UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549









FORM
10-Q


(Mark
      One)x
              Quarterly
      Report Pursuant to Section 13 or 15(d) ofthe
      Securities Exchange Act of 1934For
      the Quarterly Period Ended September 30, 2009oro
              Transition
      Report Pursuant to Section 13 or 15(d) ofthe
      Securities Exchange Act of 1934For
      the Transition Period from ____ to  ____Commission
      File No. 0-13150











CONCURRENT
COMPUTER CORPORATION


(Exact
name of registrant as specified in its charter)





Delaware
            04-2735766(State
      or other jurisdiction
            (I.R.S.
      Employer Identification No.)of
      incorporation or organization)





4375
River Green Parkway, Suite 100, Duluth, GA  30096


(Address
of principal executive offices) (Zip Code)





Telephone:
(678) 258-4000


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.    Yes  x     No   ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes   ̈No   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
“large accelerated filer”, “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.  (Check one):





Large
      accelerated filer   ̈
            
            Accelerated
      filer   ̈Non-accelerated
      filer   ̈ (Do not check if
      a smaller reporting company)
            
            Smaller
      reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes   ̈    No  x





Number of
shares of the Registrant's Common Stock, par value $0.01 per share, outstanding
as of October 29, 2009 was 8,341,000.










Concurrent Computer Corporation


Form
10-Q




For
the Three Months Ended September 30, 2009




Table
of Contents







PagePart I – Financial
    InformationItem
      1.
            Condensed Consolidated Financial Statements
            2Condensed Consolidated Balance Sheets
      (Unaudited)
            2Condensed Consolidated Statements of Operations
      (Unaudited)
            3Condensed Consolidated Statements of Cash Flows
      (Unaudited)
            4Notes to Condensed Consolidated Financial Statements
      (Unaudited)
            5Item
      2.
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            12Item
      3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            18Item
      4.
            Controls and Procedures
            18Part II – Other InformationItem
      1.
            Legal Proceedings
            19Item
      1A.
            Risk Factors
            19Item
      5.
            Other Information
            19Item
      6.
            Exhibits
            19





EX-31.1
SECTION 302 CERTIFICATION OF CEO


EX-31.2
SECTION 302 CERTIFICATION OF CFO


EX-32.1
SECTION 906 CERTIFICATION OF CEO


EX-32.2
SECTION 906 CERTIFICATION OF CFO


1
 Table of Contents


Part
      I
            Financial
      Information





Item 1.
            Condensed
      Consolidated Financial Statements





Concurrent Computer Corporation


Condensed
Consolidated Balance Sheets


(Dollars
in Thousands)








September 30,
            
            
            June 30,2009
            
            
            2009(Unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
            
            $
            27,184
            
            
            $
            29,110Accounts
      receivable, less allowance for doubtful accounts of $84 at September 30,
      2009 and $97 at June 30, 2009
            
            
            10,997
            
            
            
            14,546Inventories,
      net
            
            
            4,134
            
            
            
            3,060Prepaid
      expenses and other current assets
            
            
            1,887
            
            
            
            1,444Total
      current assets
            
            
            44,202
            
            
            
            48,160Property,
      plant and equipment, net
            
            
            4,560
            
            
            
            3,860Intangible
      - purchased technology, net
            
            
            2,937
            
            
            
            3,166Intangible
      - customer relationships, net
            
            
            1,214
            
            
            
            1,257Other
      long-term assets, net
            
            
            748
            
            
            
            692Total
      assets
            
            $
            53,661
            
            
            $
            57,135LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
            
            $
            8,969
            
            
            $
            10,582Deferred
      revenue
            
            
            6,679
            
            
            
            7,870Total
      current liabilities
            
            
            15,648
            
            
            
            18,452Long-term
      liabilities:Deferred
      revenue
            
            
            836
            
            
            
            1,041Revolving
      bank line of credit
            
            
            949
            
            
            
            949Pension
      liability
            
            
            1,971
            
            
            
            1,868Other
            
            
            1,568
            
            
            
            1,297Total
      liabilities
            
            
            20,972
            
            
            
            23,607Commitments
      and contingencies (Note 12)Stockholders'
      equity:Shares
      of common stock, par value $.01; 100,000,000 authorized;8,324,416 and
      8,321,916 issued and outstanding at September 30, 2009 and June 30, 2009,
      respectively
            
            
            83
            
            
            
            83Capital
      in excess of par value
            
            
            205,232
            
            
            
            205,222Accumulated
      deficit
            
            
            (173,274
            )
            
            
            (172,259
            )Treasury
      stock, at cost; 37,788 at September 30, 2009and June 30,
    2009
            
            
            (255
            )
            
            
            (255
            )Accumulated
      other comprehensive income
            
            
            903
            
            
            
            737Total
      stockholders' equity
            
            
            32,689
            
            
            
            33,528Total
      liabilities and stockholders' equity
            
            $
            53,661
            
            
            $
            57,135








The
accompanying notes are an integral part of the condensed consolidated financial
statements.


2
 Table of Contents


Concurrent Computer Corporation


Condensed
Consolidated Statements of Operations (Unaudited)


(In
Thousands, Except Per Share Amounts)








Three
      Months EndedSeptember 30,2009
            
            
            2008Revenues:Product
            
            $
            6,682
            
            
            $
            12,049Service
            
            
            6,068
            
            
            
            6,286Total
      revenues
            
            
            12,750
            
            
            
            18,335Cost
      of sales:Product
            
            
            2,890
            
            
            
            5,635Service
            
            
            2,121
            
            
            
            2,418Total
      cost of sales
            
            
            5,011
            
            
            
            8,053Gross
      margin
            
            
            7,739
            
            
            
            10,282Operating
      expenses:Sales
      and marketing
            
            
            3,805
            
            
            
            3,568Research
      and development
            
            
            3,100
            
            
            
            3,839General
      and administrative
            
            
            1,917
            
            
            
            2,323Total
      operating expenses
            
            
            8,822
            
            
            
            9,730Operating
      (loss) income
            
            
            (1,083
            )
            
            
            552Interest
      income
            
            
            26
            
            
            
            111Interest
      expense
            
            
            (28
            )
            
            
            (29
            )Other
      income (expense)
            
            
            100
            
            
            
            (291
            )(Loss)
      income before income taxes
            
            
            (985
            )
            
            
            343Provision
      for income taxes
            
            
            30
            
            
            
            250Net
      (loss) income
            
            $
            (1,015
            )
            
            $
            93Net
      (loss) income per shareBasic
            
            $
            (0.12
            )
            
            $
            0.01Diluted
            
            $
            (0.12
            )
            
            $
            0.01Weighted
      average shares outstanding - basic
            
            
            8,286
            
            
            
            8,292Weighted
      average shares outstanding - diluted
            
            
            8,286
            
            
            
            8,308








The
accompanying notes are an integral part of the condensed consolidated financial
statements.


