2009.

Income Taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate.  The provision for income taxes is determined using the asset and liability approach for accounting for income taxes.  A current liability is recognized for the estimated taxes payable for the current year.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount more-likely-than-not to be realized.  To the extent we establish or change the valuation allowance in a period, the tax effect will generally flow through the statement of operations.  In the case of an acquired or merged entity, we will record any valuation allowance on a deferred tax asset established through purchase accounting procedures as an adjustment to goodwill at the acquisition date.   Any subsequent change to a valuation allowance established during purchase accounting that occurs within the measurement period of the acquisition (a period not to exceed twelve months) will also be recorded as an adjustment to goodwill, provided that such a change relates to new information about the facts and circumstances that existed on the acquisition date.   All other changes to a valuation allowance established during purchase accounting will flow through the statement of operations.

The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws.  We are subject to income taxes in the U.S. and numerous foreign jurisdictions.  Significant judgment is required in determining our worldwide provision for income taxes and recording the related tax assets and liabilities.  In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain.  In spite of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities.  Therefore, an accrual for uncertain tax positions is provided for, when necessary.  In the event that we have accruals for uncertain tax positions, these accruals are reviewed quarterly and reversed upon being sustained under audit, the expiration of the statute of limitations, new information, or other determination by the taxing authorities.  The provision for income taxes includes the impact of changes in uncertain tax positions.  Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions.  Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.

In the calculation of our quarterly provision for income taxes, we use an annual effective rate based on expected annual income and statutory tax rates.  The tax (or benefit) applicable to significant unused or infrequently occurring items, discontinued operations or extraordinary items are separately recognized in the income tax provision in the quarter in which they occur.

Guarantees

We recognize the fair value of guarantee and indemnification arrangements issued or modified by us, if these arrangements are within the scope of the interpretation.  In addition, we must continue to monitor the conditions that are subject to the guarantees and indemnifications, as required under the previously existing GAAP, in order to identify if a loss has occurred.  If we determine if it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees and indemnifications.  Under our standard software license, services and maintenance agreement, we often agree to indemnify, defend and hold harmless our licensees from and against certain losses, damages and costs arising from claims alleging the licensees' use of our software infringes the intellectual property rights of a third party.  Historically, we have not been required to pay material amounts in connection with claims asserted under these provisions and, accordingly, we have not recorded a liability relating to such provisions.

Under our Software License, Services and Maintenance Agreement, we also represent and warrant to licensees that our software products will operate substantially in accordance with our published specifications regarding the product, and that the services we perform will be undertaken by qualified personnel in a professional manner conforming to generally accepted industry standards and practices.  Historically, only minimal costs have been incurred relating to the satisfaction of product warranty claims.

Other guarantees include promises to indemnify, defend and hold harmless each of our executive officers, non-employee directors and certain key employees from and against losses, damages and costs incurred by each such individual in administrative, legal or investigative proceedings arising from alleged wrongdoing by the individual while acting in good faith within the scope of his or her job duties on our behalf.  Historically, minimal costs have been incurred relating to such indemnifications and, as such, no amount has been accrued for these guarantees.

Stock-Based Compensation

We account for stock-based compensation in accordance with  ASC 718-10, which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements and requires application of a fair-value-based measurement method in accounting for share-based payment transactions with employees.  Assumptions used to estimate compensation expense from issuance of share-based compensation are based, to some extent, on historical experience and expectation of future conditions.  To the extent we issue additional share-based compensation, or assumptions regarding previously issued share-based compensation change, our future share-based compensation expense may be positively or negatively impacted.

Defined Benefit Pension Plan

We maintain a defined benefit pension plan (the "Pension Plan") for certain current and a number of former employees of our German subsidiary.  The Pension Plan provides benefits to be paid to all eligible employees at retirement based primarily on years of service with the Company and compensation rates in effect near retirement. Our policy is to fund benefits attributed to employees' services to date as well as service expected to be earned in the future.  The determination of our Pension Plan benefit obligation and expense is dependent on our selection of certain assumptions used by actuaries in calculating such amounts.  Those assumptions include, among others, the weighted average discount rate, the weighted average expected rate of return on plan assets and the weighted average rate of compensation increase.  To the extent that these assumptions change, our future benefit obligation and net periodic pension expense may be positively or negatively impacted.

Selected Operating Data as a Percentage of Net Sales

The following table sets forth our consolidated historical operating information, as a percentage of total revenues, unless otherwise noted, for the periods indicated:

Results of Operations

We recognize revenue for product sales in accordance with the appropriate accounting guidance as described in our critical accounting policies.  We recognize revenue from customer service plans ratably over the term of each plan, which are typically between one and three years.

Custom engineering services are often completed within 90 days from receipt of an order.  Revenues from these services are recognized upon completion and delivery of the product to the customer.  In certain instances, our customers require significant customization of both the software and hardware products.  In these situations, the services are considered essential to the functionality of the software and, therefore, the revenue from the arrangement, with the exception of maintenance, is recognized in conformity with accounting standards governing long term construction type contracts and performance of construction-type and certain production-type contracts.  If we are able to determine reasonable estimates of the cost of the arrangement, we record the value of the entire arrangement (excluding maintenance) as the project progresses based on actual costs incurred compared to the total costs expected to be incurred through completion.  If we are unable to reasonably estimate the costs to complete the arrangement, all revenue is deferred until the contract is completed.

