10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended June 30, 2013

or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             .

Commission file number: 001-31265

RAND WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	84-1035353
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

161 Worcester Road, Suite 401, Framingham, Massachusetts	01701
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (508) 663-1400

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $.01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.     Yes    No  x

The aggregate market value of the voting and non-voting equity stock held by non-affiliates of the registrant, computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of December 31, 2012 (the last business day of the registrant’s most recently completed second fiscal quarter): $39,953,036.

The number of shares of common stock outstanding as of September 17, 2013 was 54,019,525.

DOCUMENTS INCORPORATED BY REFERENCE

Information required by Part III of this Form 10-K is incorporated therein by reference to the Registrant’s definitive proxy statement to be filed in connection with its 2013 Annual Meeting of Stockholders.

TABLE OF CONTENTS

PART I		4
ITEM 1.	Business	4
ITEM 1B.	Unresolved Staff Comments.	8
ITEM 2.	Properties	9
ITEM 3.	Legal Proceedings	10
ITEM 4.	Mine Safety Disclosures	10
PART II		11
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
ITEM 6.	Selected Financial Data	12
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 8.	Financial Statements and Supplementary Data	20
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	20
ITEM 9A.	Controls and Procedures	20
ITEM 9B.	Other Information	21
PART III		22
ITEM 10.	Directors, Executive Officers and Corporate Governance	22
ITEM 11.	Executive Compensation	22
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	22
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	22
ITEM 14.	Principal Accounting Fees and Services	22
PART IV		23
ITEM 15.	Exhibits, Financial Statement Schedules	23
SIGNATURES		25
EXHIBIT INDEX

This Annual Report of Rand Worldwide, Inc. on Form 10-K for the year ended June 30, 2013 may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Readers of this report should be aware of the speculative nature of “forward-looking statements”. Statements that are not historical in nature, including those that include the words “anticipate”, “estimate”, “should”, “expect”, “believe”, “intend”, and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Rand Worldwide, Inc. operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; cost of capital, demand for products and services; changes in Rand Worldwide, Inc.’s competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond the Rand Worldwide, Inc.’s control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or if substantially realized, will have the expected consequences on the Rand Worldwide, Inc.’s business or operations. Except as required by applicable laws, Rand Worldwide, Inc. does not intend to publish updates or revisions of forward-looking statements it makes to reflect new information, future events or otherwise.

When used throughout this annual report, the terms “Rand Worldwide”, “the Company”, “we”, “us” and “our” refer to Rand Worldwide, Inc. and, unless the context clearly indicates otherwise, its consolidated subsidiaries.

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PART I

ITEM 1. BUSINESS

General

Rand Worldwide, Inc. (“Rand Worldwide”) is a leader in design, engineering, data archiving solutions, and facilities management technology solutions with expertise in computer aided design (“CAD”) software, computational fluid dynamics (“CFD”), data management, and process optimization for the manufacturing, engineering, and building design industries. The Company specializes in software resale, technology consulting, implementation, integration, training, data archiving, CFD analysis consulting and thermal simulation services and technical support solutions that enable clients to more effectively design, develop, and manage projects, products, and facilities. Rand Worldwide has over 25 years of industry experience and expertise, an extensive list of training and implementation services and longstanding relationships with design technology leaders including Autodesk, Archibus, Dassault Systèmes and Autonomy. The Company’s clients include businesses, government agencies, and educational institutions.

The Company differentiates itself from traditional product resellers through a wide range of value-added services, consisting primarily of training, technical support, professional services and courseware development. It also provides software customization, data migration, computer-aided design standards consulting, process workflow analysis, and implementation assistance for complex design environments. Its strategic focus is to provide clients a competitive advantage with technology solutions that address broad, enterprise-wide initiatives.

Rand Worldwide’s sales and service delivery network consists of approximately 250 employees operating out of 49 business offices throughout North America. The Company has an extensive sales database that contains several hundred thousand point-of-contact names collected over its history and an active customer list of approximately 30,000 private firms, federal, state, and local agencies, and colleges and universities.

The Company’s ongoing strategic plan calls for it to leverage the solid core business base that has been established to profitably grow its product and services offerings in the design engineering market space. Concurrently, the Company plans to continue to identify and engage in diverse software and services opportunities through strategic relationship development while taking advantage of its established brand, its geographic footprint and technical expertise to accomplish its objectives. Thus, the strategic plan calls for the Company to target specific product lines that will maximize its Autodesk business, to leverage its market position and core competencies, and to grow the services component of its business. In accordance with its strategic plan, in July 2012, the Company acquired the assets of Informative Design Partners (“IDP”). IDP is a specialty services company in the CFD market and delivers CFD analysis consulting and thermal simulation services that provide design insight, allowing clients to make better informed design decisions.

During the fourth quarter of 2013, the Company disposed of its operations in Australia, Singapore and Malaysia because those divisions did not align with the current strategic direction of the Company. The dispositions did not have a material impact on the Company’s operations or financial position.

Rand Worldwide has a software development team within its professional services group that is charged with the responsibility of developing software-based solutions for customers that improve the customers’ design workflow processes. These may include sales-oriented configuration tools or engineering-oriented automation and integration tools. The solutions often involve automating or enhancing the software products the Company sells. While focused on software customization services, the team has developed a series of add-ons and utilities complementary to the products that it resells. Such software is both offered for sale and, in some cases, provided at no cost as an additional benefit to its customers. It is Rand Worldwide’s intention to continue the development of software applications as well as to identify new areas for commercial software development.

The Company’s product sales are somewhat cyclical, and increase when the developer of a specific software product releases a new version, offers promotions or discontinues support of an older product. As is common

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among software resellers, the Company purchases products from its suppliers with a combination of cash and credit. The Company allows returns in limited situations.

Products

Substantially all of Rand Worldwide’s product sales consist of the sale of prepackaged software focused on the following four major product categories.

Design Automation. More than 91% of product revenues arise from the resale of design software developed by Autodesk for the building design and land development, manufacturing, utilities, and telecommunications industries. These product sales are primarily packaged software programs installed on a user workstation, on a local area network server, or in a hosted environment. The programs perform and support a wide variety of functions related to design, drafting, manufacturing, workflow automation, and document management activities.

Rand Worldwide also provides 3D laser scanning products including scanners and related hardware and software, as well as equipment rentals. This solution provides accurate as-builts of existing structures and facilities, resulting in a more accurate and cost effective design.

Data Management. Data management software products help businesses reduce costs, improve quality, strengthen relationships with customers and suppliers, and deliver more innovative products and services to minimize product time-to-market by leveraging the value of existing data.

Facilities Management. Physical assets, such as real estate, buildings, equipment, materials, and furniture are a significant percentage of an organization’s total asset value. These assets are used by many different business units, departments, and individuals, and must be accurately managed in order to extend asset life cycles and keep operating costs at a minimum.

Integrated Workplace Management Systems (“IWMS”) and Computer Aided Facilities Management (“CAFM”) systems enable organizations to make informed strategic and business decisions that optimize return on investment, lower asset lifecycle costs, and increase enterprise-wide productivity and profitability. Organizations of all sizes, spanning the financial, educational, governmental, healthcare, and manufacturing industries, use these solutions to deliver timely, relevant facilities information as part of their strategic business plans.

Geographic Information Systems (“GIS”) permit users to link together disparate data files (maps, aerial photos, tax records, marketing data, etc.) and provide the user with a unified image and knowledge base of a specific geographic location or building location. When combined with information from a facilities management system, information from GIS applications provide an integrated facilities view that allows enhanced analysis in various spatial contexts for professionals responsible for asset tracking, maintenance, emergency preparedness, space allocation, and construction planning.

The Company sells, customizes, and implements IWMS and CAFM solutions through its dedicated sales team, technical specialists, and network of strategic partners. It also provides GIS database development services to facilities management customers, both through its employees and strategic partners.

ASCENT Courseware. Through its ASCENT division, the Company is a leading developer and publisher of professional training and knowledge products for engineering software applications. ASCENT courseware is distributed globally through outside distribution channels and its products are used to train thousands of people in the engineering and manufacturing fields around the world each year. ASCENT’s courseware for the Autodesk products has received Autodesk Official Training Guide (AOTG) designation.

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Services

Professional services include project-focused software implementations, software customization, data migration, computer aided design standards consulting, supplemental design staffing, drawing digitization, symbol library development, and CFD analysis consulting and thermal simulation services. The Company employs over 100 industry specialists who provide professional services to its design automation customers.

Rand Worldwide offers training courses in approximately 50 different subjects related to various software solutions offered at 47 training facilities and through mobile labs sent to customer sites or other off-site facilities. Training is led by over 100 technical experts that have formal training or proven industry experience in the topics they teach. The Company also provides training services that are highly tailored to meet the needs of a particular customer, including company-specific operational topics, customized product usage, and other general technology or process training. As part of the training offering, the Company has developed and deployed an Internet-based assessment tool that allows its clients to test their employees’ knowledge and ability to use the software tools.

The Company provides end-user support services through its Solution Center which provides customers with access to highly-trained certified product-specific support engineers who accelerate issue resolution, live telephone and desktop support, online case management, and the ProductivityNOW Online Portal. A staff of full-time technology consultants assists customers with questions about product features, functions, usability issues, and configurations. The Solution Center offers services through multiple access levels including prepaid services, actual elapsed time, and annual support contracts.

The Company provides a hosted data archiving solution known as Rand Secure Archive. From total cost of ownership and scalability, to security and compliance, digital data archiving has become a leading IT and legal department challenge. Companies are investing time, money and resources to implement and manage complex digital data archiving systems to effectively handle massive amounts of electronic data. Rand Secure Archive offers data archiving and management solutions based on world-class technology. With Rand Secure Archive, companies can simplify the process to store, manage and search data and electronic communications enabling regulatory and corporate governance compliance.

Rand Secure Archive is a fully-hosted, on-demand solution that allows for rapid eDiscovery searches, governance, legal hold and data recovery. Data is hosted on secure servers with direct data access available at all times.

