NOTE 7 – MAJOR CUSTOMERS

The Company is a strategic business partner for Daimler Financial Services (which consists of a group of many companies in different countries). During the six months ended December 31, 2018, revenues earned from Daimler Financial Services were 31.6% of net revenues, consisting of license, maintenance and services revenue of $1,868,254, $1,363,117 and $7,331,991, respectively. During the six months ended December 31, 2017, revenues earned were 35.9% of net revenues, consisting of license, maintenance and services revenue of $Nil, $1,302,219 and $8,486,970, respectively. The revenue from this customer is shown in the Asia – Pacific segment.

Accounts receivable at December 31, 2018 and June 30, 2018, were $4,431,075 and $4,417,709, respectively. Revenues in excess of billings at December 31, 2018 and June 30, 2018 was $5,513,906 and $12,508,815, respectively. Included in this amount was $Nil and $1,206,669 shown as long term at December 31, 2018 and June 30, 2018, respectively.

On December 21, 2015, the Company entered into a 10-year contract with Daimler Financial Services to provide license, maintenance and services for 12 countries in the Asia Pacific Region. The implementation phase is expected to be over a five-year period with maintenance and support over 10 years. The contract is a fixed fee arrangement with total license and maintenance fees of approximately €71,000,000 (approximately $81,609,195) with services to be separately agreed upon and billed as they are performed. The customer will make fixed annual payments of €5,850,000 (approximately $6,724,138) for years 1-5 and €8,350,000 (approximately $9,597,701) for years 6-10. Under the terms of the contract, the customer has the right to withdraw from certain modules and terminate the agreement as to certain countries based on good cause or business reasons prior to the beginning of implementation.

On September 4, 2017, the Company amended the agreement which provided for an additional €7,700,000 (approximately $8,850,575) to be earned over the remaining life of the contract. The amended agreement provided for €7,000,000 (approximately $8,045,977) to be paid in the fiscal year 2018 with €100,000 (approximately $114,943) to be paid each year over the remaining seven years.