Hanks stated that Kennedy should have been clearer about project problems. 262. FOR THE DISTRICT OF COLUMBIA, Securities and Exchange Commission KPMG relied on the information concerning completion dates it received from TenFold. Tenfold is a non-profit organisation developing innovative learning products for communities across the globe. 61. 38. Order Kennedy, Hughes, Hanks, and Clayton to disgorge and pay over, as the Court may direct, all ill-gotten gains received or benefits in any form derived from the illegal conduct alleged in this Complaint, together with pre-judgment interest as provided by law. TenFold presented a written proposal and a draft contract to Utica, both of which specified that the development services would cost $5.5 million and the Specific UA license would cost $2.75 million for a total of $8.25 million. CHRIST's glorious second coming. TenFold Corporation is a major provider of vertical software applications for corporations in the insurance, health care, energy, communications, banking, investment management, and other industries. 124. (Violations by TenFold, Hughes, Hanks and Clayton of The free trial version will give you insight into the full range of tenfold’s features and outline the benefits of access rights management with tenfold. Leslie Hendrickson Hughes Kennedy responded that much more of the license revenue recognized was from product sales than from technology sales. ", "We have experienced delays for these and other reasons in the past and there can be no assurance that we will not experience delays in the future. any delays or changes in customer requirements incurred in connection with new or existing projects [or] the accuracy of our estimates of the resources required to complete any current or new projects. TenFold also offered to its customers a license to use the UA platform that was not related to any specific software development project (the "General UA license"). Learn how to pray in just a few simple steps & never miss a prayer again, with the new MyPrayer app, the all-in-one Muslim Prayer app made for YOU! Obviously, customers who are not satisfied are not going to be paying their bills.". What We Do Our clients are specialists—scientists, engineers, technologists, researchers, government officials—narrowly focused. 31. (Aiding and Abetting by Kennedy, Hughes, Hanks and Clayton of TenFold's TenFold knew at the time the first quarter 2000 10-Q was filed that the completion date had been extended to September 30, 2000. Code is not even generated behind the scenes of the TenFold app. 1801 California Street, Suite 1500 This license included two components: a license to use TenFold's UA platform for development of the application and a license to use the software application once it was finished (collectively, the "Specific UA license"). 261. 6. Hanks updated the spreadsheet weekly on the basis of information learned in the call. 182. Using June 1, 2000 as the completion date was improper. TENFOLD is certified as a women’s business enterprise by the Women’s Business Enterprise National Council (WBENC), the nation’s largest third-party certifier of the businesses owned and operated by women in the U.S. In the information it disseminated publicly prior to August 2000, TenFold portrayed itself as a thriving company with a strong base of customer support. TenFold's accounting or finance department or division, of which Hughes, Hanks and Clayton were a part, received copies of all contract amendments. 69. For the results TenFold reported in its 10-K for 1999, TenFold utilized end dates of February 29, 2000 and March 15, 2000 to calculate the revenue it would recognize on the Utica project. TenFold's failure to disclose the facts surrounding its business operations, coupled with positive statements that risks were potential rather than actual, rendered the 10-K materially false and misleading. ", "If we experience project delays, our quarterly results could suffer and our stock price could fall. 115. 173. Kennedy and Hughes participated in the preparation of TenFold's Form S-1 registration statement and, as president, chief executive officer, and chief financial officer, were responsible for the information in it. Hughes also provided materially inaccurate and misleading information during the call. Kennedy, Hughes, Hanks and Clayton knew or were reckless in not knowing of TenFold's violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. 229. As a result of this amendment, TenFold recognized approximately $2.6 million in revenue that it otherwise could not have recognized in the first quarter of 1999. At about the same time, TenFold offered Ohio Farmers a standard allocation of 10,000 shares in its IPO as part of a directed share program. 258. 9. Two years later, TenFold stock was trading at approximately $.20 per share. • Our unique development process, the TenFold Way, lets us rapidly build sophisticated applications. Plaintiff repeats and realleges paragraphs 1 through 225 above. 150. Hughes, who is still employed at TenFold, was TenFold's senior vice president of finance, reporting to the TenFold CFO, from August 2000 until September 2002. In addition, TenFold materially overstated its revenues in its financial statements for its 1999 year-end and the first quarter of 2000. Wynn K. Clayton, a resident of Salt Lake City, Utah, started working for TenFold in June 1998. 37. . On March 14, 2000, the parties signed a formal amendment to the contract extending the completion date for both development and implementation to September 30, 2000. Plaintiff repeats and realleges paragraphs 1 through 242 above. • TenFold offers the TenFold Guarantee, the industry's first money-back guarantee for delivering large-scale software applications on target, on time, and on budget. 