Astea International (ATEA) 10-Q 15 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	3 Months Ended
	Mar. 31, 2015	Jun. 30, 2014
Document and Entity Information:
Entity Registrant Name	Astea International Inc
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Entity Central Index Key	945989
Current Fiscal Year End Date	-19
Entity Common Stock, Shares Outstanding	3,587,299
Entity Public Float		$2,189,926
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Income
Software license fees	$1,140,000	$463,000
Subscriptions	256,000	73,000
Services and maintenance	4,464,000	4,303,000
Total revenues	5,860,000	4,839,000
Cost of software license fees	1,031,000	856,000
Cost of services and maintenance	3,171,000	2,997,000
Total cost of revenues	4,202,000	3,853,000
Gross Profit	1,658,000	986,000
Product Development	503,000	373,000
Sales and marketing	975,000	1,018,000
General and administrative	919,000	812,000
Total operating expenses	2,397,000	2,203,000
Income (loss) from operations	-739,000	-1,217,000
Interest (expense) income	-42,000	-67,000
Income (Loss) before income tax	-781,000	-1,284,000
Income tax expense	12,000	83,000
Net (loss) income	-793,000	-1,261,000
Net income (loss) allocable to common stockholders	($918,000)	($1,667,000)
Basic net earingings (loss) per share allocable to common stockholders	($0.26)	($0.92)
Diluted net earnings (loss) per share allocable to common stockholders	($0.26)	($0.92)
Weighted average shares outstanding used in computing basic net earnings (loss) per share	3,587,000	3,587,000
Weighted average shares outstanding used in computing diluted net earnings (loss) per share	3,587,000	3,587,000

Consolidated_Balance_Sheet

Consolidated Balance Sheet (USD $)	Mar. 31, 2015		Dec. 31, 2013
Current assets:
Cash and cash equivalents	$1,389,000		$1,349,000
Investments available for sale	13,000		13,000
Receivables, net	5,661,000	[1]	4,084,000	[1]
Prepaid expenses and other	507,000		488,000
Total current assets	7,570,000		5,934,000
Property and equipment, net	169,000		176,000
Intangibles, net	62,000		96,000
Capitalized software, net	4,120,000		4,697,000
Goodwill	1,538,000		1,538,000
Restricted cash	120,000		126,000
Other assets	98,000		98,000
Total Assets	13,677,000		12,665,000
Current liabilities:
Line of credit from director/officer, current	150,000		150,000
Accounts payable and accrued expenses	2,756,000		2,130,000
Deferred revenues	8,083,000		8,179,000
Total current liabilities	10,989,000		10,459,000
Long-term liabilities:
Line of credit from Silicon Valley Bank	1,424,000		1,004,000
Long-term accrued expenses	206,000		213,000
Deferred tax liability	383,000		374,000
Deferred revenue- long term	1,341,000		394,000
Total Liabilities	14,343,000		12,444,000
STOCKHOLDERS' EQUITY:
Convertible redeemable preferred stock,	16,000	[2]	16,000	[3]
Common stock	36,000	[4]	36,000	[4]
Additional paid-in capital	32,638,000		32,716,000
Accumulated deficit	-32,274,000		-31,481,000
Accumulated other comprehensive loss	-874,000		-858,000
Treasury stock at cost	208,000	[5]	208,000	[5]
Total stockholders' equity	-666,000		221,000
Total liabilities and stockholders' equity	$13,677,000		$12,665,000
[1]	net of allowance of $73,000
[2]	$.01 par value, shares authorized 5,000,000; issued and outstanding Series A 826,000 and oustanding Series B 797,000
[3]	$.01 par value, shares authorized 5,000,000; issued and outstanding Series A 826,000
[4]	$.01 par value, 25,000,000 shares authorized; issued 3,629,000 and outstanding 3,587,000
[5]	42,000 shares

Consolidated_Statements_of_Com

Consolidated Statements of Comprehensive Income (Loss) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprhensive Income (loss)
Net (loss) income	($793,000)	($1,261,000)
Foerighn currency translation adjustment	-16,000	-25,000
Other Comprehensive income (loss)	($809,000)	($1,286,000)

