This Annual Report on Form 10-K for the year ended December 31, 20202021 (“Annual Report”) contains “forward-looking statements”forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of ourPAR’s future operations, financial condition, financial results, business strategies and prospects. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “belief,”“can”, “could”, “continue,” “could,” “expect,” “estimate,” “future”, “goal”, “intend,” “may,” “opportunity,” “plan,” “should,” “target”, “will,” “would,” “will likely result,” and similar expressions. Forward-looking statements are based on management's current expectations and assumptions that are subject to risks and uncertainties, many of which are beyond ourPAR’s control, which could cause ourPAR’s actual results to differ materially from those expressed in or implied by forward-looking statements, including forward-looking statements relating to ourand PAR’s expectations regarding the effects of COVID-19 on its business, financial condition, and results of operations and the mitigating or otherwise intended impact of PAR’s responses to the COVID-19 pandemic on our business,same; the timing and expected benefits of acquisitions, divestitures, and capital markets transactions; statements of the plans, strategies and objectives of management for future operations, including PAR’s unified commerce cloud platform and its go-to-market strategy; statements concerning the expected development, demand, performance, market share or competitive performance relating to PAR’s products or services; projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, deferred taxes, or other financial items, or of PAR’s annual recurring revenue, active sites, and other key performance indicators and financial results. While we have taken precautionary measures intended to minimizemetrics; statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; statements about PAR’s human capital strategies and engagement; statements regarding current or future macroeconomic trends or geopolitical events and the impact of COVID-19 to our employeesthose trends and to our business, there can be no assurances that these actions are sufficientevents on PAR and that additional actions will not be required.its financial performance; statements regarding claims, disputes or other litigation matters; and any statements of assumptions underlying any of the foregoing. Factors, that haverisks, trends, and may continue to adversely affect, anduncertainties that could subsequently adversely impact, ourcause PAR’s actual results to differ materially from those expressed in or implied by forward-looking statements include the effects of COVID-19 on PAR’s business, financial condition, and results of operations and financial results due to the COVID-19 pandemic include: customertiming and actions by PAR, as well as by governments, businesses, customers and consumers, including store closures; significant reductionsclosures (temporary or volatility in demand for our productspermanent), decreased or delayed product and services; delayed or canceled store implementations, decreased productservice adoptions and bookings; reduced orinstallations, delayed software or hardware deployments and a reprioritization of investments in technology or point-of-sale infrastructure; delayedpayments or payment defaults by customers; ourcustomers, and the health and safety of PAR’s employees; PAR’s ability to be agile in the execution of our businessretain and strategiesmanage third-party suppliers, secure alternative suppliers, and our management of business continuity risks, includingnavigate component shortages, shipping delays and increased exposure to potential cybersecurity breaches and attacks, disruptions or delays in product assembly and fulfillment and limitations on our selling and marketing efforts; ourcosts; PAR’s ability to successfully attract, hire and retain necessary qualified employees to develop and expand our business;its business, as exacerbated by the “Great Resignation” or “Big Quit”; the protection of PAR’s intellectual property; PAR’s ability to increase the number of integration partners, and possible impairmentacquire and/or develop relevant technology offerings for current, new, and potential customers for the build-out of goodwillits unified commerce cloud platform; the impact of macroeconomic trends and other intangible assetsgeopolitical events, including the effects of inflation; risks associated with PAR’s international operations; changes in estimates and assumptions PAR makes in connection with the eventpreparation of a significant declineits financial statements and in our financial performance. The extentbuilding business and operational plans and strategies; disruptions in operations from system security risks, data protection breaches, and cyberattacks; PAR’s agility to which the COVID-19 pandemic will continue to impact ourexecute its business operations, and financial results is uncertainstrategies and cannot be predicted,manage its business continuity risks, including disruptions or delays in product assembly and there can be no assurance that the COVID-19 pandemic will not continue to have a materialfulfillment and adverse effectlimitations on our business, operationsPAR’s selling and financial results during any quartermarketing efforts; potential impacts, liabilities and costs from pending or year in which we are affected. Otherpotential investigations, claims and disputes; and other factors, risks, trends and uncertainties that could cause ourPAR’s actual results to differ materially from those expressed in or implied by forward-looking statements contained in this Annual Report, areincluding but not limited to, those described under “Part I, Item 1. Business”, “Part I, Item 1A. Risk Factors,” “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report and in our other filings with the U.S. Securities and Exchange Commission (“SEC”(the “SEC”). We undertakeThe forward-looking statements in this Annual Report are made as of the date of this filing and PAR assumes no obligation and does not intend to update or revise publicly anythese forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.statements.

PAR Technology Corporation, through its wholly owned subsidiaries -– ParTech, Inc. (“ParTech”) and PAR Government Systems Corporation (“ParPAR Government”) – operates in two distinct reporting segments, Restaurant/Retail and Government. Our Restaurant/Retail segment provides point-of-sale (“POS”) software, hardware, back-office software and integrated technical solutions to the restaurant and retail industries. Our Government segment provides intelligence, surveillance, and reconnaissance solutions (“ISR”) and mission systems support to the Department of Defense (“DoD”) and other Federal agencies. We derived approximately 66.7% of our total consolidated revenues from our Restaurant/Retail segment in the fiscal year ended December 31, 2020.

Our open architecture POS platforms are optimized to host our POS software applications, as well as many third-party POS software applications, and are compatible with a variety of peripheral devices. We partner with numerous vendors that offer complementary in-store peripherals, such as cash drawers, card readers, printers, and kitchen video systems, allowing us to deliver a completely integrated solution through one vendor.

We offer complete application training to our customers’customers’ in-store staff and provide technical training to our customers’ information systems personnel. We provide customers with installation, technical and life-cycle support for our products through support services, licenselicenses and/or subscription agreements. We also offer depot repair and overnight—overnight–Advanced Exchange—Exchange–services from our offices in San Diego, California, Mississauga, Ontario, and our corporate headquarters in New Hartford, New York. In North America, we offer 24-hour help desk support from our diagnostic service centers located in New Hartford, New York and Tampa, Florida, and on-site support through our field tech service network, which servicesserves the continental United States. Outside of the continental U.S., we similarly support our products by providing call center, installation, on-site, and/or depot repair services to our customersdirectly or through authorized providers.

