Astea International (ATEA) 10-Q 15 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 10, 2019
Document and Entity Information:
Entity Registrant Name	ASTEA INTERNATIONAL INC
Entity Central Index Key	0000945989
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		3,616,549
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	[1]
Current assets:
Cash and cash equivalents	$ 1,440,000	$ 1,276,000
Accounts receivables, net of reserves allowance of $92,000 (unaudited) and $92,000, respectively	5,047,000	6,294,000
Prepaid expenses and other current assets	505,000	429,000
Deferred hosting costs	1,178,000	992,000
Total current assets	8,170,000	8,991,000
Property and equipment, net	120,000	89,000
Capitalized software development costs, net	4,751,000	4,599,000
Restricted cash	73,000	72,000
Other long-term assets	524,000	517,000
Right-of-use assets	2,849,000	0
Total assets	16,487,000	14,268,000
Current liabilities:
Accounts payable and accrued expenses	4,276,000	4,137,000
Current lease liabilities	848,000	0
Deferred revenues	10,039,000	10,521,000
Total current liabilities	15,163,000	14,658,000
Long-term liabilities:
Borrowings under line of credit	2,256,000	2,669,000
Long-term accrued expenses	335,000	323,000
Deferred tax liability	49,000	49,000
Deferred revenues, net of current portion	976,000	763,000
Lease liabilities, net of current portion	2,001,000	0
Total long-term liabilities	5,617,000	3,804,000
Commitments and contingencies
Stockholders' deficit:
Common stock $.01 par value, 25,000,000 shares authorized; shares issued 3,659,000 and outstanding 3,617,000	37,000	37,000
Additional paid-in-capital	31,347,000	31,455,000
Accumulated deficit	(34,289,000)	(34,344,000)
Accumulated other comprehensive loss	(1,196,000)	(1,150,000)
Treasury stock at cost, 42,000 common shares	(208,000)	(208,000)
Total stockholders' deficit	(4,293,000)	(4,194,000)
Total liabilities and stockholders' deficit	16,487,000	14,268,000
Series A Convertible Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	8,000	8,000
Series B Convertible Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	$ 8,000	$ 8,000
[1]	Derived from audited financial statements.

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Accounts receivable, reserves allowance	$ 92,000	$ 92,000
Stockholders' deficit:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	25,000,000	25,000,000
Common stock, shares issued (in shares)	3,659,000	3,659,000
Common stock, shares outstanding (in shares)	3,617,000	3,617,000
Treasury stock at cost (in shares)	42,000	42,000
Series A Convertible Preferred Stock [Member]
Stockholders' deficit:
Preferred stock, shares issued (in shares)	826,000	826,000
Preferred stock, shares outstanding (in shares)	826,000	826,000
Series B Convertible Preferred Stock [Member]
Stockholders' deficit:
Preferred stock, shares issued (in shares)	797,000	797,000
Preferred stock, shares outstanding (in shares)	797,000	797,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Revenues	$ 6,620,000	$ 6,696,000
Costs of revenues:
Cost of revenues	4,347,000	4,486,000
Gross Profit	2,273,000	2,210,000
Operating Expenses:
Product development	163,000	214,000
Sales and marketing	976,000	1,001,000
General and administrative	1,001,000	948,000
Total operating expenses	2,140,000	2,163,000
Income from operations	133,000	47,000
Interest expense, net	74,000	35,000
Income before income taxes	59,000	12,000
Income tax expense	4,000	6,000
Net income	55,000	6,000
Preferred dividend	125,000	125,000
Net loss allocable to common stockholders	$ (70,000)	$ (119,000)
Basic and diluted loss per share allocable to common stockholders (in dollars per share)	$ (0.02)	$ (0.03)
Weighted average shares outstanding used in computing basic and diluted loss per common share (in shares)	3,617,000	3,594,000
Software License Fees [Member]
Revenues:
Revenues	$ 700,000	$ 419,000
Costs of revenues:
Cost of revenues	702,000	729,000
Subscriptions [Member]
Revenues:
Revenues	1,226,000	828,000
Costs of revenues:
Cost of revenues	255,000	234,000
Services and Maintenance [Member]
Revenues:
Revenues	4,694,000	5,449,000
Costs of revenues:
Cost of revenues	$ 3,390,000	$ 3,523,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract]
Net income	$ 55,000	$ 6,000
Other comprehensive loss:
Foreign currency translation adjustment	(46,000)	(104,000)
Comprehensive income (loss)	$ 9,000	$ (98,000)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Preferred Stock [Member]Series A Convertible Preferred Stock [Member]	Preferred Stock [Member]Series B Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In-Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Total
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect from change in accounting	$ 0	$ 0	$ 0	$ 0	$ 0	$ 630,000	$ 0	$ 630,000
Beginning Balance at Dec. 31, 2017	8,000	8,000	36,000	31,710,000	(1,055,000)	(35,338,000)	(208,000)	(4,839,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	0	0	0	6,000	0	6,000
Series A and B preferred stock dividends	0	0	0	(125,000)	0	0	0	(125,000)
Stock-based compensation	0	0	0	31,000	0	0	0	31,000
Other comprehensive loss	0	0	0	0	(104,000)	0	0	(104,000)
Ending Balance at Mar. 31, 2018	8,000	8,000	36,000	31,616,000	(1,159,000)	(34,702,000)	(208,000)	(4,401,000)
Beginning Balance at Dec. 31, 2018	8,000	8,000	37,000	31,455,000	(1,150,000)	(34,344,000)	(208,000)	(4,194,000)	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	0	0	0	55,000	0	55,000
Series A and B preferred stock dividends	0	0	0	(125,000)	0	0	0	(125,000)
Stock-based compensation	0	0	0	17,000	0	0	0	17,000
Other comprehensive loss	0	0	0	0	(46,000)	0	0	(46,000)
Ending Balance at Mar. 31, 2019	$ 8,000	$ 8,000	$ 37,000	$ 31,347,000	$ (1,196,000)	$ (34,289,000)	$ (208,000)	$ (4,293,000)
[1]	Derived from audited financial statements.