Consolidated_Statement_of_Stoc

Consolidated Statement of Stockholders' Equity (USD $)	Convertible redeemable preferred stock	Common stock	Additional paid-in-capital	Accumulated deficit	Accumulated other comprehensive income	Treasury Stock	Total
Stockholders' Equity at Dec. 31, 2013							$221,000
Dividend payments on preferred stock, Series A and B			-370,000				-370,000
Stock based compensation expense			156,000				156,000
Comprehensive income (loss)					53,000		53,000
Net (loss) income				-3,447,000
Stockholders' Equity at Dec. 31, 2014	16,000	36,000	32,716,000	-31,481,000	-858,000	-208,000	221,000
Dividend payments on preferred stock, Series A and B			-110,000				-110,000
Stock based compensation expense			32,000				32,000
Comprehensive income (loss)					-16,000		-16,000
Net (loss) income				-793,000			-793,000
Stockholders' Equity at Mar. 31, 2015	$16,000	$36,000	$32,638,000	($32,274,000)	($874,000)	($208,000)	($666,000)

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Cash flows from operating activities:
Net (loss) income	($793,000)	($1,261,000)
Depreciation and amortization	1,066,000	931,000
Decrease in allowance for doubtful accounts		-78,000
Stock-based compensation	32,000	48,000
Deferred income tax	10,000	-5,000
Changes in operating assets and liabilities:
Receivables	-1,515,000	634,000
Prepaid expenses and other	-27,000	-91,000
Accounts payable and accrued expenses	640,000	-288,000
Deferred revenues	883,000	459,000
Other assets		-1,000
Net cash (used in) provided by operating activities	296,000	348,000
Cash flows from investing activities:
Sale of short term investments		5,000
Purchases of property and equipment	-22,000
Capitalized software development costs	-426,000	-681,000
Change in restricted cash	6,000	-6,000
Net cash used in investing activities	-442,000	-682,000
Cash flows from financing activities
Dividend payments on preferred stock, Series A and B	-110,000	-75,000	-370,000
Proceeds from line of credit from Silicon Valley Bank	420,000
Deferred financing costs		-12,000
Net cash provided by (used in) financing activities	310,000	-87,000
Effect of exchange rate changes on cash	-124,000	2,000
Net increase (decrease) in cash and cash equivalents	40,000	-419,000
Cash and cash equivalents, beginning of period	1,349,000	1,111,000	1,111,000
Cash and cash equivalents, end of period	$1,389,000	$692,000	$1,349,000

Organization_Consolidation_and

Organization, Consolidation and Presentation of Financial Statements	3 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements:
Consolidation, Policy	BASIS OF PRESENTATION
	The consolidated financial statements at March 31, 2015 and for the three month periods ended March 31, 2015 and 2014 of Astea International Inc. and subsidiaries (“Astea” or the "Company") are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods.  The following unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the SEC for quarterly reports on Form 10-Q.  It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto, included in the Company’s latest annual report (Form 10-K) and our Form 10-Q’s for the quarters ended March 31, 2014, June 30, 2014, and September 30, 2014. The interim financial information presented is not necessarily indicative of results expected for the entire year ending December 31, 2015.
Reclassification, Policy	Reclassification
	Certain reclassifications to the balance sheet related to long and short-term liabilities and subscriptions revenue were made to prior period financial statements to conform to the current presentation.
Additional Financial Information Disclosure	Operating Matters and Liquidity
	The Company has a history of net losses.  In the first quarter of 2015, the Company generated a net loss of $793,000 compared to a net loss of $1,261,000 generated in the same quarter in 2014.  Further, at March 31, 2015, the Company had a working capital ratio of .69:1, with cash and cash equivalents and investments available for sale of $1,402,000.  Moreover, the Company expects to continue to incur additional operating expenses for research and development and invest in software development costs to achieve its projected revenue growth.  We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our net loss.  The Company believes that it has sufficient cash to meet its anticipated operating cash needs for at least the next 12 months. However, projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our net (loss) income.  However, due to the Company’s planned conversion to a subscription-based software delivery model it was determined that the Company needed additional liquidity. Accordingly, in 2014, the Company entered into a new line of credit agreement, and has an existing line of credit from its Chief Executive Officer, both of which are described in Note 6. As of March 31, 2015 the Company owed $150,000 against the line of credit from its Chief Executive Officer and $1,424,000 against the line of credit from Silicon Valley Bank (“SVB”).  The availability under the SVB line of credit is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable, as of March 31, 2015 the availability under the line of credit was $1,674,000.  Subsequent to the expiration of the line of credit, the CEO has committed to support the Company financially for up to $1,000,000 through April 1, 2016.  The Company has projected revenues for 2015 that management believes will provide sufficient funds to sustain its continuing operations.
	The Company was in compliance with the financial covenants for both lines of credit with the Chief Executive Officer and SVB as of March 31, 2015.
	In the event the Company does not meet its financial covenants in 2015 and SVB does not extend a waiver or forbearance agreement, and the Company believes that it does not have adequate liquidity to operate, if necessary, the Company will implement a cost cutting plan that reduces all its expenditures to the appropriate level that matches its operating cash flows.
	The Company does not plan any significant capital expenditures in 2015 other than to replace its existing capital equipment as it becomes obsolete. The Company’s plans for investment in product development are expected to be similar to prior years.