In the U.S.,North America, we market and sell our products through our dedicated sales teams and channel partners, which directly interface with our tier 1 customers (owner and/or operator of 2,000 or more sites), tier 2 customers (owner and/or operator of 500-2,000 sites), tier 3 customers (owner and/or operator of 5-500 sites) and tier 4 customers (owner and/or operator of 1-4 sites).partners. Our international direct sales teams and channel partners market and sell our products and services to tier 1 customers outside of the U.S., as well as to local/regional customers from in-country offices.

Our products are also offered and sold through sales representatives who enlist and support well-regarded value-added resellers serving multi-unit operators, the independent restaurant category, and the non-food service markets such as retail and convenience stores, amusement parks, movie theaters, cruise lines, spas, and other ticketing and entertainment venues.

We have developed and nurtured long-term relationships with several of the largest brands in the Restaurant/Retail segment, including McDonald’s Corporation and Yum! Brands, Inc. PAR hasthree of which represent a signification portion of our total revenues. We have been an approved provider of restaurant technology systems and related support services to McDonald’s Corporation and their franchisees since 1980 and an approved supplier to Yum! Brands, Inc. since 1983. Other significant restaurant chains that use PAR POS products and related services include Dairy Queen, Arby's, the Hardee’s and Carl’s Jr. units of CKE Restaurants, Inc., and franchisees of these organizations.

Our software and hardware product offerings face stiff competition in the highly competitive and rapidly evolving restaurant and retail markets. Most of our significantlarger customers have several approved suppliers of software and/or hardware similar to one or more of our products. We compete in these markets directly with product offerings from Oracle Corporation, NCR Corporation and others. We compete on the basis of product delivery (cloud versus traditional on-premise software applications), existing and planned product design, features and functionality, software application and integration capabilities, quality and reliability, product development capabilities, price, and customer service. Our competitive advantages includeinclude: our unified commerce cloud platform, open solutions offerings, including our cloud-based software (SaaScloud delivery model), on-premise software, ergonomicmodel based on modern architecture, enterprise grade solutions, purpose-built hardware, advanced development capabilities, extensive domain knowledge and expertise, excellent product reliability, a customer-dedicated direct sales force organization, and world class responsive customer service and support. As relevant technologies evolve and customer demands and expectations increase, so do the competitive pressures in the market, with new companies entering and existing companies expanding their product and service portfolios. We expect competition in the restaurant marketand retail markets to continue to increase, including competition from both cloud and traditional on-premise POS software, customer loyalty and engagement software, back-office software, hardware providers and other business software and solution providers. With many of our product and service offerings, we face competition from companies who have access to significantly more financial and technical resources than we possess.

Continuous product research, innovation, and product development are an integral part of our business. We continuously evaluate customer needs and new technologies to enable us to develop innovative and relevant products, in addition to creating enhancements to our unified commerce cloud platform and existing products that improve and/or add to their functionality, performance, operation, and integration capabilities—capabilities–from leveraging the latest innovations in cloud computing to wireless headsets and other devices to advances in internet performance. Research and development expenses were $34.6 million, $19.3 million, ,and $13.4 million, in 2021, 2020, and $12.4 million in 2020, 2019 and 2018 respectively.

We assemble our ES 8000 series platforms internally in the U.S. We source other hardware products and related materials, product assemblies, and components from third parties. Although weWe purchase most of the materials,

PAR’s Government segment provides technical expertise in contractand development of advanced systems and software solutions for the DoD, the intelligence community and other Federal agencies, as well asfederal agencies. Additionally, we provide support services for satellite command and control, communication, and IT mission systems support at a number of U.S. Governmentseveral DoD facilities both in the U.S. and worldwide. The Government segment is focused on twohas three principal offerings, intelligenceofferings: Intelligence, Surveillance, and Reconnaissance (“ISR”) solutions, and mission systems contract support, with additional revenue from a small number ofoperations and maintenance, and licensed software products for use in analytic and operational environments that leverage geospatial intelligence data.

We are actively engaged in the development of mobility applications that support the needs of mobile teams with real-time situational awareness and distributed communications. PAR Government’s ISR group has a strong legacy in the advanced research, development, and productization of geospatial information assurance technology involving steganography, steganography analysis, digital watermarking, and digital media forensics. These enabling technologies have beenare used to provide increased protection and security of geospatial data. ISR also provides scientific and technical support to the U.S. intelligence community.

PAR Government’s mission systems (“MS”) group provides a wide range of technical and supportoperational services to sustain mission critical components of the Department of Defense Information Network (“DoDIN”(the “DoDIN”). These services include continuous 24/7/365 satellite and teleport facility operations and maintenance, engineering and installation services including inside and outside plant services, and maintenance of infrastructure and information systems for very low frequency, low frequency, high frequency, very high frequency and ground-based radio transmitter/receiver facilities, including high tower antennas up to 1200 feet. We operate and maintain satellite communications and teleport facilities with ultra-high frequency, super high frequency and extremely high frequency satellite communication earth terminals, and support telecommunications architectures such as fixed submarine

The mission systemsPAR Government MS group supports critical information systems which operate elements of the DoDIN to support the National Command Authority (President and Joint Chiefs of Staff), DoD, and other governmentfederal agencies. Our system troubleshooting and regulatory experts support the customer mission around the globe. Approximately 60% of our footprint is outside the continental U.S. with contracts in Europe, Middle East, Africa, Australia, and U.S. commonwealths and territories in the Pacific and Caribbean.

PAR GovernmentGovernment’s MS group has strong and enduring relationships with a diverse set of customers throughout the U.S. DoD, intelligence community, and Federal government.other federal agencies. Our track record of delivering mission critical services to government customers spans decades, and includes contracts continuing 20 years or more, with an average contract duration of three to five years. We work closely with our customers, with many of our mission system employees co-located at customer sites. Our strong relationships and on-site presence with our customers enables PAR Government to develop substantive customer and technical domain knowledge, translate mission understanding into exemplary program execution, and create continued demand for PAR Government’s services.

