ITEX (ITEX) 10-Q 10 Mar 14 2014 Q2 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	6 Months Ended
	Jan. 31, 2014
Document Information [Line Items]	'
Entity Registrant Name	'ITEX CORP
Entity Central Index Key	'0000860518
Current Fiscal Year End Date	'--07-31
Entity Filer Category	'Smaller Reporting Company
Trading Symbol	'ITEX
Entity Common Stock, Shares Outstanding	2,919,608
Document Type	'10-Q
Amendment Flag	'false
Document Period End Date	31-Jan-14
Document Fiscal Period Focus	'Q2
Document Fiscal Year Focus	'2014

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Jan. 31, 2014	Jul. 31, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Cash	$3,394	$3,352
Accounts receivable, net of allowance of $343 and $363	924	711
Prepaid expenses	72	107
Loans and advances	22	7
Deferred tax asset, net of allowance of $31	818	818
Notes receivable	374	366
Other current assets	43	13
Total current assets	5,647	5,374
Property and equipment, net of accumulated depreciation of $436 and $423	46	57
Goodwill	3,191	3,191
Deferred tax asset, net of allowance of $133 and net of current portion	3,373	3,549
Intangible assets, net of accumulated amortization of $3,238 and $3,180	189	248
Notes receivable - net of current portion	1,228	1,065
Other long-term assets	27	30
Total assets	13,701	13,514
Current liabilities:	'	'
Accounts and other expenses payable	60	101
Commissions payable to brokers	0	308
Accrued commissions to brokers	1,181	833
Accrued expenses	338	320
Deferred revenue	28	33
Advance payments	93	130
Note Payable, current portion	6	7
Total current liabilities	1,706	1,732
Long-term liabilities:	'	'
Other long-term liabilities	2	8
Total Liabilities	1,708	1,740
Commitments and contingencies	'	'
Stockholders' equity:	'	'
Common stock, $0.01 par value; 9,000 shares authorized; 2,626 shares and 2,596 shares issued and outstanding, respectively	26	26
Additional paid-in capital	25,353	25,214
Stockholder notes receivable	-195	-226
Accumulated deficit	-13,191	-13,240
Total stockholders' equity	11,993	11,774
Total liabilities and stockholders’ equity	$13,701	$13,514

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Jan. 31, 2014	Jul. 31, 2013
In Thousands, except Per Share data, unless otherwise specified
Allowance for doubtful accounts receivable	$343	$363
Deferred tax assets, valuation allowance, current	31	31
Accumulated depreciation of property and equipment	436	423
Allowance for deferred tax asset, noncurrent	133	133
Accumulated amortization of intangible assets	$3,238	$3,180
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, shares authorized (in shares)	9,000	9,000
Common stock, shares issued (in shares)	2,626	2,596
Common stock, shares outstanding (in shares)	2,626	2,596

CONSOLIDATED_STATEMENTS_OF_INC

CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Revenue:	'	'	'	'
Marketplace revenue and other revenue	$3,696	$3,960	$7,121	$7,671
Costs and expenses:	'	'	'	'
Cost of Marketplace revenue	2,309	2,551	4,445	4,912
Corporate salaries, wages and employee benefits	628	477	1,148	961
Selling, general and administrative	516	368	1,013	836
Depreciation and amortization	30	65	72	131
Costs and Expenses, Total	3,483	3,461	6,678	6,840
Income from operations	213	499	443	831
Other income/(expense)	'	'	'	'
Interest, net	28	30	59	61
Other (expense)	0	-2	0	0
Nonoperating Income (Expense), Total	28	28	59	61
Income before income taxes	241	527	502	892
Income tax expense	78	169	163	286
Net income	$163	$358	$339	$606
Net income per common share:	'	'	'	'
Basic (in dollars per share)	$0.06	$0.14	$0.13	$0.23
Diluted (in dollars per share)	$0.06	$0.14	$0.13	$0.23
Weighted average shares outstanding:	'	'	'	'
Basic (in shares)	2,628	2,615	2,615	2,616
Diluted (in shares)	2,632	2,616	2,618	2,617