3
 Table of Contents


Concurrent Computer Corporation


Condensed
Consolidated Statements of Cash Flows (Unaudited)


(Dollars
in Thousands)








Three
      Months EndedSeptember 30,2009
            
            
            2008OPERATING
      ACTIVITIESNet
      (loss) income
            
            $
            (1,015
            )
            
            $
            93Adjustments
      to reconcile net (loss) income to net cash (used in) provided by operating
      activities:Depreciation
      and amortization
            
            
            766
            
            
            
            775Share-based
      compensation
            
            
            10
            
            
            
            82Other
      non-cash expenses
            
            
            (59
            )
            
            
            362Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            3,549
            
            
            
            (3,089
            )Inventories
            
            
            (1,101
            )
            
            
            1,656Prepaid
      expenses and other current assets
            
            
            (427
            )
            
            
            (434
            )Other
      long-term assets
            
            
            (48
            )
            
            
            99Accounts
      payable and accrued expenses
            
            
            (1,613
            )
            
            
            (3,652
            )Deferred
      revenue
            
            
            (1,396
            )
            
            
            1,892Other
      long-term liabilities
            
            
            293
            
            
            
            (29
            )Total
      adjustments to net (loss) income
            
            
            (26
            )
            
            
            (2,338
            )Net
      cash used in operating activities
            
            
            (1,041
            )
            
            
            (2,245
            )INVESTING
      ACTIVITIESCapital
      expenditures
            
            
            (1,126
            )
            
            
            (646
            )Net
      cash used in investing activities
            
            
            (1,126
            )
            
            
            (646
            )FINANCING
      ACTIVITIESPurchase
      of treasury stock
            
            
            -
            
            
            
            (252
            )Net
      cash used in financing activities
            
            
            -
            
            
            
            (252
            )Effect
      of exchange rates on cash and cash equivalents
            
            
            241
            
            
            
            (360
            )Decrease
      in cash and cash equivalents
            
            
            (1,926
            )
            
            
            (3,503
            )Cash
      and cash equivalents at beginning of period
            
            
            29,110
            
            
            
            27,359Cash
      and cash equivalents at end of period
            
            $
            27,184
            
            
            $
            23,856Cash
      paid during the period for:Interest
            
            $
            16
            
            
            $
            15Income
      taxes (net of refunds)
            
            $
            426
            
            
            $
            412








The
accompanying notes are an integral part of the condensed consolidated financial
statements


4
 Table of Contents


Concurrent Computer Corporation


Notes
to Condensed Consolidated Financial Statements








1.
            Overview
      of Business and Basis of
Presentation





Concurrent
is a provider of computing technologies and software applications and related
services for the video solutions market and the high-performance, real-time
market.  Our business is comprised of two segments for financial
reporting purposes: products and services.  We provide products and
services for each of these markets.





Our video
solutions products consist of hardware and/or software as well as integration
services, sold primarily to broadband companies that provide interactive,
digital services for the delivery of video.  Our real-time products
consist of real-time operating systems and software development tools combined,
in most cases, with off-the-shelf hardware and services sold to a wide variety
of companies seeking high-performance, real-time computer
solutions.





We
provide sales and support from offices and subsidiaries throughout North
America, Europe, and Asia.





Our
condensed consolidated interim financial statements are unaudited and reflect
all adjustments (consisting of only normal recurring adjustments) necessary for
a fair statement of our financial position, results of operations and cash flows
at the dates and for the periods indicated.  These financial
statements should be read in conjunction with our Annual Report on Form 10-K for
the year ended June 30, 2009.  There have been no changes to our
Significant Accounting Policies as disclosed in Note 2 of the consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended June 30, 2009.  The results reported in these condensed
consolidated financial statements should not be regarded as necessarily
indicative of results that may be expected for the entire year.





Use of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.





Income
Taxes





As of
June 30, 2009, we had U.S. federal tax net operating loss carryforwards of
approximately $145.5 million for income tax purposes, of which $10.3 million
expire in fiscal year 2010, and the remainder expire at various dates through
2028.





Recently
Issued Accounting Pronouncements





In
September 2009, the Financial Accounting Standards Board (the “FASB”) issued
Accounting Standards Update (ASU) No. 2009-13, “Multiple Deliverable Revenue
Arrangements – A consensus of the FASB Emerging Issues Task
Force.”  The guidance provides principles and application guidance on
whether multiple deliverables exist, determining the unit of accounting for each
deliverable, and the consideration allocated to the separate units of
accounting.  Additionally, this guidance requires an entity to
allocate revenue in an arrangement using estimated selling prices of
deliverables if a vendor does not have vendor-specific objective evidence or
third-party evidence of selling price, eliminates the use of the residual
method, and requires an entity to allocate revenue using the relative selling
price method.  However, guidance on determining when the criteria for
revenue recognition are met and how an entity should recognize revenue for a
given unit of accounting are contained in other accounting
literature.  The guidance is effective for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June
15, 2010.  Earlier application is permitted as of the beginning of an
entity’s fiscal year, and would be applied retrospectively as of the beginning
of the fiscal year, if applied subsequent to the first quarter of a fiscal
year.  We are currently evaluating the impact of adoption of this
accounting standard on our consolidated financial statements.


5
 Table of Contents


Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








In September 2009, the FASB issued ASU
No. 2009-14, “Certain Revenue Arrangements That Include Software Elements – A
consensus of the FASB Emerging Issues Task Force” which amends Accounting
Standards Codification (“ASC”) 985-605, “Software: Revenue Recognition” to
exclude from its scope certain tangible products containing both software and
non-software components that function together to deliver the product’s
essential functionality.This guidance focuses on determining
which arrangements are within the scope of the software revenue guidance in
Topic 985 (previously included in AICPA Statement of Position 97-2, Software
Revenue Recognition) and which are not. This guidance also removes tangible
products from the scope of the software revenue guidance and provides guidance
on determining whether software deliverables in an arrangement that includes a
tangible product are within the scope of the software revenue
guidance.This guidance is
effective for revenue arrangements entered into or materially modified in fiscal
years beginning on or after June 15, 2010 and shall be applied on a prospective
basis.  Earlier application is permitted as of the beginning of an
entity’s fiscal year, and would be applied retrospectively as of the beginning
of the fiscal year, if applied subsequent to the first quarter of a fiscal
year.  Weare
currently evaluating the impact of adoption of this accounting standard on our
consolidated financial statements.




In August
2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring
Liabilities at Fair Value.” This ASU clarifies the application of certain
valuation techniques in circumstances in which a quoted price in an active
market for the identical liability is not available and clarifies that when
estimating the fair value of a liability, the fair value is not adjusted to
reflect the impact of contractual restrictions that prevent its transfer. This
guidance becomes effective for us on October 1, 2009. We have evaluated this
guidance and have determined there are no significant impacts to our financial
position or results of operations.