We obtainThe PAR Government segment obtains contracts through a mix of competitive proposals and technical paper submissions in response to solicitations from government organizations and prime contractors. In addition, PAR Governmentwe often obtainsobtain contracts by submitting unsolicited proposals against publicly identified government requirements which can then beare selected on merit for further development and funding. Although well positioned in our business areas, competition for government contracts is intense. Many of our competitors are large corporations that have substantially greater financial resources and broader capabilities in management technology. Within our intel solutionsISR portfolio we compete based on the technical talent and accomplishments of our development staff, software support and program management teams who have earned a reputation for rapid solutioning, leading edge software solutions and technical talent with high security clearance and the background and appetite to tackle truly difficult problems. In our mission systemsMS contract portfolio, we also compete with many smaller, economically disadvantaged

Our strategy is to build upon ourPAR Government segment's sustained performance on existing service contracts, coupled with investments in enhanced business development capabilities. We believe we are well positioned to realize continued renewals of expiring contracts and extensions of existing contracts, and to secure service and solution contracts in expanded areas within the U.S. DoD and other Federalfederal agencies. We believe our highly relevant technical competencies, intellectual property, and investments in new technologies provide opportunities to offer systems integration, products, and highly-specialized service solutions to the U.S. DoD, intelligence community, and other Federalfederal agencies. The general uncertainty in U.S. defense total workforce policies

The value of existing PAR Government contracts at December 31, 2021, net of amounts relating to work performed to that date, was approximately $195.3 million, of which $38.6 million was funded and includes $5.8 million related to the IDIQ Contract. The value of existing PAR Government contracts at December 31, 2020, net of amounts relating to work performed to that date, was approximately $150.5 million, of which $27.8 million was funded. The value of existing PAR Government contracts at December 31, 2019, net of amounts relating to work performed to that date, was approximately $148.7 million, of which $32.8 million was funded. Funded amounts represent those amounts committed under contract by government agencies and prime contractors. Of the December 31, 20202021 PAR Government contract backlog of $150.5$195.3 million, approximately $74.0$87.0 million is expected to be completed in calendar year 2021.

A number of ourthe Company's products and components are developed and designed based on our existing copyrighted work and/or patents issued.issued or obtained through the acquisition of other businesses. Our other products include software or other intellectual property licensed from third parties. We establish, maintain, and protect our intellectual property rights and other proprietary information through the use of patents, copyrights, trademarks, and trade secret laws. We have a number of U.S. and foreign patents, and registered and common law trademarks, that protect our brand associations and symbolize our goodwill, as well as copyrights that relate to internally-developed software and various distinctive characteristics of our products. We also rely on a combination of confidentiality and assignment-of-invention agreements with our employees and consultants, and enter into confidentiality and licensing agreements with our customers and other third parties with whom we have strategic relationships. We believe our patents, copyrights, trademarks, and trade secrets have value, and we believe our use and reliance on the intellectual property laws of the U.S. and foreign countries, as well as our agreements and licenses, protect and maintain our rights in our intellectual property and other proprietary information. Despite our efforts unauthorized third parties may attempt to use, copy, or otherwise obtain and market or distribute our intellectual property and/or our other proprietary information; moreover, the rapidly changing technology in the Restaurant/Retail segment and the Government segment makes our future success dependent on the development skills, innovative designs, and technological expertise of our employees and consultants, as well as strategic technology acquisitions, rather than on the protection afforded by patent, copyright, trademark, and trade secret laws.

Our operations are subject to a variety of laws and regulations in the jurisdictions in which we operate, including with respect to data protection and privacy, import and export controls, trade restrictions, anti-corruption and bribery, and employee and labor relations. Please see our disclosure in “Risk Factors” for more details regarding laws and regulations governing our business.

Our U.S. employee population consists of 27% ethnically diverse employees and 25% are women. Globally, our workforce consists of 26% women. 20% of our U.S. employee population is under the age of 30, with 50% between the ages of 30 and 50 and 30% over the age of 50. Globally, 24% of our customers.employees are under the age of 30, with 50% between the ages of 30 and 50 and 26% over the age of 50.

To support our meritocratic, pay-for-performance strategy, we execute annual performance reviews and bi-annual 360 performance reviews with the designintent to incentivize and motivate our employees. Talent assessments enable us to identify individuals that are ready for promotion and areas of development across our core competencies. In 2021, we invested in building our talent management systems. Our 2022 plans include a first quarter launch of a robust talent development platform to dramatically increase our investment in the core competency development for all of our employee benefits programs.employees.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act (our “SEC Filings”) are available, free of charge, on our website at www.partech.com “About—www.partech.com/ Investor Relations SEC Filings” as soon as reasonably practicable after we electronically file such material with, or furnish to, the SEC. The SEC also maintains a website that contains our SEC filings.reports filed or furnished with the SEC. The address of the SEC website is https://www.sec.gov/.www.sec.gov. The information posted on or accessible through our website is not incorporated into this Annual Report or in any other report or document we file with the SEC.

Our business is subject to certain risks and uncertainties, including those described below, each of which could materially and adversely affect our business, financial condition, results of operations, cash flows, prospects and the market price of our common stock.

Further, the worldwide uncertainty, volatility, and economic disruption created by the COVID-19 pandemic, could exacerbate other risk factors that we identify in this Annual Report, any quarter or year inof which we are affected.could materially adversely impact our business, financial condition, and results of operations.

We have incurred operating losses in each of the last several years, including for the year ended December 31, 2020,2021, and we expect to continue to incur losses for the foreseeable future as we continue to invest in our Restaurant/Retail segment.segment by, among other things, making substantial investments to grow the Company through the acquisition of other businesses and enhancing our products and services through research and development. We cannot assure you that we will be successful in achieving or sustaining profitability in the future. If we are unable to generate sufficient revenue to become profitable, investors could lose their investment.