CONSOLIDATED_STATEMENT_OF_STOC

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Stockholder Note Receivable [Member]	Retained Earnings [Member]
In Thousands
Balance at Jul. 31, 2013	$11,774	$26	$25,214	($226)	($13,240)
Balance (in shares) at Jul. 31, 2013	'	2,596	'	'	'
Common stock repurchased and retired	-96	-1	-95	'	'
Common stock repurchased and retired (in shares)	'	-24	'	'	'
Payments on stockholder notes receivables	31	'	'	31	'
Stock based compensation expense	235	1	234	'	'
Stock based compensation expense (in shares)	'	54	'	'	'
Dividend payment	-290	'	'	'	-290
Net income	339	'	'	'	339
Balance at Jan. 31, 2014	$11,993	$26	$25,353	($195)	($13,191)
Balance (in shares) at Jan. 31, 2014	'	2,626	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net income	$339	$606
Items to reconcile to net cash provided by operations:	'	'
Depreciation and amortization	72	131
Stock based compensation	235	121
Decrease in allowance for uncollectible receivables	-20	-54
Change in deferred income taxes	176	309
Gain on sale of assets	0	-4
Loss on disposal of equipment	0	4
Changes in operating assets and liabilities:	'	'
Accounts receivable	-193	-242
Prepaid expenses	35	-23
Loans and advances	-15	-13
Prepaid advertising credits	0	3
Other assets	-27	-27
Accounts payable	-41	65
Commissions payable to brokers	-308	-654
Accrued commissions to brokers	348	464
Accrued expenses	18	-54
Deferred revenue	-5	-10
Other long-term liabilities	-6	-1
Advance payments	-37	-39
Net cash provided by operating activities	571	582
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'
Membership list purchase	0	45
Proceeds from notes payable	0	15
Payments on note payable	-1	-2
Purchase of property and equipment	-2	-17
Payments received from notes receivable	267	181
Advances on Loans	-438	-76
Net cash provided by (used in) investing activities	-174	146
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Principal payments on Broker notes receivable	31	52
Repurchase of Common stock	-96	-26
Cash dividend paid to Common Shareholders	-290	-235
Net cash used in financing activities	-355	-209
Net increase in cash	42	519
Cash at beginning of period	3,352	1,942
Cash at end of period	3,394	2,461
Supplemental cash flow information:	'	'
Cash paid for taxes	$35	$5

SUMMARY_OF_SIGNIFICANT_ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jan. 31, 2014
Accounting Policies [Abstract]	'
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]	'
	NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	(In thousands, except per share amounts)
	Description of the Company
	ITEX Corporation (“ITEX”, “Company”, “we” or “us”) was incorporated in October 1985 in the State of Nevada.  Through our independent licensed broker and franchise network, corporate and corporate-owned offices (individually, “broker,” and together the “Broker Network”) in the United States and Canada, we operate a leading exchange for cashless business transactions (the “Marketplace”) where products and services are exchanged for “virtual currency” only usable in the Marketplace (“ITEX dollars”).  We administer the Marketplace and act as a third-party record-keeper for our members’ transactions.
	Unaudited Interim Financial Information
	We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, operating results, and cash flows for the periods presented.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as the date of the financial statements and the reported amount of revenue and expenses during the reporting period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2013 Annual Report on Form 10-K filed with the SEC on October 21, 2013.
	Principles of Consolidation
	The consolidated financial statements include the accounts of ITEX Corporation and its wholly owned subsidiary, BXI Exchange, Inc.  All inter-company accounts and transactions have been eliminated in consolidation.
	Use of Estimates
	Management has made a number of estimates and assumptions relating to the reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ from these estimates.
	Income per Share
	We prepare our financial statements on the face of the income statement for both basic and diluted earnings per share.  Basic earnings per share excludes potential dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.  As of January 31, 2014, we had no contracts to issue common stock, but we did have 20 warrants outstanding that were anti-dilutive. The Company also had 4 unvested shares of restricted stock that are dilutive and 289 unvested shares of restricted stock that are anti-dilutive as of January 31, 2014.
	The following table presents a reconciliation of the denominators used in the computation of net income per common share basic and net income per common share – diluted for the three and six-month periods ended January 31, 2014 and 2013 (in thousands, except per share data) (unaudited):
		Three-months Ended				Six-months Ended
		January 31,				January 31,
		2014		2013		2014		2013
	Net income available for shareholders	$	163	$	358	$	339	$	606
	Weighted avg. outstanding shares of common stock		2,628		2,615		2,615		2,616
	Dilutive effect of restricted shares		4		1		3		1
	Common stock and equivalents		2,632		2,616		2,618		2,617
	Earnings per share:
	Basic	$	0.06	$	0.14	$	0.13	$	0.23
	Diluted	$	0.06	$	0.14	$	0.13	$	0.23
	Recent Accounting Pronouncements
	There have been no recent accounting pronouncements or changes in accounting pronouncements during the six-months ended January 31, 2014, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K, that are of significance, or potential significance to the Company.