2.
            Basic
      and Diluted Net Income per Share





Basic net
income per share is computed by dividing net income by the weighted average
number of common shares outstanding during each period.  Diluted net
income per share is computed by dividing net income by the weighted average
number of shares including dilutive common share equivalents.  Under
the treasury stock method, incremental shares representing the number of
additional common shares that would have been outstanding if the dilutive
potential common shares had been issued are included in the
computation.  Diluted earnings per common share assumes exercise of
outstanding stock options and vesting of restricted stock when the effects of
such assumptions are dilutive.  Common share equivalents of 984,000
and 1,051,000 for the three months ended September 30, 2009 and 2008,
respectively, were excluded from the calculation as their effect was
antidilutive.  The following table presents a reconciliation of the
numerators and denominators of basic and diluted net income per share for the
periods indicated (dollars and share data in thousands, except per-share
amounts):





Three
      Months EndedSeptember 30,2009
            
            
            2008Basic
      and diluted earnings per share (EPS) calculation:Net
      (loss) income
            
            $
            (1,015
            )
            
            $
            93Basic
      weighted average number of shares outstanding
            
            
            8,286
            
            
            
            8,292Effect
      of dilutive securities:Restricted
      stock
            
            
            -
            
            
            
            16Diluted
      weighted average number of shares outstanding
            
            
            8,286
            
            
            
            8,308Basic
      EPS
            
            $
            (0.12
            )
            
            $
            0.01Diluted
      EPS
            
            $
            (0.12
            )
            
            $
            0.01


6
 Table of Contents
  Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








3.
            Share-Based
      Compensation





At
September 30, 2009, we had share-based employee compensation plans which are
described in Note 11 of the consolidated financial statements included in our
Annual Report on Form 10-K for the year ended June 30, 2009.  Option
awards are granted with an exercise price equal to the market price of our stock
at the date of grant.  We recognize stock compensation expense over
the requisite service period of the individual grantees, which generally equals
the vesting period.  During the three months ended September 30, 2009,
we issued 268,000 shares of restricted stock to our employees, of which
approximately 102,000 shares will be released over a four year vesting period,
and the remaining 166,000 will be released only when certain performance or
market criteria are achieved over time.  Performance criteria for the
performance based restricted shares include achieving certain financial results,
and market criteria include achieving certain share prices.  As of
September 30, 2009, we had approximately 560,000 stock options and approximately
527,000 restricted shares outstanding.





During
the three months ended September 30, 2009 and 2008, we recorded $10,000 and
$82,000, respectively, of share-based compensation related to issuances of stock
options and restricted stock to employees and directors.





4.
            Inventories





Inventories
are stated at the lower of cost or market, with cost being determined by using
the first-in, first-out method.  We establish excess and obsolete
inventory reserves based upon historical and anticipated usage.  The
components of inventories are as follows (in thousands):





September 30,
            
            
            June 30,2009
            
            
            2009Raw
      materials, net
            
            $
            3,083
            
            
            $
            2,239Work-in-process
            
            
            327
            
            
            
            289Finished
      goods
            
            
            724
            
            
            
            532$
            4,134
            
            
            $
            3,060





At
September 30, 2009 and June 30, 2009, some portion of our inventory was in
excess of the current requirements based upon the planned level of sales for
future years.  Accordingly, we have reduced our gross raw materials
inventory by $1,268,000 at September 30, 2009 and $1,242,000 at June 30, 2009,
to the estimated net realizable value.





5.
            Fair
      Value Measurements





As of
July 1, 2009, we have fully adopted all provisions of the Financial Accounting
Standards Board’s (“FASB’s”) ASC that defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements.  This guidance defines fair value as the price that
would be received upon sale of an asset or paid upon transfer of a liability in
an orderly transaction between market participants at the measurement date and
in the principal or most advantageous market for that asset or
liability.  The fair value, in this context, should be calculated
based on assumptions that market participants would use in pricing the asset or
liability, not on assumptions specific to the entity.  In addition,
the fair value of liabilities should include consideration of non-performance
risk including our own credit risk.




The FASB
ASC requires certain disclosures around fair value and establishes a fair value
hierarchy for valuation inputs.  The hierarchy prioritizes the inputs
into three levels based on the extent to which inputs used in measuring fair
value are observable in the market.  Each fair value measurement is
reported in one of the three levels which are determined by the lowest level
input that is significant to the fair value measurement in its
entirety.  These levels are:




●
            Level
      1
            Quoted
      prices (unadjusted) in active markets for identical assets or
      liabilities;●
            Level
      2
            Inputs
      other than quoted prices included within Level 1 that are either directly
      or indirectly observable;●
            Level
      3
            Assets
      or liabilities for which fair value is based on valuation models with
      significant unobservable pricing inputs and which result in the use of
      management estimates.





Our debt
is relatively short-term in nature and is based on variable interest rates,
therefore the carrying value of the debt approximates fair value, which would be
based on Level 2 inputs.  The remaining recorded value of our assets and
liabilities approximate fair value, as applicable under generally accepted
accounting principles.


7
 Table of Contents


Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








6.
            Other
      Intangible Assets





Intangible
      assets consist of the following (in
thousands):





September 30,
            
            
            June 30,2009
            
            
            2009Cost
      of amortizable intangibles:Purchased
      technology
            
            $
            7,700
            
            
            $
            7,700Customer
      relationships
            
            
            1,900
            
            
            
            1,900Total
      cost of intangibles
            
            
            9,600
            
            
            
            9,600Less
      accumulated amortization:Purchased
      technology
            
            
            (4,763
            )
            
            
            (4,534
            )Customer
      relationships
            
            
            (686
            )
            
            
            (643
            )Total
      accumulated amortization
            
            
            (5,449
            )
            
            
            (5,177
            )Total
      intangible assets, net
            
            $
            4,151
            
            
            $
            4,423





Amortization
expense was $272,000 for each of the three months ended September 30, 2009 and
2008, respectively.





7.
            Accounts
      Payable and Accrued Expenses





The
components of accounts payable and accrued expenses are as follows (in
thousands):





September 30,
            
            
            June 30,2009
            
            
            2009Accounts
      payable, trade
            
            $
            4,760
            
            
            $
            4,175Accrued
      payroll, vacation, severanceand other employee
      expenses
            
            
            2,892
            
            
            
            4,682Other
      accrued expenses
            
            
            1,317
            
            
            
            1,725$
            8,969
            
            
            $
            10,582


8
 Table of Contents


Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








8.
            Comprehensive
      Income (Loss)





Our total
comprehensive income (loss) is as follows (in thousands):





Three
      Months EndedSeptember 30,2009
            
            
            2008Net
      income (loss)
            
            $
            (1,015
            )
            
            $
            93Other
      comprehensive income (loss):Foreign
      currency translation adjustment
            
            
            164
            
            
            
            71Adjustment
      in pensions
            
            
            1
            
            
            
            11Total
      comprehensive income (loss)
            
            $
            (850
            )
            
            $
            175





9.
            Concentration
      of Credit Risk, Segment, and Geographic
  Information





We
operate in two segments, products and services, as disclosed within our
condensed consolidated Statements of Operations.  We do not identify
assets on a segment basis.  We attribute revenues to individual
countries and geographic areas based upon location of our selling operating
subsidiaries.  A summary of our revenues by geographic area follows
(dollars in thousands):





Three
      Months EndedSeptember 30,2009
            
            
            2008United
      States
            
            $
            10,085
            
            
            $
            15,228Japan
            
            
            869
            
            
            
            1,989Other
      Asia Pacific countries
            
            
            923
            
            
            
            222Asia
      Pacific
            
            
            1,792
            
            
            
            2,211Europe
            
            
            873
            
            
            
            896Total
      revenue
            
            $
            12,750
            
            
            $
            18,335





In
addition, the following summarizes revenues by significant customer where such
revenue exceeded 10% of total revenues for any one of the indicated
periods:





Three
      Months EndedSeptember 30,2009
            
            
            2008Customer
      A
            
            
            15
            %
            
            <10
            %Customer
      B
            
            
            12
            %
            
            
            27
            %Customer
      C
            
            
            10
            %
            
            
            20
            %





We assess
credit risk through ongoing credit evaluations of customers’ financial condition
and collateral is generally not required.  At September 30, 2009, one
customer accounted for $1,640,000 or 15% of trade receivables.  At
June 30, 2009, one customer accounted for $2,019,000 or 14% of trade
receivables, a second customer accounted for $1,599,000 or 11% and a third
customer accounted for $1,536,000 or 10% of trade receivables.  No
other customers accounted for 10% or more of trade receivables as of September
30, 2009 or June 30, 2009.


