Concurrent Computer Corp (CCUR) SEC Annual Report (10-K) for 2015

f

UNITED STATES

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)

OR

Commission File Number: 000-13150

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:

Securities registered pursuant to Section 12(g) of the Act:  None

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

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  ý

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 ý      No o

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 ý No ☐

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.    ý

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  ý

The aggregate market value of the common equity held by non-affiliates of the registrant as of December 31, 2014 was approximately $63,299,116 based on the closing price of $7.09 of our common stock as reported by the NASDAQ Global Market on December 31, 2014.  There were 9,490,582 shares of common stock outstanding as of August 21, 2015.

Certain portions of the Registrant's Proxy Statement to be used in connection with Registrant's 2015 Annual Meeting of Stockholders scheduled to be held on October 27, 2015 are incorporated by reference in Part III hereof.

Concurrent Computer Corporation

2015 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.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

Overview

Concurrent is a global software and solutions company that develops advanced applications on a core foundation of high performance Linux ® and storage technologies.  We serve industries and customers that demand uncompromising performance, reliability and flexibility to gain a competitive edge, drive meaningful growth and confidently deliver best‑in‑class solutions that enrich the lives of millions of people around the world every day.  Our business is comprised of two segments for financial reporting purposes, products and services, which we provide for each of these markets.

Our content delivery solutions (formerly called video solutions) consist of software, hardware and services for intelligently streaming video content to a variety of consumer devices, storing and managing content in the network and collecting and analyzing data related to content delivery applications.  These streaming video, storage and data analytics products and services are deployed by service providers to support consumer-facing video services including live broadcast video, video-on-demand ("VOD") and time-shifted video applications such as cloud-based digital video recording ("cDVR").

Our real-time solutions consist of a real-time Linux operating system, development and performance optimization tools, simulation software and other system software combined, in many cases, with computer platforms and services.  These real-time products are sold to a wide variety of aerospace, defense, energy, manufacturing and automotive companies seeking high-performance, real-time computing solutions for their simulation, data acquisition and process control systems.

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

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 the Investors page of our website (www.concurrent.com ), under the ‘Company' tab in the SEC Filings section.  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 the Investors page of our website (www.concurrent.com), under the ‘Company' tab in the Corporate Governance section.  Copies will be furnished upon written request at the following address:  Attn:  Corporate 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.  No other information from our website is incorporated within this filing.

The Content Delivery Market

Our content delivery solutions are used by cable, telco and Internet service providers, to offer live broadcast, VOD and time-shifted video services to their consumer customers.  Streaming video usage has grown consistently and become a core service offering for video service providers around the world.  According to a recent study performed by Leichtman Research Group, 59% of all cable subscribers have used VOD – compared to 46% in 2009 and 10% in 2004.  Comcast reports that 70% of their customers use VOD services every month, with total consumption exceeding 3 billion hours each year.  As an alternative to watching live broadcast TV services, free on-demand ("FOD") services have also become an increasingly popular way for consumers to watch primetime television programming.  According to Rentrak, over the past year, the total time spent viewing FOD television content in the Broadcast Primetime category increased 22% over the previous year (Source: Rentrak, State of VOD: Trend Report).

Consumer use of Internet based subscription video services are also on the rise.  Internet video to TV usage doubled in 2014 and is projected to increase fourfold by 2019 (Source: Cisco VNI).  According to Nielsen, more than 40% of homes in the U.S. have access to a subscription video-on-demand ("SVOD") service like Netflix ® , Amazon Prime ® TV, HBO Now ® or Hulu ® as of the end of 2014, an increase from the 36% reported in 2013.  With the growth of these over-the-top, direct-to-consumer video services, service providers have been driven to launch competitive video services that reach beyond the television to serve customers on Internet connected devices, including tablets, smartphones, personal computers and streaming media devices.  New services like cDVR are also beginning to roll out, enabling consumers to watch recorded video at any time, on any device, over a variety of networks.

The Real-Time Computing Markets

Our real-time products are used in host, client-server, embedded and distributed computing applications in a wide range of markets.  Aerospace, defense, energy, manufacturing and automotive companies utilize our operating systems and development tools in their simulation, data acquisition and process control systems.  Simulation systems that utilize our real-time products include engines, avionics and automotive subsystems, ground vehicle operation, and mission planning and rehearsal.  Data acquisition systems that utilize our real-time products include environmental analysis and display, engine testing, range and telemetry systems, shock and vibration testing, forecasting, analysis, and command and control applications.

Our Linux operating system, debugging software applications and performance optimization tools are used by companies in a variety of industries to improve the performance of their applications on commercial hardware platforms.  Our operating system supports real-time applications, delivering ultra-low latency response time of less than 5 microseconds.  Our software tools are designed to provide developers with a better understanding of how applications interact with the underlying Linux operating system, enabling companies to deliver higher performance products, in less time, and to run them with greater reliability.

