Revenue Performance - Total revenue for 2022 was $16.0 million, a decrease from $16.9 million in 2021, primarily due to a $0.8 million decline in perpetual software licenses and a $0.7 million decrease in services revenue[101]. - Software license revenue decreased by 7% from $8.0 million in 2021 to $7.4 million in 2022, representing 46% of total revenue in 2022 compared to 47% in 2021[102]. - Software maintenance revenue increased by 6% from $6.7 million in 2021 to $7.1 million in 2022, accounting for 44% of total revenue in 2022, up from 40% in 2021[103]. - Services and other revenue fell by 31% from $2.2 million in 2021 to $1.5 million in 2022, decreasing from 13% of total revenue to 9%[104]. Operating Performance - Operating loss improved to $2.2 million in 2022 from $6.1 million in 2021, aided by a $5.7 million gain from the sale of fixed assets[101]. - Research and development expenses were $9.2 million in 2022, slightly down from $9.3 million in 2021, while total engineering costs remained stable at $10.5 million[109]. - Selling and marketing expenses increased by 10% to $7.0 million in 2022, representing 43% of total revenue, up from 38% in 2021[111]. - General and administrative expenses rose by 5% to $6.4 million in 2022, accounting for 40% of total revenue, compared to 37% in 2021[113]. Cash Flow and Financial Position - Cash used in operating activities was $5.0 million in 2022, down from $6.2 million in 2021, primarily due to the impact of the gain on the sale of fixed assets[120]. - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $29.0 million, expected to fund operations for at least the next twelve months[125]. - As of December 31, 2022, the company estimates cash requirements for operating leases to be approximately $0.5 million in 2023 and $4.2 million thereafter[126]. - The company has $3.1 million of goodwill and $2.8 million of intangible assets as of December 31, 2022, with no impairments recorded to date[143]. - The company has a total of $11.1 million in deferred tax assets, with a corresponding valuation allowance of $11.1 million as of December 31, 2022[146]. Revenue Recognition and Accounting Policies - Revenue is recognized based on the transfer of control of goods and services, following a five-step model as per ASC 606[131]. - Revenue from software licenses is recognized at a point in time upon delivery, while software maintenance revenue is recognized over time on a straight-line basis[134]. - The company does not currently have any off-balance sheet arrangements, thus avoiding exposure to financing, liquidity, market, or credit risk[129]. - The company has not experienced material impacts from inflation on financial results to date[128]. - The company assesses the need for a valuation allowance on deferred tax assets and will adjust it based on future realizability evidence[148]. - The company has not made significant payments on guarantees and indemnifications historically, with no amounts accrued in financial statements[128]. - The company is continuing to assess the impact of recent accounting standards on its consolidated financial statements[149].

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