9
 Table of Contents


Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








We
sometimes purchase product components from a single supplier in order to obtain
the required technology and the most favorable price and delivery
terms.  For the three months ended September 30, 2009, purchases from
two suppliers were equal to, or in excess of 10% of our total
purchases.  These two suppliers accounted for 27% and 12% of our
purchases during the three months ended September 30, 2009.  Also, for
the three months ended September 30, 2008, purchases from three suppliers were
equal to, or in excess of 10% of our total purchases.  These three
suppliers accounted for 23%, 17% and 13% of our purchases during the three
months ended September 30, 2008.





10.
            Term
      Loan and Revolving Credit Facility





We have a
Credit Agreement with Silicon Valley Bank (the “Credit Agreement”)
that provides for a $10,000,000 revolving credit line (the “Revolver”) with
a borrowing base dependent upon our outstanding North American accounts
receivable and a maturity date of December 31, 2010.   The
interest amount is based upon the amount advanced and the rate varies based upon
our accounts receivable and the amount of cash in excess of debt.  The
Credit Agreement establishes a minimum interest rate so that interest on
outstanding principle is calculated as prime plus 0.50% whereby, for purposes of
the Credit Agreement, “prime” is the greater of (a) Silicon Valley Bank’s most
recently announced “prime” rate,” and (b) 4.00%.  The interest rate on
the Revolver was 4.50% as of September 30, 2009. The outstanding principal
amount plus all accrued but unpaid interest is payable in full at the expiration
of the credit facility on December 31, 2010.  Based on the borrowing
formula and our financial position as of September 30, 2009, approximately
$7,176,000 was available to us under the Revolver.  As of September
30, 2009, $949,000 was drawn under the Revolver, resulting in approximately
$6,227,000 of remaining available funds under the Revolver.





In
addition, the Credit Agreement contains certain financial covenants, including a
required adjusted quick ratio (the ratio of cash and accounts receivable to
current liabilities (less the current portion of deferred revenue)) of at least
1.25 to 1.00 and a minimum tangible net worth, as defined, of at least
$10,585,000, as of September 30, 2009. The Credit Agreement also contains
customary restrictive covenants concerning our operations.  As of
September 30, 2009, we were in compliance with these covenants as our adjusted
quick ratio was 3.85 to 1.00 and our tangible net worth was
$28,008,000.





11.
            Retirement
      Plans





The
following table provides a detail of the components of net periodic benefit cost
of our German Subsidiary’s defined benefit pension plan for the three months
ended September 30, 2009 and 2008 (in thousands):





Three
      Months EndedSeptember 30,2009
            
            
            2008Service
      cost
            
            $
            4
            
            
            $
            5Interest
      cost
            
            
            69
            
            
            
            68Expected
      return on plan assets
            
            
            (29
            )
            
            
            (35
            )Amortization
      of transition amount
            
            
            1
            
            
            
            10Net
      periodic benefit cost
            
            $
            45
            
            
            $
            48





We
contributed $14,000 and $15,000 to our German subsidiary’s defined benefit plan
during the three months ended September 30, 2009 and 2008, respectively, and
expect to make similar contributions during the remaining quarters of fiscal
2010.





We
maintain a retirement savings plan, available to U.S. employees, which qualifies
as a defined contribution plan under Section 401(k) of the Internal Revenue
Code.  During the first quarter of fiscal year 2010, we suspended the
matching of our employee’s retirement savings plan contribution as a temporary
measure to reduce costs.  Prior to this suspension, we matched 50% of
up to 5% of an employee’s salary invested in our 401K program.  During
the three months ended September 30, 2009 and 2008, we contributed $68,000 and
$150,000 to this plan, respectively.


10
 Table of Contents


Concurrent
Computer Corporation


Notes
to Condensed Consolidated Financial Statements (Continued)








We also
maintain a defined contribution plan (“Stakeholder Plan”) for our U.K. based
employees.  Previously, we also had agreements with certain of our
U.K. based employees to make supplementary contributions to the Stakeholder
Plan, contingent upon their continued employment with
Concurrent.  This supplementary contribution program ended in May
2009.  During the three months ended September 30, 2009 and 2008, we
contributed $36,000 and $108,000 to the Stakeholder Plan,
respectively.





12.
            Commitments
      and Contingencies





We, from
time to time, are involved in litigation incidental to the conduct of our
business.  We believe that such pending litigation will not have a
material adverse effect on our results of operations or financial
condition.





We enter
into agreements in the ordinary course of business with customers that often
require us to defend and/or indemnify the customer against intellectual property
infringement claims brought by a third party with respect to our
products.  For example, we were notified that certain of our customers
have been sued by the following companies, in the noted jurisdictions, regarding
the listed patents:





Asserting
      Party
            
            Jurisdiction
            
            Patents
      at IssueAcacia
      Media Technologies, Corp.
            
            U.S.
      District Court
            
            U.S.
      Patent Nos. 5,132,992; 5,253,275;Northern
      District of California
            
            5,550,863,
      6,002,720 and 6,144,702U.S.A
      Video Inc.
            
            U.S.
      District Court
            
            U.S.
      Patent No. 5,130,792Eastern
      District of TexasVtran
      Media Technologies, LLC
            
            U.S.
      District Court
            
            U.S.
      Patent Nos. 4,890,320 andEastern
      District of Texas
            
            4,995,078





We
continue to review our potential obligations under our indemnification
agreements with these customers and the indemnity obligations to these customers
from other vendors that also provided systems and services to these
customers.  From time to time, we also indemnify customers and
business partners for damages, losses and liabilities they may suffer or incur
relating to personal injury, personal property damage, product liability, and
environmental claims relating to the use of our products and services or
resulting from our acts or omissions, our employees, authorized agents or
subcontractors.  To date, we have not encountered material costs as a
result of such obligations and have not accrued any material liabilities related
to such indemnifications in the financial statements under ASC
460-10-25.  The maximum potential amount of future payments that we
could be required to make is unlimited.




Pursuant
to the terms of the employment agreements with our executive officers,
employment may be terminated by either the respective executive officer or us at
any time.  In the event the executive officer voluntarily resigns
(except as described below) or is terminated for cause, compensation under the
employment agreement will end.  In the event an agreement is
terminated by us without cause or in certain circumstances constructively by us,
the terminated employee will receive severance compensation for a period from 6
to 12 months, depending on the officer, in an annualized amount equal to the
respective employee's base salary then in effect.  Additionally, if
terminated, our CEO and CFO may be entitled to bonuses during the severance
period.  At September 30, 2009, the maximum contingent liability under
these agreements is $1,942,000.  Our employment agreements with
certain of our officers contain certain offset provisions, as defined in their
respective agreements.


11
 Table of Contents




Item 2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the Condensed
Consolidated Financial Statements and the related Notes thereto which appear
elsewhere herein.  Except for the historical financial information,
many of the matters discussed in this Item 2 may be considered “forward-looking”
statements that reflect our plans, estimates and beliefs.  Actual
results could differ materially from those discussed in the forward-looking
statements.  Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in the “Cautionary
Note regarding Forward-Looking Statements,” elsewhere herein and in other
filings made with the Securities and Exchange Commission (the
“SEC”).





Overview





We are a
provider of computing technologies and software applications and related
services for the video solutions market and the high-performance, real-time
market.  Our business is comprised of two segments for financial
reporting purposes: products and services.  We provide products and
services for each of these markets.





Our video
solutions products consist of hardware and/or software as well as integration
services, sold primarily to broadband companies that provide interactive,
digital services for the delivery of video.  Our real-time products
consist of real-time operating systems and software development tools combined,
in most cases, with off-the-shelf hardware and services sold to a wide variety
of companies seeking high-performance, real-time computer
solutions.  We provide sales and support from offices and subsidiaries
throughout North America, Europe, and Asia.





We are
implementing our strategy to sell our video solutions, including our media data
and advertising solutions, to the internet and mobile device
markets.  We believe this strategy may have a positive impact on our
business; however, we cannot assure the success or timing of this
initiative.  We expect to continue to review and realign our cost
structure as needed, balanced with investing in the business.




Application
of Critical Accounting Estimates





The SEC
defines “critical accounting estimates” as those that require application of
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods.  For a complete
description of our critical accounting policies, please refer to the
“Application of Critical Accounting Policies” in our most recent Annual Report
on Form 10-K for the year ended June 30, 2009 filed with the SEC on August 28,
2009.





As
described in footnote 1 of the financial statements, in September, 2009
the FASB issued accounting guidance pertaining to revenue arrangements with
multiple deliverables, and accounting guidance on all tangible products
containing both software and non-software components that function together to
deliver the product’s essential functionality.  Once adopted, these
accounting standards may result in changes to our critical accounting estimates
pertaining to revenue recognition.


12
 Table of Contents


Results
of Operations





The three months ended September 30,
2009 compared to the three months ended September 30, 2008








Three
      Months EndedSeptember 30,(Dollars
      in Thousands)
            
            2009
            
            
            2008
            
            
            $
              Change
            
            
            %
              ChangeProduct
      revenues
            
            $
            6,682
            
            
            $
            12,049
            
            
            $
            (5,367
            )
            
            
            (44.5
            %)Service
      revenues
            
            
            6,068
            
            
            
            6,286
            
            
            
            (218
            )
            
            
            (3.5
            %)Total
      revenues
            
            
            12,750
            
            
            
            18,335
            
            
            
            (5,585
            )
            
            
            (30.5
            %)Product
      cost of sales
            
            
            2,890
            
            
            
            5,635
            
            
            
            (2,745
            )
            
            
            (48.7
            %)Service
      cost of sales
            
            
            2,121
            
            
            
            2,418
            
            
            
            (297
            )
            
            
            (12.3
            %)Total
      cost of sales
            
            
            5,011
            
            
            
            8,053
            
            
            
            (3,042
            )
            
            
            (37.8
            %)Product
      gross margin
            
            
            3,792
            
            
            
            6,414
            
            
            
            (2,622
            )
            
            
            (40.9
            %)Service
      gross margin
            
            
            3,947
            
            
            
            3,868
            
            
            
            79
            
            
            
            2.0
            %Total
      gross margin
            
            
            7,739
            
            
            
            10,282
            
            
            
            (2,543
            )
            
            
            (24.7
            %)Operating
      expenses:Sales
      and marketing
            
            
            3,805
            
            
            
            3,568
            
            
            
            237
            
            
            
            6.6
            %Research
      and development
            
            
            3,100
            
            
            
            3,839
            
            
            
            (739
            )
            
            
            (19.2
            %)General
      and administrative
            
            
            1,917
            
            
            
            2,323
            
            
            
            (406
            )
            
            
            (17.5
            %)Total
      operating expenses
            
            
            8,822
            
            
            
            9,730
            
            
            
            (908
            )
            
            
            (9.3
            %)Operating
      (loss) income
            
            
            (1,083
            )
            
            
            552
            
            
            
            (1,635
            )
            
            NM
            (1)Interest
      (expense) income - net
            
            
            (2
            )
            
            
            82
            
            
            
            (84
            )
            
            NM
            (1)Other
      income (expense) - net
            
            
            100
            
            
            
            (291
            )
            
            
            391
            
            
            NM
            (1)(Loss)
      income before income taxes
            
            
            (985
            )
            
            
            343
            
            
            
            (1,328
            )
            
            NM
            (1)Provision
      for income taxes
            
            
            30
            
            
            
            250
            
            
            
            (220
            )
            
            NM
            (1)Net
      (loss) income
            
            $
            (1,015
            )
            
            $
            93
            
            
            $
            (1,108
            )
            
            NM
            (1)




(1) NM
denotes percentage is not meaningful





Product
Revenue.  Total product revenue for the three months ended
September 30, 2009 was $6.7 million, a decrease of approximately $5.4 million,
or 44.5%, from approximately $12.0 million for the three months ended September
30, 2008.  The decrease in product revenue resulted from a $6.5
million, or 77.4%, decrease in video product sales during the three months ended
September 30, 2009, compared to the same period in the prior
year.  Video product sales decreased by $6.1 million in the United
States due to significant reductions in purchases from our two largest
customers.  We believe that the decreasing volume of video product
sales is primarily due to the impact of the economic downturn and the pace at
which our broadband customers implement, upgrade or replace video
technology.  The recent trend of declining video product sales may
continue as a result of the sustained economic downturn.  Fluctuation
in video revenue is often due to the fact that we have a small number of
customers making periodic large purchases that account for a significant
percentage of revenue.





Partially
offsetting the decline in video product revenue, revenue from our real-time
products increased by $1.1 million, or 30.4%, during the three months ended
September 30, 2009, compared to the same period in the prior year, primarily due
to increasing real-time product sales in the United States during the current
period.  Real-time product sales increased by $1.2 million in the
United States primarily due to the sale of first generation, legacy, Aegis
system spares during the three months ended September 30, 2009, compared to the
same period in the prior year.  While real-time product revenues
increased during the current three month period, compared to the same period in
the prior year, the impact of the economic downturn on our customers may impact
our real-time product sales in future periods.


13
 Table of Contents


Service
Revenue.Total service revenue for the three months ended
September 30, 2009 was $6.1 million, a decrease of $0.2 million, or 3.5%, from
$6.3 million for the three months ended September 30, 2008.  The
decrease in service revenue was due to the $0.3 million, or 7.8%, decrease in
service revenue related to video products.  Video service revenue
decreased due to lower installation revenue in the three months ended September
30, 2009, compared to the same period in the prior year.  Lower
installation service revenue was attributable to the recent trend of lower
system sales volume, from which installation service revenue is often derived,
and from the timing of installation services.




