-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SnnB5mnDtk46ehHwjmEpgslZS4WxHxfEc4m+J2txLfFp55eleSVjyHQwuQaa2oa9 Ba6mHsAIamkcJEqUK01KPQ== 0001104659-06-019772.txt : 20061004 0001104659-06-019772.hdr.sgml : 20061004 20060328132656 ACCESSION NUMBER: 0001104659-06-019772 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20060328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATAWATCH CORP CENTRAL INDEX KEY: 0000792130 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 020405716 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: 175 CABOT STREET STREET 2: SUITE 503 CITY: LOWELL STATE: MA ZIP: 01854-3633 BUSINESS PHONE: 978-441-2200 MAIL ADDRESS: STREET 1: 175 CABOT STREET STREET 2: SUITE 503 CITY: LOWELL STATE: MA ZIP: 01854-3633 CORRESP 1 filename1.htm

 

 

March 27, 2006

 

Ms. Kathleen Collins

Accounting Branch Chief

US Securities and Exchange Commission

Washington D.C 20549

 

Re:  

Datawatch Corporation

 

Form 10-K for the Fiscal Year Ended

 

September 30, 2005

 

Filed December 12, 2005

 

File No. 000-19960

 

Dear Ms. Collins:

 

We have received your letter dated March 20, 2006 and would like to respond to the following questions.

 

Question 1.

 

Note 1. Nature of Business and Summary of Significant Accounting Policies

 

Revenue Recognition, page 32

 

Question 3.

 

Please refer to comment 3 in our letter dated February 6, 2006.  We have reviewed your response and note in your disclosure on page 4 that there is a significant range in price for your “typical configurations” (e.g. $35,000 to $200,000 or $60,000 to $450,000).  Help us understand what elements are included in the low end of the price range as opposed to what elements are included in the higher priced range that results in such a significant difference.

 

RESPONSE

 

As we stated in our earlier response, “Typical configurations” describes common combinations of the various software modules, maintenance support agreements and professional services in relation to our multiple element arrangements, in which we refer to as Enterprise Software.  A basic, low end of the range system could consist of one software module (such as ES Reports) and would include only 5 user licenses for the software.  This low end range system may also include 2 professional service days to assist the Customer with the implementation of the software and an annual maintenance support agreement that is calculated at 18% of the software list price.  Our typical contracts at the high end of the range could consist of three to four additional software

 


 

modules (such as ES Style, ES Spreadsheet and ES Cube) and include between 25 - 99 user licenses for the software.  A high end system of this type would often also include 10-15 professional service days to assist the customer with implementation, installation, standard reports and training and a maintenance support agreement that is calculated at 18% of the software list price value.

 

Our use of the term “typical configurations” was meant to inform our investors the range of sales prices for the large majority of our contracts in each product group, rather than implying that a majority of the contracts were similar in size and type.  We will clarify future filings by deleting the reference to “typical configurations” in our discussion of price ranges.

 

As mentioned in our prior response, in future filings we will also clarify our revenue recognition policy to indicate that future service elements are not essential to the functionality of the software.

 

The Company acknowledges that:

 

•                  the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

 

•                  staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

 

•                  the Company may not assert staff comments as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 

 

Sincerely,

 

 

 

/s/ Robert W. Hagger

 

 

Robert W. Hagger

 

President, Chief Executive
Officer and Director

 

cc: Patrick Gilmore, Securities and Exchange Commission

 

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