No. 84. . In his opening remarks, Kennedy also touted the success of TenFold's resale strategy as reflected in the fact that TenFold had increased its percentage of license revenue as opposed to software development service revenue. Kennedy and Hughes were both aware that the unusual dealings with Ohio Farmers resulted in the recognition of additional revenue that turned a loss for the quarter into a profit, yet they both approved and signed the registration statement that failed to disclose this important information. 98. Further, Hughes 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. Kennedy and Hughes held a conference call with analysts to discuss the fourth quarter and year-end 1999 financial results on February 1, 2000. Go light years beyond RAD when it comes to rapid feedback and top quality. Kennedy resigned from his positions as the president, CEO, and a director of TenFold in January 2001, at the request of the board of directors. Information concerning the Utica transaction and its effect on revenue and income would have been important to a reasonable investor. 191000. 71. 175. TenFold's long-term business strategy was to develop entire software applications on specific customer projects that it could subsequently resell to other customers. Explore user reviews, ratings, and pricing of alternatives and competitors to Tenfold. 9. Moreover, on January 28, 2000, the parties amended the contract and extended the completion date to September 1, 2000. By reason of the foregoing, Hughes, Hanks and Clayton aided and abetted TenFold's violations of Section 13(b)(2)(B) of the Exchange Act, and unless restrained and enjoined will continue to aid and abet violations of these provisions. ultimately, tenfold is an exciting place to simply come and be social. (801) 733-0352, Stanley G. Hanks (Aiding and Abetting by Kennedy, Hughes, Hanks and Clayton of TenFold's Violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13). He stated that TenFold had obtained 70% of its revenue from licenses and 30% from services in the fourth quarter of 1999. Use of the March 31, 2000 end date was improper. On its application development services and Specific UA licenses, TenFold generally recognized revenue over the life of the contract using the percentage of completion method of accounting. TenFold utilized a completion date of March 31, 2000 for purposes of calculating the revenue it would recognize on the Unitrin contract in its 1999 10-K. 171. 116. Clayton signed the amendment on behalf of TenFold. §§ 240.12b-20, 240.13a-1, and 240.13a-13] and unless restrained and enjoined will continue to do so. TenFold's report on Form 10-Q for the first quarter of 2000 contained information that was similarly misleading and incomplete. §§ 78j(b), 78m(a), 78m(b)(2), and 78m(b)(5)], and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1 [17 C.F.R. They knew that this information had not been disclosed in TenFold's S-1 registration statement or anywhere else. 243. With TenFold, they now have the power to create and customize their applications, with virtually no technical ramp up. . By reason of the foregoing, TenFold, Kennedy and Hughes violated Section 17(a)(1) of the Securities Act and unless restrained and enjoined will continue to do so. 219. could . Salt Lake City, Utah 84121 92. Both Kennedy and Hughes addressed the participants and answered questions during the call. For example, in press releases issued during 1999 and the first quarter of 2000, TenFold announced the signing of eight customer contracts and four instances in which it had delivered projects to customers. Business people understand business needs. This could result in a fixed price that turns out to be too low, which would cause us to suffer a loss on the project and would negatively impact our operating results. TenFold allows standards-based integration within or outside the enterprise, using both thick and thin (web) client based development and access for Enterprise applications. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. 66. For the financial results TenFold reported in its 10-Q for the first quarter of 2000, TenFold used completion dates of March 25, 2000 and April 3, 2000 to calculate revenue on the Trumbull project. Reallocating more of the total cost to or price paid by Utica to the General UA license permitted TenFold to recognize approximately $2.25 million more in revenue in the fourth quarter of 1999 than if TenFold had left the price of the General UA license at $650,000 as originally negotiated. ", 126. Code is not even generated behind the scenes of the TenFold app. TenFold Corporation ("TenFold" or the "Company"), a software development company, fraudulently reported misleading information regarding its financial position and business success in its registration statement filed with the Commission for its May 1999 initial public offering ("IPO") and in its public statements and periodic Commission filings related to its 1999 and first quarter 2000 operations. 51. 93. 