Accounting_Changes_and_Error_C

Accounting Changes and Error Corrections	3 Months Ended
	Mar. 31, 2015
Accounting Changes and Error Corrections:
Immaterial Error Correction	Correction of an Immaterial Error
	The Company identified an immaterial error related to its classification on the consolidated balance sheet for an accrued liability that is due more than a year after the balance sheet date. The Company determined that in accounting for this accrued liability, it did not properly classify it in long-term liabilities on the consolidated balance sheet.  The Company reviewed the impact of this error on the prior periods in accordance with SEC guidelines on materiality of the error from a qualitative and quantitative perspective and determined that the error was not material to the prior period consolidated financial statements.  However, the Company has corrected the balance sheet for the year ended December 31, 2014 by increasing the long-term accrued expenses and decreasing the accounts payable and accrued expenses in current liabilities by $213,000.  The impact on the error increased our working capital ratio from .56:1 to .57:1 as of December 31, 2014.  In addition, the error had no impact on our financial bank covenants as of December 31, 2014.
New Accounting Pronouncements and Changes in Accounting Principles	NEW ACCOUNTING GUIDANCE
	In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2017 and early adoption is not permitted. We anticipate this standard may have a material impact on our consolidated financial statements, and we are currently evaluating its impact.
	In August 2014, FASB issued Preparation of Financial Statements - Going Concern, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Presentation of Financial Statements--Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations, however, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure. We anticipate this update will not have a material impact on our consolidated financial statements.

Risks_and_Uncertainties

Risks and Uncertainties	3 Months Ended
	Mar. 31, 2015
Risks and Uncertainties:
Concentration Risk Disclosure	1.       CONCENTRATION OF CREDIT RISK
	Financial instruments, which potentially subject the Company to credit risk, consist of cash equivalents and accounts receivable.  The Company’s policy is to limit the amount of credit exposure to any one financial institution.  The Company places investments with financial institutions evaluated as being creditworthy, or investing in short-term money market which are exposed to minimal interest rate and credit risk.  Cash balances are maintained with several banks.  Certain operating accounts may exceed the Federal Deposit Insurance Corporation (FDIC) limits.
	The Company sells its products to customers involved in a variety of industries including information technology, medical devices and diagnostic systems, industrial controls and instrumentation and retail systems.  While the Company does not require collateral from its customers, it does perform continuing credit evaluations of its customers’ financial condition.