Cost of sales consists of the cost of the computer systems sold, including amortization of software development costs, labor, material, overhead and third party product costs.  Cost of sales also includes the salaries, benefits and other costs of the maintenance, service and help desk personnel associated with product installation and support activities.

Sales and marketing expenses consist primarily of the salaries, benefits, overhead, and travel expenses of employees responsible for acquiring new business and maintaining existing customer relationships, as well as marketing expenses related to trade publications, advertisements, trade shows and depreciation costs of demo equipment.

Research and development expenses are comprised of salaries, benefits, overhead, and travel expenses of employees involved in hardware and software product enhancement and development, cost of outside contractors engaged to perform software development services, software certification costs.  Development costs are expensed as incurred.

General and administrative expenses consist primarily of salaries, benefits, overhead, and travel expenses of management and administrative personnel, human resources, information systems, insurance, investor relations, accounting and fees for legal, accounting, and other professional services.

Fiscal Year 2010 in Comparison to Fiscal Year 2009

The following table sets forth summarized consolidated financial information for each of the two fiscal years ended June 30, 2010 and 2009 as well as comparative data showing increases and decreases between periods.

(1) NM denotes percentage is not meaningful

Product Revenue .  Total product revenue for fiscal year 2010 was approximately $35.8 million, a decrease of approximately $8.9 million, or 20.0%, from $44.7 million in fiscal year 2009.  The decrease in product sales resulted from the $11.1 million, or 38.8%, decrease in video product sales to approximately $17.6 million in fiscal year 2010, from $28.7 million in fiscal year 2009.  Video solutions product sales decreased by $8.8 million in the United States due to reductions in purchases from our two largest video customers.  Video solutions product sales decreased by $2.3 million in our Asia-Pacific region primarily due to revenue in the prior year period from completion of customized software products to a Japanese cable distributor that did not recur in the current year period.  We believe that the decreasing volume of video solutions product sales for this fiscal year is primarily due to the impact of the economic downturn and the pace at which our broadband customers upgrade or replace video technology.  Fluctuation in video revenue is often due to the fact that we have a small number of customers making periodic large purchases that account for a significant percentage of our revenue.

Partially offsetting the decrease in video solutions product revenue, real-time product sales increased $2.2 million, or 14.0%, to $18.2 million in fiscal year 2010 from $15.9 million in fiscal year 2009.  Real-time product sales increased by $2.9 million in the United States primarily due to the sale of legacy Aegis system spares during the twelve months ended June 30, 2010, compared to the same period in the prior year.  Partially offsetting the increase in real-time product sales in the United States, real-time product sales decreased by $0.1 million and $0.6 million in our Asia-Pacific and Europe regions, respectively, during the twelve months ended June 30, 2010, compared to the same period in the prior year primarily due to a year over year decline in purchase volume by our international customers.

Service Revenue.   Total service revenue for fiscal year 2010 was $24.7 million, a decrease of approximately $2.3 million, or 8.5%, from $26.9 million for fiscal year 2009.  The decrease in service revenue was due to the $2.2 million, or 12.7%, decrease in service revenue related to video solutions products.  Video solutions service revenue decreased due to lower installation revenue in the twelve months ended June 30, 2010, compared to the same period in the prior year.  Lower installation service revenue was attributable to lower product sales, from which installation service revenue is often derived, and from the timing of installation services.

Service revenues related to real-time product sales decreased $0.1 million, or 1.0%, in fiscal year 2010, compared to the prior year.   We have experienced a steady decline in real-time service revenues over the past few years, as our legacy products have been removed from service and, to a lesser extent, from customers purchasing our new products that produce less service revenue.  We expect real-time service revenues to ultimately decline further, as legacy systems continue to be removed from service and are only partially offset by newer system service and price increases to maintain support of legacy systems.

Product Gross Margin.   Product gross margin was $21.0 million in fiscal year 2010, a decrease of approximately $3.0 million, or 12.6%, from $24.0 million in fiscal year 2009.  Product gross margin as a percentage of product revenue increased to 58.7% in fiscal 2010 from 53.7% in fiscal year 2009.  Product margins decreased in terms of dollars due to lower product revenue during the twelve months ended June 30, 2010, compared to the same period of the prior year.  Product gross margins, as a percentage of product revenue, increased primarily because higher margin real-time legacy system sales and video solutions software sales accounted for a greater portion of total product revenue during the twelve months ended June 30, 2010, compared to the same period in the prior year.

Service Gross Margin .  The gross margin on service revenue decreased approximately $1.9 million, or 11.0%, to $15.4 million in fiscal year 2010 from $17.3 million in fiscal year 2009.  Service gross margins as a percentage of service revenue decreased to 62.6% in fiscal year 2010 from 64.3% in fiscal year 2009.  The decrease in service margins as a percentage of service revenue was primarily due to the $2.3 million decrease in service revenue, which was coupled with only a $0.4 million reduction of service costs, as service costs are predominantly fixed over the near term.  Decreasing service costs resulted from decreasing facilities, personnel and severance costs, as we have focused on managing costs of the infrastructure that is necessary to fulfill service and support provided for our products.