Markets and Competition

Design Automation. In the design automation market, Rand Worldwide focuses on providing enterprise solutions to small- and medium-sized businesses with under one billion dollars of annual revenue, primarily in the architecture, engineering, and construction (“AEC”) market and the mechanical design and manufacturing (“MFG”) market. The AEC market is comprised of design services focused on the construction of large physical assets such as buildings, roads, factories, utility companies, and commercial infrastructure projects. The MFG market is primarily focused on the design, tooling, assembly, and testing of instruments, electronic devices, machines, mechanical devices, and power-driven equipment.

While several local and regional competitors exist in the various geographic territories where the Company conducts business, it believes that it has a competitive advantage in terms of geographic reach, comprehensive training and support, and the provision of other products and services, and that it is one of the largest commercial Autodesk resellers in the United States. Two competitors that could be compared to Rand Worldwide in scale, size, geographical reach, and target markets for the resale of Autodesk products are Tata Technologies Company (“Tata”) and Mensch und Maschine Software SE (“M+M”).

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Tata is a systems integrator for design automation products with offices located in 17 countries and has headquarters in the United States, the United Kingdom, and India. While the Company believes that Tata has greater revenues than Rand Worldwide, the Company estimates that the Autodesk portion of Tata’s business is less than the Company’s Autodesk business.

M+M is one of the leading European providers of computer aided design and manufacturing solutions with more than 50 offices located across the world and headquarters in Germany. M+M is the largest European Autodesk value-added reseller; however, the Company believes that M+M’s Autodesk-related business in Europe is comparable to the Company’s Autodesk-related business in North America.

Data Management. In this market, the Company faces similar competition from local and regional Autodesk resellers in its design automation business.

Facilities Management. The Company provides IWMS and CAFM solutions to organizations of all sizes, spanning the financial, educational, governmental, healthcare, and manufacturing industries. As a reseller of technology from ARCHIBUS and Idisis, the Company competes with not only competitive applications but also other resellers of the products it represents.

Computational Fluid Dynamics. In the CFD market, the Company provides CFD analysis consulting and thermal simulation services to businesses primarily in the AEC and MFG markets. Competitors include local and regional consulting firms as well as software companies which have developed CFD analysis software and provide consulting services.

Arrangements with Principal Suppliers

Revenues are primarily derived from the resale of vendor software products and services. These sales are made pursuant to channel sales agreements whereby Rand Worldwide is granted the authority to purchase and resell the vendor products and services. Under these agreements, the Company both resells software directly to its customers and acts as a sales agent for various vendors and receives commissions for its sales efforts.

On February 1, 2013, the Company entered into renewable Value Added Reseller Agreements with Autodesk. The renewable agreements have a term of three years but provide targets and set forth rebate programs for a one-year period. Under these agreements, Autodesk appointed the Company as a non-exclusive partner to market, distribute, and support Autodesk software products. The territories for such authorizations include the authorization to sell various Autodesk products in parts of the United States and in all of Canada. The Company must achieve yearly minimum purchase requirements from the sale of Autodesk’s various software products in order to be eligible to purchase such products directly from Autodesk. For the year ended June 30, 2013, the Company’s revenue from the sale of Autodesk software and subscriptions was approximately $57.2 million.

Customers

The Company currently markets its products to private companies, public corporations, government agencies, and educational institutions throughout the United States and Canada. In the fiscal year ended June 30, 2013, the revenues generated by our top 10 customers represented approximately seven percent of consolidated revenues, and no single customer accounted for two percent or more of our consolidated revenues.

Intellectual Property

The Company regards its technology and other proprietary rights as essential to its business. As such, it relies on copyright, trade secret, confidentiality procedures, contract provisions, and trademark law to protect its technology and intellectual property. Rand Worldwide has confidentiality agreements with its consultants and corporate partners and controls access to, and distribution of, its products, documentation, and other proprietary information.

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Rand Worldwide owns several federally registered trademarks, and has other trademark applications pending, but has no patents or patent applications pending. This Annual Report contains trademarks and trade names of Rand Worldwide and its affiliates as well as those of other companies. All trademarks and trade names appearing in this report are the property of their respective holders.

Employees

At June 30, 2013, the Company had 355 employees, of which 352 are full-time employees including 34 at our Owings Mills, Maryland office and 13 at our Framingham, Massachusetts office, which both constitute our corporate headquarters and house a training facility and some sales and technical personnel. Other employees are located in 47 other offices throughout the United States and Canada. None of our employees are represented by collective bargaining agreements, and we have never experienced a work stoppage. We believe that our employee relations are good.

Available Information

Rand Worldwide maintains an Internet site at http://rand.com on which it makes available, free of charge, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to the foregoing as soon as reasonably practicable after these reports are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). In addition, stockholders may access these reports and documents on the SEC’s web site at www.sec.gov. The Company’s executive offices are located at 161 Worcester Road, Suite 401, Framingham, Massachusetts 01701 and its telephone number is (508) 663-1400.

ITEM 1B. RISK FACTORS

This item is not required for smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

This item is not applicable to smaller reporting companies.

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ITEM 2. PROPERTIES

The Company has corporate offices in Framingham, Massachusetts and Owings Mills, Maryland with leases for 10,127 square feet and 10,179 square feet, respectively, that expire on October 31, 2015 and September 30, 2016, respectively. These facilities house executive and primary administrative offices as well as accounting, order processing operations, IT, sales, and marketing. The Company also leases office space at the following locations:

Domestic Locations	Square Footage		Term
California—Newport Beach		948		10/31/2013
Colorado—Greenwood Village		3,381		7/31/2017
Florida—Maitland		3,425		10/31/2014
Florida—Tampa		4,103		3/31/2014
Illinois— Chicago		2,095		10/31/2017
Illinois—Rolling Meadows		3,440		4/30/2015
Indiana—Indianapolis		1,858		7/31/2018
Iowa—Cedar Rapids		2,456		10/31/2014
Iowa—Des Moines		3,027		8/31/2016
Michigan—Grandville		505		2/28/2014
Michigan—Troy		5,090		3/31/2014
Minnesota—St. Paul		2,725		month to month
Nebraska—Omaha		5,473		month to month
New Hampshire—Bedford		2,843		1/31/2016
New Mexico—Albuquerque		2,490		7/31/2015
New York—Albany		2,027		5/31/2015
New York—Buffalo		1,875		9/30/2016
New York—New York		2,323		11/30/2017
New York—Syracuse		1,280		12/31/2014
North Carolina—Charlotte		2,093		5/31/2016
North Carolina—Huntersville		204		3/31/2014
North Carolina—Huntersville		221		4/30/2014
North Carolina—Morrisville		3,671		11/30/2016
Ohio—Dublin		2,304		8/31/2018
Ohio—Independence		8,493		9/30/2017
Ohio—Toledo		435		9/30/2018
Ohio—Vandalia		1,567		10/31/2016
Oregon—Portland		3,147		10/31/2015
Texas—Houston		2,352		12/31/2014
Texas—Irving		3,238		7/31/2018
Utah—Murray City		2,870		5/31/2015
Virginia—Charlottesville		1,546		2/28/2018
Virginia—Richmond		1,832		9/30/2015
Virginia—Virginia Beach		3,191		3/31/2018
Washington—Seattle		3,621		10/31/2015
Wisconsin—Milwaukee		1,909		4/30/2016

International Locations	Square Footage		Term
Alberta—Calgary, CA		4,239		4/30/2014
Alberta—Edmonton, CA		3,075		month to month
British Columbia—Richmond, CA		2,319		1/31/2017
Manitoba—Winnipeg, CA		1,517		10/31/2017
Nova Scotia—Halifax, CA		1,850		12/31/2014

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International Locations	Square Footage		Term
Ontario—Mississauga, CA		12,063		9/30/2019
Ontario—Nepean, CA		955		8/31/2014
Saskatchewan—Regina, CA		280		12/31/2013
Saskatchewan—Saskatoon, CA		3,360		11/30/2015

The commercial real estate market is volatile and unpredictable in terms of available space, rental fees, and occupancy rates and preferred locations. The Company cannot be certain that additional space will be available when it is required, or that it will be affordable or in a preferred location.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is involved in legal matters or named as a defendant in legal actions arising from normal operations, or is presented with claims for damages arising out of the conduct of its business. Management believes that no pending matter, alone or together with other pending matters, is likely to have a material adverse effect on the Company’s future financial condition or results of operations.

ITEM 4. MINE SAFTEY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price Data

Rand Worldwide’s common stock is not heavily traded. Trades are affected in privately-negotiated transactions and by certain broker-dealers, who make a market in the common stock through the Over-the-Counter Bulletin Board (the “OTCBB”) . Market information for Rand Worldwide, Inc.’s common stock may be found at the OTCBB’s Internet website, www.otcbb.com, under the symbol “RWWI”. The information contained in or accessed through that website is not part of this Annual Report or incorporated herein by reference. The following table sets forth, to the best knowledge of the Company, the high and low bid quotations per share, rounded to the nearest whole cent, as available through the OTCBB for each quarterly period within the two most recent fiscal years. These quotations represent prices between dealers and do not reflect retail mark-ups, mark-downs or commissions, and may not represent actual transactions. There may have been additional transactions during these periods of which the Company is not aware.

Period	High		Low
Fiscal Year Ended June 30, 2013
First Quarter	$	0.85	$	0.67
Second Quarter		0.86		0.68
Third Quarter		0.94		0.70
Fourth Quarter		0.95		0.81
Fiscal Year Ended June 30, 2012
First Quarter	$	0.82	$	0.68
Second Quarter		0.86		0.63
Third Quarter		0.80		0.57
Fourth Quarter		0.89		0.68

Recent Closing Price

On September 17, 2013, the closing price for our common stock as reported on the OTCBB was $1.02.

Dividend Information

The Company has never paid cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. Rather, management intends to continue its strategy of retaining earnings for the foreseeable future for use in the expansion and operation of our businesses. The declaration and amount of any future cash dividends is at the discretion of the Company’s Board of Directors. Moreover, without the consent of our senior lender, the Company is prohibited from declaring dividends on the Company’s common stock. Accordingly, there can be no guarantee that stockholders will receive any cash dividends on their common stock in the future.