Business Strategy

Content Delivery Product Line

Our content delivery solutions are deployed by service providers to address the multi-screen video market.  We offer flexible solutions comprised of software integrated with standard commercial hardware and have adapted our proven, best-in-class solutions with features to address new Internet connected consumer devices, next generation service provider network architectures, as well as innovative products designed to improve the quality of service associated with over-the-top content services.  Our multi-screen video analytics software (formerly called MDI) provides operational reporting and collection for timely and accurate cross-services data aggregation, auditing and logistics, and intelligence.  The data is collected from VOD, linear TV (live TV), digital video recorder ("DVR"), web and mobile platforms, producing a comprehensive view of the consumer experience that enhances understanding of content consumption.

Real-Time Product Line

Our real-time strategy is comprised of initiatives designed to maintain and expand our current real-time product line.  We provide regular updates to our RedHawk ™ Linux real-time operating system and NightStar ™ suite of software debugging and analysis tools.  We are continually expanding the functionality offered on our iHawk ™ and ImaGen ™ integrated hardware platforms, including products such as SIMulation Workbench ™ , SIGnal Workbench ™ and GPU Workbench ™ .  We evaluate additional opportunities to cooperate with partners to expand offerings of compatible third-party applications.

New Products

Our business strategy includes the development and introduction of new products.  We have focused our efforts on new solutions that leverage core competencies derived from our research and development efforts in content management and real-time technology.  We have been working on new products including scale-out storage solutions, Linux-based software solutions and services targeted at the software-defined data center marketplace.

Products and Services

Our products fall into two principal groups, content delivery and real-time.  In addition, we provide technical support for our products.  For fiscal year 2015, our products segment accounted for 68% of our revenue and our service segment accounted for 32% of our revenue.

Content Delivery Products

UpShift ™ Unified Content Delivery Solution.  Concurrent's unified content delivery solution combines our innovative video ingest, storage and delivery software modules with standard commercial hardware sourced from leading original equipment manufacturers ("OEMs").  Our content delivery products allow video service providers to build regional, national and global content delivery networks ("CDNs") to deliver video to any screen.  We believe our modular, software based approach provides our customers with the ability to more easily deploy new systems, expand those deployments, and add services over time.  Our unified solution provides a common software framework for delivering video to traditional set-top boxes ("STBs") as well as IP connected devices.  Our design goal is to provide seamless end-user viewing of the highest quality on any device and to offer a seamless migration path for service providers that are evolving their proprietary video networks toward more flexible IP delivery networks.  Our solution enables live video broadcast, VOD, and time-shifted video services like cDVR from a common solution architecture.

Our content delivery software is integrated with standard commercial hardware components such as servers, disk arrays, solid state storage arrays, and network switching equipment.  Our content delivery products are compatible with a wide range of video infrastructure technologies and consumer access devices, including digital head-end equipment, network transport, IP routers/switches, QAMs, DSL technologies, CMTS, STBs, and IP connected consumer electronic devices.

Our multi-screen video analytics platform provides business insights to drive revenue opportunities and optimize video operations for service providers across multiple screens.  The multi-screen video analytics solution suite includes several offerings which enable data management and reporting for linear TV, VOD services, CDN services and interactive advertising.

Real-Time Products

Our real-time products include hardware and software solutions designed for the automotive, aerospace, energy, manufacturing and defense markets.  Our software solutions include RedHawk Linux, an open source real-time operating system featuring extremely low latency, advanced tuning features, and real-time determinism.  Application performance on the RedHawk Linux OS can be optimized using NightStar tools, a GUI‑based set of development tools that enable users to debug, analyze, and tune application software running in CPU and GPU based computing environments.  The pairing of our RedHawk Linux OS and NightStar tools offers application developers a greater degree of visibility and control of how their applications run on commercial hardware versus traditional operating systems.  Customers can deploy our RedHawk Linux OS on our iHawk and ImaGen servers, which are based on the latest Intel ® and AMD ® -technologies and are optimized for simulation, data acquisition and process-control applications.  We also offer application software that is used to support real-time simulation and testing applications.  SIMulation Workbench delivers a complete framework for developing and executing real-time hardware-in-the-loop ("HIL") and man-in-the-loop ("MIL") simulations.  SIGnal Workbench is a programmable real-time signal conditioning solution and GPU Workbench is a development platform for real-time applications using NVIDIA ® CUDA ® technology.

Services

Customer Support .  We 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, troubleshooting, operational support, and software support services.  In addition to these basic service and support options, we also offer, for additional fees, software upgrades, additional onsite services, enhanced monitoring services, site audits, and other professional services related to our products.

Managed Services.   We offer a comprehensive set of professional services to customers using our multi‑screen video analytics 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.

