What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2020-05-11 compared with 2020-02-10 · 32 added, 19 removed, 453 unchanged (10% of the section changed)

14 unchanged sentences

A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending could cause current or potential customers to reduce their technology budgets or be unable to fund software or services purchases, which could cause customers to delay, decrease or cancel purchases of our products and services or cause customers to not pay us or to delay paying us for previously purchased products and services.

We face risks related to health epidemic, including the COVID-19 pandemic, which could have a material adverse effect on our business, financial condition and results of operations.

We face various risks, related to public health issues, including epidemics, pandemics, and other outbreaks, including the recent pandemics of respiratory illness caused by a novel coronavirus known as COVID-19, which the World Health Organization characterized as a pandemic in March 2020.

The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place or stay-at-home orders, and business shutdowns.

For example, employees at our headquarters located in Sunnyvale, California, are currently subject to a shelter-in-place order from the local government.

Our offices in India and United Kingdom have also been impacted by COVID-19 and have been subject to various measures implemented by local government to reduce the spread of COVID-19.

These measures may adversely impact our employees and operations and the operations of our customers and third-party distribution partners, and may negatively impact our sales and marketing activities.

These measure by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect our sales and marketing activities and our business, financial condition and results of operations.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, mandating that all non-essential personnel in our headquarters to work from home, temporary closures of our offices, and cancellation of physical participation in sales activities, meetings, events and conferences), and we may take further actions as may be required by government authorities, or that we determine are in the best interests of our employees and customers.

There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

In addition, we face additional risks and challenges related to having a portion of our workforce working from home, including added pressure on our IT systems and the security of our network, and new challenges as our team adjust to online collaboration.

If significant portions of our workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, our operations will be impacted.

The extent to which the COVID-19 pandemic impacts our business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating activities can resume.

The COVID-19 pandemic could cause fluctuations in foreign currency markets, impact the availability of future borrowings and our ability to access capital, increase the cost of borrowings, increase credit risks of our customers, negatively affect our liquidity and the liquidity and stability of markets of our securities.

Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business and the value of our securities as a result of its global economic impact, including any recession that has occurred or may occur in the future.

There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

We do not yet know the full extent of COVID-19’s impact on our business, our operations, or the global economy as a whole.

However, the effects could have a material impact on our results of operations, and we will continue to monitor the situation closely.

Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future, and because we recognize revenue from subscriptions over a period of time, downturns in revenue may not be immediately reflected in our operating results.

39 unchanged sentences

Consequently, we often face difficulty predicting the quarter in which expected sales will actually occur.

contributes to the uncertainty and fluctuations in our future operating results.

This contributes to the uncertainty and fluctuations in our future operating results.

In particular, the corporate decision-making and approval process of our customers and potential customers has become more complicated.

24 unchanged sentences

We believe that our future success depends in part upon our ability to develop, maintain and expand strategic, long-term and profitable partnerships and reseller relationships.

If we are unable to do so for any reason, including as a result of any change in the leadership of

our distribution partners, or if any existing or future distribution partners fail to successfully market, resell, implement or support our products for their customers, or if distribution partners represent multiple providers and devote greater resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.

If we are unable to do so for any reason, including as a result of any change in the leadership of our distribution partners, or if any existing or future distribution partners fail to successfully market, resell, implement or support our products for their customers, or if distribution partners represent multiple providers and devote greater

resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.

Our failure to develop, maintain and expand relationships with systems integrators could harm our business.

17 unchanged sentences

These risks in turn could cause our operating results and financial condition to suffer.

We derived 40% and 43% of our revenue from international sales during three months ended December 31, 2019 and 2018, respectively.

We derived 42% and 44% of our revenue from international sales during the six months ended December 31, 2019 and 2018, respectively.

We derived 37% and 43% of our revenue from international sales during three months ended March 31, 2020 and 2019, respectively.

We derived 40% and 44% of our revenue from international sales during the nine months ended March 31, 2020 and 2019, respectively.

In addition to those discussed elsewhere in this section, our international sales operations are subject to a number of specific risks, such as:

8 unchanged sentences

reduced intellectual property protections in some countries.

As of December 31, 2019 approximately 48% of our workforce was employed in India.

As of March 31, 2020 approximately 47% of our workforce was employed in India.

Of our employees in India, 48% are allocated to research and development.

153 unchanged sentences

As part of our business strategy, we periodically make investments in, or acquisitions of, complementary businesses, joint ventures, services and technologies and intellectual property rights, and we expect that we will continue to make such investments and acquisitions in the future.

For example in August 2014, we acquired Exony Ltd.

Acquisitions and investments involve numerous risks, including:

23 unchanged sentences

and foreign law such as fraud, defamation, libel, invasion of privacy, negligence, copyright or trademark infringement, or other theories based on the nature and content of the materials disseminated by users of our technology platforms.

In addition, domestic and foreign legislation has been

proposed that could prohibit or impose liability for the transmission over the Internet of certain types of information.

Our defense of any of these actions could be costly and involve significant time and attention of our management and other resources.

In addition, domestic and foreign legislation has been proposed that could prohibit or impose liability for the transmission over the Internet of certain types of information.

defense of any of these actions could be costly and involve significant time and attention of our management and other resources.

The Digital Millennium Copyright Act (DMCA) is intended, among other things, to reduce the liability of online service providers for listing or linking to third-party web properties that include materials that infringe copyrights or rights of others.

24 unchanged sentences

Department of Commerce, and the EU and Switzerland, which established a means for legitimating the transfer of personally identifiable information (PII) by U.S.

companies doing business in Europe from the European Economic

Area (EEA) to the U.S.

As a result of the October 6, 2015 EU Court of Justice (ECJ), opinion in Case C-362/14 (Schrems v.

companies doing business in Europe from the European Economic Area (EEA) to the U.S.

As a result of the October 6, 2015 EU Court of Justice (ECJ), opinion in Case C-362/14 (Schrems

Data Protection Commissioner) regarding the adequacy of the U.S.-EU Safe Harbor Framework, the U.S.

23 unchanged sentences

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

The CCPA may increase our compliance costs

and potential liability.

The CCPA may increase our compliance costs and potential liability.

Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.

84 unchanged sentences

Our insiders who are significant stockholders have the ability to exercise significant control over matters requiring stockholder approval, including the election of our board of directors, and may have interests that conflict with those of other stockholders.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 33% of our outstanding capital stock as of December 31, 2019, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 28% as of such date.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 32% of our outstanding capital stock as of March 31, 2020, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 28% as of such date.

As a result of these concentrated holdings, Mr.

9 unchanged sentences

Interactive Data Files Pursuant to Rule 405 of Regulation S-T:

(i) Condensed Consolidated Balance Sheets as of December 31, 2019 and June 30, 2019, (ii) Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2019 and 2018, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2019 and 2018, (iv) Condensed Consolidated Statements of Stockholders’

Equity (Deficit) for the three and six months ended December 31, 2019 and 2018 (v) Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2019 and 2018 and (vi) Notes to Condensed Consolidated Financial Statements.

(i) Condensed Consolidated Balance Sheets as of March 31, 2020 and June 30, 2019, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2020 and 2019, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2020 and 2019, (iv) Condensed Consolidated Statements of Stockholders’

Equity for the three and nine months ended March 31, 2020 and 2019, (v) Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and 2019 and (vi) Notes to Condensed Consolidated Financial Statements.

XBRL Instance Document

8 unchanged sentences

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

February 10, 2020

eGain Corporation

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors