Revenue Performance - Total revenue for 2020 was $11.3 million, a decrease from $12.2 million in 2019, primarily due to lower services revenue [100]. - Software license revenue increased by 9% from $4.6 million in 2019 to $5.0 million in 2020, representing 45% of total revenue in 2020 compared to 38% in 2019 [102]. - Software maintenance revenue rose by 3% from $5.3 million in 2019 to $5.4 million in 2020, accounting for 48% of total revenue in 2020 [104]. - Services revenue decreased by 64% from $2.3 million in 2019 to $0.8 million in 2020, dropping to 7% of total revenue [106]. Expenses - Research and development expenses increased by 8% from $7.9 million in 2019 to $9.1 million in 2020, representing 87% of total revenue [112]. - Selling and marketing expenses surged by 50% from $3.6 million in 2019 to $5.4 million in 2020, making up 48% of total revenue [115]. - General and administrative expenses rose by 51% from $3.6 million in 2019 to $5.4 million in 2020, also 48% of total revenue [116]. Operating Loss - Operating loss for 2020 was $9.4 million, compared to a loss of $4.1 million in 2019 [100]. - Cash used by operating activities was $5.3 million in 2020, primarily due to a net loss of $7.6 million [122]. Cash Position - Cash and cash equivalents at the end of 2020 were $38.6 million, expected to fund operations for at least the next twelve months [126]. Financial Reporting and Accounting - The company does not have any off-balance sheet arrangements with unconsolidated entities, thus avoiding exposure to financing, liquidity, market, or credit risk [128]. - Revenue is recognized based on the transfer of control of promised goods and services, following the five-step model outlined in ASC 606 [130]. - Revenue is categorized into software licenses, software maintenance, and services, with software licenses recognized at a point in time upon delivery [131]. - As of December 31, 2020, the company had $8.7 million in deferred tax assets, fully offset by a valuation allowance of $8.7 million [141]. - The company adopted ASU No. 2019-12 on January 1, 2020, which simplified the accounting for income taxes without resulting in adjustments to financial statements [143]. - The company is assessing the impact of ASU 2016-13 on its consolidated financial statements, which changes the methodology for measuring credit losses [144]. Stock-Based Compensation - Stock-based compensation is measured at grant date fair value and recognized as an expense over the vesting period [136]. - The company uses the Black-Scholes model to estimate the fair value of stock options, considering various significant assumptions [137]. Revenue Recognition - Revenue from software maintenance is recognized over time on a straight-line basis over the contract period [131]. - The company makes judgments regarding the allowance for doubtful accounts based on a review of significant outstanding invoices [142].
Aware(AWRE) - 2020 Q4 - Annual Report