Sales and Marketing

We sell our solutions in the U.S. primarily through our direct field sales team supported by consultants and our sales support group.  Our sales force has significant experience in content delivery and real-time applications.  Outside North America, we utilize a direct sales force out of our facilities in France, Germany, Japan, China and the United Kingdom.  Our global sales efforts are augmented by a variety of channel partners (resellers and system integrators).

Customers

We derive revenue from a limited number of customers.  Our products are typically assembled and shipped in the same quarter the purchase order is received, and as a result, we typically have minimal backlog.  Our backlog for content delivery and real-time products and services at June 30, 2015 totaled $8.6 million compared to $7.7 million at June 30, 2014.

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 content delivery solutions revenue has come from, and is expected to continue to come from, sales to service providers.  For the fiscal year ended June 30, 2015, Cox Communications, Inc. ("Cox") represented 9% of our total revenue and Time Warner Cable Inc. ("TWC") represented 6% of our total revenue.  For the fiscal year ended June 30, 2014, Cox and TWC each represented 13% of our total revenue.  For the fiscal year ended June 30, 2013, Cox and TWC each represented 12% of our total revenue.  No other customer of content delivery solutions accounted for more than 10% of our total revenue during fiscal years 2014 and 2013.

Although we sell our real-time products to large customers, our customer base is generally more diversified than our content delivery business.  For the fiscal years 2015, 2014 and 2013, no single real-time customer accounted for more than 10% of total revenue.

We derive a significant portion of our real-time product revenue from the supply of products to U.S. Government prime contractors and agencies of the U.S. Government.  The supplied systems include RedHawk, iHawk, ImaGen, and other configurations with certain systems incorporating custom enhancements requested by the customer.  We sell these integrated computer systems to prime contractors, including Lockheed Martin Corporation, The Boeing Company, Northrop Grumman Corporation, Raytheon Company and other Fortune 500 companies.  We also supply spare parts, upgrades, and engineering consulting services and system maintenance.  For the fiscal years ended June 30, 2015, 2014 and 2013, we recorded $12.0 million, $10.1 million and $9.6 million, respectively, in revenue to U.S. Government prime contractors and agencies of the U.S. Government.  These amounts represented 19%, 14% and 15% of total revenue in fiscal years 2015, 2014 and 2013, respectively.  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.

New Product Development

We are committed to the development of new technology and rapid innovation.  Research and development costs are expensed when incurred and aggregated $13.6 million, $13.0 million and $11.6 million in fiscal years 2015, 2014 and 2013, 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.  The following development strategies are indicative of the general direction of product development activities.  Due to the inherent uncertainty involved with product development, we cannot guarantee the availability of future products and features.

Concurrent is focusing our new product development efforts on solutions that leverage our core competencies in high performance Linux and storage.  All of Concurrent's products are built on our core foundation of Linux and storage experience and technology.  We are developing products in four main solutions areas that include storage, Linux, content delivery and real-time.  For discussion purposes below, content delivery and storage products are addressed under content delivery, while real-time and Linux products are addressed under real-time.  New product initiatives in each area include:

Content Delivery Products.   Our research and development strategies for our content delivery products are based on market demands and emerging trends in the content delivery marketplace.

Real-Time Products.   Our research and development strategies for real-time are focused on enhancing our products for the simulation and testing marketplace.

Competition

Our content delivery 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 content delivery solutions currently include the following:  Adobe Systems, Inc., Akamai Technologies, Arris Group, Inc., Cisco Systems, Inc., Edgeware AB, Ericsson AB, Envivio Inc., Harmonic, Inc., Broadpeak and Wowza Media Systems, LLC.  Typically, in opportunities for our multi-screen video analytics products, we also compete against in-house development or customer offerings from some professional services consulting entities.   Our storage solutions compete with offerings sold buy Nimble Storage, Inc., Nexenta Systems, Inc., Coho Data, Inc., Caringo, Inc., DataDirect Networks and Tegile, Inc.

Our real-time product line competes with a number of companies, including:  (1) companies providing competitive Linux and other real-time operating systems or tools for time-critical systems, including Lynx Software Technologies, Red Hat, Inc. and Wind River Systems, Inc.; (2) companies involved in simulation and data acquisition, including Opal RT Technologies, Inc., National Instruments Corporation and dSpace, GmbH; (3) customers who may choose to integrate their own in-house, real-time products using standard commercial hardware and open-source Linux operating systems and tools; and (4) computer companies that provide solutions for high‑performance image generation, including Quantum3D, Inc. and Rockwell Collins, Inc.

Additional competitors with significant market presence and financial resources, including computer hardware and software companies, content providers and television equipment manufacturers, including digital STB 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 copyright and other intellectual property rights with respect to much of the technology incorporated in our content delivery and real-time products, 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 we do, 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 grant customers perpetual or term 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 code 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 nine U.S. patents:  Nos. 7,877,468, 8,079,052, 8,505,057, 8,522,268, 8,650,601, 8,695,031, 8,763,044, 8,943,218 and 8,972,600 and have multiple patent applications pending in the U.S.  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 (the "Patent License").  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.

We have entered into licensing agreements with several third-party software developers and suppliers.  Generally, such agreements grant us non-exclusive, worldwide term licenses to distribute software as part of the solutions we market.

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:  Arrow Electronics, Inc., Avnet, Inc. ("Avnet"), CSP, Inc., Curtiss-Wright Corporation, Dell, Inc., ("Dell"), Dot Hill Systems Corporation ("Dot Hill"), General Electric, General Standards Corporation, Intel Corporation, Kardios Systems Corporation, KMA Systems, North Atlantic Industries. Inc., Oracle Corporation, Qlogic Corporation, Seagate Technology, LLC, Supermicro Computer, Inc. and Western Digital Technologies, Incorporated.  Comparable products are available from other sources and would conform to our system specifications with moderate engineering effort.  Single-source suppliers accounting for 10% or more of these purchases during the fiscal year ended June 30, 2015 were Dot Hill (15%), Dell (20%), and Avnet (19%).  During the fiscal year ended June 30, 2014, Dot Hill (23%), Dell (18%) and Avnet (13%) were the only single-source suppliers accounting for 10% or more of these purchases.  During the fiscal year ended June 30, 2013, Dot Hill (24%) and Dell (16%) were the only single-source suppliers accounting for 10% or more of these purchases.

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 content delivery products being placed from quarter-to-quarter are principally attributable to the buying patterns and budgeting cycles of our customers.  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 U.S., 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. 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.

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.

Industries we serve are subject to extensive regulation in the U.S. and other countries.  Our content delivery business is dependent upon the continued growth of video services in the U.S. and internationally.  Broadband companies in the U.S. are subject to extensive government regulation by the Federal Communications Commission ("FCC") and other federal and state regulatory agencies, including the Open Internet rules which became effective June 12, 2015.  Additional regulations could have the effect of limiting capital expenditures by our customers 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 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 assembly 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, 2015, we had 260 employees and contractors worldwide.  Of these employees and contractors, 205 were located in the U.S. 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, 2015, 2014 and 2013 is presented in Note 10 to the consolidated financial statements included herein.

The following are the material 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.  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 Statement Regarding Forward-Looking Statements" on page 41.

Risks Related to Our Business

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

Cox accounted for approximately 9% and TWC accounted for approximately 6% of fiscal year 2015 total revenue and each accounted for approximately 13% of fiscal year 2014 total revenue.  Cox accounted for approximately 16% and TWC accounted for approximately 12% of fiscal year 2015 total content delivery solutions revenue and 23% of fiscal year 2014 total content delivery solutions revenue.  If we are unsuccessful in maintaining key relationships with these and other existing customers, if these customers' purchasing levels are reduced or they choose to upgrade their services with solutions from our competitors, 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.

Due to our limited customer base and the relative size of each customer compared to Concurrent, our customers may make extensive demands on 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 global economic conditions and on each of these customers' businesses.

In North America, service providers have widely adopted video services 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 content delivery solutions into these markets may be limited.

We depend on a small number of domestic cable multiple system operators ("MSOs") for a substantial proportion of our domestic revenues.  Any decrease or delay in capital spending for advanced technologies harms our operating results, financial condition and cash flows.

The capital spending patterns of our existing and potential customers are dependent on a variety of factors, including:

We expect these sales to continue to constitute a significant majority of our revenues for the foreseeable future.  Demand for our products will depend on the magnitude and timing of capital spending by service providers on advanced technologies for constructing and upgrading their network infrastructure.  Further demand will also depend on customers' continuing to upgrade and expand their offerings with our solutions.  Continued slowdowns or delays in this spending would likely have a material adverse impact on our quarterly revenues and could result in net losses.

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 revenues from the supply of systems under government contracts and/or orders.  For the fiscal years ended June 30, 2015 and 2014, we recorded $12.0 million and $10.1 million, respectively, in revenue to U.S. Government prime contractors and agencies of the U.S. Government.  These sales represent approximately 19% and 14% of our total sales in the fiscal years ended June 30, 2015 and 2014, 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.

We depend on U.S. Government customers for a significant portion of our revenue, and sequestration (automatic, across-the-board U.S. Government budgetary spending cuts) currently required under the Budget Control Act of 2011 and the Bipartisan Budget Act of 2013 continues to have potential adverse consequences on our future business.

U.S. Government spending priorities and Department of Defense spending levels continue to be uncertain and difficult to predict and may be affected by numerous factors, including whether sequestration currently required under the Budget Control Act of 2011 and the Bipartisan Budget Act of 2013 and their actual impact on the Department of Defense budget and other programs. A shift in U.S. Government spending priorities, or a reduction in total U.S. Government spending, could have material adverse consequences on our future business.