Sales and Marketing.   Sales and marketing expenses decreased $0.3 million or 1.6% to $15.5 million in fiscal year 2010 from $15.8 million in fiscal year 2009.  Lower sales and marketing expenses were primarily attributable to a $0.3 million decrease in severance charges as a result of prior year changes to our sales group and a $0.3 million reduction of salaries and benefits.  Partially offsetting these decreases in costs, we incurred $0.3 million of additional costs to support international channel partner sales.

Research and Development.   Research and development expenses decreased approximately $1.2 million, or 9.0%, to approximately $12.5 million in fiscal 2010 from $13.8 million in fiscal 2009.  Lower research and development expenses were primarily attributable to a $0.8 million reduction of salaries and benefits, and $0.2 million reduction in severance charges as a result of prior year reductions to our real-time research and development group.  Additionally, we incurred $0.2 million less in incentive compensation resulting primarily from lower revenue and operating results during the twelve months ended June 30, 2010, as compared to the same period in the prior year.

General and Administrative.   General and administrative expenses decreased approximately $0.3 million, or 2.9%, to approximately $8.7 million in fiscal year 2010 from $8.9 million in the fiscal year 2009.  General and administrative expenses decreased primarily because we incurred $0.2 million less in consulting fees, primarily attributable to prior year strategic planning costs.  Additionally, we were able to reduce our insurance costs by $0.1 million during the twelve months ended June 30, 2010, compared to the same period in the prior year.

Goodwill and Trademark Impairment.   As of both June 30, 2010 and 2009, we had net goodwill and trademark balances of $0 due to the fact that we recorded total goodwill and trademark impairment charges of $17.1 million during the twelve months ended June 30, 2009.    We recorded a $16.0 million goodwill impairment charge due to the sustained decline in our stock price and the estimated effect of the economic downturn on our weighted average cost of capital, which reflects the market's presumed risk on our ability to generate estimated future cash flows.  Additionally, as a result of our strategic planning process during fiscal year 2009, we rebranded our Everstream product lines to better reflect our strategic direction and no longer intend to use the Everstream trademark.  Consequently, we recorded a $1.1 million impairment of our Everstream trademark during fiscal year 2009.

Interest income (expense) - net.   Interest income (expense), net decreased approximately $0.2 million during fiscal year 2010, compared to the prior year, primarily due to the decrease in the yield from our cash caused by the decline in interest rates during the past eighteen months.

Provision for Income Taxes.   We recorded an income tax provision for our domestic and foreign subsidiaries of $0.4 million in fiscal year 2010, compared to income tax provision of $0.2 million for our domestic and foreign subsidiaries in fiscal year 2009.  The change in the consolidated effective tax rate during fiscal year 2010 was primarily attributable to a non-recurring prior year ($0.4) million deferred tax benefit resulting from the reversal of a deferred tax liability associated with the Everstream trademark.   When the trademark was removed from the books as a result of the impairment, the associated deferred tax liability was also written off . Partially offsetting the prior year tax benefit, we recorded $0.5 million of income tax expense that was primarily attributable to income earned in Japan that cannot be offset by U.S. net operating loss carryforwards and that is subject to an approximately 49% effective tax rate.  We also recorded $0.1 million of income tax expense for our U.S. operations related to alternative minimum tax ("AMT") that may not be offset by our net operating loss carryforwards, and some state income taxes.  Other than AMT, our net operating loss carryforwards were available to reduce otherwise taxable income recorded in the U.S. in fiscal years 2010 and 2009.

Net (Loss) Income.   The net loss for fiscal year 2010 was ($1.0) million, or $(0.12) per basic and diluted share, compared to net loss for fiscal year 2009 of ($14.5) million, or ($1.75) per basic and diluted share.

Liquidity and Capital Resources

Our liquidity is dependent upon many factors, including sales volume, operating results and the efficiency of asset use and turnover.  Our future liquidity will be affected by, among other things:

Uses and Sources of Cash

We generated $6.5 million of cash from operating activities during fiscal year 2010 compared to generating $4.3 million of cash during fiscal year 2009.  Operating cash inflow during the twelve months ended June 30, 2010 was primarily attributable to prepayments from two of our video customers for multi-year maintenance and service contracts.  As a result, the deferred revenue increased by approximately $6.5 million.  Prior period operating cash inflow during fiscal year 2009 was primarily attributable to income generated from operations, excluding non-cash expenses.

We invested $3.1 million in property, plant and equipment during fiscal year 2010 compared to $2.0 million during fiscal year 2009.  Capital additions during fiscal year 2010 were primarily related to development and testing equipment required to implement our strategy to develop and sell solutions to the internet and mobile device markets.  Capital additions in the prior period related primarily to demonstration systems and product development and testing equipment related to our traditional markets.

On March 31, 2010, we entered into a Second Amended and Restated Loan and Security Agreement (the "Credit Agreement") with Silicon Valley Bank (the "Bank") which amends certain terms of the existing Loan and Security Agreement (the "Prior Agreement').  The Credit Agreement extends the maturity date of our credit facility to December 31, 2013 and improves the interest rate paid on outstanding advances under the existing $10.0 million credit line (the "Revolver").  Advances against the Revolver bear interest on the outstanding principal at a rate per annum equal to the greater of 4.00% or either: (1) the prime rate, or (2) the LIBOR rate plus a LIBOR rate margin of 2.75%.  The Credit Agreement also alters the Revolver availability, allowing $10.0 million for advances under the Revolver as long as we maintain cash at or through the Bank of $15.0 million or more.  At all times that we maintain cash at or through the Bank of less than $15.0 million, the amount available for advance under the Revolver is based upon a formula that is primarily based upon  a percentage of eligible accounts receivable, which may result in less than, but no more than $10.0 million of availability.