We may experience volatility in our reported revenues and operating results due to the differences in timing of revenue recognition between our software as a service (“SaaS”)SaaS offerings and our traditional on-premise software and hardware sales. The SaaS delivery model is subscription based; accordingly, SaaS revenues are generally recognized ratably over the life of the subscriptions. In contrast, revenue from our on-premise software and hardware sales is generally recognized in full at the time of delivery. Accordingly, the SaaS delivery model creates risks related to the timing of revenue recognition not associated with our traditional on-premise software delivery model.model and hardware sales. A portion of our SaaS revenue results from the recognition of deferred revenue relating to subscription agreements entered into during prior reporting periods. A decline in new or renewed subscriptions in any period may not be immediately reflected in our reported financial results for that period, but may result in a decline in our revenue in future reporting periods. If any of our assumptions about revenue from our SaaS businessdelivery model prove incorrect, our actual results may vary materially from those anticipated, estimated, or projected.

Although we test our products and product updates prior to their release and throughout their intended life, our cloudcloud-based and on-premise software and hardware products sometimes contain coding or configuration errors that can negatively impact their functionality, performance, operation, and integration capabilities. Coding and configuration errors can expose us to product liability, performance issues, warranty claims, and harm to our reputation, which could adversely affect our financial condition and results of operations.

If we fail to provide technical and maintenance support services that are responsive, satisfy our customers’ expectations, and timely resolve issues that they encounter with our products or if there is a perception that we do not maintain high quality technical and maintenance support, then theyour customers may not purchase additional products or services from us in the future.future, negatively affecting our revenues, which would have a material and adverse effect on our business, financial condition, and results of operations.

Revenues from our Restaurant/Retail segment constituted 66.7%74.4% of our total consolidated revenues for 2020.the year ended December 31, 2021. Aggregate sales to our three largest customers (which include sales to those three customers’ respective franchisees) constituted consolidated revenues for 2020the year ended December 31, 2021 of 31.0%30.0%. Significant reductions, delays, or cancellation of orders by one of these customers, or the loss of one of these customers, would reduce our revenue and operating income and would materially and adversely affect our business, operating results of operations, and financial condition.

We continue to integrate components onto our enterprise resource planning, or ERP, system which is intended to provide accurate, timely and reliable reports on our financial condition and operating results. Significant disruptionsresults operations. Delays in the operation offully integrating our ERP could have a material adverse effect onsystem can result in operational inefficiencies, including management and staff time to manage, coordinate, and execute unintegrated components, increased costs and can impair our ability to provide accurate, timely and reliable reports on our financial condition and operating results, or otherwise operatewhich in turn would negatively impact our business. Additionally, if the ERP does not operate as intended, the effectiveness ofcompetitive position and customer relationships and harm our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.business.

We depend on our suppliers to deliver hardware and related materials, product assemblies, and components in a timely and satisfactory manner and in full compliance with contract terms and applicable laws and regulations. In some instances, we are dependent on sole-source suppliers for certain of our assembly components and hardware products. If certain materials, componentsproducts, which may subject us to other significant risks, including higher prices, reduced control over inventory delivery schedules, or product assemblies are not available or if any of these suppliers otherwise fails to meet our needs or becomes insolvent, such risks being exacerbated as a result of the COVID-19 pandemic, we may not have readily available alternative sources for such materials, components or product assemblies.inadequate inventory. While we have entered into long-term or volume purchase agreements with some suppliers, have increased safety stock inventory and the use of alternative sources when possible, and have taken other actions to ensure the availability of needed materials, components, and products, we cannot be sure that thehardware and related materials, product assemblies or components will be available or in the needed quantities and quality or at favorable or competitive prices. If we experience a material supplier problem it could lead to a shortage of supplies and extended lead times for delivery, which could negatively impact our ability to satisfactorily and timely complete our customer obligations. We could also incur additional costs and delays in addressing this type of problem. This could result in reduced sales, breach or termination of contracts, and damage to our reputation and relationships with our customers, which could have a negative impact on our business, financial condition and results of operations

COVID-19 pandemic-related issues have created trade and shipping disruptions and port congestion, resulting in increased transportation costs for our hardware and related materials, product assemblies, and components. We continue to experience price increases for materials and component parts; while we have been able to obtain cost reductions and avoid unfavorable changes to terms with some of our suppliers, this is not the case with all of our suppliers, and we may not be successful in maintaining favorable terms or securing favorable terms from other suppliers in the future. To offset increased costs, we have and may in the future increase the prices of our products. These price increases could make us less competitive, result in reduced sales, loss of potential new customers, and cause damage to our reputation and relationships with our current customers, which could have a negative impact on our business, financial condition.condition and results of operations.

Our goodwill was approximately $41.2 million and $41.4$457.3 million at December 31, 2020 and December 31, 2019,2021 and our intangibles were $33.1 million and $32.9$118.8 million at December 31, 2020 and December 31, 2019.2021. Identifiable intangible assets are primarily a result of business acquisitions and internally developed capitalized software. We test our goodwill and identifiable intangible assets for impairment annually, or more frequently if an event occurs or circumstances change that would indicate possible impairment. We describe the impairment testing process and results of this testing more thoroughly in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operations – Critical Accounting Policies and Estimates.” Our estimates are subject to uncertainties including those associated with the COVID-19 pandemic; the extent to which the COVID-19 pandemic will continue to impact these estimates is uncertain and cannot be predicted. Any of our estimates could be incorrect or misplaced, including our COVID-19 estimates.uncertainties. If we determine an impairment has occurred at any point in time, we will be required to reduce goodwill or identifiable intangible assets on our balance sheet, which could adversely impact our results of operations. Additional information about our impairment testing is contained in Note 1 –Summary– Summary of Significant Accounting Policies of the notes to consolidated financial statements (Part II, Item 8 of this Annual Report).