Service
revenues related to real-time product sales remained relatively flat during the
three months ended September 30, 2009, compared to the same period in the prior
year.  However, we have experienced a steady decline in real-time
service revenues over the past few years, as our legacy products have been
removed from service and, to a lesser extent, from customers purchasing our new
products that produce less service revenue.  We expect real-time
service revenues to ultimately decline further, partially offset by newer system
service, as legacy systems continue to be removed from service.





Product Gross
Margin.  Product gross margin was $3.8 million for the three
months ended September 30, 2009, a decrease of approximately $2.6 million, or
40.9%, from approximately $6.4 million for the three months ended September 30,
2008.  Product gross margin as a percentage of product revenue
increased to 56.7% in the three months ended September 30, 2009 from 53.2% in
the three months ended September 30, 2008.  Product margins decreased
in terms of dollars due to lower product revenue during the three months ended
September 30, 2009, compared to the same period of the prior
year.  Product gross margins, as a percentage of product revenue,
increased primarily because higher margin real-time legacy system sales
accounted for a greater portion of total product revenue during the three months
ended September 30, 2009, compared to the same period in the prior
year.





Service Gross
Margin.  The gross margin on service revenue increased to 65.0%
of service revenue in the three months ended September 30, 2009 from 61.5% of
service revenue in the three months ended September 30, 2008.  The
increase in service margins as a percentage of service revenue was primarily due
to the $0.3 million reduction in service costs during the three months ended
September 30, 2009, compared to the same period in the prior
year.  Decreasing service costs resulted from decreasing headcount and
severance costs, as we have focused on managing costs of the infrastructure that
is necessary to fulfill service and support provided for our
products.  We expect to maintain similar or slightly lower service
margins as we continue to manage costs related to our maintenance and support
infrastructure.





Sales and
Marketing.Sales and marketing expenses increased
approximately $0.2 million, or 6.6% to $3.8 million in the three months ended
September 30, 2009 from $3.6 million in the three months ended September 30,
2008.  Sales and marketing expense increased primarily because we
incurred $0.2 million of additional costs to support channel partner sales and
other business development opportunities during the three months ended September
30, 2009, compared to the same period in the prior year.  Also, we
incurred $0.1 million of additional severance costs as a result of changes to
our sales group during the three months ended September 30,
2009.  Partially offsetting these increases in costs, we incurred $0.1
million less in incentive compensation primarily due to lower revenue in the
three months ended September 30, 2009, compared to the same period in the prior
year.  We anticipate that our sales and marketing expenses may
increase in the upcoming fiscal year as we implement our strategy to sell our
video solutions to the internet and mobile device markets, as well as increase
our effort to sell through new channels.





Research and
Development.Research and development expenses decreased
approximately $0.7 million, or 19.2%, to approximately $3.1 million in the three
months ended September 30, 2009 from $3.8 million in the three months ended
September 30, 2008.  Decreasing research and development expenses were
primarily attributable to a $0.7 million reduction of research and development
related salaries, benefits and other employee related costs, resulting from
headcount reductions, as part of our effort to reduce operating
expenses.  We anticipate that our research and development expenses
may increase this fiscal year as we implement our strategy to develop video
solutions for the internet and mobile device markets.


14
 Table of Contents


General and
Administrative.General and administrative expenses decreased
approximately $0.4 million, or 17.5%, to approximately $1.9 million in the three
months ended September 30, 2009 from $2.3 million in the three months ended
September 30, 2008.  General and administrative expense decreased
primarily because we incurred $0.2 million less in consulting fees, primarily
attributable to prior year strategic planning costs.  Additionally, we
were able to reduce our accounting costs by $0.1 million and insurance costs by
$0.1 million during the three months ended September 30, 2009, compared to the
same period in the prior year.





Other (Expense) Income -
net.  During the three months ended September 30, 2009, we
incurred approximately $0.1 million of realized currency translation
gains.  These gains resulted from the increasing value of the Japanese
yen and euro during three months ended September 30, 2009 and the resulting
impact on foreign currency transactions by our subsidiaries for which the
Japanese yen and euro are the functional currency.  During the three
months ended September 30, 2008, we incurred approximately $0.3 million of
realized currency translation losses.  These losses resulted from the
decline in the value of the euro during the three months ended September 30,
2008, and the resulting impact foreign currency transactions by our subsidiaries
for which the euro is the functional currency.




Provision for Income
Taxes.We recorded an income tax expense for our domestic and
foreign subsidiaries of less than $0.1 million in the three months ended
September 30, 2009, compared to tax expense $0.3 million for our domestic and
foreign subsidiaries in the three months ended September 30, 2008.  We
have significant net operating loss carryforwards available to offset taxable
income in the United States and in many of the foreign locations in which we
operate.  However, during the three months ended September 30, 2008
our subsidiaries in Japan and the United Kingdom, which have no remaining net
operating loss carryforwards to offset taxable income, generated taxable
income.  During the three months ended September 30, 2009, our
subsidiary in Japan did not generate taxable income, resulting in a lower total
tax provision during the three months ended September 30, 2009 compared to the
same period in the prior year.





Net (Loss)
Income.The net loss for the three months ended September 30,
2009 was ($1.0) million or ($0.12) per basic and diluted share, compared to net
income for the three months ended September 30, 2008 of $0.1 million, or $0.01
per basic and diluted share.





Liquidity
and Capital Resources





Our
liquidity is dependent on many factors, including sales volume, operating
results and the efficiency of asset use and turnover.  Our future
liquidity will be affected by, among other things:





·
            the
      impact of the global economic recession on our business and our
      customers;




·
            the
      rate of growth or decline, if any, of video solutions market expansions
      and the pace that broadband companies implement, upgrade or replace video
      technology;




·
            the
      rate of growth or decline, if any, of deployment of our real-time
      operating systems and tools;




·
            the
      actual versus anticipated decline in revenue from maintenance and product
      sales of real-time proprietary
systems;




·
            our
      ability to manage expenses consistent with the rate of growth or decline
      in our markets;




·
            the
      success of our strategy to sell our solutions to the internet and mobile
      video markets;




·
            our
      ability to implement our strategy to develop and sell solutions to the
      internet and mobile device markets;




·
            ongoing
      cost control actions and expenses, including capital
      expenditures;




·
            the
      margins on our product sales;




·
            our
      ability to leverage the potential of our  media data management
      to serve advanced advertising and other related data
      initiatives;




15
 Table of Contents




·
            our
      ability to raise additional capital, if
  necessary;




·
            our
      ability to obtain additional or replacement bank financing, if
      necessary;




·
            our
      ability to meet the covenants contained in our Credit
      Agreement;




·
            timing
      of product shipments, which typically occur during the last month of the
      quarter;




·
            our
      reliance on a small customer base (2 of our video customers accounted for
      37% of our revenue in fiscal year 2009, and three customers accounted for
      37% of our revenue in fiscal year 2010 first quarter ended September 30,
      2009);




·
            the
      percentage of sales derived from outside the United States where there are
      generally longer accounts receivable collection cycles;
  and




·
            the
      number of countries in which we operate, which may require maintenance of
      minimum cash levels in each country and, in certain cases, may restrict
      the repatriation of cash, such as maintained levels of
      capital.