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income	$ 55,000	$ 6,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	689,000	726,000
Non cash lease expense	283,000	0
Amortization of deferred financing costs	8,000	7,000
Amortization of deferred hosting costs	98,000	11,000
Stock-based compensation	17,000	31,000
Changes in operating assets and liabilities:
Receivables	1,318,000	326,000
Prepaid expenses and other	(60,000)	(183,000)
Deferred Hosting costs	(284,000)	(363,000)
Other assets	(7,000)	(7,000)
Accounts payable, current and non-current accrued expenses	(7,000)	(112,000)
Deferred revenues	(244,000)	144,000
Lease liabilities	(283,000)	0
Net cash provided by operating activities	1,583,000	586,000
Cash flows from investing activities:
Purchases of property and equipment	(45,000)	(9,000)
Capitalized software development costs	(827,000)	(900,000)
Net cash used in investing activities	(872,000)	(909,000)
Cash flows from financing activities:
Dividend payments on preferred stock	(125,000)	0
Payment on term note from Bridge Bank	0	(125,000)
Payments on line of credit from Bridge Bank	(5,286,000)	(3,472,000)
Proceeds on line of credit from Bridge Bank	4,873,000	3,445,000
Net cash used in financing activities	(538,000)	(152,000)
Effect of exchange rate changes on cash	(8,000)	34,000
Net increase (decrease) in cash, cash equivalents and restricted cash	165,000	(441,000)
Cash, cash equivalents and restricted cash, beginning of period	1,348,000	2,001,000
Cash, cash equivalents and restricted cash, end of period	1,513,000	1,560,000
Supplemental disclosure of cash flows information:
Cash paid for interest	66,000	29,000
Supplemental disclosure of non-cash flows information:
Accrued preferred dividends	$ 125,000	$ 125,000

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2019
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The condensed consolidated financial statements at March 31, 2019 and for the three month periods ended March 31, 2019 and 2018 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 accompanying 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, 2018, June 30, 2018, and September 30, 2018. The interim financial information presented is not necessarily indicative of results expected for the entire year ending December 31, 2019. Comparability The condensed consolidated financial statements for the period ended March 31, 2019 are presented under the new Lease standard, while the comparative period presented has not been adjusted and continues to be reported in accordance with the previous standard. The Lease standard requires lessees to recognize a right-of-use ("ROU") asset and lease liability for all leases on the condensed consolidated balance sheet beginning January 1, 2019 with no modification to prior periods. Recently Adopted Accounting Standards- Leases In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance was effective for the Company on January 1, 2019. The guidance was adopted on a modified retrospective basis and provides for certain practical expedients. The adoption of this guidance changed the way we account for our operating leases, which resulted in the Company recording the future benefits of those leases as an asset and the related minimum lease payments as a liability on our condensed consolidated balance sheets. The Company does not finance purchases of equipment, but it does have operating leases for office space and equipment in all locations. The Company has identified all material operating lease agreements. It has also reviewed all significant contracts for embedded leases. No embedded leases were identified during this process. We determine if an arrangement is a lease at inception. All leases to which the Company is a party are operating leases. Beginning January 1, 2019, the operating leases are being reported on our condensed consolidated balance sheet as operating lease ROU assets and current and noncurrent operating lease liabilities. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities will be recognized at the commencement date based on the present value of the lease payments over the lease term. As none of our leases provide an implicit interest rate, we used our incremental borrowing rate based on the information available at the commencement date in calculating the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option. The new guidance provides a number of optional practical expedients in transition. The Company elected the package of practical expedients which permitted us under the new guidance not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. Astea did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. On adoption, we recognized operating liabilities of $3,132,000, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new guidance also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for one of our office equipment leases. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities. This includes not recognizing ROU assets or lease liabilities for existing short-term leases on those assets in transition. We elected the practical expedient to not separate lease and non-lease components for all of our leases. As expected, the adoption of this guidance resulted in additional lease-related disclosures in the footnotes to our condensed consolidated financial statements (see Note 5). Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts presented on the condensed consolidated statement of cash flows: March 31, 2019 December 31, 2018 Cash and cash equivalents $ 1,440,000 $ 1,276,000 Restricted cash 73,000 72,000 Total cash, cash equivalents, and restricted cash reported on the consolidated statements of cash flows $ 1,513,000 $ 1,348,000 Amounts included in restricted cash represent funds required to be set aside by a contractual agreement with the building leasing companies in Europe. The restrictions will lapse when the building leases expires. Operating Matters and Liquidity The Company has a history of net losses and an accumulated deficit of $34,289,000 as of March 31, 2019. In the first three months of 2019, the Company generated net income of $55,000 compared to income of $6,000 generated in the first three months of 2018. Further, at March 31, 2019, the Company had a working capital ratio of .54:1, with cash and cash equivalents of $1,440,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000. The increase in cash and cash equivalents for the first three months 2019 was primarily driven by an increase of cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an increase in repayments of the Company’s line of credit and the dividend payment. As of March 31, 2019, the Company owed $2,256,000 against the line of credit from . As of March 31, 2019, the availability under the line of credit was $594,000. The Company has projected revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least May 16, 2020. The Second Loan Agreement increased the availability under the line of credit from $2,400,000 to $2,850,000 (see Note 4). The Company was in compliance with the WAB financial and liquidity covenant as of March 31, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at least the next year. As a result, the amount due to WAB under the line of credit as of March 31, 2019 were classified in the accompanying consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with WAB. Our primary cash requirements are to fund operations However, projections of future cash needs and cash flows are subject to risks and uncertainty. Management’s current operating plan is to maintain and/or reduce operating expenses in order to be aligned with expected revenues. The primary area of focus will continue to be headcount and costs from outside consultants. The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity. The Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance. In 2019, the Company will continue to consider ways to reduce operating expenses in certain areas of the Company in order to maintain our liquidity. However, management has implemented new marketing initiatives which have increased our spending in this area in 2019. We believe the new initiatives will directly contribute to increasing new business, which is essential to our growth. Operations will generate enough cash to meet obligations at least through May 16, 2020. As noted above, if the Company’s actual results fall short of expectations, the Company will make cost adjustments to improve the Company’s operating cash flows. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on our significant and existing customer base, closing license and subscription sales in a timely manner, lack of a history of consistently generating net income and uncertainty of future profitability, and possible fluctuations in financial results.