COMMITMENTS

COMMITMENTS	6 Months Ended
	Jan. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Commitments Disclosure [Text Block]	'
	NOTE 2 – COMMITMENTS
	The Company leases office space under an operating lease. The lease commitment is for the Company’s corporate headquarters in Bellevue, Washington. The corporate headquarters lease expires on April 30, 2015.
	Future minimum payments at January 31, 2014 under the operating lease for office space is as follows (in thousands):
	Lease commitments
	for the year ending
	July 31,
	2014(1)			84
	2015			127
	Total		$	211
		-1	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.
	Rent expense, including utilities and common area charges, was $ 40 and $ 49, respectively for the three-month periods ended January 31, 2014 and 2013. Rent expense was $ 81 and $ 91 for the six-month periods ended January 31, 2014 and 2013.
	In addition to the foregoing lease commitments, the Company is a party to several non-cancelable and non-refundable purchase commitments. Those purchase obligations consist primarily of arrangements for telecommunications and co-location services for the Company’s network operations.
	Future minimum payments at January 31, 2014 under the non-cancelable commitments were as follows (in thousands):
	Year ending July 31,
	2014 (1)			8
	2015			2
	Total		$	10
	_______
		-1	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.

LEGAL_PROCEEDINGS_AND_LITIGATI

LEGAL PROCEEDINGS AND LITIGATION CONTINGENCIES	6 Months Ended
	Jan. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Legal Matters and Contingencies [Text Block]	'
	NOTE 3 – LEGAL PROCEEDINGS AND LITIGATION CONTINGENCIES
	From time to time we are subject to a variety of claims and litigation incurred in the ordinary course of business.  In our opinion, the outcome of our pending legal proceedings, individually or in the aggregate, will not have a material adverse effect on our business operations, results of operations, cash flows or financial condition.
	Management has regular litigation reviews, including updates from outside counsel, to assess the need for accounting recognition or disclosure of contingencies relating to pending lawsuits. The Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable, and the amount can be reasonably estimated.  The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote.  For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Company discloses the nature of the contingency and, where feasible, an estimate of the possible loss.  For purposes of our litigation contingency disclosures, “significant” includes material matters as well as other items which management believes should be disclosed.
	Management judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. Litigation is subject to inherent uncertainties and unfavorable rulings could occur.  Although management currently does not believe resolving any pending proceeding will have a material adverse impact on our financial statements, management’s view of these matters may change in the future.  A material adverse impact on our financial statements could occur for the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