The interest rate on the Revolver was 4.00% as of June 30, 2010. The outstanding principal amount plus all accrued but unpaid interest is payable in full at the expiration of the credit facility on December 31, 2013.  Based on our cash balance at the Bank as of June 30, 2010, $10.0 million was available to us under the Revolver.  During fiscal year 2010, we paid the $949,000 previously outstanding balance under the Revolver and $0 was drawn under the Revolver as of June 30, 2010.

Under the Credit Agreement, we are subject to financial covenants similar to those in the Prior Agreement.  Specifically, we are obligated to maintain, as of the last day of each quarter, a consolidated tangible net worth of at least $11.5 million, increasing by 100% of quarterly net income and 100% of issuances of equity, net of issuance costs.  Our obligation with respect to maintaining a consolidated quick ratio of at least 1.25:1.00 did not change in the Credit Agreement.  All other material terms of the Prior Agreement remain the same and include additional financial covenants and customary restrictive covenants concerning our operations.  The Credit Agreement is secured by substantially all of the assets of the Company.  As of June 30, 2010, we were in compliance with these covenants as our adjusted quick ratio was 4.56 to 1.00, and our tangible net worth was $30.0 million.

At June 30, 2010, we had working capital (current assets, less current liabilities) of $30.5 million, including cash and cash equivalents of approximately $31.4 million, and had no material commitments for capital expenditures, compared to working capital of $29.7 million at June 30, 2009, including cash and cash equivalents of approximately $29.1 million.  Based upon our existing cash balances, historical cash usage, available credit facility, and generation of operating cash flow in the current fiscal year, we believe that existing cash balances will be sufficient to meet our anticipated working capital and capital expenditure requirements for the next twelve months.

Off-Balance Sheet Arrangements

We enter into agreements in the ordinary course of business with customers, resellers, distributors, integrators and suppliers that often require us to defend and/or indemnify the other party against intellectual property infringement claims brought by a third party with respect to our products.  We evaluate estimated losses for such indemnifications under ASC 460-20 and ASC 460-10-25.  We consider factors such as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, we have not encountered material costs as a result of such obligations and have not accrued any material liabilities related to such indemnifications in our financial statements.  See footnote 17 to the Consolidated Financial Statements for the additional disclosures regarding indemnification.

Contractual Obligations

The following table summarizes our significant contractual obligations as of June 30, 2010:

Recently Issued Accounting Pronouncements

Adopted

In December 2008, the FASB issued ASC 715-20-65-2, "Compensation – Retirement Benefits:  Defined Benefit Plans."  This section provides guidance on the objectives an employer should consider when providing detailed disclosures about assets of a defined benefit pension plan or other postretirement plan.  These disclosure objectives include investment policies and strategies, categories of plan assets, significant concentrations of risk and the inputs and valuation techniques used to measure the fair value of plan assets.  These provisions are effective for our fiscal year ending June 30, 2010.  ASC 715-20-65-2 concerns disclosure only and did not have an impact on our financial position or results of operations.  See footnote 9 for the additional disclosures required by this pronouncement.

In May 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") No. 855, which provides guidance on management's assessment of subsequent events.  Historically, management had relied on U.S. auditing literature for guidance on assessing and disclosing subsequent events.  ASC 855 represents the inclusion of guidance on subsequent events in the accounting literature and is directed specifically to management, since management is responsible for preparing an entity's financial statements.  The new standard clarifies that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date, "through the date that the financial statements are issued or are available to be issued."  Management must perform its assessment for both interim and annual financial reporting periods.  We adopted ASC 855 as of June 30, 2009, and adoption of this ASC did not have a material impact on our financial statements.  For each reporting period, we assess the need for disclosure of subsequent events through the date that the financial statements are issued and have determined that no subsequent events merit disclosure for our fiscal year ending June 30, 2010.

ASC  No. 810, "Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51" requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent's equity.  The amount of net income attributable to the noncontrolling interest will be included in consolidated net income.  It also amends certain consolidation procedures for consistency with the requirements of ASC 805, "Business Combinations."  The provisions also include expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest.  We adopted these provisions on July 1, 2009 and the adoption did not have an impact on our financial position or results of operations.

In August 2009, the FASB issued ASU No. 2009-05, "Measuring Liabilities at Fair Value." This ASU clarifies the application of certain valuation techniques in circumstances in which a quoted price in an active market for the identical liability is not available and clarifies that when estimating the fair value of a liability, the fair value is not adjusted to reflect the impact of contractual restrictions that prevent its transfer. We adopted these provisions on October 1, 2009 and the adoption did not have an impact on our financial position or results of operations.

In January 2010, the FASB issued ASU No. 2010-06, "Improving Disclosures About Fair Value Measurements" ("ASU 2010-06"), which provides amendments to ASU Subtopic No. 820-10, "Fair Value Measurements and Disclosures – Overall."  ASU 2010-06 requires additional disclosures and clarifications of existing disclosures for recurring and nonrecurring fair value measurements.  ASU 2010-06 added new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances and settlements related to Level 3 measurements.  The ASU also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value.  The ASU further amends the disclosure requirements about employers post retirement benefit plant assets.  The revised guidance is effective for interim and annual reporting periods beginning after December 15, 2009.  ASU 2010-06 concerns disclosure only and did not have an impact on our financial position or results of operations.