NEW ACCOUNTING PRONOUNCEMENTS N

NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED	3 Months Ended
	Mar. 31, 2019
NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED [Abstract]
NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED	2. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our condensed consolidated financial statements. In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for us beginning January 1, 2020. We expect to adopt this accounting standard update on a modified retrospective basis and we are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK	3 Months Ended
	Mar. 31, 2019
CONCENTRATION OF CREDIT RISK [Abstract]
CONCENTRATION OF CREDIT RISK	3. CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to credit risk, consist of cash, 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 funds which are exposed to minimal interest rate and credit risk. Cash balances are maintained with several banks. Certain operating accounts may exceed insured 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.

LINE OF CREDIT and TERM NOTE

LINE OF CREDIT and TERM NOTE	3 Months Ended
	Mar. 31, 2019
LINE OF CREDIT and TERM NOTE [Abstract]
LINE OF CREDIT and TERM NOTE	4. LINE OF CREDIT and TERM NOTE Line of Credit and Term Loan with Western Alliance Bank On August 11, 2017, the Company entered into a Business Financing Agreement (the “Financing Agreement”) with Bridge Bank, a division of WAB, which included a revolving line of credit and a term loan. The agreement was to mature on September 1, 2019. The Financing Agreement with WAB, established a revolving credit line for the Company in the principal amount of up to $2,400,000 (the “Revolving Credit Line”) and a Term Loan of $400,000 (the “Term Loan”). Availability under the Revolving Credit Line is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable. Advances under the Revolving Credit Line (the “Advances”) may be repaid and reborrowed in accordance with the Loan Agreement. Pursuant to the Financing Agreement, the Company agreed to pay to WAB the outstanding principal amount of all Advances, the unpaid interest thereon, and all other obligations incurred with respect to the Loan Agreement on September 1, 2019. Interest accrues and is paid monthly at the Wall Street Journal Prime Rate plus 1.5%. At March 31, 2019, the interest rate was 7%. The original Term Loan provided proceeds of $400,000 to the Company. Beginning in August 2017, for the first six months of the term loan the Company was only required to pay interest. Then for the next 18 months, the Term Loan was to be amortized into monthly payments of principal and interest. The interest rate on the original Term Loan was the Wall Street Journal Prime Rate plus 1.75%. The Term Loan was modified in November 2017 by the , and as a result, the Company fully repaid the Term Loan by April 30, 2018. The Company repaid $150,000 of the Term Loan in December 2017, $125,000 in January 2018 and the balance of $125,000 in April 2018. On July 24, 2018, the Company entered into a Second Modification to Business Financing Agreement (“Loan Modification”) with WAB which amended the First Modification, dated November 22, 2017. The Loan Modification increased the credit limit under Company’s credit facility to $2,850,000, extended the maturity date of the credit facility through November 15, 2020 and revised and clarified certain covenants and other terms of the credit facility. No other terms or conditions were modified. The Company expects to be able to continue to comply with the required covenants contained in the agreement with WAB for at least the next year. As a result, the amounts due to WAB under the line of credit and term loan as of March 31, 2019 are classified in the accompanying consolidated balance sheet in accordance with the repayment terms stipulated in the agreement. As of March 31, 2019 the Company owed $2,256,000 under the revolving line of credit. The Company incurred $54,000 of interest expense to WAB in the first three months of 2019. As of March 31, 2019, there was availability of $594,000 under the line of credit. The Company was in compliance with the financial and liquidity covenants of the Loan Modification as of March 31, 2019. Subject to certain exceptions, the amended Financing 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. In addition, actual EBITDA, as defined in the Financing Agreement for the trailing 6-month period must be at least $1 as tested quarterly. The amended Financing Agreement 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 Modification contains a negative covenant prohibiting the Company from granting a security interest in their intellectual property to any party.

LEASES

LEASES	3 Months Ended
	Mar. 31, 2019
LEASES [Abstract]
LEASES	5. LEASES The Company adopted the new lease standard on January 1, 2019 using the modified retrospective transition method. Prior periods were not retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which among other things, allowed the Company to continue to account for existing leases based on the historical lease classification. The Company also elected the practical expedients to combine lease and non-lease components for its office leases, which primarily relate to ancillary expenses such as common area maintenance charges and management fees. The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s leases are primarily related to operating leases for its corporate office and subsidiaries, office equipment and cars. The Company's leases have remaining lease terms of less than 1 to 4 years, and sometimes include options to renew. Renewal and termination options are included in the lease term when it is reasonably certain that the Company will exercise the option. However, it has been the Company’s experience to renegotiate a lease and not renew based on the terms of the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As all of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate plus some additional considerations for the term of the lease, based on the information available at the lease commencement date, to determine the present value of lease payments. Based on the present value of lease payments for the Company's existing leases, the Company recorded ROU assets and lease liabilities of approximately $3,132,000 upon adoption on January 1, 2019. There was one lease at one of our subsidiaries that was renewed for 2 years effective at January 1, 2019 that is included in the lease liability. The Company had no finance leases. The impact of the new lease standard on the March 31, 2019 condensed consolidated balance sheet was as follows: March 31, 2019 Right-of-use assets $ 2,849,000 Current lease liabilities 848,000 Noncurrent lease liabilities 2,001,000 Total lease liabilities $ 2,849,000 Weighted average remaining lease term 2.5 years Weighted average discount rate 7.17 % Total operating lease costs for the three months ended March 31, 2019 and March 31, 2018 were $320,000 and $326,000, respectively, which is included in operating cost on the condensed consolidated income statement. The following table provides supplemental cash flow information related to our operating leases at March 31, 2019: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $320,000 The following table shows the future maturities of lease liabilities for leases in effect as of March 31, 2019: Lease Liabilities 2019 (excluding the three months ended March 31, 2019) $ 960,000 2020 1,049,000 2021 837,000 2022 452,000 2023 1,000 Total lease payments 3,298,000 Less: imputed interest (449,000 ) Total $ 2,849,000