The Company has outstanding shares of Series D Convertible Preferred Stock (“Series D Stock”) and Series E Convertible Preferred Stock (“Series E Stock”), which are eligible for 10% annual, cumulative dividends. The dividends are payable quarterly as declared by the Board of Directors. These dividends have priority over any declaration or payment of any dividend or other distribution on the common stock and have been paid each quarter.

For the years ended June 30, 2013 and 2012, dividends totaling $109,000 and $137,000, respectively, were paid to the holders of the Series D Stock and Series E Stock.

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Number of Stockholders

As of September 12, 2013, there were 1,212 holders of record of the Company’s common stock, 7 holders of Series D Stock, and 25 holders of Series E Stock.

Equity Compensation Plan Information

Pursuant to the SEC’s Regulation S-K Compliance and Disclosure Interpretation 106.01, the information regarding the Company’s equity compensation plans required by this Item pursuant to Item 201(d) of Regulation S-K is located in Item 12 of Part III of this annual report and is incorporated herein by reference.

Issuer Purchases of Equity Securities

During the fourth quarter of fiscal year 2013, the Company did not purchase any shares of its common stock.

Sales of Unregistered Equity Securities

During the fourth quarter of fiscal year 2013, the Company did not sell any unregistered equity securities.

ITEM 6. SELECTED FINANCIAL DATA

This item is not required for smaller reporting companies.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

Overview

Rand Worldwide is a leading provider of design automation and data management solutions for the manufacturing, building design, engineering, infrastructure and facilities management markets. The Company also specializes in technical support, training, and consulting aimed at improving design and documentation efficiencies and the seamless integration of workflow processes. This combination of technology solutions and services enables customers to enhance productivity, profitability, and competitive position.

The Company’s business strategy is built on three core principles designed to leverage its existing strengths with expected market opportunities:

- Maintain and profitably grow its strong position in the Autodesk software market.

- Profitably grow its consulting and services business by leveraging its experts in design engineering.

- Acquire or license and integrate diverse, yet complementary, software and services businesses to extend its product offerings to its large customer base and expand its market potential.

Discontinued Operations

During the fourth quarter of its fiscal year ended June 30, 2013, the Company sold its operations in Singapore, Malaysia and Australia. Accordingly, the results of these operations and the gains and losses

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recognized upon their disposal are considered discontinued operations and are presented separately from the results of the Company’s continuing operations. The results for prior periods have been reclassified to separately present the results of discontinued operations.

Critical Accounting Policies

The consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. Critical accounting policies and estimates that impact the consolidated financial statements are those that relate to software revenue recognition, estimates of bad debts, income taxes and recoverability of goodwill and purchased intangible assets. All of these critical accounting policies are discussed with and reviewed by the Company’s Audit Committee on a periodic basis. Presented below is a description of the accounting policies that management believes are most critical to an understanding of the consolidated financial statements.

Software Revenue Recognition- The Company derives most of its revenue from the resale of packaged software products, and, historically, the Company has not experienced significant customer returns. Rand Worldwide earns service revenue from training and other professional services, which often are related to the products that are sold but are not essential to the functionality of the software. Annual support contracts are also offered to customers for the software products that are sold, or the Company offers maintenance and support services under hourly billing arrangements.

Revenue from software arrangements is recognized in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 985, Software Revenue Recognition. Prior to recognizing any revenue under these arrangements, (1) persuasive evidence of an arrangement must exist, (2) delivery of the software or service must have occurred, (3) all fees must be assessed as fixed or determinable, and (4) all fees must be probable of collection. The Company determines whether criteria (3) and (4) have been satisfied based on its judgment regarding the fixed nature of the fee charged for services rendered and products delivered and the collectability of such fee. Revenue recognized in a reporting period could be adversely affected if future changes in conditions related to a transaction cause management to determine these criteria are not met. In the past, it has not been necessary to adjust reported revenues due to changes in conditions, and the Company continues to evaluate current conditions that may affect the nature and timing of our revenue recognition.

The Company’s arrangements with its customers may involve the sale of one or more products and services at the same time. The Company considers these to be multiple elements of a single arrangement. The Company follows the guidance in FASB ASC 605-25, Multiple-Element Arrangements where we allocate the total arrangement consideration to each separable element based on the relative selling price of each element in accordance with selling price hierarchy, which includes: vendor specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; and best estimate of selling price if neither VSOE nor TPE is available. In general, the Company uses VSOE to allocate the selling price to each element. Arrangement consideration allocated to undelivered elements is deferred until delivery of the individual elements.

Bad Debts- The Company maintains an allowance for doubtful accounts for estimated losses which may result from the inability of customers to pay for purchased products and services or for disputes that affect the ability to fully collect accounts receivable. Rand Worldwide estimates this allowance by reviewing the status of past-due accounts and records general reserves based on historical bad debt expense. Accounts are considered past due based on the payment terms as stated on the invoice. Actual experience has not varied significantly from estimates; however, if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to pay for products or services, there may be a need to record additional allowances in future periods. To mitigate this risk, the Company performs ongoing credit evaluations of its customers.

13

Income Taxes- Income taxes are accounted for under the liability method, under which deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against the net deferred tax assets is recorded if based upon the weight of available evidence it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records liabilities for income tax contingencies if it is probable that the Company has incurred a tax liability and the liability or range of loss can be reasonably estimated. The Company records liabilities for uncertain tax positions in accordance with ASC 740-10, Income Taxes.

Recoverability of goodwill and purchased intangible assets- The Company accounts for goodwill and other intangibles under ASC 350, Goodwill and Other Intangible Assets. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment; while the second phase, if necessary, measures the impairment. At June 30, 2013, management considers the Company to be a single reporting unit; accordingly, all of the goodwill is associated with the entire company. The Company performs the required impairment analysis of goodwill annually or on an interim basis if circumstances dictate. Any reduction of the enterprise fair value below the recorded amount of equity could require the Company to write down the value of goodwill and record an expense for an impairment loss. Management’s analysis of the recoverability of goodwill as of June 30, 2013 determined that there was no need for any write downs of its assets.

Results of Operations

The following describes the components of each line item of our consolidated statement of operations.

Product Sales- Product sales consist primarily of the resale of packaged design software, including:

• Autodesk 2D and 3D computer aided design software for customers in the mechanical, architectural and civil engineering sectors, as well as visualization and animation technology to companies in the media and entertainment industry;

• Autodesk data management software;

• Archibus facilities management software for space planning, strategic planning, and lease/property administration;

• Leica 3D laser scanning equipment for the Architectural, Engineering and Construction sector;

• ASCENT internally developed courseware for a variety of engineering applications; and

• Autonomy data archiving solutions

Service Revenue- Rand Worldwide provides services in the form of training, consulting services, software development, custom courseware development, technical support and data archiving solutions to its customers. Rand Worldwide employs a technical staff of over 100 personnel associated with these types of services. The Company also offers support and implementation services to complement the data archive solutions provided and sold through its Rand Secure Archive Division.

Commission Revenue- The Company offers Autodesk’s subscription programs, which entitle subscribers to receive software upgrades, web support and eLearning lessons directly from Autodesk. Because Rand Worldwide does not participate in the delivery of these subscription products or the web support and eLearning lesson benefits, the Company records the gross profit from the sale of Autodesk software subscriptions as commission revenue. In addition, the Company sells technology upgrades to existing Autodesk customers through the Autodesk Subscription program where the customers receive the latest releases of Autodesk software, incremental product enhancements, and personalized web support direct from Autodesk.

14

Based on its analysis of the Autodesk Subscription program, Rand Worldwide records the net proceeds that it receives from Autodesk for subscription sales in accordance with the provisions of ASC 605, Revenue Recognition.

Rand Worldwide also generates commission revenue from the resale of Autodesk software to various customers, a number of which Autodesk considers major and government accounts. Autodesk designates customers as major accounts based on specific criteria, primarily sales volume, and typically gives these customers volume discounts. The Company is responsible for managing and reselling Autodesk products to a number of these major and government account customers; however, software products are shipped directly from Autodesk to the customers. Rand Worldwide receives commissions upon shipment of the products from Autodesk to the customer based on a percentage of the sales price.

Cost of Product Sales- The cost of product sales consists of the cost of purchasing products from software suppliers or hardware manufacturers as well as the associated shipping and handling costs. The Company earns a volume incentive rebate from its primary supplier, Autodesk, paid monthly as a percentage of qualifying purchases. The rebate percentage is established based on quarterly purchasing volume. These rebates serve to reduce the cost of product sales. The Company accrues its rebates the month the underlying sales are posted, in accordance with ASC 605-50, Customer Payments and Incentives. The Company has generally been able to focus its sales efforts in a manner to achieve margins on its product sales that are within a relatively narrow range period to period.

Cost of Service Revenue- Cost of service revenue includes the direct costs associated with the implementation of software and hardware solutions as well as training, support services, and professional services. These costs consist primarily of compensation, travel, literature, and the costs of third-party contractors engaged by the Company. The cost of service revenue does not include an allocation of overhead costs.

Selling, General and Administrative Expenses- Selling, general and administrative expenses consist primarily of compensation and other expenses associated with the Company’s sales force, management, finance, human resources, and information systems. Advertising and public relations expenses and expenses for facilities, such as rent and utilities, are also included in selling, general and administrative expenses.

Depreciation and Amortization Expenses- Depreciation expense represents the period costs associated with our investment in property and equipment, consisting principally of computer equipment, software, furniture and fixtures, and leasehold improvements. Amortization expense represents the period costs of the acquired customer list and trade name intangible assets. The Company computes depreciation and amortization expenses using the straight-line method. Rand Worldwide leases all of its facilities and depreciates leasehold improvements over the lesser of the lease term or the estimated useful life of the asset. Total amortization expense for the year ended June 30, 2013 was $846,000 and total depreciation expense for the same period was $1,045,000.

Interest Expense- For the year ended June 30, 2013, interest expense consisted of interest on capital lease obligations and borrowings from lines of credit.

15

Selected Revenue Information for Years Ended June 30, 2013 and June 30, 2012

The following table sets forth the percentages of total revenue represented by selected items reflected in our audited Consolidated Statements of Operations included elsewhere in this report. The year-to-year comparisons of financial results are not necessarily indicative of future results.