If the U.S. Government budget process results in a prolonged shutdown or prolonged operation under a continuing resolution, we may experience further delayed orders, delayed payments, declines in revenues, profitability and cash flows.

If revenues forecasted for a particular period are not realized in such period due to the lengthy, complex and unpredictable sales cycles of our products, our operating results, financial condition and cash flows for that or subsequent periods will be adversely affected.

For these and other reasons, our sales cycles are generally between 6 and 18 months, but can last longer. If orders forecasted for a specific customer for a particular quarter do not occur in that quarter, our operating results, financial condition and cash flows for that quarter or subsequent quarters could be substantially lower than anticipated.  Our quarterly and annual results may fluctuate significantly due to revenue recognition rules and the timing of the receipt of customer orders.  Additionally, service revenues such as installation services associated with product sales are impacted by such delays.

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 new products and solutions 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 or respond quickly enough 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.

We are continuing to adapt our content delivery products to add features allowing deployments to cable, IPTV, and Internet CDN providers to enable multi-screen video delivery.  The changes require new knowledge sets, especially in research and development, and will require us to develop and sell new products to new customers.  A failure to execute on this transition will adversely affect our business.

Our video expertise for more than fifteen years has been focused on the VOD market.  Although we have been successful in VOD, we recognize it is a relatively limited market and, as such, we are transitioning the business to serve video to all devices.  We are introducing 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 wider customer set.  We believe that these steps are necessary, but that they will be expensive.  We are making these investments in a challenging macroeconomic environment and may be unable to develop or sell any new marketable products.  In addition, we face robust competition both from internally-developed solutions and from large, well-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 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 content delivery and real-time products or developing, integrating 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 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.

Broadband Internet video services for televisions have gained traction and could replace current VOD services and cause a negative impact on our revenue associated with our content delivery products.

A number of well-funded companies such as Amazon Prime TV, HBO Now, Apple, Hulu and Netflix are or will be capable of delivering Internet video services for home television viewing.  As these products are developed, successfully deployed and embraced by consumers, our customers may discontinue purchases of our content delivery products.

We have experienced competitive pricing pressure for our products and services and expect to continue to experience this pressure.  As pricing pressures continue, it may impact our revenue and call into question our ability to achieve and maintain profitability.

Over the years, our industry has experienced a decrease in average selling prices.  We anticipate that the average selling prices of our products will continue to decrease in the future in response to competitive pricing pressures, increased sales discounts and new product introductions by our competitors. We may experience substantial decreases in future operating results, financial condition and cash flows due to a decrease of our average selling prices.  We also anticipate that our gross margins will fluctuate from period to period as a result of the mix of products we sell in any given period.  If our sales of lower margin products significantly expand in future quarterly periods, our overall gross margin levels, operating results, financial condition and cash flows will be adversely impacted.

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

We incurred net losses of $0.3 million, $2.9 million, $3.3 million and $1.0 million in fiscal years ended June 30, 2015, 2012, 2011 and 2010, respectively.  As of June 30, 2015, we had an accumulated deficit of approximately $173.8 million.  We may have difficulty sustaining profitable operations and incur additional net losses in the future.

We have taken and continue to take measures to address the variability in the market for our products and services, which could have long-term negative effects on our business or impact our ability to adequately address an increase in customer demand.

We have taken and continue to take measures to address the variability in the market for our products and services, to increase average revenue per unit of our sales and to reduce our operating expenses, rationalize capital expenditure and minimize customer turnover.  We cannot ensure that the measures we have taken will not impair our ability to effectively develop and market products and services, to remain competitive in the industries in which we compete, to operate effectively, to operate profitably during slowdowns or to effectively meet a rapid increase in customer demand.  These measures may have long-term negative effects on our business by reducing our pool of technical and operational talent, decreasing or slowing improvements in our products and services, making it more difficult to hire and retain talented individuals and to quickly respond to customers or competitors in an upward cycle.

If we are unable to manage change in our operations effectively, our business may be harmed through a diminished ability to monitor and control effectively our operations, and a decrease in the quality of work and innovation of our employees.

Our ability to successfully offer new products and services and implement our business plan in a rapidly evolving market requires effective planning and management.  In light of the growing complexities in managing our portfolio of products and services, our anticipated future operations may strain our technical, operational and administrative resources.  A failure to manage changes in our volume of business may harm our business through a decreased ability to monitor and control effectively our operations, and a decrease in the quality of products and innovation of our employees upon which our business is dependent.  If we fail to meet customers' supply expectations, we could incur penalties, our revenue would be adversely affected and we may lose business, which could materially and adversely affect our operating results, financial condition and cash flows.

Any weaknesses identified in our system of internal controls by us or our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 could have an adverse effect on our business .

Section 404 of the Sarbanes-Oxley Act of 2002 requires that companies evaluate and report on their systems of internal control over financial reporting.  We have reported material weaknesses in our financial reporting controls during fiscal years 2013 and 2015.  In future periods, we may identify deficiencies in our system of internal controls over financial reporting that may require remediation.  There can be no assurances that any such future deficiencies identified may not be significant deficiencies or material weaknesses that would be required to be reported in future periods.