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2019
INCOME TAXES [Abstract]
INCOME TAXES	6. INCOME TAXES 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 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 2014 through 2018, the only periods subject to examination. The Company believes that its income tax positions and deductions will be sustained on a tax authority 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 accrued is recorded in interest expense or interest income, respectively, in the condensed consolidated statement of operations. For the three months ended March 31, 2019 and 2018, there were no interest or penalties related to uncertain tax positions. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when the difference and carryforwards are expected to be recovered or settled. A valuation allowance for deferred tax assets is provided when we estimate that it is more likely than not that all or a portion of the deferred tax assets may not be realized through future operations. This assessment is based upon consideration of available positive and negative evidence which includes, among other things, our most recent results of operations and expected future profitability. We consider our actual historical results to have a stronger weight than other more subjective indicators when considering whether to establish or reduce a valuation allowance on deferred tax assets. As of March 31, 2019, we had approximately $10.9 million of net deferred tax assets, against which we provided a 100% valuation allowance. Our net deferred tax assets were generated primarily by operating losses. Accordingly, it is more likely than not, that we will not realize these assets through future operations.

EQUITY

EQUITY	3 Months Ended
	Mar. 31, 2019
EQUITY [Abstract]
EQUITY	7. EQUITY Share-Based Awards Compensation costs include share-based payments granted to employees and directors based on the estimated grant date fair value. 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, 2019, the total unrecognized compensation cost related to non-vested options amounted to $546,000, which is expected to be recognized over the options’ weighted average remaining vesting period of 3.55 years. The Company has Stock Option Plans (the “Plans”) under which incentive and non-qualified stock options may be granted to its employees, officers, directors and others. Generally, incentive stock options are granted at fair value, become exercisable over a four-year period, have a 10-year contractual term and are subject to the employee’s continued employment. Non-qualified options are granted at exercise prices determined by the Board of Directors and vest over varying periods. Activity under the Company’s stock option plans for the three months ended March 31, 2019 is as follows: OPTIONS OUTSTANDING Shares Weighted Average Exercise Price Per Share Balance, December 31, 2018 762,000 $ 2.54 Granted 185,000 $ 5.86 Forfeited (60,000 ) $ 2.64 Balance, March 31, 2019 887,000 $ 3.20 There are 328,000 shares available for granting future options as of March 31, 2019. It is the Company’s policy to issue shares from authorized but unissued common stock when stock options are exercised. The following table summarizes outstanding options under the Company’s stock option plans as of March 31, 2019: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding Options 887,000 $3.20 6.32 $2,503,000 Ending Vested and Exercisable 564,000 $2.39 4.63 $2,035,000 Options Vested and Expected to Vest 778,000 $2.96 5.87 $2,377,000 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. At March 31, 2019, there were accrued dividends of $546,000. 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. The Company has rights to cause conversion of all of the shares of Series A Preferred Stock outstanding. 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. Each and every outstanding share of Series A 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. 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 unpaid and accrued dividends. Preferred stock dividends on the Series A are declared quarterly by the Board of Directors. The Company reports the Series A Preferred Stock on the Company’s consolidated balance sheet within stockholders’ deficit. 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 Revolving Promissory Note dated March 26, 2014. 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 is entitled to a quarterly dividend, which accrues at an annual rate of 10%. The Company’s Chief Executive Officer may convert 100% of his shares of the Series B Preferred Stock into shares of common stock. Each and every 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 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 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 unpaid and accrued dividends. Preferred stock dividends on the Series B are declared quarterly by the Board of Directors. At March 31, 2019, there were accrued dividends of $349,000. The Company reports the Series B Preferred Stock on the Company’s consolidated balance sheet within stockholders’ deficit.

LOSS PER SHARE

LOSS PER SHARE	3 Months Ended
	Mar. 31, 2019
LOSS PER SHARE [Abstract]
LOSS PER SHARE	8. 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 earnings 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 losses allocable to the common stockholders for the years ended March 31, 2019 and 2018. All options outstanding at March 31, 2019 and 2018 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 as the inclusion of these options and shares would have been antidilutive. Three Months Ended March 31, 2019 2018 Numerator: Net income $ 55,000 $ 6,000 Preferred dividend 125,000 125,000 Net loss allocable to common shareholders $ (70,000 ) $ (119,000 ) Denominator: Basic and diluted weighted average number of common shares outstanding 3,617,000 3,594,000 Basic and diluted loss per common share $ (0.02 ) $ (0.03 )