Investments_Debt_and_Equity_Se

Investments, Debt and Equity Securities	3 Months Ended
	Mar. 31, 2015
Investments, Debt and Equity Securities:
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure	INVESTMENTS AVAILABLE FOR SALE
	Investments that the Company designated as available-for-sale are reported at fair value, with unrealized gains and losses, net of tax, recorded in accumulated other comprehensive loss.  The Company bases the cost of the investment sold on the specific identification method.  The available-for-sale investments consist of mutual funds.  If an available-for-sale investment is other than temporarily impaired, the loss is charged to either earnings or stockholders’ (deficit) equity depending on our intent and ability to retain the security until we recover the full cost basis and the extent of the loss attributable to the creditworthiness of the issuer.
	On March 31, 2015 and December 31, 2014 the fair value for all of the Company’s investments was determined based upon quoted prices in active markets for identical assets (Level 1).
	The carrying amount, gross unrealized holding gains, gross unrealized holding losses, and fair value of available-for-sale securities by major security type and class of security at March 31, 2015 and December 31, 2014 were as follows:
			Aggregate		Gross unrealized		Gross unrealized holding (losses)		Aggregate
			cost basis		holding gains				fair value
	At March 31, 2015
	Available-for-sale:
	Mutual Funds	$	13,000	$	-	$	-	$	13,000
	At December 31, 2014
	Available-for-sale:
	Mutual Funds	$	13,000	$	-	$	-	$	13,000
	The aggregate fair value of mutual funds as of March 31, 2015 and December 31, 2014 was $13,000. As of March 31, 2015 and December 31, 2014 there were no mutual funds that had unrealized losses.  The mutual funds contain investments that seek a high level of current income. The funds normally invest at least 80% of net assets, plus the amount of any borrowings for investment purposes, in floating or adjustable rate senior loans of any maturity or credit quality, including those rated below investment grade or determined by the fund's advisor to be of comparable quality.