210. Ratings and Reviews See All. TenFold should have used July 14, 2000, or a later date, as the end date to calculate revenue on the Trumbull contract for the results reported in its 10-Q for the first quarter of 2000. Hanks stated that, "[w]e set the wrong expectations, we're not yet a products company.". By reason of the foregoing, TenFold, Kennedy and Hughes violated Section 17(a)(2) of the Securities Act and unless restrained and enjoined will continue to do so. KPMG relied on Hughes' explanation in its audit of TenFold's 1999 financial statements. With respect to TenFold's cash flow position, Kennedy misleadingly discussed TenFold's success obtaining "deferred revenue" -- money that customers had paid but that TenFold had not yet earned -- and collecting its bills. B. tenfold Download . TenFold's estimation methodology was inadequate because TenFold's team sizes did not remain constant. Full text of "Life of James Green, doctor of divinity, rector and dean of Maritzburg, Natal, from February, 1849, to January, 1906" See other formats 164. 205. TenFold manipulated the structure of the Utica transaction in a way that enabled it to accelerate recognition of revenue into 1998. Since only the commercial lines application contract contained a TenFold Guarantee, the guarantee was limited to $5.5 million under the new structure presented by TenFold. ", 126. § 240.13b2-1] and unless restrained and enjoined will continue to do so. 15043), ________________________________ TenFold and Trumbull contracted for TenFold to complete the development portion of a software development project for Trumbull by January 10, 2000. 207. By reason of the foregoing, TenFold, Kennedy and Hughes violated Section 17(a)(3) of the Securities Act and unless restrained and enjoined will continue to do so. could . § 78m(b)(2)(B)], and unless restrained and enjoined will continue to do so. 5 Ratings. 23. Section 17(a)(2) of the Securities Act). They looked for the percentage of revenue attributable to license sales to grow if TenFold was succeeding with its business model. Clayton also participated in formulating the accounting adjustments for extended completion dates on projects in the insurance group, which included five of the Delayed Projects. 248. Go light years beyond RAD when it comes to rapid feedback and top quality. 154. Purchase with purpose! Instead of contributing to full and fair disclosure, however, these statements were affirmatively misleading because the types of events that were described as mere possibilities had in fact actually occurred, were occurring, and had become a prominent pattern at TenFold. 119. Clayton then served as TenFold's controller from February 2001 to September 2002. As CFO, Hughes was responsible for the information transmitted to KPMG, but he failed to provide updated and accurate information, and affirmatively misled KPMG. TenFold Corporation, a Delaware corporation, develops large-scale software applications. For the financial results TenFold reported in its 10-Q for the first quarter of 2000, TenFold used a completion date of June 1, 2000 to calculate revenue on the Unitrin project. Because TenFold had not billed these customers, TenFold did not include their projects when it calculated the amount of time it took customers to pay bills. 231. Plaintiff repeats and realleges paragraphs 1 through 245 above. On January 28, 2000, the parties amended the contract and extended the completion date to September 1, 2000. 254. WHEREFORE, the Commission respectfully requests that the Court: Find that the defendants, and each of them, committed the violations alleged. In connection with the transactions, acts, practices, and courses of business described in this Complaint, each of the defendants, directly and indirectly, has made use of the means or instrumentalities of interstate commerce, of the mails, of the facilities of a national securities exchange, and/or of the means and instruments of transportation or communication in interstate commerce. 145. Hughes signed TenFold's first quarter 2000 10-Q. Shortly after signing the contract, TenFold, at Kennedy's direction, approached Ohio Farmers and asked it to amend the contract to remove the termination for convenience and acceptance clauses. In fairness to investors, TenFold should have frankly disclosed the nature and extent of the problems it was actually experiencing, and that such difficulties had become regular and pervasive occurrences. 239. § 78m(b)(2)(A)] and substantially assisted TenFold in committing these violations. While TenFold did recognize product revenue in its insurance group, TenFold did not recognize product revenue in either the health care or energy groups during the fourth quarter of 1999. Both Kennedy and Hughes addressed the participants and answered questions during the call. 43. Certain of the transactions, acts, practices and courses of business constituting the violations of law alleged herein occurred within this judicial district. §§ 78u(e) and 78aa]. Stanislav Minkine General Manager With extensive knowledge in the Gaming and Hardware business, tenfold.global has been an instrumental part in developing our brand in new territories. In the 10-K, TenFold touted the success of its business strategy and attempted to distinguish itself as a software provider that solved the "buy vs. build" dilemma faced by many companies seeking to replace enterprise-wide applications. No. 98. In addition, a participant in the call asked about the breakdown between "product" revenue and "technology" revenue in the revenue that TenFold reported. Kennedy, Hughes, Hanks and Clayton also knew that Kennedy had made false and misleading statements and provided incomplete information during the February 1, 2000 analyst call, and that no one from TenFold had taken any action to correct the erroneous and misleading statements made by Kennedy. 