Competition for highly skilled employees in our abilityindustry is intense. In 2021, the labor market in the U.S. experienced a significant increase in workers leaving their positions, otherwise known as the “Great Resignation” or the “Big Quit,” which has made the market to hirereplace these individuals increasingly competitive and has resulted in

Third parties may assert claims that our software, hardware platforms,systems or technology infringe, misappropriate, or otherwise violate their intellectual property or other proprietary rights. Third parties may also assert that our sale of certain products require the payment of license fees to them. Such claims may be made by our competitors seeking to obtain a competitive

A component of our growth strategy is to continue to expand through acquisitions that complementwe believe add complementary companies, products, and expand our operations. Wetechnologies. Accordingly, we may not be ablesubject to risks that are commonly associated with the acquisition of other businesses, including:

The markets for our software and hardware products are characterized by rapid technological advances, intense competition among existing and emerging competitors, evolving industry standards,practices, disruptive technology

While we think our software and hardware products offer competitive, innovative features and functionality, any one of these factors could create downward pressure on pricing and gross margins and could adversely affect sales to our existing customers, as well as our ability to attract and sell to new customers. Our future success depends on our ability to anticipate and identify changes in customer needs and/or relevant technologies, quickly respond to customer requirements, and to rapidly and effectively introduce new and innovative products, features, and functions; it also depends on our ability to effectively communicate with our customers and quickly respond to our customers’ requirements.functions. If we fail in these efforts, our business, results of operations, and financial conditions could suffer. Any delay in the development, marketing, or launch of new products or enhancements to our existing products, or failure to effectively communicate or meet our customers’ requirements could result in reduced sales, performance penalties, or termination of contracts, and could damage our reputation and relationships with our customers and impede our ability to attract new customers, causing a decline in our revenue, earnings, or stock price and weakening our competitive position.

Our government contracting businessGovernment segment has been focused on niche offerings reflecting ourits expertise, primarily in the areas of ISR, systems engineering and evaluation, satellite and telecommunications services, and management technology/systems services. Many of our competitors in the Government segment are larger and have substantially greater financial resources and broader capabilities in management technology. WeOur Government segment also competecompetes with smaller companies, many of which are designated by the government for preferential “set aside” treatment, that target particular segments of the government market and may have superior capabilities in a particular segment. These companies may be better positioned to obtain contracts through competitive proposals. Consequently, there are no assurances we will continue to win government contracts as a prime contractor or subcontractor, and our failure to do so would reduce our revenue and operating income and could adversely affect our business, operating results, and financial condition.

As of December 31, 2021, we sold $120.0had $398.8 million inof aggregate principal amount ofoutstanding under the 4.500% Convertible Senior Notes due 2024 (the “2024 Notes”), 2.875% Convertible Senior Notes due 2026 (the “2026 Notes”). We received approximately $115.8 million of net proceeds from, and the sale of the 2026 Notes, and used a portion of the proceeds to repurchase $66.3 million of the $80.0 million in aggregate principal amount of the 4.500%1.50% Convertible Senior Notes due 2024 that we sold on April 15, 20192027 (the “2024“2027 Notes”, and together with the 2024 Notes and 2026 Notes, the “Notes”“Senior Notes”). As of March 10, 2021, we had $133.8 million aggregate principal amount of the Notes outstanding.

We are obligated to pay interest on the Notes semi-annually in cash and, in certain circumstances, we are obligated to pay additional interest or special interest on the Notes. If a fundamental change occurs, holders of the Senior Notes may require us to repurchase all or a portion of their Senior Notes in cash. Furthermore, upon conversion of any Senior Notes, unless we elect to deliver solely shares of our common stock to settle the conversion (excluding cash in lieu of delivering fractional shares of our common stock), we must make cash payments in respect of the Senior Notes. Any of the cash payments described above could be significant, and we may not have enough available cash or be able to obtain financing so that we can make such payments when due. If we fail to pay interest on the Notes, repurchase the Notes when required or deliver the consideration due upon conversion, we will be in default under both of the indentures governing the Notes, which could materially and adversely affect our financial condition and restrict our operations.

In connection with our services and products, we may collect, process, transmit, and/or store (on our systems and those of third partyservice providers) customer transactional data, as well as their and our customers’ and employees’ personally identifiable information and/or other data and information. Personally identifiable information is increasingly subject to legislation and regulations in numerous jurisdictions with regard to privacy and data security, including the California Consumer Privacy Act and the New York SHIELD Act, which provide for fines and potential liability to consumers. Likewise, the European Union’s General Data Protection Regulation, the GDPR, imposes obligations and restrictions on the ability to collect, analyze, and transfer personal data. Moreover, what constitutes personally identifiable information and what other data and/or information is subject to the privacy laws varies by jurisdiction and continues to evolve, and the laws that do reference data privacy continue to be interpreted by the courts and their applicability and reach are therefore uncertain. ComplianceOngoing compliance with these laws and regulations orand additional efforts to ensure that our policies and procedures are updated to reflect changes in these laws and regulations may be onerous andare expensive and may be inconsistent from jurisdiction to jurisdiction,require significant resources. The lack of clarity and regulatory guidance on some issues further increasingincreases the cost of compliance. For example, Brexit, which took effect in January 2020, will lead to further legislative changes and reduced clarity as to whether data transfer to the United Kingdom will remain lawful in the long term, which may require us to expend additional resources to ensure that we are compliance with new rules or legislation. Our failure and/inability, or the failure of our customers, vendors, and service providersperceived inability, to comply with applicableadequately address privacy and data protection concerns, or comply with applicable laws, and regulations, policies, or other legal obligations could damage our reputation, discourage current and/or potential customers from using our products and services, and result in fines, governmental investigations and/or enforcement actions, complaints by private individuals, and/or the payment of penalties to consumers, any one or all of which could adversely affect our business, financial condition, and results of operations. Illustrative of this risk, on March 21, 2019, a complaint was filed against PAR asserting that it violated the Illinois Biometric Information Privacy Act. See “Note 14—Contingencies” of the notes to consolidated financial statements (Part II, Item 8 of this Annual Report) for additional information regarding this lawsuit.