GEOGRAPHIC REGION DATA

GEOGRAPHIC REGION DATA	3 Months Ended
	Mar. 31, 2019
GEOGRAPHIC REGION DATA [Abstract]
GEOGRAPHIC REGION DATA	9. GEOGRAPHIC REGION 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 execute management 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 geographic regions as follows: Three Months Ended March 31, 2019 2018 Revenues Software license fees United States $ 369,000 $ 324,000 Europe 52,000 50,000 Asia/Pacific 279,000 45,000 Total foreign software license fees revenue 331,000 95,000 Total software license fees 700,000 419,000 Subscriptions United States 679,000 416,000 Europe 276,000 272,000 Asia/Pacific 271,000 140,000 Total foreign subscriptions 547,000 412,000 Total subscription revenue 1,226,000 828,000 Services and maintenance United States 2,989,000 3,334,000 Europe 630,000 590,000 Asia/Pacific 1,075,000 1,525,000 Total foreign services and maintenance revenue 1,705,000 2,115,000 Total services and maintenance revenue 4,694,000 5,449,000 Total revenue $ 6,620,000 $ 6,696,000 Net income (loss) United States $ 211,000 $ (61,000 ) Europe (200,000 ) (56,000 ) Asia/Pacific 44,000 123,000 Net income $ 55,000 $ 6,000

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2019
BASIS OF PRESENTATION [Abstract]
Basis of Presentation	The condensed consolidated financial statements at March 31, 2019 and for the three month periods ended March 31, 2019 and 2018 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 accompanying 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, 2018, June 30, 2018, and September 30, 2018. The interim financial information presented is not necessarily indicative of results expected for the entire year ending December 31, 2019.
Comparability	Comparability The condensed consolidated financial statements for the period ended March 31, 2019 are presented under the new Lease standard, while the comparative period presented has not been adjusted and continues to be reported in accordance with the previous standard. The Lease standard requires lessees to recognize a right-of-use ("ROU") asset and lease liability for all leases on the condensed consolidated balance sheet beginning January 1, 2019 with no modification to prior periods.
Recently Adopted Accounting Standards- Leases	Recently Adopted Accounting Standards- Leases In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance was effective for the Company on January 1, 2019. The guidance was adopted on a modified retrospective basis and provides for certain practical expedients. The adoption of this guidance changed the way we account for our operating leases, which resulted in the Company recording the future benefits of those leases as an asset and the related minimum lease payments as a liability on our condensed consolidated balance sheets. The Company does not finance purchases of equipment, but it does have operating leases for office space and equipment in all locations. The Company has identified all material operating lease agreements. It has also reviewed all significant contracts for embedded leases. No embedded leases were identified during this process. We determine if an arrangement is a lease at inception. All leases to which the Company is a party are operating leases. Beginning January 1, 2019, the operating leases are being reported on our condensed consolidated balance sheet as operating lease ROU assets and current and noncurrent operating lease liabilities. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities will be recognized at the commencement date based on the present value of the lease payments over the lease term. As none of our leases provide an implicit interest rate, we used our incremental borrowing rate based on the information available at the commencement date in calculating the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option. The new guidance provides a number of optional practical expedients in transition. The Company elected the package of practical expedients which permitted us under the new guidance not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. Astea did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. On adoption, we recognized operating liabilities of $3,132,000, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new guidance also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for one of our office equipment leases. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities. This includes not recognizing ROU assets or lease liabilities for existing short-term leases on those assets in transition. We elected the practical expedient to not separate lease and non-lease components for all of our leases. As expected, the adoption of this guidance resulted in additional lease-related disclosures in the footnotes to our condensed consolidated financial statements (see Note 5).
Cash, Cash Equivalents and Restricted Cash	Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts presented on the condensed consolidated statement of cash flows: March 31, 2019 December 31, 2018 Cash and cash equivalents $ 1,440,000 $ 1,276,000 Restricted cash 73,000 72,000 Total cash, cash equivalents, and restricted cash reported on the consolidated statements of cash flows $ 1,513,000 $ 1,348,000 Amounts included in restricted cash represent funds required to be set aside by a contractual agreement with the building leasing companies in Europe. The restrictions will lapse when the building leases expires.
Operating Matters and Liquidity	Operating Matters and Liquidity The Company has a history of net losses and an accumulated deficit of $34,289,000 as of March 31, 2019. In the first three months of 2019, the Company generated net income of $55,000 compared to income of $6,000 generated in the first three months of 2018. Further, at March 31, 2019, the Company had a working capital ratio of .54:1, with cash and cash equivalents of $1,440,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000. The increase in cash and cash equivalents for the first three months 2019 was primarily driven by an increase of cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an increase in repayments of the Company’s line of credit and the dividend payment. As of March 31, 2019, the Company owed $2,256,000 against the line of credit from . As of March 31, 2019, the availability under the line of credit was $594,000. The Company has projected revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least May 16, 2020. The Second Loan Agreement increased the availability under the line of credit from $2,400,000 to $2,850,000 (see Note 4). The Company was in compliance with the WAB financial and liquidity covenant as of March 31, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at least the next year. As a result, the amount due to WAB under the line of credit as of March 31, 2019 were classified in the accompanying consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with WAB. Our primary cash requirements are to fund operations However, projections of future cash needs and cash flows are subject to risks and uncertainty. Management’s current operating plan is to maintain and/or reduce operating expenses in order to be aligned with expected revenues. The primary area of focus will continue to be headcount and costs from outside consultants. The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity. The Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance. In 2019, the Company will continue to consider ways to reduce operating expenses in certain areas of the Company in order to maintain our liquidity. However, management has implemented new marketing initiatives which have increased our spending in this area in 2019. We believe the new initiatives will directly contribute to increasing new business, which is essential to our growth. Operations will generate enough cash to meet obligations at least through May 16, 2020. As noted above, if the Company’s actual results fall short of expectations, the Company will make cost adjustments to improve the Company’s operating cash flows. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on our significant and existing customer base, closing license and subscription sales in a timely manner, lack of a history of consistently generating net income and uncertainty of future profitability, and possible fluctuations in financial results.