We face risks associated with the trend of increased stockholder activism .

Publicly-traded companies have increasingly become subject to campaigns by investors seeking to increase short-term stockholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or even sales of assets or the entire company.  Given our market capitalization and other factors, it is possible that stockholders may in the future attempt to effect such changes or acquire control over us. Responding to proxy contests and other actions by activist stockholders would be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of business strategies, which could adversely affect our results of operations and financial condition.

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

Key components of both our content delivery and real-time 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 portions of our software and freely distribute it.  This could substantially impact our business and our ability to protect our products and future business.

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.

Our competitors or other companies 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, financial condition and cash flows 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 and cash flows could be harmed.

We may not be able to adequately protect our intellectual property rights.

Protecting our global intellectual property rights and combating unlicensed copying and use of software and other intellectual property is difficult.  While piracy may adversely affect U.S. revenue, the impact on revenue from outside the U.S. is likely to be more significant, particularly in countries where laws are less protective of intellectual property rights.  Our revenues may be impacted if our intellectual property is copied or otherwise misappropriated and we are not able to successfully assert our rights over our intellectual property.  We may be unable to close sales if our intellectual property is copied; we may face increased competition if our trade secrets are disclosed; and our reputation may be negatively impacted if our company or product names are misused.  Similarly, the absence of harmonized patent laws makes it more difficult to ensure consistent respect for patent rights, making enforcement more difficult.  Reductions in the legal protection for software intellectual property rights could adversely affect revenue.

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 content delivery and real-time products are extremely competitive.  Our competitors include 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.  This intense competition has negatively impacted our content delivery solutions revenues and may severely impact our success and ability to earn additional revenue through expanding our content delivery solutions offerings.

In addition to competing against large, established content delivery product providers, our multi-screen video analytics products are seeing competition by internally-developed solutions as well as other big data vendors.

The market for our real-time products is ever changing.  We face a number of well-funded competitors who 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 primary competitors we face in both of our markets and a categorization of our competitors is included under the Competition heading in Part I, Item 1., the Business section of this Annual Report on Form 10-K for the year ended June 30, 2015.

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.

From time to time we complete an analysis of the ownership changes in our stock pursuant to Section 382 of the Internal Revenue Service tax code.  As of June 30, 2015, the ownership change was 29.7%, compared to 31.8% as of June 30, 2014.  Future transactions and the timing of such transactions could cause an additional ownership change for Section 382 income tax purposes.  Section 382 limits the ability of a company that undergoes an "ownership change," which is generally defined as any change in ownership of more than 50% of its common stock over a three-year period, to utilize its net operating loss carryforwards and certain built-in losses or deductions, as of the ownership change date, that are recognized during the five-year period after the ownership change.  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.  Most 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.  We could lose all or a substantial part of the benefit of our accumulated net operating loss carryforwards.

We have a significant base of deployed content delivery products that our customers, over time, may decide to replace for products from other companies.

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.

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

The ongoing uncertainty and unevenness in the recovery in the domestic and global economy may negatively affect our operating results, financial condition and 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 impairments, or under-produce finished goods, affecting our ability to meet customer requirements.

Our operating results, financial condition and cash flows may vary based on changes in our customers' capital expenditures.  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, financial results and cash flows.

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.

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 12-16 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 period originally planned, and, as a result, may adversely affect our financial results for that particular period.  See the Supplier heading in Part I, Item 1., the Business section of this Annual Report on Form 10-K for additional information.

A large number of our maintenance contracts are for legacy systems that are aging and may be replaced.

A large percentage of the services we provide are 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 to international customers accounted for approximately 46%, 42% and 39% of our revenue in fiscal years 2015, 2014, and 2013, respectively.  Accordingly, our business is susceptible to numerous risks associated with international operations.

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:

Our efforts to maintain channels to market and sell our products internationally may not be successful.

Our international sales are supported by a combination of direct sales in certain international locations and indirect channel sales through distributor and reseller arrangements with third parties in others.  We may not be able to maintain productive reseller and/or distribution agreements and/or may not be able to successfully manage these sales channels. In addition, many of our resellers also sell products from other vendors that compete with our products and may choose to focus on products of those vendors.  Additionally, our ability to utilize an indirect sales model in these international markets will depend on our ability to qualify and train those resellers to perform product installations and to provide customer support.  If we fail to develop and cultivate relationships with significant resellers, or if these resellers do not succeed in their sales efforts (whether because they are unable to provide support or otherwise), we may be unable to grow or sustain our revenue in international markets.