In February 2010, the FASB issued ASU No. 2010-09, "Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements."  The amendments in ASU 2010-09 remove the requirement for a Securities and Exchange Commission (SEC) filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements.  Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP.  The FASB also clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued.  The FASB believes these amendments remove potential conflicts with the SEC's literature.  All of the amendments in ASU 2010-09 were effective upon issuance except for conduit debt obligors, and we adopted this ASU as of March 31, 2010.  The adoption did not have an impact on our financial position or results of operations.

Not yet adopted

In September 2009, the FASB  issued ASU  No. 2009-13, "Multiple Deliverable Revenue Arrangements – A consensus of the FASB Emerging Issues Task Force."  The guidance provides principles and application guidance on whether multiple deliverables exist, determining the unit of accounting for each deliverable, and the consideration allocated to the separate units of accounting.  Additionally, this guidance requires an entity to allocate revenue in an arrangement using estimated selling prices of deliverables if a vendor does not have vendor-specific objective evidence or third-party evidence of selling price, eliminates the use of the residual method, and requires an entity to allocate revenue using the relative selling price method.  However, guidance on determining when the criteria for revenue recognition are met and how an entity should recognize revenue for a given unit of accounting are contained in other accounting literature.  The guidance is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.  Earlier application is permitted as of the beginning of an entity's fiscal year, and would be applied retrospectively as of the beginning of the fiscal year, if applied subsequent to the first quarter of a fiscal year.  We have adopted this standard as of July 1, 2010, and we are still evaluating the impact of adoption of this accounting standard on our consolidated financial statements.

In September 2009, the FASB issued ASU No. 2009-14, "Certain Revenue Arrangements That Include Software Elements – A consensus of the FASB Emerging Issues Task Force" which amends ASC 985-605, "Software: Revenue Recognition" to exclude from its scope certain tangible products containing both software and non-software components that function together to deliver the product's essential functionality.  This guidance focuses on determining which arrangements are within the scope of the software revenue guidance in Topic 985 (previously included in AICPA Statement of Position 97-2, Software Revenue Recognition) and which are not. This guidance also removes tangible products from the scope of the software revenue guidance and provides guidance on determining whether software deliverables in an arrangement that include a tangible product are within the scope of the software revenue guidance. This guidance is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and shall be applied on a prospective basis.  Earlier application is permitted as of the beginning of an entity's fiscal year, and would be applied retrospectively as of the beginning of the fiscal year, if applied subsequent to the first quarter of a fiscal year.  We have adopted this standard as of July 1, 2010, and we are still evaluating the impact of adoption of this accounting standard on our consolidated financial statements.

In December 2009, the FASB issued ASU No. 2009-17, "Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities."  ASU 2009-17 amends the evaluation criteria to identify the primary beneficiary of a variable interest entity provided by FASB Interpretation 46(R), "Consolidation of Variable Interest Entities-An Interpretation of ARB No. 51."  Additionally, the provisions require ongoing assessment of whether an enterprise is the primary beneficiary of the variable interest entity.  We have adopted these provisions as of July 1, 2010.  We do not expect that these provisions will have a material impact on our financial statements.

In April 2010, the FASB issued ASU No. 2010 – 17, "Revenue  Recognition – Milestone Method (Topic 605): Milestone Method of Revenue Recognition."  ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone of revenue recognition for certain research and development transactions.  Under this new standard, a company can recognize as revenue consideration that is contingent upon achievement of a milestone in the period in which it is achieved, only if the milestone meets all criteria to be considered substantive.   This standard will be effective for us on a prospective basis for periods beginning after January 1, 2011.  We have evaluated the potential impact of this standard and expect it will have no significant impact on our financial position or results of operations.

In July 2010, the FASB issued ASU No. 2010 – 20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses."  ASU 2010 – 20 amends Topic 310 to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses.  As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide new disclosures about its financing receivables and related allowance for credit losses.  These provisions are effective for interim and annual reporting periods on or after December 15, 2010.  ASU 2010-20 concerns disclosures only and will not have a material impact on our financial position or results of operations.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements made or incorporated by reference in this annual report may constitute "forward-looking statements" within the meaning of the federal securities laws.  When used or incorporated by reference in this report, the words "believes," "expects," "estimates," "anticipates," and similar expressions, are intended to identify forward-looking statements.  Statements regarding future events and developments, our future performance, market share, and new market growth, as well as our expectations, beliefs, plans, estimates, or projections relating to the future, are forward-looking statements within the meaning of these laws.  Examples of our forward-looking statements in this report include, but are not limited to, the impact of our new video strategy on our business, anticipated reduced product revenue due to the economic downturn, the expected timing of revenue recognition for Media Data and Advertising Solutions sales, our expected cash position, the impact of interest rate changes and fluctuation in currency exchange rates, our sufficiency of cash, the impact of litigation, and our trend of declining real-time service revenue.  These statements are based on beliefs and assumptions of our management, which are based on currently available information.  All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected.  The risks and uncertainties which could affect our financial condition or results of operations include, without limitation: delays or cancellations of customer orders; changes in product demand; economic conditions; our ability to satisfy the financial covenants in the Credit Agreement; various inventory risks due to changes in market conditions; uncertainties relating to the development and ownership of intellectual property; uncertainties relating to our ability and the ability of other companies to enforce their intellectual property rights; the pricing and availability of equipment, materials and inventories; the concentration of our customers; failure to effectively manage change; delays in testing and introductions of new products;  rapid technology changes; system errors or failures; reliance on a limited number of suppliers and failure of components provided by those suppliers; uncertainties associated with international business activities, including foreign regulations, trade controls, taxes, and currency fluctuations; the impact of  competition on the pricing of video products; failure to effectively service the installed base; the entry of new well-capitalized competitors into our markets; the success of new video solutions; the success of our relationships with technology and channel partners; capital spending patterns by a limited customer base; the current challenging macro-economic environment; privacy concerns over data collection; and the availability of debt or equity financing to support our liquidity needs.