NEW ACCOUNTING PRONOUNCEMENTS_2

NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED (Policies)	3 Months Ended
	Mar. 31, 2019
NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED [Abstract]
NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED	In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our condensed consolidated financial statements. In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for us beginning January 1, 2020. We expect to adopt this accounting standard update on a modified retrospective basis and we are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements

CONCENTRATION OF CREDIT RISK (P

CONCENTRATION OF CREDIT RISK (Policies)	3 Months Ended
	Mar. 31, 2019
CONCENTRATION OF CREDIT RISK [Abstract]
CONCENTRATION OF CREDIT RISK	Financial instruments, which potentially subject the Company to credit risk, consist of cash, 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 funds which are exposed to minimal interest rate and credit risk. Cash balances are maintained with several banks. Certain operating accounts may exceed insured 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.

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	3 Months Ended
	Mar. 31, 2019
BASIS OF PRESENTATION [Abstract]
Reconciliation of Cash, Cash Equivalents and Restricted Cash	The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts presented on the condensed consolidated statement of cash flows: March 31, 2019 December 31, 2018 Cash and cash equivalents $ 1,440,000 $ 1,276,000 Restricted cash 73,000 72,000 Total cash, cash equivalents, and restricted cash reported on the consolidated statements of cash flows $ 1,513,000 $ 1,348,000

LEASES (Tables)

LEASES (Tables)	3 Months Ended
	Mar. 31, 2019
LEASES [Abstract]
Impact of New Lease Standard on Condensed Consolidated Balance Sheet	The impact of the new lease standard on the March 31, 2019 condensed consolidated balance sheet was as follows: March 31, 2019 Right-of-use assets $ 2,849,000 Current lease liabilities 848,000 Noncurrent lease liabilities 2,001,000 Total lease liabilities $ 2,849,000 Weighted average remaining lease term 2.5 years Weighted average discount rate 7.17 %
Supplemental Cash Flow Information Related to Operating Leases	The following table provides supplemental cash flow information related to our operating leases at March 31, 2019: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $320,000
Future Maturities of Lease Liabilities	The following table shows the future maturities of lease liabilities for leases in effect as of March 31, 2019: Lease Liabilities 2019 (excluding the three months ended March 31, 2019) $ 960,000 2020 1,049,000 2021 837,000 2022 452,000 2023 1,000 Total lease payments 3,298,000 Less: imputed interest (449,000 ) Total $ 2,849,000

EQUITY (Tables)

EQUITY (Tables)	3 Months Ended
	Mar. 31, 2019
EQUITY [Abstract]
Activity of Stock Options	Activity under the Company’s stock option plans for the three months ended March 31, 2019 is as follows: OPTIONS OUTSTANDING Shares Weighted Average Exercise Price Per Share Balance, December 31, 2018 762,000 $ 2.54 Granted 185,000 $ 5.86 Forfeited (60,000 ) $ 2.64 Balance, March 31, 2019 887,000 $ 3.20
Outstanding Options Under Stock Options Plans	The following table summarizes outstanding options under the Company’s stock option plans as of March 31, 2019: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding Options 887,000 $3.20 6.32 $2,503,000 Ending Vested and Exercisable 564,000 $2.39 4.63 $2,035,000 Options Vested and Expected to Vest 778,000 $2.96 5.87 $2,377,000

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2019
LOSS PER SHARE [Abstract]
Calculation of Earnings Per Share	All options outstanding at March 31, 2019 and 2018 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 as the inclusion of these options and shares would have been antidilutive. Three Months Ended March 31, 2019 2018 Numerator: Net income $ 55,000 $ 6,000 Preferred dividend 125,000 125,000 Net loss allocable to common shareholders $ (70,000 ) $ (119,000 ) Denominator: Basic and diluted weighted average number of common shares outstanding 3,617,000 3,594,000 Basic and diluted loss per common share $ (0.02 ) $ (0.03 )

GEOGRAPHIC REGION DATA (Tables)

GEOGRAPHIC REGION DATA (Tables)	3 Months Ended
	Mar. 31, 2019
GEOGRAPHIC REGION DATA [Abstract]
Disaggregated Information about Revenues by Geographic Region	Accordingly, the Company considers itself to have three geographic regions as follows: Three Months Ended March 31, 2019 2018 Revenues Software license fees United States $ 369,000 $ 324,000 Europe 52,000 50,000 Asia/Pacific 279,000 45,000 Total foreign software license fees revenue 331,000 95,000 Total software license fees 700,000 419,000 Subscriptions United States 679,000 416,000 Europe 276,000 272,000 Asia/Pacific 271,000 140,000 Total foreign subscriptions 547,000 412,000 Total subscription revenue 1,226,000 828,000 Services and maintenance United States 2,989,000 3,334,000 Europe 630,000 590,000 Asia/Pacific 1,075,000 1,525,000 Total foreign services and maintenance revenue 1,705,000 2,115,000 Total services and maintenance revenue 4,694,000 5,449,000 Total revenue $ 6,620,000 $ 6,696,000 Net income (loss) United States $ 211,000 $ (61,000 ) Europe (200,000 ) (56,000 ) Asia/Pacific 44,000 123,000 Net income $ 55,000 $ 6,000

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details)	3 Months Ended
	Mar. 31, 2019USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2018USD ($)		Jul. 24, 2018USD ($)	Dec. 31, 2017USD ($)	Aug. 11, 2017USD ($)
Recently Adopted Accounting Standards - Leases [Abstract]
Operating liabilities	$ 2,849,000
ROU assets	2,849,000		$ 0	[1]
Cash, cash equivalents and restricted cash [Abstract]
Cash and cash equivalents	1,440,000		1,276,000	[1]
Restricted cash	73,000		72,000	[1]
Total cash, cash equivalents, and restricted cash reported on the consolidated statements of cash flows	1,513,000	$ 1,560,000	1,348,000			$ 2,001,000
Operating Matters and Liquidity [Abstract]
Accumulated deficit	(34,289,000)		(34,344,000)	[1]
Net income	$ 55,000	$ 6,000
Working capital ratio	0.54
Line of Credit Facility [Abstract]
Line of credit owed	$ 2,256,000		2,669,000	[1]
Business Financing Agreement [Member] | Revolving Credit Line [Member]
Line of Credit Facility [Abstract]
Maximum availability under line of credit							$ 2,400,000
Second Modification Business Financing Agreement [Member] | Revolving Credit Line [Member]
Line of Credit Facility [Abstract]
Line of credit owed	2,256,000
Line of credit available	$ 594,000
Maximum availability under line of credit					$ 2,850,000
ASU 2016-02 [Member]
Recently Adopted Accounting Standards - Leases [Abstract]
Operating liabilities			3,132,000
ROU assets			$ 3,132,000
[1]	Derived from audited financial statements.