Debt

Debt	3 Months Ended
	Mar. 31, 2015
Debt:
Debt Disclosure	LINE OF CREDIT
	Line of Credit from Director/ Officer- Related Party Transaction
	On May 29, 2013, the Company entered into a Revolving Loan Agreement and associated Revolving Promissory Note (collectively the “Loan Documents”) with Zack Bergreen, the Company’s Chief Executive Officer.  Pursuant to the Loan Documents, Mr. Bergreen provided an unsecured $2,000,000 revolving line of credit to the Company (the “Line of Credit”).  Amounts outstanding under the Line of Credit bear interest at a rate of 7% per annum, with interest payable monthly.  The maturity date of the Line of Credit is May 29, 2015.   The Company may pay all amounts outstanding and terminate the Loan Documents prior to that time without any penalties.  The Loan Documents contain customary covenants, default and other provisions.  The Loan Documents were negotiated and approved by the Audit Committee of the Company’s Board of Directors.  Borrowings under the Line of Credit are subject to the Audit Committee’s approval.   On March 27, 2014 the Company amended its original Loan Documents with Mr. Bergreen.  Pursuant to the amended Loan Documents, Mr. Bergreen provided an additional $1,000,000 unsecured revolving line of credit to the Company to increase the total available line of credit to $3,000,000.   No other terms or conditions to the original agreement were changed.  On June 20, 2014, the Company converted $2,000,000 of outstanding principal owed to Mr. Bergreen under the Loan Documents in exchange for 797,000 shares of Series B Preferred Stock (see Note 8).  In addition, during the second quarter of 2014, the Company repaid $250,000 of principal against the line of credit owed to Mr.  Bergreen. On August 12, 2014, the Board of Directors approved a reduction in the Line of Credit from Mr. Bergreen from $3,000,000 to $1,000,000.   As of March 31, 2015 and December 31, 2014, the Company owed $150,000 against the line of credit and classified it as current on the balance sheet due to the date of maturity. In addition, the Company incurred $4,000 and $37,000 of interest expense on this line of credit for the three months ended March 31, 2015 and 2014, respectively.  The Company was in compliance with the financial covenants of this agreement as of March 31, 2015 and December 31, 2014.
	Line of Credit from Silicon Valley Bank
	On June 13, 2014, the Company entered into a Loan and Security Agreement with SVB (the “Prior Loan Agreement”).  The Prior Loan Agreement established a revolving credit facility for the Company in the principal amount of up to $3,000,000 (the “Prior Revolving Facility”).  Availability under the Prior Revolving Facility is tied to a borrowing base formula that is based on 80% of the Company’s eligible accounts receivable.  Advances under the Prior Revolving Facility may be repaid and reborrowed in accordance with the Prior Loan Agreement.  No advances were made at closing of the loan. Pursuant to the Prior Loan Agreement, the Company agreed to pay SVB the outstanding principal amount of all borrowings, the unpaid interest thereon, and all other obligations incurred with respect to the Prior Loan Agreement on June 13, 2016.
	On December 18, 2014, the Company and SVB amended and restated the Prior Loan Agreement to reduce the aggregate borrowing amount and revise certain other terms of the Prior Loan Agreement and the Prior Revolving Facility (the “Loan Agreement”).
	The Loan Agreement established a new revolving credit facility for the Company in the principal amount of up to $2,000,000 (the “Revolving Facility”).  Availability under the Revolving Facility is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable.  Advances under the Revolving Facility (the “Advances”) may be repaid and reborrowed in accordance with the Loan Agreement.  No advances were made at closing.  Pursuant to the Loan Agreement, the Company agreed to pay to SVB the outstanding principal amount of all Advances, the unpaid interest thereon, and all other obligations incurred with respect to the Loan Agreement on December 18, 2016.  Interest will accrue on the unpaid principal balance of the Advances at a floating per annum rate equal to the greater of: (i) 2.25% above the prime rate (which may be reduced to 2.00% above the prime rate for every month in which the Company maintain an “adjusted quick ratio” of at least 1.50:1) or (ii) 5.25%; provided, that the minimum interest amount due per month shall not be less than $2,000.
	If the Company is not streamline eligible at the end of any month, all outstanding advances plus accrued interest are immediately due and payable.  Provided that no event of default exists, SVB may, in its good faith business discretion, refinance the outstanding borrowings with Advances based on specific eligible accounts.  During an event of default the rate of interest will increase 5% above the otherwise applicable rate, until such event of default is cured or waived.  All accrued and unpaid interest is payable monthly on the last calendar day of each month.
	Subject to certain exceptions, the Loan Agreement contains covenants prohibiting the Company from, among other things: (a) conveying, selling, leasing, transferring or otherwise disposing of their properties or assets; (b) liquidating or dissolving; (c) engaging in any business other than the business currently engaged in or reasonably related thereto; (d) entering into any merger or consolidation, or acquiring all or substantially all of the capital stock or property of another entity; (e) becoming liable for any indebtedness; (f) allowing any lien or encumbrance on any of their property; and (g) paying any dividends (other than dividends on outstanding convertible preferred stock); and (i) making payment on subordinated debt.  Further, the Company must maintain a minimum “adjusted quick ratio,” tested as of the last day of each month, of at least 1.25:1.00.  The adjusted quick ratio is the ratio of (a) the Company’s’ consolidated, unrestricted cash plus net booked accounts receivable to (b) the Company’s liabilities to SVB plus, without duplication, the aggregate amount of the Company’s’ liabilities that mature within 1 year, minus the current portion of deferred revenue.
	The Revolving Facility is secured by a first priority perfected security interest in substantially all of the assets of the Company, excluding the intellectual property of the Company.  The Loan Agreement contains a negative covenant prohibiting the Company from granting a security interest in their intellectual property to any party.
	As of March 31, 2015 and December 31, 2014 the Company borrowed $1,424,000 and $1,004,000, respectively against the Revolving Facility and classified it as a long-term liability on the balance sheet. The Company incurred $38,000 of interest expense to SVB for the three months ended March 31, 2015. The Company was in compliance with the covenants of this agreement as of March 31, 2015 and December 31, 2014.

