NOTE 5 – 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 fiscal year 2018, revenues earned from Daimler Financial Services were 36.3% of net revenues, consisting of license, maintenance and services revenue of $230,815, $2,708,808 and $19,189,945, respectively. During the fiscal year 2017, revenues earned were 44.3% of net revenues, consisting of license, maintenance and services revenue of $16,545,603, $2,473,889 and $10,016,552, respectively. The revenue from this customer is shown in the Asia – Pacific segment.

Accounts receivable at June 30, 2018 and 2017 for this customer were $4,417,709 and $1,620,717, respectively. Revenues in excess of billing at June 30, 2018 and 2017 was $12,508,815 and $18,579,540, respectively. Included in this amount was $1,206,669 and $5,173,538 shown as long term at June 30, 2018 and 2017, 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 $82,558,000) 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 $7,697,000) for years 1-5 and €8,350,000 (approximately $10,987,000) 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.