	Years ended
	June 30, 2013			June 30, 2012
Revenue:
Product sales		50.7	%		54.2	%
Service revenue		26.4	%		23.5	%
Commission revenue		22.9	%		22.3	%
Total revenue		100.0	%		100.0	%
Cost of revenue:
Cost of product sales		31.9	%		36.6	%
Cost of service revenue		17.6	%		15.4	%
Total cost of revenue		49.5	%		52.0	%
Gross margin		50.5	%		48.0	%
Other operating expenses:
Selling, general and administrative		42.5	%		40.3	%
Depreciation and amortization		2.3	%		1.9	%
Total other operating expenses		44.8	%		42.2	%
Operating income		5.7	%		5.8	%
Other income (expense):
Interest expense		(0.4	)%		(0.4	)%
Currency exchange losses		(0.1	)%		(0.1	)%
Other expense		(0.1	)%		(0.1	)%
Income from continuing operations before income taxes		5.1	%		5.2	%
Income tax expense (benefit)		2.0	%		(5.0	)%
Income from continuing operations		3.1	%		10.2	%

Year Ended June 30, 2013 Compared to Year Ended June 30, 2012

Revenue

	Years ended
	June 30, 2013		June 30, 2012		% change
Revenue:
Product sales	$	41,869,000	$	43,953,000		(4.7	)%
Service revenue		21,764,000		19,090,000		14.0	%
Commission revenue		18,870,000		18,101,000		4.2	%
Total Revenue:	$	82,503,000	$	81,144,000		1.7	%

Revenue: Total revenue for the year ended June 30, 2013 increased by $1.4 million, or 1.7%, when compared to the prior year.

16

Product sales as reported in the current fiscal year decreased by $2.1 million, or 4.7%, from the levels in the prior year. Product sales of the core Autodesk resale business decreased 6.1%, or $2.5 million, over the prior year, and in response, the Company is focusing its sales efforts and adjusting its compensation plans in an effort to boost its product sales. Despite the overall decrease in product revenue as a result of the Autodesk-related sales, the Company’s ASCENT division grew its product revenues by 15.1%. The Company’s overall gross margins from product sales increased by $1.4 million, or 9.7%, over the prior year. Product margins have increased due to increased sales of the Company’s proprietary products as well as increased sales incentives received from Autodesk.

Service revenues increased $2.7 million, or 14.0%, for the year ended June 30, 2013 when compared those reported for the year ended June 30, 2012. The increased service revenues included an increase of $928,000 in software development projects, $637,000 in increased service revenues from Rand Secure Archive services, and $792,000 from its CFD consulting business which the Company acquired in August 2012. The remaining $343,000 increase in service revenues was primarily training services.

In fiscal year 2013, commission revenues increased $769,000, or 4.2%,. Through a disciplined approach to sales and a heightened attention to customer satisfaction, the Company’s renewal rates on its Autodesk subscriptions are among the highest in the sales channel, allowing for modest year-over-year growth in commission revenues.

Cost of Revenue

	Years ended
	June 30, 2013		June 30, 2012		% change
Cost of revenue:
Cost of product sales	$	26,282,000	$	29,738,000		(11.6	)%
Cost of service revenue		14,540,000		12,479,000		16.5	%
Total cost of revenue	$	40,822,000	$	42,217,000		(3.3	)%
Gross margin	$	41,681,000	$	38,927,000		7.1	%

Cost of Revenue: Total cost of revenue decreased by $1.4 million, or 3.3%, for the year ended June 30, 2013 when compared to the year ended June 30, 2012.

Cost of product sales decreased 11.6% while product sales decreased 4.7% over the previous fiscal year. During fiscal year 2013, the Company achieved a significant increase in product margins, with product margin rates increasing from 32.3% to 37.2%. Margins earned on product sales increased $1.4 million, or 9.7%, despite product revenues decreasing 4.7%. Much of the increase in product margins was attributable to increased sales of the Company’s proprietary products including Revit Clarity and licenses for ASCENT courseware. Additional increases in product margins were the result of Autodesk moving from a target-based rebate to a volume-based rebate effective February 2012, which resulted in increased rebates for Rand Worldwide, thus reducing the cost of product sales.

Cost of service revenue increased 16.5%, while service revenue increased by 14.0% over last year due to the fact that the Company hired additional technical staff, mainly those related to the Company’s recent acquisitions of Informative Design Partners (“IDP”) in July 2012 and Inlet Technology, LLC (“Inlet”) in February 2012 as well as the expansion of the Rand Secure Archive division. As a result, cost of service revenue as a percentage of related revenue increased to 66.8% during fiscal year 2013 from 65.4% during the prior fiscal year.

Gross Margin: The Company’s overall gross margin percentage of 50.5% for the year ended June 30, 2013 was higher than the 48.0% gross margin for the previous year due primarily to the increased product margins.

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Other Operating Expenses

	Years ended
	June 30, 2013		June 30, 2012		% change
Other operating expenses:
Selling, general and administrative	$	35,111,000	$	32,692,000		7.4	%
Depreciation and amortization		1,891,000		1,533,000		23.4	%
Total other operating expenses	$	37,002,000	$	34,225,000		8.1	%

Selling, General and Administrative: Selling, general and administrative expenses increased $2.4 million, or 7.4%, over the prior year. The increase in these expenses was primarily the result of the addition of new employees including those related to the Company’s recent acquisitions as well as the expansion of the Rand Secure Archive division. Marketing costs also increased significantly as the result of the Rand Secure Archive expansion efforts.

Depreciation and Amortization: Depreciation and amortization expenses increased $358,000, or 23.4%, the result of additional depreciation expense associated with hardware and software acquired for the Company’s data archiving division as well as the regularly scheduled replacement of computer equipment.

Other Income (Expense):

	Years ended
	June 30, 2013			June 30, 2012			% change
Other income (expense):
Interest expense	$	(304,000	)	$	(359,000	)		(15.3	)%
Currency exchange losses		(110,000	)		(93,000	)		18.3	%
Other expense		(62,000	)		(26,000	)		138.5	%
Total other income (expense)	$	(476,000	)	$	(478,000	)		(0.4	)%

Other Income (Expense): Other income (expense) includes interest expense arising from the Company’s borrowings and recognized foreign exchange gains and losses.

Interest expense for fiscal year 2013 decreased $55,000, or 15.3%, when compared to the prior fiscal year mainly due to a decreased line of credit balance.

The Company incurred $110,000 of currency exchange losses during the year ended June 30, 2013, compared with $93,000 of losses for the year ended June 30, 2012, mainly due to the Canadian Dollar gaining strength relative to the US Dollar.

Income Tax Expense (Benefit)

	Years ended
	June 30, 2013		June 30, 2012			% change
Income tax expense (benefit)	$	1,691,000	$	(4,049,000	)		(141.8	)%

Income Tax Expense (Benefit): The Company recorded a tax expense of $1,691,000 for the year ended June 30, 2013 versus an income tax benefit of $4,049,000 for the prior year.

In the prior fiscal year, the Company had a valuation allowance against its net operating loss carryforwards and was able to offset most of its income tax expense against its net operating loss carryforwards. During the

18

quarter ended June 30, 2012, the Company recognized as an asset its U.S. net operating loss carryforwards that it expects will be realizable and, as a result, the Company’s income tax expense is no longer offset against large unrecognized U.S. net operating loss carryforwards. Consequently, income tax expense for fiscal year 2013 was significantly higher.

At June 30, 2013, the Company had US federal net operating loss carryforwards available to reduce future taxable income of approximately $29.9 million, a portion of which may be limited as to annual utilization under Internal Revenue Code Section 382. Because of this limitation, approximately $23.3 million of net operating losses are expected to expire before being utilized. For tax year June 30, 2013, it is projected that approximately $5.4 million of net operating loss carryforwards will be utilized to offset taxable income.

In addition, at June 30, 2013, the Company had foreign net operating loss carryforwards of approximately $17.4 million available to reduce future taxable income. These carryforwards expire between 2014 and 2031.

As of June 30, 2013, the Company has maintained the valuation allowance of its net deferred tax assets of approximately $5.4 million in the Company’s foreign entities, due to insufficient history of profitable quarters. The United States entities maintain a valuation allowance of $4.3 million due to expiration of net operating losses carryforward prior to utilization, capital losses and a portion of state net operating loss carryforwards. The valuation allowances are evaluated quarterly to determine the appropriate allowance amount.

Rand Worldwide’s Canadian subsidiary, Rand A Technology Corporation, is currently being audited by the Canada Revenue Agency for tax years 2005 through 2009. Preliminary results from the audit indicate that some deductions may be disallowed. The net effect to deferred tax assets and the related valuation allowance cannot be determined at this time. Management believes that it has properly recorded the tax expense for the periods under review and should the results of the audit stand, the Company expects no material adjustments to its financial statements.

Discontinued Operations

	Years ended
	June 30, 2013			June 30, 2012
Income (loss) from discontinued operations, net of tax	$	(241,000	)	$	92,000
Loss on sales of discontinued operations, net of tax	$	(370,000	)	$	—

The Company disposed of its operations in Singapore, Malaysia and Australia during May and June of 2013 as detailed in Note 14. The disposals resulted in a loss of $370,000 that was recognized in the fourth quarter of fiscal year 2013.

Liquidity and Capital Resources

Historically, the Company has financed its operations and met its capital expenditure requirements primarily through cash flows provided by operations and borrowings under short-term debt arrangements.

On February 29, 2012, the Company entered into an $8 million line of credit facility, including a $1,000,000 sublimit for the issuance of standby or trade letters of credit, with PNC Bank, National Association. The interest rate is the “Eurodollar Rate”, which is calculated by using the LIBOR rate, plus a margin of 2.0%. The Company had no outstanding borrowings from the bank under its credit line as of June 30, 2013 and had $3.1 million outstanding as of June 30, 2012. The Company has pledged its U.S. trade accounts receivable as collateral against the line of credit. The line expires on November 30, 2014.

The Company’s operating assets and liabilities consist primarily of accounts receivable, cash, borrowings under line of credit, accounts payable, and deferred revenue. Changes in these balances are affected principally by the timing of sales, collections and vendor payments. The Company purchases approximately 97% of its product from one principal supplier and its distributors, which provide the Company with credit to finance those purchases.