Uses
and Sources of Cash





We used
$1.0 million of cash from operating activities during the three months ended
September 30, 2009 compared to using $2.2 million of cash during the three
months ended September 30, 2008.  Operating cash outflow during the
three months ended September 30, 2009 was primarily attributable to payment of
prior year bonuses, and the timing of payroll payments and inventory purchases
during the period.  Prior period operating cash outflow was primarily
attributable to the timing of accounts receivable collection and the payment of
prior year payables and accruals during the period.





We
invested $1.1 million in property, plant and equipment during the three months
ended September 30, 2009 compared to $0.6 million during the three months ended
September 30, 2008.  Capital additions during three months ended
September 30, 2009 were primarily related to development and testing equipment
required to implement our strategy to develop and sell solutions to the internet
and mobile device markets.  Capital additions during the three months
ended September 30, 2008 related primarily to demonstration systems and product
development and testing equipment related to our traditional
markets.  We expect capital additions to continue at a similar or
slightly lower level during the remainder of this fiscal year.





We have a
Credit Agreement with Silicon Valley Bank (the “Credit Agreement”)
that provides for a $10,000,000 revolving credit line (the “Revolver”) with
a borrowing base dependent upon our outstanding North American accounts
receivable and a maturity date of December 31, 2010.   The
interest amount is based upon the amount advanced and the rate varies based upon
our accounts receivable and the amount of cash in excess of debt.  The
Credit Agreement establishes a minimum interest rate so that interest on
outstanding principle is calculated as prime plus 0.50% whereby, for purposes of
the Credit Agreement, “prime” is the greater of (a) Silicon Valley Bank’s most
recently announced “prime” rate,” and (b) 4.00%.  The interest rate on
the Revolver was 4.50% as of September 30, 2009. The outstanding principal
amount plus all accrued but unpaid interest is payable in full at the expiration
of the credit facility on December 31, 2010.  Based on the borrowing
formula and our financial position as of September 30, 2009, approximately
$7,176,000 was available to us under the Revolver.  As of September
30, 2009, $949,000 was drawn under the Revolver, resulting in approximately
$6,227,000 of remaining available funds under the Revolver.





In
addition, the Credit Agreement contains certain financial covenants, including a
required adjusted quick ratio (the ratio of cash and accounts receivable to
current liabilities (less the current portion of deferred revenue)) of at least
1.25 to 1.00 and a minimum tangible net worth of at least $10,585,000, as of
September 30, 2009. The Credit Agreement also contains customary restrictive
covenants concerning our operations.  As of September 30, 2009, we
were in compliance with these covenants as our adjusted quick ratio was 3.85 to
1.00 and our tangible net worth was $28,008,000.





At
September 30, 2009, we had working capital (current assets less current
liabilities) of $28.6 million, including cash and cash equivalents of
approximately $27.2 million, and had no material commitments for capital
expenditures, compared to working capital of $29.7 million at June 30, 2009,
including cash and cash equivalents of approximately $29.1
million.  Based upon our existing cash balances, historical cash
usage, available credit facility, and anticipated operating cash flow in the
current fiscal year, we believe that existing cash balances will be sufficient
to meet our anticipated working capital and capital expenditure requirements for
the next twelve months.


16
 Table of Contents


Off-Balance
Sheet Arrangements





We enter
into agreements in the ordinary course of business with customers, resellers,
distributors, integrators and suppliers that often require us to defend and/or
indemnify the other party against intellectual property infringement claims
brought by a third party with respect to our products.  We evaluate
estimated losses for such indemnifications under ASC 460-20 and ASC
460-10-25.  We consider factors such as the degree of probability of
an unfavorable outcome and the ability to make a reasonable estimate of the
amount of loss. To date, we have not encountered material costs as a result of
such obligations and have not accrued any material liabilities related to such
indemnifications in our financial statements.





Contractual
Obligations and Commercial Commitments





Our
contractual obligations and commercial commitments are disclosed in our Annual
Report on Form 10-K for the year ended June 30, 2009. There have been no
material changes to our contractual obligations and commercial commitments
during the three months ended September 30, 2009.





CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





Certain
statements made or incorporated by reference in this quarterly report may
constitute “forward-looking statements” within the meaning of the federal
securities laws.  When used or incorporated by reference in this
release, the words “believes,” “expects,” “estimates,” “anticipates,” and
similar expressions, are intended to identify forward-looking
statements.  Statements regarding future events and developments, our
future performance, market share, and new market growth, as well as our
expectations, beliefs, plans, estimates, or projections relating to the future,
are forward-looking statements within the meaning of these
laws.  Examples of our forward-looking statements in this report
include, but are not limited to, the impact of our new video strategy on our
business, anticipated reduced product revenue due to the economic downturn,
maintaining similar service margins, our expected cash position, the impact of
interest rate changes and fluctuation in currency exchange rates, our
sufficiency of cash, the impact of litigation, and our trend of declining
real-time service revenue.  These statements are based on beliefs and
assumptions of our management, which are based on currently available
information.  All forward-looking statements are subject to certain
risks and uncertainties that could cause actual events to differ materially from
those projected.  The risks and uncertainties which could affect our
financial condition or results of operations include, without limitation: delays
or cancellations of customer orders; changes in product demand; economic
conditions; our ability to satisfy the financial covenants in the credit
agreement; various inventory risks due to changes in market conditions;
uncertainties relating to the development and ownership of intellectual
property; uncertainties relating to our ability and the ability of other
companies to enforce their intellectual property rights; the pricing and
availability of equipment, materials and inventories; the concentration of our
customers; failure to effectively manage change; delays in testing and
introductions of new products;  rapid technology changes; system
errors or failures; reliance on a limited number of suppliers and failure of
components provided by those suppliers; uncertainties associated with
international business activities, including foreign regulations, trade
controls, taxes, and currency fluctuations; the impact of  competition
on the pricing of video products; failure to effectively service the installed
base; the entry of new well-capitalized competitors into our markets; the
success of new video solutions and real-time products; the success of our
relationships with Alcatel-Lucent; capital spending patterns by a limited
customer base and in light of the current negative macro-economic environment;
privacy concerns over data collection; and the availability of debt or equity
financing to support our liquidity needs if cash flow does not
improve.





Other
important risk factors are discussed in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2009.





Our
forward-looking statements are based on current expectations and speak only as
of the date of such statements.  We undertake no obligation to
publicly update or revise any forward-looking statement, whether as a result of
future events, new information or otherwise.


17
 Table of Contents


Item 3.
            Quantitative
      and Qualitative Disclosures About Market
Risk





We are
exposed to market risk from changes in interest rates and foreign currency
exchange rates.  We are exposed to the impact of interest rate changes
on our short-term cash investments and bank loans.  Short-term cash
investments are primarily in U.S. treasuries.  These short-term
investments carry a degree of interest rate risk.  Bank loans include
the variable rate Revolver.  We believe that the impact of a 2%
increase or decrease in interest rates would not be material to our investment
income and interest expense from bank loans.