INCOME_TAXES

INCOME TAXES	6 Months Ended
	Jan. 31, 2014
Income Tax Disclosure [Abstract]	'
Income Tax Disclosure [Text Block]	'
	NOTE 4 – INCOME TAXES
	Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the three and six-months ended January 31, 2014 and 2013 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 35% to pre-tax income primarily because of state income taxes, estimated permanent differences and change in valuation allowance.
	The Federal effective tax rate related to our provision for income taxes in the three and six-months ended January 31, 2014 is similar to that used in the similar periods ending January 31, 2013. The State effective tax rate related to our provision for income taxes in the three and six-months ended January 31, 2014 is lower to that used in the three and six-month periods ending January 31, 2013, due to the resolution of certain state tax positions which led to a reduction in the accrued expenses on our consolidated balance sheet for uncertain tax positions related primarily to state jurisdictions.
	The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes.
	As of January 31, 2014 we have recognized a net income tax expense of $ 163 which is our estimated federal and state income tax liability for the six-months ended January 31, 2014 net of the impairment of certain state deferred tax assets recorded during 2011 and 2012. Realization of our deferred tax asset is dependent upon future earnings in specific tax jurisdictions, the timing and amount of which are uncertain.
	We account for any uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. As such, we are required to make subjective assumptions and judgments regarding income tax exposures. The result of the reassessment of our tax positions did not have an impact on the consolidated financial statements.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jan. 31, 2014
Stockholders' Equity Note [Abstract]	'
Stockholders' Equity Note Disclosure [Text Block]	'
	NOTE 5 – STOCKHOLDERS’ EQUITY (in thousands, except per share amounts)
	The Company has 5,000 shares of preferred stock authorized at $ 0.01 par value.  No preferred shares were issued or outstanding as of January 31, 2014.
	On March 9, 2010, the Company announced a $ 2,000 stock repurchase program, authorized by the Board of Directors.  The program authorizes the repurchase of shares in open market purchases or privately negotiated transactions, has no expiration date and may be modified or discontinued by the Board of Directors at any time.  During the six-month period ended January 31, 2014, the Company repurchased 24 shares of common stock for $ 96. During the six-month period ended January 31, 2013, the Company repurchased 7 shares of common stock for $ 26.

STOCKBASED_PAYMENTS

STOCK-BASED PAYMENTS	6 Months Ended
	Jan. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	'
	NOTE 6 – STOCK-BASED PAYMENTS (in thousands, except per share amounts)
	In December 2013, stockholders approved the adoption of the ITEX Corporation 2014 Equity Incentive Plan (the “2014 Plan”), pursuant to which 400 shares of common stock were authorized for issuance. The 2014 Plan provides for the awards of restricted stock, restricted stock units, and other awards including unrestricted stock awards, stock bonuses, or the payment of cash for bonuses or in settlement of restricted stock unit awards to the Company’s employees, directors, officers or consultants. 360 shares remained available for future grants under the 2014 Plan as of January 31, 2014.
	In December 2013, the Company issued 25 shares to an executive, valued at the grant date stock price of $ 3.95 per share, with immediate vesting. The grant was expensed as compensation expense.
	In January 2013, the Company issued 15 shares to its outside directors, valued at the grant date stock price of $ 4.10 per share, with a vesting period of one year from the date of grant. The grant is to be amortized to compensation expense over a period of one year.
	We account for stock-based compensation in accordance with the related guidance.  Under the fair value recognition provisions, we estimate stock-based compensation cost at the grant date based on the fair value of the award.  We recognize that expense ratably over the requisite service period of the award and recognized $ 235 and $ 121 of stock based compensation expense for the six-month periods ending January 31, 2014 and 2013, respectively.
	At January 31, 2014, 278 shares of common stock granted under the 2004 Plan remained unvested and 15 shares of common stock granted under the 2014 Plan remained unvested.  At January 31, 2014, the Company had $ 985 of unrecognized compensation expense, expected to be recognized over a weighted-average period of approximately six years.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jan. 31, 2014
Subsequent Events [Abstract]	'
Subsequent Events [Text Block]	'
	NOTE 7 – SUBSEQUENT EVENTS
	On February 28, 2014, the Board of Directors declared a cash dividend in the amount of $ 0.05 per share, payable on March 20, 2014 to stockholders of record as of the close of business on March 10, 2014.