LINE OF CREDIT and TERM NOTE (D

LINE OF CREDIT and TERM NOTE (Details) - USD ($)	Aug. 11, 2017	Apr. 30, 2018	Jan. 31, 2018	Dec. 31, 2017	Mar. 31, 2019	Dec. 31, 2018	[1]	Jul. 24, 2018
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Line of credit, outstanding amount					$ 2,256,000	$ 2,669,000
Business Financing Agreement [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Debt instrument, maturity date					Sep. 1, 2019
Business Financing Agreement [Member] | Term Loan [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Debt instrument, face amount	$ 400,000
Proceeds from issuance of debt	400,000
First payment period of debt payment for interest					6 months
Remaining period of debt payment for principal and interest					18 months
Frequency of periodic payment					Monthly
Repayment of debt		$ 125,000	$ 125,000	$ 150,000
Business Financing Agreement [Member] | Term Loan [Member] | Wall Street Journal Prime Rate [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Basis spread on variable interest rate					1.75%
Business Financing Agreement [Member] | Revolving Credit Line [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Maximum borrowing capacity	$ 2,400,000
Percentage of borrowing base based on eligible domestic accounts receivable	80.00%
Line of credit interest rate					7.00%
Business Financing Agreement [Member] | Revolving Credit Line [Member] | Wall Street Journal Prime Rate [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Basis spread on variable interest rate					1.50%
Second Modification Business Financing Agreement [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Interest expense					$ 54,000
Actual EBITDA trailing period					6 months
Actual EBITDA trailing period, test value					$ 1
Second Modification Business Financing Agreement [Member] | Revolving Credit Line [Member]
Line of Credit and Term Loan with Western Alliance Bank [Abstract]
Debt instrument, maturity date					Nov. 15, 2020
Maximum borrowing capacity								$ 2,850,000
Line of credit, outstanding amount					$ 2,256,000
Line of credit, remaining borrowing capacity					$ 594,000
[1]	Derived from audited financial statements.

LEASES (Details)

LEASES (Details)	3 Months Ended
	Mar. 31, 2019USD ($)LeaseSubsidiary	Dec. 31, 2018USD ($)
Lease, Cost [Abstract]
Right-of-use assets	$ 2,849,000	$ 0	[1]
Lease liabilities	$ 2,849,000
Number of leases renewed | Lease	1
Number of subsidiaries at which operating lease was renewed | Subsidiary	1
Renewed lease term	2 years
ASU 2016-02 [Member]
Lease, Cost [Abstract]
Right-of-use assets		3,132,000
Lease liabilities		$ 3,132,000
Minimum [Member]
Lease, Cost [Abstract]
Remaining lease term	1 year
Maximum [Member]
Lease, Cost [Abstract]
Remaining lease term	4 years
[1]	Derived from audited financial statements.

LEASES, Impact of New Lease Sta

LEASES, Impact of New Lease Standard on Condensed Consolidated Balance Sheet (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	[1]
Impact of New Lease Standard on Condensed Consolidated Balance Sheet [Abstract]
Right-of-use assets	$ 2,849,000		$ 0
Current lease liabilities	848,000		0
Noncurrent lease liabilities	2,001,000		$ 0
Total lease liabilities	$ 2,849,000
Weighted average remaining lease term	2 years 6 months
Weighted average discount rate	7.17%
Operating lease cost	$ 320,000	$ 326,000
[1]	Derived from audited financial statements.

LEASES, Supplemental Cash Flow

LEASES, Supplemental Cash Flow Information (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Supplemental Cash Flow Information [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 320,000

LEASES, Future Maturities of Op

LEASES, Future Maturities of Operating Lease Liabilitie (Details)	Mar. 31, 2019USD ($)
Future Maturities of Operating Lease Liabilities [Abstract]
2019 (excluding the three months ended March 31, 2019)	$ 960,000
2020	1,049,000
2021	837,000
2022	452,000
2023	1,000
Total lease payments	3,298,000
Less: imputed interest	(449,000)
Total	$ 2,849,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
INCOME TAXES [Abstract]
Interest or penalties related to uncertain tax positions	$ 0	$ 0
Net deferred tax assets	$ 10.9
Percentage of valuation allowance against deferred tax assets	100.00%

EQUITY, Activity of Stock Optio

EQUITY, Activity of Stock Options (Details)	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Share-based Compensation, Nonvested Awards, Compensation [Abstract]
Unrecognized compensation cost related to non-vested options | $	$ 546,000
Options weighted average remaining vesting period	3 years 6 months 18 days
Number of shares available for granting future options (in shares)	328,000
Incentive Stock Option [Member]
Share-based Compensation, Nonvested Awards, Compensation [Abstract]
Incentive stock options exercisable period	4 years
Incentive stock options contractual term	10 years
Stock Option Plan [Member]
Share-based Compensation, Nonvested Awards, Compensation [Abstract]
Incentive stock options contractual term	6 years 3 months 25 days
Number of Shares [Roll Forward]
Beginning balance (in shares)	762,000
Granted (in shares)	185,000
Forfeited (in shares)	(60,000)
Ending balance (in shares)	887,000
Weighted Average Exercise Price Per Share [Abstract]
Beginning balance (in dollars per share) | $ / shares	$ 2.54
Granted (in dollars per share) | $ / shares	5.86
Forfeited (in dollars per share) | $ / shares	2.64
Ending balance (in dollars per share) | $ / shares	$ 3.20