25. By providing perspective, rigorous problem solving, and communication that is 1801 California Street, Suite 1500 Robert P. Hughes, a resident of Sandy, Utah, began working for TenFold in February 1995. IV. Under generally accepted accounting principles, TenFold was limited in the amount of revenue that it could recognize on the Ohio Farmers contract due to these two unusual clauses. Moreover, the TenFold accounting department was generally not informed when team sizes changed on projects, so it could not even re-estimate labor costs. CHRIST's glorious second coming. Hughes failed to inform KPMG at any time prior to the filing of TenFold's 1999 10-K that the Utica project would not be complete by the end date provided to KPMG and that the completion date was being extended well beyond the date provided. An internal e-mail reflects that by February 28, 2000, Hughes and Clayton knew the projected end date for the Utica project was September 30, 2000. UNITED STATES DISTRICT COURT 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. § 78m(b)(2)(B)], and unless restrained and enjoined will continue to do so. 140. Two years later, TenFold stock was trading at approximately $.20 per share. 127. 122. Njbgonah , 09/07/2018. 205. Ohio Farmers also agreed to purchase a General UA license from TenFold. Additionally, the customers for the Delayed Projects are all listed in TenFold's 1999 10-K as TenFold customers, but no disclosure was made about the significant and material problems TenFold was experiencing on those projects. In its registration statement, TenFold disclosed that Ohio Farmers had received an allocation of 250,000 shares in its IPO and that TenFold had derived 30% of its quarterly revenue from Ohio Farmers. Clayton has held a Utah CPA license since 1997. 76. 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. In addition, defendant Hughes provided false and misleading information to TenFold's auditors. Under generally accepted accounting principles (GAAP), TenFold could not immediately recognize all license revenue on a contract that contained a guarantee provision like the TenFold Guarantee. Using February 29, 2000 and March 15, 2000 as the end dates was improper. As CFO, Hughes had a duty to provide correct information to KPMG. Salesforce is an American cloud computing company specializing in CRM. 79. Plaintiff repeats and realleges paragraphs 1 through 228 above. 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. Plaintiff demands a jury trial in this case. Accordingly, use of proper completion dates was essential in TenFold's method of calculating percentage of completion revenue. Under the terms of the contract, Trumbull was entitled to invoke the TenFold Guarantee if TenFold had not completed the project by March 25, 2000. At the time the 10-K was filed, TenFold was aware that the projected end date for the project had been extended to September 1, 2000. It's up to you to ensure that this does not happen. 5 Ratings. 124. ". From finding the perfect entry strategy, to expanding the brand, the hard work of tenfold.global has offered us significant growth in both brand awareness and revenue allowing us to be a top contender in the space. Originally, TenFold and Utica negotiated an application development contract that provided for Utica to purchase TenFold's development services, a Specific UA license, training, and support for a total of $8.25 million. 88. 73. TenFold and Utica contracted for TenFold to complete the development portion of a software development project for Utica by August 31, 1999. 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. FOR THE DISTRICT OF COLUMBIA, Securities and Exchange Commission § 78m(b)(5)], and unless restrained and enjoined will continue to do so. 178. IT administrators and users must only set the desired level of authorization (read, modify) and tenfold will take care of the rest. 37. The holdbacks were essential in order for TenFold to be able to utilize the percentage of completion method for revenue recognition, since TenFold's method of tracking progress on its contracts was rudimentary, its projects often required additional effort later in the project schedule, and TenFold routinely missed its scheduled completion dates and negotiated extensions of project schedules. E. TenFold's Disclosures Inflated Its Stock Price, Which Collapsed After Defendants Sold Shares. Denver, Colorado 80202 Universal application 108 is comprised of a rich set of application components (FIG. KPMG asked TenFold to provide it with an explanation of customer comments on the confirmation responses. Kennedy was very involved in certain projects during January 2000, including Nielsen and Untitrin, as he actively worked to manage those customer accounts. 165. TenFold stated in several different places in its 10-K that it delivers applications on time to its customers or it refunds the customer's money. In marketing materials and filings with the Commission, TenFold claimed that it could develop applications in a matter of months that it would take other software developers years to develop. By March 2000, when its annual report on Form 10-K for 1999 was filed with the Commission, TenFold was late on at least the following major development projects (collectively, the "Delayed Projects"): 89. Hughes, Hanks, and Clayton, as part of TenFold's accounting or finance department or division, were responsible for and implemented TenFold's system of internal controls. 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