Other important risk factors are discussed under the heading "Risk Factors".

Our forward-looking statements are based on current expectations and speak only as of the date of such statements.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

Item 8.   Financial Statements and Supplementary Data.

The following consolidated financial statements and supplementary data are included herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Controls and Procedures

As required by Securities and Exchange Commission rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer.  Based on this evaluation, these officers have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control

There were no significant changes to our internal control over financial reporting during the quarter ended June 30, 2010 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Management has evaluated the effectiveness of its internal control over financial reporting as of June 30, 2010 based on the control criteria established in a report entitled Internal Control-Integrated Framework , issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, we have concluded that Concurrent's internal control over financial reporting is effective as of June 30, 2010.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm in accordance with recent amendments to Section 404 of the Sarbanes-Oxley Act of 2002 pursuant to Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act that permit us to provide only management's report in this Annual Report.

Item 9B . Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information regarding the Registrant's executive officers is located in Item X of this Form 10-K.

The Registrant hereby incorporates by reference in this Form 10-K certain information contained under the caption "Election of Directors" in the Registrant's Proxy Statement to be used in connection with its Annual Meeting of Stockholders to be held on October 26, 2010 ("Registrant's 2010 Proxy Statement").

The Registrant hereby incorporates by reference in this Form 10-K certain information contained under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Registrant's 2010 Proxy Statement.

The Registrant hereby incorporates by reference in this Form 10-K certain information contained under the caption "Election of Directors – Corporate Governance and Committees of the Board of Directors" in the Registrant's 2010 Proxy Statement.

Item 11. Executive Compensation.

The Registrant hereby incorporates by reference in this Form 10-K certain information contained under the caption "Compensation Discussion and Analysis" (Other than the Compensation Committee Report) and "Compensation of Directors" in the Registrant's 2010 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The Registrant hereby incorporates by reference in this Form 10-K certain information contained under the captions "Common Stock Ownership of Management and Certain Beneficial Owners" and "Equity Compensation Plan Information" in Registrant's 2010 Proxy Statement.

The Registrant knows of no contractual arrangements, including any pledge by any person of securities of the Registrant, the operation of which may at a subsequent date result in a change in control of the Registrant.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The Registrant herein incorporates by reference in this Form 10-K certain information under the caption "Certain Relationships and Related Party Transactions" in Registrant's 2010 Proxy Statement.

Item 14.   Principal Accountant Fees and Services.

The registrant hereby incorporates by reference in this Form 10-K certain information under the caption "Principal Accountant Fees and Services" in Registrant's 2010 Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) (1) Financial Statements Filed As Part Of This Report:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of June 30, 2010 and 2009

Consolidated Statements of Operations for each of the three years in the period ended June 30, 2010

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) for each of the three years in the period ended June 30, 2010

Consolidated Statements of Cash Flows for each of the three years in the period ended June 30, 2010

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

Schedule II Valuation and Qualifying Accounts

All other financial statements and schedules not listed have been omitted since the required information is included in the Consolidated Financial Statements or the Notes thereto, is not applicable, material or required.

(3) Exhibits

* Included herewith.

CONCURRENT COMPUTER CORPORATION

ANNUAL REPORT ON FORM 10-K

Item 8

Consolidated Financial Statements and Supplementary Data

Year Ended June 30, 2010

RE PORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Concurrent Computer Corporation:

We have audited the accompanying consolidated balance sheets of Concurrent Computer Corporation and subsidiaries (the "Company") as of June 30, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity and comprehensive income (loss), and cash flows for each of the three years in the period ended June 30, 2010.  Our audits also included the financial statement schedule listed in the Index at Item 15 (a)(2).  These financial statements and financial statement schedule are the responsibility of the Company's management.  Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Concurrent Computer Corporation and subsidiaries as of June 30, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2010, in conformity with accounting principles generally accepted in the United States of America.  Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Atlanta, Georgia

August 31, 2010

CON CURRENT COMPUTER CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

The accompanying notes are an integral part of the consolidated financial statements.

CON CURRENT COMPUTER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

The accompanying notes are an integral part of the consolidated financial statements.

CON CURRENT COMPUTER CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

EQUITY AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share amounts)

For each of the three years in the period ended June 30, 2010

The accompanying notes are an integral part of the consolidated financial statements.

CON CURRENT COMPUTER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

The accompanying notes are an integral part of the consolidated financial statements.

CONC URRENT COMPUTER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We are a provider of software, hardware and professional services for the video market, the media industry, and the high-performance, real-time market.  Our business is comprised of two segments for financial reporting purposes: products and services.  We provide products and services for each of these markets.