SUMMARY_OF_SIGNIFICANT_ACCOUNT1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jan. 31, 2014
Accounting Policies [Abstract]	'
Quarterly Financial Information Policy, [Policy Text Block]	'
	Unaudited Interim Financial Information
	We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, operating results, and cash flows for the periods presented.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as the date of the financial statements and the reported amount of revenue and expenses during the reporting period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2013 Annual Report on Form 10-K filed with the SEC on October 21, 2013.
Consolidation, Policy [Policy Text Block]	'
	Principles of Consolidation
	The consolidated financial statements include the accounts of ITEX Corporation and its wholly owned subsidiary, BXI Exchange, Inc.  All inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates, Policy [Policy Text Block]	'
	Use of Estimates
	Management has made a number of estimates and assumptions relating to the reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ from these estimates.
Earnings Per Share, Policy [Policy Text Block]	'
	Income per Share
	We prepare our financial statements on the face of the income statement for both basic and diluted earnings per share.  Basic earnings per share excludes potential dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.  As of January 31, 2014, we had no contracts to issue common stock, but we did have 20 warrants outstanding that were anti-dilutive. The Company also had 4 unvested shares of restricted stock that are dilutive and 289 unvested shares of restricted stock that are anti-dilutive as of January 31, 2014.
	The following table presents a reconciliation of the denominators used in the computation of net income per common share basic and net income per common share – diluted for the three and six-month periods ended January 31, 2014 and 2013 (in thousands, except per share data) (unaudited):
		Three-months Ended				Six-months Ended
		January 31,				January 31,
		2014		2013		2014		2013
	Net income available for shareholders	$	163	$	358	$	339	$	606
	Weighted avg. outstanding shares of common stock		2,628		2,615		2,615		2,616
	Dilutive effect of restricted shares		4		1		3		1
	Common stock and equivalents		2,632		2,616		2,618		2,617
	Earnings per share:
	Basic	$	0.06	$	0.14	$	0.13	$	0.23
	Diluted	$	0.06	$	0.14	$	0.13	$	0.23
New Accounting Pronouncements, Policy [Policy Text Block]	'
	Recent Accounting Pronouncements
	There have been no recent accounting pronouncements or changes in accounting pronouncements during the six-months ended January 31, 2014, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K, that are of significance, or potential significance to the Company.

SUMMARY_OF_SIGNIFICANT_ACCOUNT2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jan. 31, 2014
Accounting Policies [Abstract]	'
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	'
	The following table presents a reconciliation of the denominators used in the computation of net income per common share basic and net income per common share – diluted for the three and six-month periods ended January 31, 2014 and 2013 (in thousands, except per share data) (unaudited):
		Three-months Ended				Six-months Ended
		January 31,				January 31,
		2014		2013		2014		2013
	Net income available for shareholders	$	163	$	358	$	339	$	606
	Weighted avg. outstanding shares of common stock		2,628		2,615		2,615		2,616
	Dilutive effect of restricted shares		4		1		3		1
	Common stock and equivalents		2,632		2,616		2,618		2,617
	Earnings per share:
	Basic	$	0.06	$	0.14	$	0.13	$	0.23
	Diluted	$	0.06	$	0.14	$	0.13	$	0.23

COMMITMENTS_Tables

COMMITMENTS (Tables)	6 Months Ended
	Jan. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	'
	Future minimum payments at January 31, 2014 under the operating lease for office space is as follows (in thousands):
	Lease commitments
	for the year ending
	July 31,
	2014(1)			84
	2015			127
	Total		$	211
		-1	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.
Long-term Purchase Commitment [Table Text Block]	'
	Future minimum payments at January 31, 2014 under the non-cancelable commitments were as follows (in thousands):
	Year ending July 31,
	2014 (1)			8
	2015			2
	Total		$	10
	_______
		-1	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.