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For the year ended June 30, 2013, net cash provided by operating activities was $4,645,000, compared with cash provided by operating activities of $2,753,000 during the year ended June 30, 2012. The increase in cash provided by operating activities from the year ended June 30, 2013 to the year ended June 30, 2012 was due mainly to increased collections of accounts receivable, partially offset by increased deferred revenues.

Approximately $1,632,000 of cash was used in investing activities during the year ended June 30, 2013 compared to $2,192,000 of cash used in investing activities during the year ended June 30, 2012. The Company used less of its cash for acquitisitions in the current fiscal year compared with the prior year but increased its purchases of property and equipment by $392,000 as compared with the prior year’s levels.

For the year ended June 30, 2013, net cash used in financing activities was $3,534,000 compared to $1,149,000 of net cash used in financing activities during the year ended June 30, 2012. The difference was a result of the Company paying down its outstanding line of credit balance and capital lease obligatons using cash from operating activities during the year ended June 30, 2013.

Because the Company is one of the largest resellers of Autodesk software and because Autodesk has continued to state its intention to continue to strengthen its relationships with its resellers, the Company expects to continue to be a leading seller of Autodesk software. The Company is a party to a Value Added Reseller Agreement with Autodesk effective February 1, 2013. The agreement provides for an initial term of 12 months that, subject to certain requirements and termination rights of the parties, automatically renews on an annual basis for two additional 12 month periods. The agreement designates the Company as an authorized reseller of Autodesk software and prescribes the authorized sales territories, authorized products and services, rebate and incentive program details and marketing support.

Off Balance Sheet Transactions

The Company is not party to any off-balance sheet transactions as defined in Item 303 of the SEC’s Regulation S-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

This item is not required for smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item may be found immediately after the signatures to this report and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

ITEM 9A. CONTROLS AND PROCEDURES

The Company maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and is accumulated and communicated to management in a timely manner. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource

20

constraints, and the benefits of controls must be considered relative to their costs. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

An evaluation of the effectiveness of these disclosure controls and procedures as of June 30, 2013 was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, has concluded that the Company’s disclosure controls and procedures are, in fact, effective at the reasonable assurance level.

During the fourth quarter of the fiscal year ended June 30, 2013, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

As required by Section 404 of the Sarbanes-Oxley Act of 2002, management has performed an evaluation and testing of the Company’s internal control over financial reporting as of June 30, 2013. Management’s report on the Company’s internal control over financial reporting is included in Item 8 of this report and is incorporated herein by reference.

ITEM 9B. OTHER INFORMATION

None.

21

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is contained in the sections of the definitive Proxy Statement of the Company to be filed with the SEC in connection with the 2013 Annual Meeting of Stockholders (the “Proxy Statement”) entitled, “ELECTION OF DIRECTORS (Proposal 1)”, “EXECUTIVE OFFICERS”, “SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE”, and “CORPORATE GOVERNANCE” and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is contained in the sections of the Proxy Statement entitled “CORPORATE GOVERNANCE” and “EXECUTIVE COMPENSATION” and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information, as of June 30, 2013, with respect to all compensation arrangements that we maintain under which shares of common stock may be issued:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(1)
Equity compensation plans approved by security holders		3,488,629	$	0.77		1,982,000
Equity compensation plans not approved by security holders		-0-		-0-		-0-
Total		3,488,629	$	0.77		1,982,000

(1) This amount represents shares of stock that may be issued under (a) the Avatech Solutions, Inc. Amended and Restated Restricted Stock Plan, which contemplates the grant of shares of common stock upon such terms, including with respect to forfeiture and restrictions of resale and transfer, as the Board deems appropriate, and (b) the Rand Worldwide, Inc. Omnibus Equity Compensation Plan, which, in addition to stock options, permits the grant of stock awards, stock units, performance units, and other stock-based awards.

All other information required by this item is contained in the section of the Proxy Statement entitled, “BENEFICIAL OWNERSHIP OF VOTING SECURITIES OF RAND WORLDWIDE, INC.” and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is contained in the sections of the Proxy Statement entitled, “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” and “CORPORATE GOVERNANCE” and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is contained in the section of the Proxy Statement entitled, “ACCOUNTING FEES AND SERVICES” and is incorporated herein by reference.

22

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) and (2).    List of Financial Statements and Schedules.

	Page
Financial Statement Schedule II—Rand Worldwide, Inc. and Subsidiaries Valuation and Qualifying Accounts		24
Management’s Report on Internal Control over Financial Reporting		F-2
Report of Independent Registered Public Accounting Firm		F-3
Consolidated Balance Sheets at June 30, 2013 and 2012		F-4
Consolidated Statements of Operations for the Years Ended June 30, 2013 and June 30, 2012		F-6
Consolidated Statements of Comprehensive Income for the Years Ended June 30, 2013 and June  30, 2012		F-7
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2013 and June  30, 2012		F-8
Consolidated Statements of Cash Flows for the Years Ended June 30, 2013 and June 30, 2012		F-10
Notes to Consolidated Financial Statements		F-11

23

(c). Financial Statement Schedule—Schedule II

Rand Worldwide, Inc. and Subsidiaries Valuation and Qualifying Accounts

Description	Balance at beginning of period		Additions						Deductions			Balance at end of period
			Charged to costs and expenses			Charged to other accounts
Year Ended June 30, 2013:
Deducted from assets accounts:
Allowance for doubtful accounts	$	405,000	$	110,000		$	(117,000	)(1)	$	(145,000	)(2)	$	253,000
Valuation allowance for net deferred tax assets	$	11,691,000	$	(997,000	)	$	(449,000	)(3)	$	(520,000	)(1)	$	9,725,000
Year Ended June 30, 2012:
Deducted from assets accounts:
Allowance for doubtful accounts	$	607,000	$	(42,000	)	$	—		$	(160,000	)(2)	$	405,000
Valuation allowance for net deferred tax assets	$	17,362,000	$	22,000		$	(5,693,000	)(3)	$	—		$	11,691,000

(1) Write-off from disposal of foreign subsidiaries

(2) Uncollectible accounts written off, net of recoveries

(3) Decrease in valuation allowance, net of temporary differences as discussed in Footnote 10 of the accompanying financial statements

(a)(3) and (b).    Exhibits required to be filed by Item 601 of Regulation S-K

The exhibits filed or furnished with this annual report are listed in the Exhibit List that immediately follows the Notes to the Consolidated Financial Statements presented elsewhere in this report, which list is incorporated herein by reference.

24

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

	RAND WORLDWIDE, INC.
Date: September 30, 2013	By:	/s/ Marc L. Dulude
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Richard A. Charpie	By:	/s/ Marc L. Dulude
	Director September 30, 2013		Director and Chief Executive Officer (Principal Executive Officer) September 30, 2013
By:	/s/ Peter H. Kamin	By:	/s/ Manu Parpia
	Director September 30, 2013		Director September 30, 2013
By:	/s/ Lawrence Rychlak	By:	/s/ Charles D. Yie
	Director, President and Chief Financial Officer (Principal Financial and Accounting Officer) September 30, 2013		Director September 30, 2013

25

FINANCIAL STATEMENTS

Rand Worldwide, Inc. and Subsidiaries

Index to Audited Consolidated Financial Statements

	Page
Management’s Report on Internal Control Over Financial Reporting		F–2
Report of Independent Registered Public Accounting Firm		F–3
Consolidated Balance Sheets		F–4
Consolidated Statements of Operations		F–6
Consolidated Statements of Comprehensive Income		F–7
Consolidated Statements of Stockholders’ Equity		F–8
Consolidated Statements of Cash Flows		F–10
Notes to Consolidated Financial Statements		F–11

F-1

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Rand Worldwide, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because management’s report was not subject to attestation pursuant to Section 989G(a) of the recently-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, which permits the Company, as a “smaller reporting company”, to provide only this management’s report.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A control system, no matter how well designed and operated can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their cost.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2013 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on its assessment and the foregoing criteria, management has concluded that, as of June 30, 2013, the Company’s internal control over financial reporting is effective.

September 30, 2013

/s/ Marc L. Dulude	/s/ Lawrence Rychlak
Chief Executive Officer	President and Chief Financial Officer
(Principal Executive Officer)	(Principal Financial and Accounting Officer)

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

Rand Worldwide, Inc.

We have audited the accompanying consolidated balance sheets of Rand Worldwide, Inc. and Subsidiaries (the “Company”) as of June 30, 2013 and 2012 and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the years in the two year period ended June 30, 2013. Company management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rand Worldwide, Inc. and Subsidiaries as of June 30, 2013 and 2012 and the consolidated results of their operations and their cash flows for each of the years in the two-year period ended June 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

/s/ Stegman & Company

Baltimore, Maryland

September 30, 2013

F-3

Rand Worldwide, Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30,
	2013			2012
Assets
Current assets:
Cash	$	1,214,000		$	1,680,000
Accounts receivable, less allowance of $253,000 and $405,000 in 2013 and 2012		13,097,000			18,099,000
Income tax receivable		851,000			281,000
Other receivables		2,227,000			994,000
Inventory		27,000			107,000
Prepaid expenses and other current assets		2,520,000			2,084,000
Deferred tax assets		141,000			78,000
Total current assets		20,077,000			23,323,000
Property and equipment:
Computer software and equipment		8,432,000			8,231,000
Office furniture and equipment		1,900,000			1,974,000
Leasehold improvements		685,000			699,000
		11,017,000			10,904,000
Less accumulated depreciation and amortization		(8,379,000	)		(8,193,000	)
		2,638,000			2,711,000
Customer list, net of accumulated amortization of $6,648,000 and $6,105,000 in 2013 and 2012		3,586,000			3,290,000
Goodwill		17,700,000			15,954,000
Trade name, net of accumulated amortization of $1,247,000 and $945,000 in 2013 and 2012		2,684,000			2,986,000
Deferred income taxes		1,245,000			2,576,000
Other assets		236,000			370,000
Total assets	$	48,166,000		$	51,210,000

F-4

Rand Worldwide, Inc. and Subsidiaries

Consolidated Balance Sheets (Continued)

	June 30,
	2013			2012
Liabilities and stockholders’ equity
Current liabilities:
Borrowings under line of credit	$	—		$	3,140,000
Accounts payable and accrued expenses		7,458,000			9,850,000
Accrued compensation and related benefits		1,453,000			1,804,000
Deferred revenue		4,255,000			4,666,000
Obligations under capital leases		294,000			290,000
Total current liabilities		13,460,000			19,750,000
Long-term liabilities:
Obligations under capital leases		322,000			614,000
Other long-term liabilities		1,184,000			—
Total liabilities		14,966,000			20,364,000
Commitments and contingencies (Note 11)
Stockholders’ equity:
Convertible Preferred Stock, $0.01 par value; 1,300,537 shares authorized, 1,298,728 shares issued; 385,357 shares outstanding at June 30, 2013 and June 30, 2012; aggregate liquidation preference of $1,093,000 at June 30, 2013 and June 30, 2012		4,000			4,000
Common stock, $0.01 par value; 80,000,000 shares authorized; issued and outstanding shares of 54,000,186 and 53,493,077 at June 30, 2013 and June 30, 2012, respectively		540,000			535,000
Additional paid-in capital		65,497,000			64,947,000
Accumulated deficit		(33,799,000	)		(35,700,000	)
Accumulated other comprehensive income		958,000			1,060,000
Total stockholders’ equity		33,200,000		$	30,846,000
Total liabilities and stockholders’ equity	$	48,166,000		$	51,210,000

See accompanying notes.