Our managementAs discussed in Part II, Item 9A. Controls and Procedures of this Annual Report, we reported that our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 20202021 due to material weaknesses related to the control activities component and monitoring controls that were not effective, as discussed in Part II, Item 9A. Controls and Procedures. We have startedactivities component of the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

If we fail to take actions designed to remediate these material weaknesses. While we believe that the remedial measures we are implementing will allow us to ascertain whethercorrect our internal control over financial

Although only 8.5%7.3%, 6.4%8.5%, and 6.6%6.4% of our total consolidated revenues were derived from sales outside of the U.S., in 2021, 2020, 2019, and 20182019 respectively, we have operations across the globe, and our international operations subject us to a variety of risks and challenges, including:

These risks and challenges could result in U.S.an increase in our cost of doing business internationally, hardware or component shortages, shipping delays, longer payment cycles, increased taxes, and international trade policies that restrict imports or increase tariffsrestrictions on the repatriation of funds to the U.S., any of which could have a material adverse effect on our results of operations.

Total consolidated revenues of 33.0%, 34.0%, and 33.0%26% in 2020, 2019, and 2018, respectively,2021 were derived from contracts to provide technical expertise to government organizations and prime contractors. In any given year, the majority of our government contracting activity is associated with the U.S. Department of Defense. Contracts with the U.S. Government typically provide that such contracts are terminable, in whole or in part, at the convenience of the U.S. Government. If the U.S. Government terminates a contract on this basis, we would be entitled to receive payment for our allowable costs and, in general, a proportionate share of our fee or profit for work actually performed. Most U.S. Government contracts are also subject to modification or termination in the event of changes in funding. As such, we may perform work prior to formal authorization, or the contract prices may be adjusted for changes in scope of work. Termination or modification of a substantial number of our U.S. Government contracts could have a material adverse effect on our business, financial condition, and results of operations.

We perform work for various U.S. Government agencies and departments primarily pursuant to fixed-price, cost-plus fixed fee and time-and-material prime contracts and subcontracts. Approximately 50.1%The majority of revenues derived from government contracts for the year ended December 31, 20202021 were based on fixed-price or time and material contracts, andwith most of the remaining balance (approximately 49.9% of total government revenues) was based onderived from cost-plus fixed fee contracts. Approximately 59.8% of revenuescontracts and a small portion derived from government contracts for the year ended December 31, 2019 were based on fixed-price or time and material contracts, and the balance (approximately 40.2% of total government revenues) was based on cost-plus fixed fee contracts. Approximately 60.0% of revenues derived from government contracts for the year ended December 31, 2018 were based on fixed-price or time and material contracts, and the balance (approximately 40.0% of total government revenues) was based on cost-plus fixed fee contracts.commercialized product licensing.

While fixed-price contracts allow us to benefit from cost savings, they also expose us to the risk of cost overruns. If the initial estimates we use for calculating the contract price are incorrect, we can incur losses on those

Under time and materials contracts, we are paid for labor at negotiated hourly billing rates and for certain expenses. Under cost-plus fixed fee contracts, we are reimbursed for allowable costs and paid a fixed fee. If our costs under either of these types of contracts were to exceed the contract ceiling, or are not allowable under the provisions of the contract or applicable regulations, we may not be reimbursed for 100% of our associated costs. Our inability to control our costs under either a time-and-materials contract or a cost-plus fixed fee contract could have a material adverse effect on our financial condition and operating results. Cost overruns also may adversely affect our ability to sustain existing programs and obtain future contract awards.

Our Government segment depends upon continued U.S. Government expenditures on defense, intelligence, homeland security, and other programs that we support. Changes in U.S. Government budgetary priorities, a significant decline in government expenditures, or a shift of expenditures away from programs that we support could have a material adverse effect on our financial condition and results of operations.

Additionally, in years when Congress does not complete our budget process before the end of our fiscal year (September 30), government operations are funded through a continuing resolution (“CR”) that temporarily funds federal agencies. Recent CRs have generally provided funding at the levels provided in the previous fiscal year. When the U.S. Government operates under a CR, it may delay funding we expect to receive from customers on work we are already performing and will likely result in new initiatives being delayed or in some cases canceled, which could have a material adverse effect on our financial condition, results of operations, and liquidity.

Our Government segment is subject to various laws and regulations relating to the formation, administration, and performance of U.S. Government contracts, which affect how we do business with our customers and increase our performance costs. Among the most significant laws and regulations are:

Failure to comply with these or other laws and regulations could result in contract termination, loss of security clearances, suspension or debarment from contracting with the U.S. Government, civil and/or criminal fines, and penalties. Any such consequences could have a material adverse effect on our reputation, financial condition, results of operations, and liquidity.

Our backlog consists of funded backlog, which is based on amounts actually committed by a customer for payment for goods and services, and unfunded backlog, which is based upon contract revenue we have the potential to earn over the remaining life of the contracts. Our backlog may not result in actual revenue in any

The U.S. Government may revise its procurement practices or adopt new contracting rules and regulations, such as cost accounting standards. It could also adopt new contracting methods relating to General Services Administration (“GSA”)GSA contracts, Governmentwide Acquisition Contracts, or other multi-award contracts, or adopt new standards for contract awards intended to achieve certain social or other policy objectives. In addition, the U.S. Government may face restrictions from new legislation or regulations, as well as pressure from U.S. Government employees and their unions, on the nature and amount of services the U.S. Government may obtain from private contractors. These changes could impair our ability to obtain new contracts or contracts under which we currently perform when those contracts are up for recompete. Any new contracting methods could be costly or administratively difficult for us to implement, and as a result, could harm our financial condition and results of operations. A realignment of funds with changed U.S. Government priorities, including “insourcing” of previously contracted support services, and the realignment of funds to other non-defense-related programs may reduce the amount of funds available to defense-related and other programs in our core service areas.