EQUITY, Outstanding Options Und

EQUITY, Outstanding Options Under Stock Options Plans (Details) - Stock Option Plan [Member] - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Number of Shares [Roll Forward]
Outstanding Options (in shares)	887,000	762,000
Ending Vested and Exercisable (in shares)	564,000
Options Vested and Expected to Vest (in shares)	778,000
Weighted Average Exercise Price Per Share [Abstract]
Outstanding Options (in dollars per share)	$ 3.20	$ 2.54
Ending Vested and Exercisable (in dollars per share)	2.39
Options Vested and Expected to Vest (in dollars per share)	$ 2.96
Weighted Average Remaining Contractual Term [Abstract]
Outstanding Options	6 years 3 months 25 days
Ending Vested and Exercisable	4 years 7 months 17 days
Options Vested and Expected to Vest	5 years 10 months 13 days
Aggregate Intrinsic Value [Abstract]
Outstanding Options	$ 2,503,000
Ending Vested and Exercisable	2,035,000
Options Vested and Expected to Vest	$ 2,377,000

EQUITY, Convertible Preferred S

EQUITY, Convertible Preferred Stock (Details) - USD ($)	Sep. 24, 2008	Mar. 31, 2019	Dec. 31, 2018		Mar. 31, 2018	Jun. 20, 2014
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Accrued dividend		$ 125,000			$ 125,000
Series A Convertible Preferred Stock [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, issued (in shares)		826,000	826,000
Preferred stock, value issued		$ 8,000	$ 8,000	[1]
Percentage of daily accrual	10.00%
Accrued dividend		$ 546,000
Convertible preferred stock, shares issued upon conversion (in shares)		1
Number of consecutive trading days		30 days
Series A Convertible Preferred Stock [Member] | Minimum [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Redemption percentage of preferred stock		130.00%
Percentage of the closing price of common stock to then current conversion price for mandatory and automatic conversion into shares of common stock		300.00%
Series A Convertible Preferred Stock [Member] | Chief Executive Officer [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, issued (in shares)	826,000
Share price (in dollars per share)	$ 3.63
Preferred stock, value issued	$ 3,000,000
Series B Convertible Preferred Stock [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, issued (in shares)		797,000	797,000
Preferred stock, value issued		$ 8,000	$ 8,000	[1]
Percentage of daily accrual		10.00%
Accrued dividend		$ 349,000
Convertible preferred stock, shares issued upon conversion (in shares)		1
Number of consecutive trading days		30 days
Series B Convertible Preferred Stock [Member] | Minimum [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Percentage of the closing price of common stock to then current conversion price for mandatory and automatic conversion into shares of common stock		300.00%
Series B Convertible Preferred Stock [Member] | Chief Executive Officer [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, issued (in shares)						797,000
Share price (in dollars per share)						$ 2.51
Percentage of shares of preferred stock convertible into shares of common stock		100.00%
Series B Convertible Preferred Stock [Member] | Chief Executive Officer [Member] | Revolving Credit Facility [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Long-term debt						$ 2,000,000
[1]	Derived from audited financial statements.

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator [Abstract]
Net income	$ 55,000	$ 6,000
Preferred dividend	125,000	125,000
Net loss allocable to common shareholders	$ (70,000)	$ (119,000)
Denominator [Abstract]
Basic and diluted weighted average number of common shares outstanding (in shares)	3,617,000	3,594,000
Basic and diluted loss per common share (in dollars per share)	$ (0.02)	$ (0.03)

GEOGRAPHIC REGION DATA (Details

GEOGRAPHIC REGION DATA (Details)	3 Months Ended
	Mar. 31, 2019USD ($)Region	Mar. 31, 2018USD ($)
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of geographic regions | Region	3
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	$ 6,620,000	$ 6,696,000
Net income (loss)	55,000	6,000
Software License Fees [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	700,000	419,000
Subscriptions [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	1,226,000	828,000
Services and Maintenance [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	4,694,000	5,449,000
United States [Member] | Reportable Geographical Components [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Net income (loss)	211,000	(61,000)
United States [Member] | Reportable Geographical Components [Member] | Software License Fees [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	369,000	324,000
United States [Member] | Reportable Geographical Components [Member] | Subscriptions [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	679,000	416,000
United States [Member] | Reportable Geographical Components [Member] | Services and Maintenance [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	2,989,000	3,334,000
Foreign [Member] | Reportable Geographical Components [Member] | Software License Fees [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	331,000	95,000
Foreign [Member] | Reportable Geographical Components [Member] | Subscriptions [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	547,000	412,000
Foreign [Member] | Reportable Geographical Components [Member] | Services and Maintenance [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	1,705,000	2,115,000
Europe [Member] | Reportable Geographical Components [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Net income (loss)	(200,000)	(56,000)
Europe [Member] | Reportable Geographical Components [Member] | Software License Fees [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	52,000	50,000
Europe [Member] | Reportable Geographical Components [Member] | Subscriptions [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	276,000	272,000
Europe [Member] | Reportable Geographical Components [Member] | Services and Maintenance [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	630,000	590,000
Asia/Pacific [Member] | Reportable Geographical Components [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Net income (loss)	44,000	123,000
Asia/Pacific [Member] | Reportable Geographical Components [Member] | Software License Fees [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	279,000	45,000
Asia/Pacific [Member] | Reportable Geographical Components [Member] | Subscriptions [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	271,000	140,000
Asia/Pacific [Member] | Reportable Geographical Components [Member] | Services and Maintenance [Member]
Geographic Areas, Revenues from External Customers [Abstract]
Revenues	$ 1,075,000	$ 1,525,000