F-5

Rand Worldwide, Inc. and Subsidiaries

Consolidated Statements of Operations

	Years ended
	June 30, 2013			June 30, 2012
Revenues:
Product sales	$	41,869,000		$	43,953,000
Service revenue		21,764,000			19,090,000
Commission revenue		18,870,000			18,101,000
Total revenue		82,503,000			81,144,000
Cost of revenue:
Cost of product sales		26,282,000			29,738,000
Cost of service revenue		14,540,000			12,479,000
Total cost of revenue		40,822,000			42,217,000
Gross margin		41,681,000			38,927,000
Other operating expenses:
Selling, general and administrative		35,111,000			32,692,000
Depreciation and amortization		1,891,000			1,533,000
Total operating expenses		37,002,000			34,225,000
Operating income		4,679,000			4,702,000
Other expense:
Interest expense		304,000			359,000
Currency exchange losses		110,000			93,000
Other expense		62,000			26,000
		476,000			478,000
Income from continuing operations before income taxes		4,203,000			4,224,000
Income tax expense (benefit)		1,691,000			(4,049,000	)
Income from continuing operations		2,512,000			8,273,000
(Loss) income from discontinued operations, net of tax		(241,000	)		92,000
Loss on sale of discontinued operations, net of tax		(370,000	)		—
Net income	$	1,901,000		$	8,365,000
Net income from continuing operations	$	2,512,000		$	8,273,000
Preferred stock dividends		(109,000	)		(137,000	)
Net income from continuing operations available to common stockholders	$	2,403,000		$	8,136,000
Income per common share from continuing operations, basic	$	0.04		$	0.16
Income per common share from discontinued operations, basic		(0.01	)		—
Income per common share, basic	$	0.03		$	0.16
Income per common share from continuing operations, diluted	$	0.04		$	0.15
Income per common share from discontinued operations, diluted		(0.01	)		—
Income per common share, diluted	$	0.03		$	0.15
Shares used for computing income per common share:
Weighted average shares used in computation—basic		53,951,438			52,625,538
Weighted average shares used in computation—diluted		55,102,436			54,900,931

See accompanying notes.

F-6

Rand Worldwide, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

	Years ended
	June 30, 2013			June 30, 2012
Net income	$	1,901,000		$	8,365,000
Other comprehensive income, net of tax:
Net change in cumulative foreign currency translation gain		(102,000	)		(283,000	)
Comprehensive income	$	1,799,000		$	8,082,000

See accompanying notes.

F-7

Rand Worldwide, Inc. and Subsidiaries

Consolidated Statement of Stockholders’ Equity

	Convertible Preferred Stock						Common Stock				Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income			Total
	Number of Shares			Par Value			Number of Shares		Par Value
Balance at July 1, 2011		1,090,150		$	11,000			51,882,678	$	519,000	$	64,864,000		$	(44,065,000	)	$	1,343,000		$	22,672,000
Stock based compensation		—			—			—		—		190,000			—			—			190,000
Preferred stock dividends		—			—			—		—		(137,000	)		—			—			(137,000	)
Issuance of common stock upon the exercise of options		—			—			84,400		1,000		38,000			—			—			39,000
Conversion of preferred stock into common stock		(704,793	)		(7,000	)		1,525,999		15,000		(8,000	)		—			—			—
Foreign currency translation adjustment		—			—			—		—		—			—			(283,000	)		(283,000	)
Net income		—			—			—		—		—			8,365,000			—			8,365,000
Balance at June 30, 2012		385,357		$	4,000			53,493,077	$	535,000	$	64,947,000		$	(35,700,000	)	$	1,060,000		$	30,846,000

See accompanying notes.

F-8

Rand Worldwide, Inc. and Subsidiaries

Consolidated Statement of Stockholders’ Equity (Continued)

	Convertible Preferred Stock				Common Stock				Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income			Total
	Number of Shares		Par Value		Number of Shares		Par Value
Balance at July 1, 2012		385,357	$	4,000		53,493,077	$	535,000	$	64,947,000		$	(35,700,000	)	$	1,060,000		$	30,846,000
Stock based compensation		—		—		—		—		261,000			—			—			261,000
Preferred stock dividends		—		—		—		—		(109,000	)		—			—			(109,000	)
Issuance of common stock upon the exercise of options		—		—		9,597		—		3,000			—			—			3,000
Issuance of common stock for acquisition		—		—		497,512		5,000		395,000			—			—			400,000
Foreign currency translation adjustment		—		—		—		—		—			—			(102,000	)		(102,000	)
Net income		—		—		—		—		—			1,901,000			—			1,901,000
Balance at June 30, 2013		385,357	$	4,000		54,000,186	$	540,000	$	65,497,000		$	(33,799,000	)	$	958,000		$	33,200,000

See accompanying notes.

F-9

Rand Worldwide, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Years ended
	June 30, 2013			June 30, 2012
Cash flows from operating activities
Net income	$	1,901,000		$	8,365,000
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt (recoveries) expense		110,000			(34,000	)
Gain on sale of property and equipment		—			(1,000	)
Depreciation and amortization		1,891,000			1,595,000
Stock-based compensation		261,000			190,000
Deferred income taxes		1,268,000			(4,307,000	)
Changes in operating assets and liabilities:
Accounts receivable and other receivables		3,659,000			1,263,000
Income tax receivable		(570,000	)		(194,000	)
Inventory		80,000			25,000
Prepaid expenses and other current assets		(436,000	)		(1,158,000	)
Other assets		134,000			33,000
Accounts payable and accrued expenses		(3,030,000	)		(3,885,000	)
Accrued compensation and related benefits		(351,000	)		(651,000	)
Deferred revenue		(411,000	)		1,512,000
Other long-term liabilities		139,000			—
Net cash provided by operating activities		4,645,000			2,753,000
Cash flows from investing activities
Purchases of property and equipment		(1,032,000	)		(640,000	)
Purchase of Informative Design Partners		(600,000	)		—
Purchase of Inlet Technology, LLC		—			(1,552,000	)
Net cash used in by investing activities		(1,632,000	)		(2,192,000	)
Cash flows from financing activities
Proceeds from borrowings under line of credit		63,992,000			103,752,000
Repayment of borrowings under line of credit		(67,132,000	)		(104,551,000	)
Principal payments on capital lease obligations		(288,000	)		(252,000	)
Proceeds from issuance of common stock to employees		3,000			39,000
Payment of preferred stock dividends		(109,000	)		(137,000	)
Net cash used in financing activities		(3,534,000	)		(1,149,000	)
Effect of exchange rate changes on cash from continuing operations		55,000			(363,000	)
Net change in cash		(466,000	)		(951,000	)
Cash—beginning of year		1,680,000			2,631,000
Cash—end of year	$	1,214,000		$	1,680,000

See accompanying notes.

F-10

Rand Worldwide, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

When used throughout these notes, the terms “Rand Worldwide”, “the Company”, “we”, “us” and “our” refer to Rand Worldwide, Inc. and, unless the context clearly indicates otherwise, its consolidated subsidiaries.

Nature of Business and Basis of Presentation

Rand Worldwide, Inc. is a leading supplier in the design automation, facilities and data management software marketplace. Rand Worldwide also provides value-added services, such as training, technical support, hosted data archiving solutions and other consulting and professional services to businesses, government agencies and educational institutions worldwide.

The Company is organized into three divisions: IMAGINiT Technologies (“IMAGINiT”), Enterprise Applications, and ASCENT – Center for Technical Knowledge (“ASCENT”). Executive management performs their primary analyses based upon geographic location and operations by geographic segment are disclosed within Note 16.

The IMAGINiT division is one of the largest value-added resellers of Autodesk, Inc. (“Autodesk”) products in the world, providing Autodesk solutions and value-added services to customers in the manufacturing, infrastructure, building, and media and entertainment industries. IMAGINiT also specializes in computational fluid dynamics analysis consulting and thermal simulation services and sells its own proprietary software products and related services, enhancing its total client solution offerings. IMAGINiT operates in the United States and Canada.

The Enterprise Applications division is the non-Autodesk component of the business and offers various products and services including data governance solutions, facilities management solutions and 3DExperience products from Dassault Systèmes which include CATIA, ENOVIA, SIMULIA, DELMIA, and DMU. Enterprise Applications also specializes in training solutions for Dassault Systèmes and PTC products including Pro/ENGINEER, CREO, and Windchill.

ASCENT is the courseware division of Rand Worldwide and is a leading developer of professional training materials and knowledge products for engineering software tools.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventory

Inventory consists of packaged computer software and is stated at the lower of first-in, first-out cost, or market.

Property and Equipment

Property and equipment is stated at cost. Depreciation for computer software and equipment and office furniture and equipment is provided for by the straight-line method over estimated useful lives ranging from three to seven years. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the asset using the straight-line method. Repairs and maintenance costs are expensed as incurred.