SUMMARY_OF_SIGNIFICANT_ACCOUNT3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Summary Of Significant Accounting Policies [Line Items]	'	'	'	'
Net income available for shareholders	$163	$358	$339	$606
Weighted avg. outstanding shares of common stock (in shares)	2,628	2,615	2,615	2,616
Dilutive effect of restricted shares (in shares)	4	1	3	1
Common stock and equivalents (in shares)	2,632	2,616	2,618	2,617
Earnings per share:	'	'	'	'
Basic (in dollars per share)	$0.06	$0.14	$0.13	$0.23
Diluted (in dollars per share)	$0.06	$0.14	$0.13	$0.23

SUMMARY_OF_SIGNIFICANT_ACCOUNT4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	6 Months Ended
In Thousands, unless otherwise specified	Jan. 31, 2014
Summary Of Significant Accounting Policies [Line Items]	'
Dilutive Securities Outstanding	4
Restricted Stock [Member]	'
Summary Of Significant Accounting Policies [Line Items]	'
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	289
Warrant [Member]	'
Summary Of Significant Accounting Policies [Line Items]	'
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	20

COMMITMENTS_Details

COMMITMENTS (Details) (Bellevue, WA [Member], USD $)	Jan. 31, 2014
In Thousands, unless otherwise specified
Bellevue, WA [Member]	'
Lease commitments for the year ending July 31,	'
2014	$84	[1]
2015	127
Total	$211
[1]	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.

COMMITMENTS_Details_1

COMMITMENTS (Details 1) (Telecommunications and Data Communications [Member], USD $)	Jan. 31, 2014
In Thousands, unless otherwise specified
Telecommunications and Data Communications [Member]	'
Year ending July 31,	'
2014	$8	[1]
2015	2
Total	$10
[1]	The expected payments for 2014 reflect future minimum payments for the six-month period from February 1, 2014 to July 31, 2014.

COMMITMENTS_Details_Textual

COMMITMENTS (Details Textual) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Commitments [Line Items]	'	'	'	'
Operating Leases, Rent Expense	$40	$49	$81	$91

INCOME_TAXES_Details_Textual

INCOME TAXES (Details Textual) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Income Taxes [Line Items]	'	'	'	'
Income tax expense	$78	$169	$163	$286
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%	35.00%	35.00%

STOCKHOLDERS_EQUITY_Details_Te

STOCKHOLDERS' EQUITY (Details Textual) (USD $)	6 Months Ended		12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013	Jul. 31, 2010
Stock Repurchase Program, Authorized Amount	'	'	$2,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$0.01	'	'
Preferred Stock, Shares Authorized (in shares)	5,000	'	'
Preferred Stock, Shares Issued (in shares)	0	'	'
Preferred Stock, Shares Outstanding (in shares)	0	'	'
Stock Repurchased During Period, Value	$96	$26	'
Stock Repurchased During Period, Shares	24	7	'

STOCKBASED_PAYMENTS_Details_Te

STOCK-BASED PAYMENTS (Details Textual) (USD $)	6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jan. 31, 2014	Jan. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Stock based compensation	$235	$121
Equity Incentive 2004 Plan [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	278	'
Equity Incentive 2014 Plan [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	400	'
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	360	'
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	15	'
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$985	'
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	'6 years	'
Executive Officer [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	25	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$3.95	'
Outside Directors [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	15	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$4.10	'

SUBSEQUENT_EVENTS_Details_Text

SUBSEQUENT EVENTS (Details Textual) (Subsequent Event [Member], USD $)	0 Months Ended
	Feb. 28, 2014
Subsequent Event [Member]	'
Subsequent Event [Line Items]	'
Dividends Payable, Amount Per Share	$0.05
Dividends Payable, Date to be Paid	20-Mar-14
Dividends Payable, Date of Record	10-Mar-14