Equity

Equity	3 Months Ended
	Mar. 31, 2015
Equity:
Preferred Stock	Convertible Preferred Stock
	Series A
	On September 24, 2008 the Company issued 826,000 shares of Series-A Convertible Preferred Stock (“Series A Preferred Stock”) to its Chief Executive Officer at a price of $3.63 per share for a total of $3,000,000.  Dividends accrue daily on the Series A Preferred at a rate of 10% and are payable only when, and if, declared by the Company’s Board of Directors, quarterly in arrears. The Company paid $75,000 and accrued $75,000 in Series-A preferred stock dividends for the three months ended March 31, 2015.
	The Series A Preferred Stock may be converted into common stock at the rate of one share of common for each share of Series A Preferred Stock.   Since September 2010, the Company has had certain rights to cause conversion of all of the shares of Series A Preferred Stock outstanding.  Since September 2012, the Company may redeem, subject to board approval, all of the shares of Series A Preferred Stock then outstanding at a price equal to the greater of (i) 130% of the purchase price plus all accrued and unpaid dividends and (ii) the fair market value of such number of shares of common stock which the holder of the Series A Preferred Stock would be entitled to receive had the redeemed Series A Preferred Stock been converted immediately prior to the redemption. In the event of a liquidation of the Company, the holder of the Series A and (Series B) preferred stock shall be entitled to receive in preference to the holders of the common stock, the original amount invested in the preferred stock plus any declared but unpaid dividends.
	The Company reports the Series A Preferred Stock on the Company’s consolidated balance sheet within stockholders’ (deficit) equity.
	Series B
	On June 20, 2014, the Company  issued 797,000 of Series-B Convertible Preferred Stock (“Series B Preferred Stock”)  to  its Chief Executive Officer at a price of $2.51 per share in exchange for the cancellation of  $2,000,000 of outstanding principal owed to its Chief Executive Officer under a certain Revolving Promissory Note dated  March 26, 2014.  The Audit Committee of the Board of Directors of the Company negotiated and unanimously approved the transaction.
	The per share price was determined as the greater of (i) the average closing bid price of a share of the Company’s common stock reported by Nasdaq for the 30 trading days ending two trading days prior to the date of the Series B Preferred Stock agreement and (ii) 10% above the closing bid price of the Company’s common stock on the date of the Series B Preferred Stock agreement.  Accordingly, the per share price was set at $2.51 (“Purchase Price”), corresponding to 10% above the closing bid price on June 20, 2014.  Pursuant to the terms of the Series B Preferred Stock agreement, the Company also granted its Chief Executive Officer certain registration rights in the event the Company elects to file a registration statement with the Securities and Exchange Commission relating to an offering of its equity securities under the Securities Act of 1933, as amended.
	The Series B Preferred Stock may be converted into shares of common stock on a one-to-one ratio, subject to customary anti-dilution provisions.  The Series B Preferred Stock pays a quarterly dividend, which accrues at an annual rate of 7%, subject to certain rate adjustments as provided for under the agreement, until June 20, 2016 and at an annual rate of 10% thereafter.  The Company’s Chief Executive Officer may convert up to 50% of the Series B shares into shares of common stock at any time until June 20, 2015, and thereafter may convert 100% of his shares of the Series B Preferred Stock into shares of common stock.  Following June 20, 2016, each and every then outstanding share of Series B Preferred Stock is subject to mandatory and automatic conversion into shares of common stock if the closing price of the common stock as reported by the principal exchange or quotation system on which such Common Stock is traded or reported exceeds 300% of the then current conversion price for 30 consecutive trading days.  The Company may redeem up to 50% of the shares of the outstanding Series B Preferred Stock at any time on or prior to December 17, 2014 at a price equal to 110% of the Purchase Price, plus an amount equal to any unpaid and accrued dividends. At any time after December 17, 2014 and prior to June 20, 2015, the Company may redeem up to 50% of the shares of the outstanding Series B Preferred Stock minus the number of shares redeemed in any First Partial Redemption, at a price equal to 130% of the Purchase Price, plus an amount equal to any unpaid and accrued dividends.  Additionally, after June 20, 2015, the Company may redeem all of the outstanding shares of the Series B Preferred Stock issued at a price per share equal to 300% of the purchase price.  The Series B Preferred Stock ranks senior to the Common Stock and on parity with the Company’s Series A Convertible Preferred Stock. In the event of a liquidation of the Company, the holder of the Series B and (Series A) preferred stock shall be entitled to receive in preference to the holders of the common stock, the original amount invested in the preferred stock plus any declared but unpaid dividends.
	The Company reports the Series B Preferred Stock on the Company’s consolidated balance sheet within stockholders’ (deficit) equity at the amount of net proceeds received less an imputed dividend cost. The imputed dividend cost of $110,000 was the result of the preferred stock having a dividend rate during the first two years after its issuance (7%) that is lower than the rate that becomes fixed (10%) after the initial two year period. The imputed dividend cost of $110,000 will be amortized over the first two years from the date of issuance and is based upon the present value of the dividend discount using a 10% yield. The Company amortized $15,000 related to the imputed dividend cost for the three months ended March  31, 2015. The Company paid $35,000 and accrued $35,000 in Series-B preferred stock dividends for the three months ended March 31, 2015.