U.S. Government agencies, including the Defense Contract Audit Agency, or DCAA, and the Defense Contract Management Agency, or DCMA, routinely audit and investigate government contracts and government contractors’ administrative processes and systems. These agencies review our performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations, and standards. They also evaluate the adequacy of internal controls over our business systems, including our purchasing, accounting, estimating, earned value management, and government property systems. Any costs found to be improperly allocated or assigned to contracts will not be reimbursed, and any such costs already reimbursed must be refunded and certain penalties may be imposed. Moreover, if any of the administrative processes and systems are found not to comply with requirements, we may be subjected to increased government scrutiny and approval that could delay or otherwise adversely affect our ability to compete for or perform contracts or collect our revenue in a timely manner. Therefore, an unfavorable outcome of an audit by the DCAA or another U.S. Government agency could cause actual results to differ materially and adversely from those anticipated. If a government investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines, and suspension or debarment from doing business with the federal government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us. Each of these results could have a material adverse effect on our business, financial condition, results of operations, and liquidity.

We currently do not plan to declare dividends on shares of our common stock in the foreseeable future.

We may issue and sell additional shares of common stock or other securities in the future offerings to raise capital or issue securities for other purposes, including in connection with acquisitions of other businesses or other strategic transactions. We cannot predict the size of future issuances of equity securities, the size and terms of future issuances of debt instrumentsTransactions involving newly issued common stock or other securities convertible into equity securities or the effect,our common stock, if any, that future issuances and sales of our securities will have on the market price of the common stock. Transactions involving newly issued common stockconverted, could result in dilution, possibly substantial, to our existing security holders.

The stock market in general is subject to fluctuations that affect the share prices and trading volumes of many companies, and these broad market fluctuations could adversely affect the market price of our common stock. Factors that could affect our common stock price include but are not necessarily limited to the following:include:

The trading market for our common stock is influenced by the research and reports that equity research and other securities analysts publish about us, our business, and our industry.the industries in which we operate. We do not have control over these analysts. Analysts could issue negative recommendations with respect to our common stock or publish other unfavorable commentary or cease publishing reports about us,our common stock, our business, or our industry.the industries in which we operate. If one or more of these analysts cease coverage of us, we could lose visibility in the market. As a result of one or more of these factors, the market price of our common stock could decline rapidly and our common stock trading volume could be adversely affected.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for:

This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act. It could apply, however, to a suit that falls within one or more of the categories set forth in the exclusive forum provision and that also asserts claims under the Securities Act, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce this provision with respect to claims under the Securities Act, and our stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Our certificate of incorporation and bylaws contain certain provisions that may discourage, delay, or prevent a change in our management or control over us. For example, our certificate of incorporation and bylaws, collectively:

These provisions could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of stockholders may consider such proposal, if effected, desirable. Such provisions could also make it more difficult for third parties to remove and replace the members of our board of directors. Moreover, these provisions may inhibit increases in the market price of our common stock that may result from takeover attempts or speculation.

Our corporate headquarters is located at PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York. We own our corporate headquarters – both the building and land. Weland, and we lease all our other properties for varying terms. We believe our existing properties, both owned and leased, are in good condition and are suitable for the conduct of our business for the foreseeable future.

The following table sets forth the location, the operatingreporting segment (if applicable) that uses and the use of each of our principal properties, and each properties’ approximate square footage:

*The square footage in the table above does not include Company owned space leased to third parties.

In addition to the properties identified above, we have leasehold interests in small office spaces located in: Australia, Canada, Dubai, India, United Arab Emirates; Shanghai, China; Staines, United Kingdom;Emirates and Sydney, Australia (sales and service).other locations within the U.S.

Our common stock is listed on the New York Stock Exchange under the symbol “PAR”. According to the records of our transfer agent, as of March 10, 2021,February 22, 2022, there were 325370 holders of record of our common stock. A substantially greater number of holders of our common stock are held in “street name” or by beneficial holders whose shares of common stock of record are held by brokers, banks, and other financial institutions.

We have never declared or paid cash dividends on our common stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our common stock will be at the discretion of our board of directors, subject to the terms of any future financings and applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.

Recipients of stockequity awards may elect to have shares withheld to satisfy minimum statutory federal, state, and local tax withholding obligations arising from the vesting of their shares.awards. When we withhold these shares, we are required to remit to the

Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance graphof our common stock shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 ofor “soliciting material” under the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.such filings.

The graph below reflects the cumulative stockholder return on our common stock compared to the cumulative return of the Russell 2000 index and the Russell 2000 Technology index, a published peer industry group of 171175 companies on an annual basis.

The graph reflects the investment of $100 on December 31, 20152016 in our common stock, the Russell 2000 and the Russell 2000 Technology indices. The total cumulative dollar returns shown below represent the value that such investments would have had on December 31, 2020.2021. Historical stock price performance should not be relied upon as an indication of future stock price performance.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes thereto included under Part II, Item 8 of this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the results contemplated by these forward-looking statements included in this discussion asdue to a resultnumber of certain factors, including but not limited to, those discussed inunder “Risk Factors” included elsewhere in this Annual Report on Form 10-K.Part I, Item 1A above.

We, through our wholly owned subsidiaries - ParTech, Inc. and PAR TechnologyGovernment Systems Corporation operates- operate in two distinct reporting segments, Restaurant/Retail and Government. Our Restaurant/Retail segment provides point-of-sale (“POS”) software, hardware, back-office software and integrated technical solutions to the restaurant and retail industries. Our Government segment provides intelligence, surveillance, and reconnaissance solutions (“ISR”) and mission systems support to the Department of Defense (“DoD”) and other Federal agencies.

Our Restaurant/Retail segment is a leading provider of POS software, systems,hardware, and services to the restaurant and retail industries. Our promise is to deliver the solutions that connect people to the restaurants, meals,industries, with more than 500 customers currently using our software products and moments they love.more than 50,000 active restaurant locations. We provide multi-unit and individualenterprise restaurants, franchisees, and enterprise customersother restaurant outlets in the three major restaurant categories:categories, quick service, fast casual, quick serve, and table service, with operational efficiencies, offering them a fully integrated cloud solution withby combining our leading Brink POS cloud software for front-of-house, our Data Central back-office cloud solution, our PAR Pay and PAR Payment Services for payment solutions, and our point-of-sale hardware forPunchh customer loyalty and engagement solution onto a unified commerce cloud platform. Our unified commerce cloud platform delivers an integrated suite of modern solutions that are extensible and built on open APIs that retain flexibility and the front-of-house, our leading back-office cloud software - Data Central - for the back-of-house, and our wireless headsets for drive-thru order taking.