Our video solutions consist of software, hardware, and services for intelligently streaming video and collecting video consumption media data for advanced interactive video services and advertising.  Our solutions and services are sold to broadband and content providers around the world.

Our real-time products consist of Linux ® and other real-time operating systems and software development tools combined, in most cases, with off-the-shelf hardware and services sold to a wide variety of companies seeking high-performance, real-time computer solutions.  These solutions are typically used in applications requiring low-latency response and determinism such as simulation, image generation, testing, process control and data acquisition.  Our real-time products are specially designed for use with applications that acquire, process, store, analyze and display large amounts of rapidly changing information in real time – that is, with microsecond response times as changes occur.  Our systems and software support applications in the military, aerospace, financial and automotive markets.

We provide sales and support from offices and subsidiaries throughout North America, Europe, and Asia.

Principles of Consolidation

The consolidated financial statements include the accounts of Concurrent and all wholly-owned domestic and foreign subsidiaries.  All intercompany transactions and balances have been eliminated in consolidation.

Foreign Currency

The functional currency of all of our foreign subsidiaries is the applicable local currency.  The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using average rates of exchange prevailing during the fiscal year.  Adjustments resulting from the translation of foreign currency financial statements are accumulated in a separate component of stockholders' equity.  Gains or losses resulting from foreign currency transactions are included in the Consolidated Statements of Operations, except for those relating to intercompany transactions of a long-term investment nature, which are accumulated in a separate component of stockholders' equity.

Gains (losses) on foreign currency transactions of $(185,000), $(86,000), and $233,000 for the years ended June 30, 2010, 2009 and 2008, respectively, are included in "Other (expense) income, net" in the Consolidated Statements of Operations.

Cash and Cash Equivalents

Short-term investments with maturities of 90 days or less at the date of purchase are considered cash equivalents.  Cash equivalents are stated at cost plus accrued interest, which approximates market value, and represent cash invested in U.S. government securities and bank certificates of deposit.

Inventories

Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis.  We establish excess and obsolete inventory reserves based upon historical and anticipated usage.

Property, Plant, and Equipment

Property, plant and equipment are stated at acquired cost less accumulated depreciation.  Depreciation is provided on a straight-line basis over the estimated useful lives of assets ranging from one to ten years.  Leasehold improvements are amortized over the shorter of the useful lives of the improvements or the terms of the related lease.  Gains and losses resulting from the disposition of property, plant and equipment are included in operations.  Expenditures for repairs and maintenance are charged to operations as incurred and expenditures for major renewals and betterments are capitalized.

CONCURRENT COMPUTER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

Goodwill and Trademark

Goodwill and trademark are tested for impairment on an annual basis as of July 1, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach.  During the third quarter of fiscal 2009, we initiated an interim goodwill impairment test due to our sustained, reduced stock price and market capitalization during the quarter.  We concluded that an impairment charge of $15,990,000 should be recorded, resulting in goodwill being fully impaired.  Additionally, as a result of our strategic planning process during fiscal year 2009, we rebranded our Everstream product lines to better reflect our strategic direction and no longer intend to use the Everstream trademark.  Consequently, we recorded a $1,100,000 impairment of our Everstream trademark during fiscal year 2009.  As a result of the interim impairment analysis and strategic planning process, we fully impaired both our goodwill and trademark as of March 31, 2009.  See footnote 6 for additional disclosures.

Revenue Recognition Policy

We recognize revenue when persuasive evidence of an arrangement exists, the system has been shipped or the services have been performed, the fee is fixed or determinable and collectibility of the fee is probable.

Software and Hardware Sales

Product revenues are recognized based on the guidance in Accounting Standards Codification ("ASC") Topic 985.  Our standard contractual arrangements with our customers generally include the delivery of a hardware and software system, certain professional services that typically involve installation and training, and ongoing software and hardware maintenance.  The software component of the arrangement is considered to be essential to the functionality of the hardware; therefore, the hardware and the hardware maintenance components are considered software related and the provisions apply to all elements of the arrangement.  Under multiple element arrangements, we allocate revenue to the various elements based on vendor-specific objective evidence ("VSOE") of fair value.  Our VSOE of fair value is determined based on the price charged when the same element is sold separately.  If VSOE of fair value does not exist for all elements in a multiple element arrangement, but does exist for undelivered elements, we recognize revenue using the residual method.  Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement is recognized as revenue.  Where fair value of undelivered elements has not been established and the only undelivered element is services, the total arrangement is recognized over the period during which the services are performed.

In certain instances, our customers require significant customization of both the software and hardware products.  In these situations, the design and development is considered essential to the functionality of the software and, therefore, the revenue from these arrangements, with the exception of maintenance, is recognized in conformity with ASC Topic 605.  For long-term contracts, revenue is recognized using the completed contract method, or when costs are dependably estimable, we use the percentage-of-completion method of accounting based on costs incurred on the project compared to the total costs expected to be incurred through completion.

Professional Services

Professional services revenue is primarily generated from integration of third party interfaces, engineer consulting, and hardware installation.  These services are typically completed within 90 days from the receipt of the order.  Under accounting literature governing multiple element arrangements, we allocate revenue to the various elements based on VSOE of fair value, or other acceptable measures of fair value when services are determined to be non-software deliverables.  We determine VSOE for the services based on the standard rate per hour used when similar services are sold separately.  Revenues from these services are recognized when the services are performed.