Compensation_Related_Costs_Sha

Compensation Related Costs, Share Based Payments	3 Months Ended
	Mar. 31, 2015
Compensation Related Costs, Share Based Payments:
Disclosure of Compensation Related Costs, Share-based Payments	Share-Based Awards
	The Company estimates the fair value of stock options granted using the Black-Scholes-Merton (Black-Scholes) option-pricing formula and amortizes the estimated option value using an accelerated amortization method where each option grant is split into tranches based on vesting periods.  The Company’s expected term represents the period that the Company’s share-based awards are expected to be outstanding and was determined based on historical experience regarding similar awards, giving consideration to the contractual terms of the share-based awards and employee termination data.  Executive level employees who hold a majority of options outstanding, and non-executive level employees each have similar historical option exercise and termination behavior and thus were grouped for valuation purposes.  The Company’s expected volatility is based on the historical volatility of its traded common stock and places exclusive reliance on historical volatilities to estimate our stock volatility over the expected term of its awards.  The Company has historically not paid dividends to common stockholders and has no foreseeable plans to issue dividends.  The risk-free interest rate is based on the yield from the U.S. Treasury zero-coupon bonds with an equivalent term.
	As of March 31, 2015, the total unrecognized compensation cost related to non-vested options amounted to $213,000, which is expected to be recognized over the options’ average remaining vesting period of 2.61 years.  No income tax benefit was realized by the Company in the three months ended March 31, 2015.
	Under the Company’s stock option plans, option awards generally vest over a four year period of continuous service and have a 10 year contractual term.  The fair value of each option is amortized on a straight-line basis over the option’s vesting period.  The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model.
	There were 110,000 and 80,000 options granted during the first three months of 2015 and 2014, respectively.
	Activity under the Company’s stock option plans for the three months ended March 31, 2015 is as follows:
		OPTIONS OUTSTANDING
					Weighted Average Exercise Price Per Share
			Shares
	Balance, December 31, 2014		689,000		$	3.77
	Granted		110,000			1.26
	Canceled		(23,000	)		4.19
	Expired		(31,000	)		7.28
	Balance, March 31, 2015	745,000	$	3.25
	The following table summarizes outstanding options under the Company’s stock option plans as of March 31, 2015:
			Weighted Average Exercise Price Per Share	Weighted Average Remaining Contractual Term (in years)
		Number of Shares			Aggregate Intrinsic Value
	Outstanding Options	745,000	$3.25	5.96	$-
	Ending Vested and Exercisable	497,000	$3.83	4.42	$-
	Options Vested and Expected to Vest	647,000	$3.45	5.45	$-

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2015
Income Taxes:
Income Tax Disclosure	INCOME TAX
	The Company has identified its federal tax return and its state returns in Pennsylvania and California as “major” tax jurisdictions.  Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.  The Company’s evaluation was performed for tax years ended 2009 through 2014, the only periods subject to examination. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.
	The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before income taxes.  Penalties are recorded in general and administrative expenses and interest paid or received is recorded in interest expense or interest income, respectively, in the statement of operations.  For the first three months of 2015, there was no interest or penalties related to the settlement of any audits.
	At March 31, 2015, the Company maintained a 100% valuation allowance for its remaining deferred tax assets, based on the uncertainty of the realization of future taxable income.