F-11

Impairment of Long-Lived Assets Excluding Goodwill

Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the identifiable net assets acquired in purchase business combinations. The Company accounts for goodwill in accordance with ASC 350, Goodwill and Other Intangible Assets. Under ASC 350, goodwill is subject to annual impairment tests or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is the amount determined by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit to which goodwill has been allocated from the estimated fair value of the reporting unit. If the recorded value of goodwill exceeds its implied value, an impairment charge is recorded for the excess.

The carrying amount of goodwill was $17,700,000 and $15,954,000 as of June 30, 2013 and 2012, respectively.

Stock Options and Stock Granted to Employees

The Company applies ASC 718-10, Share-Based Payment, which requires companies to measure the cost of share-based awards to employees based on the grant-date fair value of the award using an option pricing model, and to recognize that cost over the period during which an employee is required to provide service in exchange for the award. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted to employees and recognizes the compensation cost of employee share-based awards in its statement of operations using the straight-line method over the vesting period of the award, net of estimated forfeitures.

The use of the Black-Scholes option pricing model to estimate the fair value of share-based awards requires that the Company make certain assumptions and estimates for required inputs to the model, including (i) the fair value of the Company’s common stock at each grant date, (ii) the expected volatility of the Company’s common stock value based on industry comparisons, (iii) the expected life of the share-based award, (iv) the risk-free interest rate, and (v) the dividend yield. The Company uses the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

Revenue Recognition and Accounts Receivable

The Company’s revenue recognition policies are in accordance with ASC 985-685, Software—Revenue Recognition, and ASC 605-20, Revenue Recognition.

F-12

Revenue from product sales and the sale of developed software is recognized when the following four criteria are met: (i) an executed proposal or signed purchase order has been obtained; (ii) delivery of the software has occurred; (iii) the fee is fixed or determinable; and (iv) the fee is probable of collection. Software product sales billed and not recognized as revenue are included in deferred revenue. The Company generally does not require collateral for accounts receivable. The Company allows returns from customers in limited situations. The Company has historically not experienced significant returns, and accordingly, allowances for returned products are not recorded.

Product Sales

For revenue derived from license fees for packaged software products, the Company follows ASC 985-605, Software-Revenue Recognition, and ASC 605-10, Revenue Recognition. The Company recognizes revenue from the sale of software licenses and training materials upon shipment of the products, provided that evidence of the arrangement exists, the arrangement fee is fixed or determinable, and collection of the related receivable is probable and free of contingencies.

Service Revenue

Revenue from installation, training and consulting services is recognized upon completion of the requested service, which typically occurs within ninety days of receipt of an order. Support services are sold either in prepaid blocks of hours which typically expire in one year, or as annual contracts for unlimited support for a specified number of users and products supported. Prepaid support service revenue is recognized monthly based upon usage with unused balances recognized in full upon expiration. Annual support contract revenues are recognized ratably over the contract period. Revenue from the Rand Secure Archive hosted data archiving solution is recognized ratably over the contract period. Installation and consulting services provided by the Company are not considered essential to the functionality of any software products sold as those services do not alter the functionality or capabilities of the product and could be performed by customers or other vendors.

Commission Revenue

Fees earned from the resale of Autodesk’s software support agreements are reported as commission revenue and presented net of their related costs. For these transactions, the Company considers Autodesk to be the primary obligor in the arrangement as Autodesk has the responsibility of providing the end-customer all the deliverables under the contract, including software upgrades and various support services. As a result, the Company assumes an agency relationship in these transactions, and recognizes the net fee associated with serving as an agent in revenue.

The Company earns a fixed rebate from its primary supplier, Autodesk, for its qualifying renewal subscriptions, which increase gross profits and the corresponding commission revenues on such sales. The rebates on renewal subscriptions are paid monthly and are accrued in accordance with ASC 605-50, Customer Payments and Incentives¸ in the month the underlying sales are posted .

Commissions revenue also includes referral fees paid by Autodesk for major account and government customer transactions, determined based on specified percentages of the amount billed by Autodesk to the referred customer. These referral fees are recorded as revenue in the period earned, based on reporting by Autodesk, and are typically settled within ten days following the end of the reporting period.

Multiple-Element Arrangements

The Company’s arrangements with its customers may involve the sale of one or more products and services at the same time. The Company considers these to be multiple elements of a single arrangement. The Company follows ASC 605-25, Multiple-Element Arrangements. We allocate the total arrangement consideration to each

F-13

separable element based on the relative selling price of each element in accordance with selling price hierarchy, which includes: vendor specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; and best estimate of selling price if neither VSOE nor TPE is available. In general, the Company uses VSOE to allocate the selling price to each element. Arrangement consideration allocated to undelivered elements is deferred until delivery of the individual elements.

Fixed or Determinable Fee

Management assesses whether the total fee payable to the Company for the order is fixed or determinable and free of contingencies at the time of delivery. Management considers the payment terms of the transaction, including whether the terms are extended, and its collection experience in similar transactions that did not require concessions, among other factors. If the total consideration payable to the Company is not fixed or determinable, revenue is recognized only as payments become due from the customer, provided that all other revenue recognition criteria are met.

Customer Acceptance Criteria

If an arrangement includes customer acceptance criteria, the Company defers all revenue from the arrangement until acceptance is received or the acceptance period has lapsed, unless those acceptance criteria only require that the product perform in accordance with the software vendor’s standard published product specifications. If a customer’s obligation to pay the Company is contingent upon a future event, such as installation or acceptance, the Company defers all revenue from the arrangement until that event has occurred.

Deferred Revenue

Deferred product revenue is comprised of amounts that have been invoiced to customers upon delivery of a product, but are not yet recognizable as revenue because one or more of the conditions required for revenue recognition have not yet been met. Deferred service revenue represents amounts invoiced to customers for telephone support contracts or maintenance and support contracts, which are recognized ratably as revenue over the term of the arrangements, or for installation, training or professional services that have not yet been performed.

Product Returns

The Company’s arrangements with customers do not contain any rights of product return, other than those related to standard warranty provisions that permit replacement of defective goods. As of June 30, 2013 and June 30, 2012, the Company had no reserve recorded for product returns because such returns have been insignificant.

Shipping and Handling Fees

The Company records as revenue any amounts billed to customers for shipping and handling costs, and it records as cost of revenue its actual shipping costs incurred.

Allowance for Doubtful Accounts

The Company uses estimates to determine the amount of the allowance for doubtful accounts necessary to reduce accounts receivable to its expected net realizable value. The Company estimates the amount of the required allowance by reviewing the status of past-due receivables and analyzing historical bad debt trends. Actual collection experience has not varied significantly from estimates, due primarily to credit policies, collection experience, and a lack of concentration of accounts receivable. The Company charges-off receivables deemed to be uncollectible to the allowance for doubtful accounts.

F-14

Cost of Product Sales

Cost of product sales consists of the cost of purchasing products from software suppliers or hardware manufacturers as well as the associated shipping and handling costs. The Company earns a volume incentive rebate from its primary supplier, Autodesk, paid monthly as a percentage of qualifying purchases. The rebate percentage is established based on quarterly purchasing volume. These rebates serve to reduce the cost of product sales. The Company accrues its rebates the month the underlying sales are posted, in accordance with ASC 605-50, Customer Payments and Incentives. The Company has generally been able to focus its sales efforts in a manner to achieve margins on its product sales that are within a relatively narrow range period to period.

Cost of Service Revenue

Cost of service revenue consists primarily of direct employee compensation of all service personnel, the cost of subcontracted services and direct expenses billable to customers. Cost of service revenue does not include an allocation of overhead costs.

Advertising and Marketing Costs

The Company’s marketing activities performed and executed over the course of the year include public relations, tradeshows, email campaigns, social media, website development and enhancement, marketing automation initiatives, virtual events, advertising and promotions as well as ongoing branding efforts. The Company receives funding from its primary vendor, Autodesk, which offsets a portion of the costs incurred for marketing and advertising. Marketing and advertising costs are expensed as incurred, net of vendor funding and are included in selling, general and administrative expenses in the accompanying statements of operations. Advertising expenses, net of reimbursements from suppliers, were immaterial for the years ended June 30, 2013 and June 30, 2012.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income and foreign currency translation adjustments. During the years ended June 30, 2013 and June 30, 2012, unrealized foreign currency translation losses of $102,000 and $283,000, respectively, were recorded in accumulated other comprehensive income within stockholders’ equity.

Income Taxes

The Company uses the liability method to account for income taxes. Income tax expense includes income taxes currently payable and deferred taxes arising from temporary differences between financial reporting and income tax bases of assets and liabilities. Deferred income taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income tax expense, if any, consists of the taxes payable for the current period. Valuation allowances are established when the realization of deferred tax assets are not considered more likely than not. The Company records liabilities from uncertain tax positions in accordance with ASC 740-10, Income Taxes. The Company believes that its income tax filing positions taken or expected to be taken in its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will results in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax position have been recorded. Interest and penalties related to unrecognized tax benefits are recorded as part of income tax expense. The Company’s income tax returns for the past three years are subject to examination by tax authorities, and may change upon examination.

Foreign Currency Translation

Assets and liabilities of the Company’s foreign subsidiaries, whose functional currencies are the respective local currencies, are translated into U.S. dollars at the current rates of exchange in effect at the balance sheet dates.

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Revenues and expenses are translated using the average exchange rates for the period. The resulting translation adjustments are included as a separate component of stockholders’ deficit in the consolidated balance sheets within accumulated other comprehensive income. Foreign currency transaction gains or losses resulting from the re-measurement of monetary assets and liabilities stated in a currency other than the functional currency are included in the Company’s results of operations.

In addition, for the years ended June 30, 2013 and June 30, 2012, realized currency transaction losses from operations of $110,000 and $93,000, respectively, were recorded in the statement of operations.

Reclassifications

Certain prior year financial statement amounts have been reclassified to confirm to the current year presentation.