Our open architecture POS platforms are optimized to host our POS software applications, as well as many third-party POS applications, and are compatible with a variety of peripheral devices. We partner with numerous vendors that offer complementary in-store peripherals, such as cash drawers, card readers and printers and kitchen video systems, allowing us to deliver a completely integrated solution through one vendor.

The COVID-19 pandemic has caused and continues to cause significant disruption to the U.S.have widespread, rapidly evolving and unpredictable impacts on global economies, includinginflation, supply chains, work force participation and wages, and has created significant volatility and disruption in financial markets. Our focus remains on promoting employee health and safety, serving our customers and ensuring business continuity. We have taken actions by continuing our work from home policy, permitting only critical business travel, maintaining safety stock inventory and, when possible sourcing materials and components from multiple suppliers, and regularly monitor pricing of our services and products. We continue to actively monitor the impact of governmentsituation and company actionswill continue to reduce the spreadadapt our business operations as necessary.

We reportedTotal product, service and contract revenues of $187.2were $282.9 million for the year ended December 31, 2019, a decrease2021, an increase of 7.0% from $201.269.1 million or 32.3% compared to $213.8 million for the year ended December 31, 2018. Our net loss was $15.62020.

Product revenues were $105.0 million or $0.96 loss per diluted share for the year ended December 31, 2019 versus a net loss2021, an increase of $24.1$31.8 million or $1.50 loss per diluted share43.4% compared to $73.2 million for the year ended December 31, 2018. Our year-over-year unfavorable performance2020. The increase was primarily driven by lower Restaurant/Retail hardware revenue and corresponding hardware support service revenue from our traditional tier 1 customers as one of these customers completed significant projects in 2018 which were not repeated in 2019. We partially offset these reductions with continued growth in Brink POS revenue, including related Software as a Service (“SaaS”), hardware and support services revenue. The 2018 net loss include a valuation allowance of $14.9 million to reduce the carrying valuerefresh purchases by some of our deferred tax assets.

Product revenues were $73.2 million for the year ended December 31, 2020, an increase of $6.9 million or 10.4% fromcompared to $66.3 million recorded infor the year ended December 31, 2019. This increase was primarily driven by the acquisition of the assets of 3M Company's Drive-Thru product line and continuedCommunications Systems business (the “Drive-Thru Acquisition”) with revenues of $14.6 million. Brink growth. The Drive-Thru product line brought an additional $14.6 million in revenue in 2020 compared to partial year of performance in 2019 as we acquired the product line on September 30, 2019. BrinkPOS related hardware revenue saw an increase of $4.8 million compared to 2019.million. Partially offsetting these revenue gains were declines in other Core hardware revenue of $10.5 million, driven by the COVID-19 pandemic,pandemic. Other decreases included PixelPoint license sales declinereduction of $1.3 million and SureCheck, our food safety and workforce product solution we sold in 2019 (“SureCheck”), product revenue decrease of $0.7 million as the divestiture of thethat product line closed during the fourth quarter of 2019.

Total gross margin as a percentage of revenue for the year ended December 31, 2019, a decrease of 15.8% from $78.8 million reported2021 was 22.0% as compared to 18.4% for the year ended December 31, 2020.

Product margin for the year ended December 31, 2021 increased to 23.0% as compared to 19.6% for the year ended December 31, 2020. The increase in 2018. This decreasemargin was primarily due to favorable product mix and favorable

Service margin for the year ended December 31, 2021 increased to 30.5% as compared to 27.9% for the year ended December 31, 2020. The increase was driven by lower revenuesa higher mix of SaaS software from our tier 1 customersthe Punchh Acquisition and by a decrease in our international business. Our hardware sales in the Restaurant/Retail segment were down versus prior year as we completed hardware project installationscost improvement initiatives with a large domestichosting costs and customer support service. Service margin during the first halfyear ended 2021 included $11.8 million of 2018 whichamortization of acquired developed technology compared to $3.3 million of amortization of acquired developed technology during the year ended December 31, 2020. Excluding the amortization of acquired developed technology, service margin was not recurring in 2019. Additionally, international sales were down in 201941.7% compared to 32.7% year-over-year for the years ended December 31, 2021 and SureCheck2020, respectively.

Contract margin for the year ended December 31, 2021 was divested. SureCheck product revenue was $0.7 million in 2019 versus $2.0 million in 2018.relatively unchanged at 8.0%, compared to 7.9% for the year ended December 31, 2020.

Total gross margin as a percentage of revenue for the year ended December 31, 2020 an increase of 21.6% from $57.0 million reportedwas 18.4% compared to 20.0% for the year ended December 31, 2019, primarily due to an increase in revenue from Brink services of $8.7 million which includes an increase of $4.1 million in Brink SaaS service revenue, and $8.1 million revenue related to the Restaurant Magic Acquisition. Partially offsetting these gains were declines of $2.7 million in SureCheck product revenue as the product line was divested in fourth quarter 2019 and $1.8 million decline of Core services.2019.

SG&A expenses were 29.1%$84.0 million for the year ended December 31, 2019,2021, compared to 22.1% recorded$46.2 million, an increase of 37.8 million or 81.8% for the year ended December 31, 2018. Service margins increased2020. The increase was primarily duedriven by $19.3 million of expenses excluding stock-based compensation incurred in the Punchh Acquisition. Other drivers were increases in stock-based compensation of $10.4 million of which $8.7 million was related to Brink POS SaaSthe Punchh Acquisition, $4.3 million in corporate expenses, $2.3 million in internal technology infrastructure costs, and the increase in profitability in our field service business. During 2018$1.5 million for sales and 2019, impairment charges were recorded for SureCheck capitalized softwaremarketing expenses.