CONCURRENT COMPUTER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

Managed Services, Software as a Service and Hosting

In fiscal year 2010 we began offering our media data and advertising solutions software to our customers either as: 1) a term license with maintenance and managed services, or 2) software as a service.  In some cases these services are offered under a hosting model.  Revenue from hosting, maintenance fees and the sale of consulting services relating to managed services and software as a service arrangements are recognized ratably over the term of the arrangement. Set-up and implementation revenue is deferred until the solution is delivered and then recognized ratably over the longer of the term of the arrangement or the estimated customer life. Transactions fees from processing transactions for customers are recognized once the transaction is complete.

Hardware and Software Maintenance

We recognize revenue from maintenance services in accordance with ASC 985.  Depending upon the specific terms of the customer agreement, we may include warranty or maintenance as part of the purchase price.  Depending upon the specific terms of the customer agreement, we either accrue the estimated costs to be incurred in performing maintenance services at the time of revenue recognition and shipment of product, or we defer revenue associated with the maintenance services to be provided during the maintenance period based upon the value for which we have sold such services separately when they are renewed by existing customers.  For those arrangements in which the maintenance period is less than or equal to one year and for arrangements whereby the arrangement is a product warranty, we accrue the estimated costs to be incurred in providing services.  In accordance with ASC Topic 985, we have determined that the warranty or maintenance fee is part of the initial license fee, the maintenance period is for one year or less, the estimated cost of providing the services are immaterial, and upgrades and enhancements offered during maintenance arrangements historically have been and are expected to continue to be minimal and infrequent.  Actual costs are then charged against the warranty accrual as they are incurred.  For those arrangements in which the maintenance period is greater than one year, we defer revenue based upon the value for which we have sold such services separately.  This revenue is then recognized on a straight line basis over the warranty period.

Other

We record reimbursable out–of–pocket expenses in both services and maintenance net sales and as a direct cost of services and maintenance.  The reimbursement by customers of shipping and handling costs are recorded in product and other net sales and the associated cost as a cost of sale.  We account for sales taxes on a net basis.

Allowance for Doubtful Accounts

The allowance for doubtful accounts receivable is based on an analysis of our historical charge-off ratio, e our aging of accounts receivable and our assessment of the collectibility of our receivables.  If there is a deterioration of one of our major customer's credit worthiness or actual account defaults are higher than our historical trends, our reserve estimates could be adversely impacted.

Deferred Revenue

Deferred revenue consists of billings for maintenance contracts and for products that are pending completion of the revenue recognition process.  Maintenance revenue, whether bundled with the product or priced separately, is recognized ratably over the maintenance period.  For contracts extending beyond one year, deferred revenue related to the contract period extending beyond twelve months is classified among long-term liabilities.

Defined Benefit Pension Plan

We maintain a defined benefit pension plan (the "Pension Plan") for certain current and a number of former employees of our German subsidiary.  The Pension Plan provides benefits to be paid to all eligible employees at retirement based primarily on years of service with the Company and compensation rates in effect near retirement. Our policy is to fund benefits attributed to employees' services to date as well as service expected to be earned in the future.  The determination of our Pension Plan benefit obligation and expense is dependent on our selection of certain assumptions used by actuaries in calculating such amounts.  Those assumptions include, among others, the weighted average discount rate, the weighted average expected rate of return on plan assets and the weighted average rate of compensation increase.  To the extent that these assumptions change, our future benefit obligation and net periodic pension expense may be positively or negatively impacted.

CONCURRENT COMPUTER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

Capitalized Software

We account for software development costs in accordance with ASC 985-20.  Under ASC 985-20, the costs associated with software development are required to be capitalized after technological feasibility has been established.  We cease capitalization upon the achievement of customer availability.  Costs incurred by us between technological feasibility and the point at which the products are ready for market are generally insignificant and as a result we had minimal internal software development costs capitalized at June 30, 2010 and 2009.  We have not incurred costs related to the development of internal use software.

Research and Development

Research and development expenditures are expensed as incurred.

Basic and Diluted Net Loss per Share

On July 8, 2008, stockholders of Concurrent approved a one-for-ten reverse stock split (the "Reverse Stock Split") that became effective on July 9, 2008 upon the filing of a Certificate of Amendment to Concurrent's Restated Certificate of Incorporation with the Secretary of State of the State of Delaware.  No fractional shares of our common stock were issued as a result of the Reverse Stock Split.  Instead, stockholders who otherwise were entitled to receive a fractional share of common stock as a consequence of the Reverse Stock Split, upon surrender to the exchange agent of the certificates representing such fractional shares, received cash from Concurrent.  The fractional shares represented approximately 429 Post-Reverse Stock Split shares.

Per share computations for fiscal year 2009 and 2008 are presented based upon the new number of shares outstanding, after the Reverse Stock Split, and prior period weighted average shares outstanding and earnings per share amounts have been restated based upon shares outstanding as a result of the Reverse Stock Split.

Basic net (loss) income per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year.  Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares including dilutive common share equivalents.  Under the treasury stock method, incremental shares representing the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued are included in the computation.  Common share equivalents of 904,000, 1,055,000, and 1,018,000 for the years ended June 30, 2010, 2009 and 2008 were excluded from the calculation as their effect was anti-dilutive.