Earnings_Per_Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2015
Earnings Per Share:
Earnings Per Share	LOSS PER SHARE
	Loss per share is computed on the basis of the weighted average number of shares and common stock equivalents outstanding during the period.  In the calculation of diluted loss per share, shares outstanding are adjusted to assume conversion of the Company’s non-interest bearing convertible stock and exercise of options as if they were dilutive.  In the calculation of basic loss per share, weighted average numbers of shares outstanding are used as the denominator.
	The Company had net loss allocable to common stockholders for the three months ended March 31, 2015 and 2014.  Loss per share is computed as follows:
		Three
		Months Ended
		March 31,
			2015			2014
	Numerator:
	Net loss available to common shareholders	$	(918,000	)	$	(1,336,000	)
	Denominator:
	Weighted average shares used to compute net loss available
	to common shareholders per  common share basic and dilutive		3,587,000			3,587,000
			(0.26	)	$		)
	Basic and dilutive net loss per share to common shareholder	$				(0.37
	All options outstanding to purchase shares of common stock and shares of common stock issued on the assumed conversion of the eligible preferred stock were excluded from the diluted loss per common share calculation for the three months ended March 31, 2015 and 2014, as the inclusion of these options would have been antidilutive.

Segment_Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2015
Segment Reporting:
Segment Reporting Disclosure	GEOGRAPHIC SEGMENT DATA
	The Company and its subsidiaries are engaged in the design, development, marketing and support of its service management software solutions.  Substantially all revenues result from the license of the Company’s software products and related professional services and customer support services.  The Company’s chief executive officer reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance.  Accordingly, the Company considers itself to have three reporting segments as follows:
	For the three months ended March 31,	2015			2014
	Revenues
	Software license fees
	United States	$	412,000		$	20,000
			412,000			20,000
	Total United States software license fees
	Europe		630,000			443,000
	Asia/Pacific		98,000			-
			728,000			443,000
	Total foreign software license fees
	Total software license fees		1,140,000			463,000
	Subscriptions
	United States		209,000			73,000
			209,000			73,000
	Total United States subscriptions
	Europe		-			-
	Asia/Pacific		47,000			-
			47,000			-
	Total foreign subscriptions
	Total subscriptions		256,000			73,000
	Services and maintenance
	United States		2,931,000			2,696,000
	Total United States services and maintenance revenue		2,931,000			2,696,000
	Europe		722,000			927,000
	Asia/Pacific		811,000			680,000
	Total foreign services and maintenance revenue		1,533,000			1,607,000
			4,464,000			4,303,000
	Total services and maintenance revenue
		$	5,860,000		$	4,839,000
	Total revenue
	Net (loss) income
	United States	$	(389,000	)	$	(1,018,000	)
	Europe		(201,000	)		138,000
	Asia/Pacific		(203,000	)		(381,000	)
	Net loss	$	(793,000	)	$	(1,261,000	)

Fair_Value_Measures_and_Disclo

Fair Value Measures and Disclosures	3 Months Ended
	Mar. 31, 2015
Fair Value Measures and Disclosures:
Fair Value Disclosures	FAIR VALUE OF FINANCIAL INSTRUMENTS
	The Company defines the fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
	The Company accounts for certain assets and liabilities at fair value.  The hierarchy below lists three levels of fair value based on the extent to which inputs in measuring fair value are observable in the market.  We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.  These levels are:
	1.     Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access.
	2.     Level 2 - Valuations based on inputs on other than quoted prices included within Level 1, for which all significant inputs are observable, either directly or indirectly.
	3.     Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The inputs reflect the Company’s assumptions about the assumptions a market participant would use in pricing the asset.
	The carrying amounts of cash and cash equivalents, trade accounts receivable, other assets, trade accounts payable and accrued expenses at face value approximate fair value because of the short nature of these instruments.
	Investments classified as available for sale are measured using quoted market prices multiplied by the quantity held where quoted market prices were available.
	Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. Fair value is calculated based on publicly available market information or other estimates determined by management. We employ a systematic methodology on a quarterly basis that considers available quantitative and qualitative evidence in evaluating potential impairment of our investments. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality, the duration and extent to which the fair value is less than cost, and for equity securities, our intent and ability to hold, or plans to sell, the investment. For fixed income securities, we also evaluate whether we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery. We also consider specific adverse conditions related to the financial health of and business outlook for the investee, including industry and sector performance, changes in technology, and operational and financing cash flow factors. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense) and a new cost basis in the investment is established.

Uncategorized_Items

Uncategorized Items	1/1/2014 - 3/31/2014
	USD ($)
[us-gaap_OtherComprehensiveIncomeLossTax]	-1,286,000