90. 223. 202. In addition, Kennedy stated in the call that TenFold had resold developed products in its insurance, energy, and health care groups. E V A S. Many styles le availab % 0 7 50 105 B Street • West Rainier, OR Phone 503-556-0171. V. TENFOLD'S FAILURE TO DISCLOSE UNUSUAL TRANSACTIONS IN ITS REGISTRATION STATEMENT. About 60 percent of its revenues comes from insurance companies. However, although TenFold did sell an unusually large amount of licenses during the fourth quarter, this ratio was materially affected by the lower service revenues TenFold recorded as a result of revenue adjustments caused by the project delays. 255. 42. The parties began negotiating revised completion and guarantee dates for the project in November 1999. TenFold's process for estimating the percentage of completion and amount of revenue to recognize for each project included identifying the date the project was to be completed and calculating the percentage of the project schedule that had passed. Violations of Section 13(b)(2)(B) of the Exchange Act). ‎TENFOLD Education is South Africa’s first Mobile based learning application for High School learners. Our focus is on innovative technologies that make our world more sustainable. (Aiding and Abetting by Hughes, Hanks and Clayton of TenFold's He stated that TenFold had obtained 70% of its revenue from licenses and 30% from services in the fourth quarter of 1999. Trusted by the best companies in the world, to integrate more phones globally, than any other. Kennedy and Hughes acknowledge receiving and reviewing Hanks' February 3, 2000 e-mail. Under the Exchange Act). Further, Hanks aided and abetted TenFold's violations of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. 245. . 80. Hughes stated that Kennedy had "covered all the points [he] would have," such that he had nothing to add. 198. Universal Communications Layer Accelerate time to value, maintain voice quality and eliminate security risks by leveraging Tenfold’s Universal Communications Layer to connect into your existing communications platforms Automatically Log every Call with Notes 32. TenFold performed its loss position calculations based on the estimated labor expended on a project. 1801 California Street, Suite 1500 The first of these unusual transactions involved TenFold changing the prices assigned to several components sold to Utica Mutual Insurance Company ("Utica") which allowed TenFold to immediately recognize revenue in 1998 and turn a loss for that year into a profit. For those customers whose payments were tied to contract milestones, TenFold had not yet achieved the results necessary to trigger the billing of many of these customers. They both knew of highly unusual circumstances surrounding the transaction that resulted in the recognition of additional revenue that turned a loss for the year into a profit, yet they both approved and signed the registration statement that failed to disclose this important information. Kennedy, Hughes, Hanks, and Clayton were all aware of the status of TenFold's development projects, including the Delayed Projects. 49. After Kennedy finished discussing service revenues, Kennedy asked Hughes if Hughes had anything to add. 222. Additionally, due to inherent uncertainties involved in accurately estimating the percentage of completion for its development projects, TenFold established a policy, which it communicated to its auditors, of holding back twenty percent (20%) of the revenues from a project (the "holdback") until the project was completed or close to completion. The parties began negotiating an extension in March of 2000, and signed an amendment to the contract on April 13, 2000 that extended the completion date for both development and implementation to July 14, 2000. South Jordan, Utah 84095 TenFold has developed a suite of tools wrapped into its Universal Application (patent pending) software that separates the update and retrieve SQL database calls from a company's business logic to standardize the application development process. Tenfold provides integrated solutions to communicating research findings. Hanks has held a Utah CPA license since 1993. _____ how to chat on tenfold: a very short instruction manual 1. open the app. Rather, the four individual defendants immediately proceeded to sell TenFold stock, reaping thousands and even millions in proceeds. E. TenFold's Disclosures Inflated Its Stock Price, Which Collapsed After Defendants Sold Shares. Violations of Section 13(b)(2)(A) of the Exchange Act). Later in the call, one participant specifically questioned why TenFold's service revenues were down from the third quarter of 1999. The proposal and contract included a TenFold Guarantee that covered the entire $8.25 million contract price. Kennedy, Hughes, Hanks, and Clayton were all aware of the status of TenFold's development projects and other material nonpublic information at the time they traded in TenFold stock in February of 2000. 259. TenFold announced its fourth quarter and year-end 1999 financial results on January 31, 2000. 60. Under generally accepted accounting principles, in order to use the percentage of completion method of revenue recognition an entity must be able to make estimates that are reasonably dependable. The status of every project was reviewed at these weekly meetings, and matters discussed would include schedules, completion dates, changes and adjustments. 83.
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