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

To date, the majority of our revenues have been denominated in U.S. dollars, while a significant portion of our international expenses are incurred in the local currencies of countries in which we operate. Because a portion of our business is conducted outside the U.S., we face exposure to adverse movements in foreign currency exchange rates.  These exposures may change over time as business practices evolve, and they could have a material adverse impact on our financial results and cash flows.  An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the U.S. where we often sell in dollars, and a weakened dollar could increase local currency operating costs.  In preparing our consolidated financial statements, certain financial information is required to be translated from foreign currencies to the U.S. dollar using either the spot rate or the weighted-average exchange rate.  If the U.S. dollar changes relative to applicable local currencies, there is a risk our reported sales, operating expenses, and net income could significantly fluctuate.  We are not able to predict the degree of exchange rate fluctuations, nor can we estimate the effect any future fluctuations may have upon our future operations.

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, vendor testing and additional 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 content delivery 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, could require us to spend a significant amount of resources and insurance coverage, if available, may be inadequate.

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 products 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 operations personnel.  Competition for qualified personnel is intense, and we may fail to retain our key employees or to attract or retain other highly qualified personnel.  The loss of the services of one or more of our key personnel could seriously impact our business, especially the loss of highly specialized technical personnel.  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.

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.

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

Our content delivery products enable recording, storing, and delivering video over commercial 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 for claims that our products enabled or assisted in breaching copyright laws.

If content providers, such as movie studios, limit the scope of content licensed for use in the digital content delivery 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 content delivery market is contingent upon 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 content delivery solutions.

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 is a high risk of hurricanes.  A hurricane could shut down the Pompano Beach facility for extended periods thereby making it impossible for us to assemble and ship real-time products.  Further, an extended shut-down could slow the release of software products for our real-time business since most of 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, financial condition and cash flows.  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.

Our operating results may be adversely affected by continuing economic uncertainty in Europe and elsewhere and by related global economic conditions.

The lingering effects of the European debt crisis and related European financial restructuring efforts may cause the value of the European currencies, including the euro, to further deteriorate, thus reducing the purchasing power of our European customers.  One potential outcome of the European financial situation is the re-introduction of individual currencies in one or more Eurozone countries or the dissolution of the euro entirely.  Should the euro dissolve entirely, the legal and contractual consequences for holders of euro-denominated obligations would be determined by laws in effect at such time.  The potential dissolution of the euro, or market perceptions concerning this and related issues, could adversely affect the value of our euro-denominated assets and obligations.  In addition, the European crisis has contributed to instability in global credit markets.  If global economic and market conditions, or economic conditions in Europe, the U.S. or other key markets, remain uncertain, persist, or deteriorate further, consumer purchasing power and demand for our products could decline, and we may experience material adverse impacts on our business, operating results, and financial condition.

Risks Related to Our Industries

The success of our business is dependent upon the success of our multi-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 content delivery continues to evolve.  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 content delivery and real-time product lines.  The television industry is subject to extensive regulation in the U.S. and other countries.  Our content delivery solutions revenue is dependent upon the continued growth of the digital television industry in the U.S. and internationally.  Broadband companies are subject to extensive government regulation by the FCC and other federal and state regulatory agencies.  The 1984 Cable Act, which amended the Communications Act of 1934, 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 our customers 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 important for our multi-screen video analytics solutions since these products monitor STB functions that could be impacted by privacy law protections.  In addition, new ‘net neutrality' legislation or regulations could be implemented or interpreted in a way that curtails certain of our products' uses within our customers' data networks and adversely impacts our customers' ability to operate those networks efficiently or profitably.  This could impact our sales of those products.  The enactment by federal, state or international governments of new laws or regulations could adversely affect our 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 compliance, our production and resultant revenues could be halted or significantly delayed.

The cable and telecommunications industries are experiencing consolidation, which could result in delays or reductions in purchases of products and services, which could have a material adverse effect on our business.

We are experiencing the consolidation of many participants in the cable and telecommunications industries. When consolidations occur, it is possible that the acquirer will not continue using the same suppliers, possibly resulting in an immediate or future elimination of sales opportunities and future support revenue.  Even if sales are not reduced, consolidation can also result in pressure from customers for lower prices or better terms, reflecting the increase in the total volume of products purchased, the elimination of a price differential between the acquiring customer and the company acquired, or other factors.  Consolidations could also result in delays in purchasing decisions by the affected companies prior to completion of the transaction and by the merged businesses.  The purchasing decisions of the merged companies could have a material adverse effect on our business.

We may be subject to liability if private information supplied to our customers is misused.

Our content delivery solutions allow 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.

Other Risks

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

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

None.

Our principal facilities as of June 30, 2015 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 operations, research and development, sales, marketing, service, and administration.

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

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, balance sheets or the related consolidated statements of operations, stockholders' equity and comprehensive income (loss) and cash flows in the period ended June 30, 2015.