We
conduct business in the United States and around the world.  Our most
significant foreign currency transaction exposure relates to the United Kingdom,
those Western European countries that use the euro as a common currency, and
Japan.  We do not hedge against fluctuations in exchange rates and
believe that a 10% upward or downward fluctuation in foreign currency exchange
rates relative to the United States dollar would not have a material impact on
future earnings, fair values, or cash flows.





Item 4.
            Controls
      and Procedures





As
required by SEC rules, we have evaluated the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period
covered by this report.  This evaluation was carried out under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer.  Based on
this evaluation, these officers have concluded that the design and operation of
our disclosure controls and procedures are effective.  There were no
significant changes to our internal control over financial reporting during the
period covered by this report that materially affected, or are reasonably likely
to materially affect, our internal controls over financial
reporting.





Disclosure
controls and procedures are our controls and other procedures designed to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), are recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms.  Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act are accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.


18
 Table of Contents


Part II   
Other Information





Item 1.
            Legal
      Proceedings





From time
to time, we may be involved in litigation relating to claims arising out of our
ordinary course of business.  We are not presently involved in any
material litigation.





Item 1A.
            Risk
      Factors





Risk
factors are discussed in Part II, Item 1A. of our Annual Report on Form 10-K for
the fiscal year ended June 30, 2009.




Part
II
 
 Item 5.
              Other
      Information
 
  On
October 30, 2009, we entered into a Fourth Amendment to the Amended and Restated
Loan and Security Agreement (the “Amendment”) with Silicon Valley Bank (the
“Bank”), which amends certain terms of the existing Amended and Restated Loan
and Security Agreement (the “Credit Agreement”).  The Amendment
increases the aggregate limit of both “Permitted Liens” and “Permitted
Indebtedness” secured by Permitted Liens from $1,000,000 to $2,000,000 as of
July 1, 2009.
  All other
terms of the existing Credit Agreement shall remain the same, whereby the Bank
provides for a $10,000,000 revolving credit line with a borrowing base dependent
upon the our outstanding accounts receivable (the “Revolver”) and is secured by
substantially all of our assets.   In addition, the Credit
Agreement contains certain financial covenants, in addition to the minimum
tangible net worth, and customary restrictive covenants concerning the Company’s
operations.


Item 6.
            Exhibits





3.1
            Restated
      Certificate of Incorporation of the Registrant (incorporated by reference
      to the Registrant's Registration Statement on Form S-2 (No.
      33-62440)).




3.2
            Amended
      and Restated Bylaws of the Registrant (incorporated by reference to the
      Registrant’s Quarterly Report on Form 10-Q for the period ended March 31,
      2003).




3.3
            Certificate
      of Correction to Restated Certificate of Incorporation of the Registrant
      (incorporated by reference to the Registrant’s Annual Report on Form 10-K
      for the fiscal year ended June 30,
2002).




3.4
            Certificate
      of Amendment of the Restated Certificate of Incorporation of the
      Registrant (incorporated by reference to the Registrant’s Proxy on Form
      DEFR14A filed on June 2, 2008).




3.5
            Amended
      Certificate of Designations of Series A Participating Cumulative Preferred
      Stock (incorporated by reference to the Form 8-A/A, dated August 9,
      2002).




3.6
            Amendment
      to Amended Certificate of Designations of Series A Participating
      Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A,
      dated August 9, 2002).




4.1
            Form
      of Common Stock Certificate (incorporated by reference to the Registrant’s
      Quarterly Report on Form 10-Q for the period ended March 31,
      2003).




4.2
            Form
      of Rights Certificate (incorporated by reference to the Registrant’s
      Current Report on Form 8-K/A filed on August 12,
  2002).




4.3
            Amended
      and Restated Rights Agreement dated as of August 7, 2002 between the
      Registrant and American Stock Transfer & Trust Company, as Rights
      Agent (incorporated by reference to the Registrant’s Current Report on
      Form 8-K/A filed on August 12,
2002).




4.4
            Form
      of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
      Form 8-K dated May 15, 2007 and incorporated herein by
      reference).




4.5
            Form
      of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
      Form 8-K dated May 15, 2007 and incorporated herein by
      reference).




10.1**
            Fourth Amendment to Amended And Restated Loan and Security
      Agreement.




11.1*
            Statement
      Regarding Computation of Per Share
Earnings.




31.1**
            Certification
      of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.




31.2**
            Certification
      of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.




32.1**
            Certification
      of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.




32.2**
            Certification
      of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.







*
            Data
      required by Statement of Financial Accounting Standards No. 128, “Earnings
      per Share,” is provided in the Notes to the condensed consolidated
      financial statements in this
report.




** Filed
herewith.


19
 Table of Contents


SIGNATURES








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








Date:  November
      2, 2009
            
            CONCURRENT
      COMPUTER CORPORATIONBy:
            /s/
      Emory O. BerryEmory
      O. BerryChief
      Financial Officer and Executive Vice President of
    Operations(Principal
      Financial and Accounting Officer)


20
 Table of Contents


Exhibit
Index





3.1
            Restated
      Certificate of Incorporation of the Registrant (incorporated by reference
      to the Registrant's Registration Statement on Form S-2 (No.
      33-62440)).





3.2
            Amended
      and Restated Bylaws of the Registrant (incorporated by reference to the
      Registrant’s Quarterly Report on Form 10-Q for the period ended March 31,
      2003).





3.3
            Certificate
      of Correction to Restated Certificate of Incorporation of the Registrant
      (incorporated by reference to the Registrant’s Annual Report on Form 10-K
      for the fiscal year ended June 30,
2002).





3.4
            Certificate
      of Amendment of the Restated Certificate of Incorporation of the
      Registrant (incorporated by reference to the Registrant’s Proxy on Form
      DEFR14A filed on June 2, 2008).





3.5
            Amended
      Certificate of Designations of Series A Participating Cumulative Preferred
      Stock (incorporated by reference to the Form 8-A/A, dated August 9,
      2002).





3.6
            Amendment
      to Amended Certificate of Designations of Series A Participating
      Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A,
      dated August 9, 2002).





4.1
            Form
      of Common Stock Certificate (incorporated by reference to the Registrant’s
      Quarterly Report on Form 10-Q for the period ended March 31,
      2003).





4.2
            Form
      of Rights Certificate (incorporated by reference to the Registrant’s
      Current Report on Form 8-K/A filed on August 12,
  2002).





4.3
            Amended
      and Restated Rights Agreement dated as of August 7, 2002 between the
      Registrant and American Stock Transfer & Trust Company, as Rights
      Agent (incorporated by reference to the Registrant’s Current Report on
      Form 8-K/A filed on August 12,
2002).





4.4
            Form
      of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
      Form 8-K dated May 15, 2007 and incorporated herein by
      reference).





4.5
            Form
      of Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on
      Form 8-K dated May 15, 2007 and incorporated herein by
      reference).




10.1**
              Fourth Amendment to Amended And Restated Loan and Security
      Agreement.


11.1*
            Statement
      Regarding Computation of Per Share
Earnings.





31.1**
            Certification
      of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.





31.2**
            Certification
      of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.





32.1**
            Certification
      of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





32.2**
            Certification
      of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.





*
            Data
      required by Statement of Financial Accounting Standards No. 128, “Earnings
      per Share,” is provided in the Notes to the condensed consolidated
      financial statements in this
report.





** Filed
herewith.





21