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 21, 2015:

Derek Elder, President, Chief Executive Officer, and Director.   Mr. Elder joined Concurrent as President, Chief Executive Officer and Director on November 18, 2014.  Mr. Elder most recently served as Senior Vice President and General Manager of the DOCSIS & Multiservice Gateway business unit at ARRIS Group, Inc. ("ARRIS") (NASDAQ: ARRS) since April 2013.  Mr. Elder has also held a number of other leadership positions at ARRIS in sales, product management and marketing during his ten-year tenure, including serving as Senior Vice President & General Manager, Touchstone Broadband CPE Division from March 2011 to April 2013, Senior Vice President, Product Management & Marketing from May 2008 to May 2011 and Senior Vice President, North American Sales prior thereto.  Prior to ARRIS, Mr. Elder was a technology and business leader at Tropic Networks, Cisco Systems and Narad Networks, Inc.  Mr. Elder earned his undergraduate degree from the University of Maryland University College and his Masters of Business Administration from The Pennsylvania State University.

Emory O. Berry, Chief Financial Officer and Executive Vice President of Operations.   Mr. Berry has served as our Chief Financial Officer and Executive Vice President of Operations since August 1, 2008.  In 2009, he assumed responsibility as Vice President and General Manager, Real-Time.  Before joining Concurrent, 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.  Mr. Berry has over 20 years of financial and operational leadership experience with private and public firms in the high-tech and healthcare industries.  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, which was a publicly traded company at that time, 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 began his career as an auditor with Ernst and Young, LLP.  Mr. Berry is a certified public accountant.  He earned his undergraduate degree in Accounting from Samford University and his Masters of Business Administration from Georgia State University.

PART II

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.

On August 21, 2015, the last reported sale price of our common stock on NASDAQ was $5.18 per share.  As of August 21, 2015, there were 701 registered holders of record of our common stock.

In fiscal years 2014 and 2015, we paid four quarterly cash dividends of $0.12 per share of common stock.  We intend to pay a regular quarterly cash dividend on our common shares subject to, among other things, our results of operations, cash balances, future cash requirements, financial condition, statutory requirements of Delaware law, and other factors that the Board of Directors may deem relevant.  We believe that a portion of our dividends may be treated as a return of capital to stockholders, rather than dividend income, as we believe dividend payments may exceed our cumulative earnings and profits.

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 SEC.

Overview

We provide software, hardware and professional services for the content delivery market and the high‑performance, real-time market.  Our business is comprised of two segments for financial reporting purposes, products and services, which we provide for each of these markets.

Our content delivery solutions (formerly called video solutions) consist of software, hardware and services for intelligently streaming video content to a variety of consumer devices, storing and managing content in the network and collecting and analyzing data related to content delivery applications.  Our streaming video, storage and data analytics products and services are deployed by service providers to support consumer-facing video services including live broadcast video, VOD and time-shifted video applications such as cDVR.

Our real-time solutions consist of real-time Linux operating system versions, development and performance optimization tools, simulation software and other system software combined, in many cases, with computer platforms and services.  These real-time products are sold to a wide variety of companies seeking high-performance, real-time computer solutions in the military, aerospace, financial and automotive markets around the world.

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 U.S., 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

As described in Note 2 to the consolidated financial statements, in September 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2009-13, Multiple Deliverable Revenue Arrangements – A Consensus of the FASB Emerging Issues Task Force ("ASU 2009-13"). This guidance pertains to revenue arrangements with multiple deliverables, and accounting guidance on all tangible products containing both software and non-software components that function together to deliver the product's essential functionality.  We adopted this new accounting standard on July 1, 2010 and we elected to apply the guidance on a prospective basis.

We generate revenue from the sale of products and services. We commence revenue recognition when all of the following conditions are met:

Determination of the third and fourth criteria above are based on our judgments regarding the fixed nature of the fee charged for products and services delivered and the collectability of those fees.

Our standard multiple-element contractual arrangements with our customers generally include the delivery of systems with multiple components of hardware and software, certain professional services that typically involve installation and consulting, and ongoing system maintenance.  Product revenue is generally recognized when the product is delivered.  Professional services that are of a consultative nature may take place prior to, or after, delivery of the system, and installation services typically occur within 90 days after delivery of the system.  Professional services revenue is typically recognized as the service is performed.  Initial warranty begins after delivery of the system and typically is provided for 90 days to three years after delivery.  Maintenance revenue, where applicable, will be recognized ratably over the maintenance period.  Our product sales are predominantly system sales whereby software and equipment function together to deliver the essential functionality of the combined product.  Upon our adoption of ASU No. 2009-14, Software (Topic 985) – Certain Revenue Arrangements That Include Software Elements also on July 1, 2010, we determined sales of these systems were typically outside of the scope of the software revenue guidance in Accounting Standards Codification ("ASC") Topic 985, Software (previously included in American Institute of Certified Public Accountants Statement of Position 97-2, Software Revenue Recognition or "SOP 97-2") and should be accounted for under ASU 2009-13.