2. Supplemental Disclosure of Cash Flow Information

The Company paid interest of approximately $81,000 and $236,000, and paid federal and state taxes of approximately $124,000 and $503,000, respectively, for the years ended June 30, 2013 and June 30, 2012. Total cash purchases of property and equipment were approximately $1,032,000 and $640,000, respectively, for the years ended June 30, 2013 and June 30, 2012. Total non-cash purchases of property and equipment were $1,051,000 for the year ended June 30, 2012. There were no non-cash purchases of property and equipment for the year ended June 30, 2013.

In connection with the acquisition of Informative Design Partners on July 31, 2012, the Company issued 497,512 shares of its common stock for $400,000.

3. Business Combinations

Acquisition of Informative Design Partners

On March 1, 2012, the Company acquired all of the net assets of Inlet Technology, LLC (“Inlet”) a Virginia Beach-based value added reseller. The purchase price was $1,300,000, plus a post-closing adjustment of $252,000 for increases in the working capital level since the previous balance sheet date. The purchase price and working capital adjustment were paid in cash. Goodwill of $794,000 and other intangible assets of $480,000 were recorded as a results of this acquisition. The goodwill represents the results of expected synergies from combining the operations of the acquired business with the Company’s operation and intangible assets that do not qualify for separate recognition, such as an assembled workforce. The impact of this acquisition was not material to the Company’s consolidated balance sheets and results of operations.

The other intangible asset resulting from this acquisition was the Inlet customer list. The estimated fair value of this list was $480,000 as of the acquisition date, and the carrying amount was $448,000 at June 30, 2012. The customer list has an estimated useful life of five years and future expected amortization expense is approximately $96,000 per year for fiscal years 2013 through 2016 and $64,000 for fiscal year 2017.

On July 31, 2012, the Company acquired certain assets of Informative Design Partners (“IDP”) for an initial payment of $1 million, comprised of $600,000 in cash and $400,000 in common stock, plus contingent consideration to be paid over three years based on earnings achieved from the acquired business.

4. Borrowings Under Line of Credit

On February 29, 2012, the Company entered into an $8 million line of credit facility, including a $1,000,000 sublimit for the issuance of standby or trade letters of credit, with PNC Bank, National Association. The interest rate is the “Eurodollar Rate”, which is calculated by using the LIBOR rate, plus a margin of 2.0%. The Company had no outstanding borrowings from the bank under its credit line as of June 30, 2013 and had $3.1 million

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outstanding as of June 30, 2012. The Company has pledged its U.S. trade accounts receivable as collateral against the line of credit. The line expires on November 30, 2014.

5. Preferred Stock

The Company’s preferred stock included in the equity section of the accompanying consolidated balance sheets consists of the following as of June 30, 2013 and 2012:

	June 30
	2013		2012
Series D Convertible Preferred Stock, $0.01 par value; 1,297,537 shares authorized and issued; and 384,495 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $231,000 at June 30, 2013 and 2012,	$	4,000	$	4,000
Series E Convertible Preferred Stock, $0.01 par value; 3,000 shares authorized; 1,191 shares issued; 862 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $862,000 at June 30, 2013 and 2012, respectively		—		—
Total Preferred Stock	$	4,000	$	4,000

Convertible Preferred Stock

At June 30, 2003, the Company had issued and outstanding 172,008 shares of Series C Convertible Preferred Stock (the “Series C shares”). On December 31, 2003, the Series C shares were converted into 484,487 shares of newly authorized Series D Convertible Preferred Stock (the “Series D shares”). In 2004, the Company issued 813,050 shares of Series D Convertible Preferred Stock for cash proceeds totaling $330,000 and a reduction in notes payable to a related party of $98,000. At June 30, 2013 and 2012, 384,495 shares of Series D Convertible Preferred Stock were outstanding with the following terms:

Redemption Feature- The Series D shares are redeemable in the event that the Company is engaged in a business combination that is approved by the Board of Directors and subsequently submitted and approved by a vote of the Company’s stockholders. The 2010 merger with pre-merger Rand Worldwide did not trigger any redemption provisions of the Series D shares. Any director who holds shares of Series D is not eligible to vote on the proposed business combination. The redemption price is $0.30 (upon conversion) per share plus an amount equal to all declared and unpaid dividends accrued on such shares since the original issue date.

Voting Rights- Each holder of the Series D shares shall vote together with all other classes and series of stock of the Company as a single class on all actions. Each share shall entitle the holder to one vote per share of common stock into which the preferred stock is then convertible on each such action. In addition, these holders have special voting rights in connection with certain matters, including the issuance of senior stock or debentures, certain mergers, the dissolution of the Company and any amendment to the charter or the terms of the securities that would impair their rights.

Dividend Rate- The holders of the Series D shares are entitled to receive cumulative dividends at a rate of 10% per annum when and as declared by the Board of Directors. Dividends are paid quarterly to preferred stockholders.

Conversion Feature- The Series D shares are convertible at any time beginning 120 days after the original issuance date at the option of the holder and automatically converts into common stock if the common stock trades for more than $2.25 per share for 60 consecutive trading days. Each Series D share is convertible into shares of common stock by multiplying the appropriate conversion rate in effect by the number of shares of preferred stock being converted. As of June 30, 2012, the conversion rate would yield two shares of common stock for each share of Series D share; however, this rate may be adjusted due to stock splits, dividends, and other events defined in the stock purchase agreement between the Company and the holders of the Series D shares.

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Liquidation Preference- In the event of a liquidation, dissolution or winding up of the Company, the holders of Series D shares are entitled to receive for each share, prior and in preference to any distribution of any of the assets or surplus funds to the holders of common stock, an amount equal to $0.60 per share plus all accumulated but unpaid dividends. If upon the occurrence of such event, the assets and funds thus distributed among the holders are insufficient to permit the payment of the preferential amount, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the preferred stockholders.

In July 2005, the Company issued 1,191 shares of Series E Convertible Preferred Stock which raised $1,191,000 for working capital purposes. At June 30, 2013 and 2012, 862 shares of Series E Convertible Preferred Stock (the “Series E shares”) were outstanding with the following terms:

Redemption Feature- The Series E shares are redeemable in the event that the Company is engaged in a business combination that is approved by the Board of Directors and subsequently submitted and approved by a vote of the Company’s stockholders. The 2010 merger with pre-merger Rand Worldwide did not trigger any redemption provisions of the Series E shares. Any director who holds shares of Series E is not eligible to vote on the proposed business combination. The redemption price is $0.65 per share (upon conversion) plus an amount equal to all declared and unpaid dividends accrued on such shares since the original issue date.

Voting Rights- Each holder of the Series E shares shall vote together with all other classes and series of stock of the Company as a single class on all actions. Each share shall entitle the holder to one vote per share of common stock into which the preferred stock is then convertible on each such action. In addition, these holders have special voting rights in connection with certain matters, including the issuance of senior stock or debentures, certain mergers, the dissolution of the Company and any amendment to the charter or the terms of the securities that would impair their rights.

Dividend Rate- The holders of the Series E shares are entitled to receive cumulative dividends at a rate of 10% per annum when and as declared by the Board of Directors. Dividends are paid quarterly to preferred stockholders.

Conversion Feature- The Series E shares are convertible at any time beginning 120 days after the original issuance date at the option of the holder and automatically converts into common stock if the common stock trades for more than $2.25 per share for 60 consecutive trading days. Each Series E share is convertible into shares of common stock by multiplying the appropriate conversion rate in effect by the number of shares of preferred stock being converted. As of June 30, 2013, the conversion rate would yield 1,538.5 shares of common stock for each share of Series E; however, this rate may be adjusted due to stock splits, dividends, and other events defined in the stock purchase agreements between the Company and the holders of the Series E shares.

Liquidation Preference- In the event of a liquidation, dissolution or winding up of the Company, the holders of Series E shares are entitled to receive for each share, prior and in preference to any distribution of any of the assets or surplus funds to the holders of common stock, an amount equal to $0.65 per share (upon conversion) plus all accumulated but unpaid dividends. If upon the occurrence of such event, the assets and funds thus distributed among the holders are insufficient to permit the payment of the preferential amount, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the preferred stockholders.

6. Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Such outstanding shares include those issued through equity compensation plans, Board compensation, and the exercise of stock warrants. Diluted earnings (loss) per common share include the potential dilution that would occur from common shares issuable upon the exercise of outstanding stock options and warrants and the conversion of preferred

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stock. As of June 30, 2013 and 2012, 5,584,413 and 5,577,684 shares of common stock, respectively, were issuable upon the conversion or exercise of options and preferred stock. For the years ended June 30, 2013 and 2012, there were 1,850,651 and 1,427,860 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The following summarizes the computations of basic and diluted earnings per common share:

	Years ended
	June 30, 2013			June 30, 2012
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	2,512,000		$	8,273,000
Income (loss) from discontinued operations, net of tax		(241,000	)		92,000
Loss on disposition of discontinued operations, net of tax		(370,000	)		—
Net income		1,901,000			8,365,000
Net income from continuing operations		2,512,000			8,273,000
Payment of preferred stock dividends		(109,000	)		(137,000	)
Net income from continuing operations available to common stockholders	$	2,403,000		$	8,136,000
Weighted average shares used in computing basic net earnings per share:		53,951,438			52,625,538
Assumed conversion of preferred stock		769,630			2,095,784
Effect of outstanding stock options		381,368			179,609
Weighted average shares used in computing diluted net earnings per share:		55,102,436			54,900,931
Earnings per common share from continuing operations, basic	$	0.04		$	0.16
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, basic	$	0.03		$	0.16
Earnings per common share from continuing operations, basic	$	0.04		$	0.15
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, diluted	$	0.03		$	0.15

7. Intangible Assets

The following is a summary of the carrying amount, accumulated amortization and the resulting net book value of intangible assets:

June 30, 2013

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	10,234,000	$	6,648,000	$	3,586,000
Trade name		3,931,000		1,247,000		2,684,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	15,489,000	$	9,219,000	$	6,270,000

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June 30, 2012

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	9,395,000	$	6,105,000	$	3,290,000
Trade name		3,931,000		945,000		2,986,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	14,650,000	$	8,374,000	$	6,276,000

Amortization expense for intangible assets for the years ended June 30, 2013 and June 30, 2012 were $845,000 and $678,000, respectively. Future estimated amortization expense for intangibles assets is as follows: $828,000 in 2014, $807,000 in 2015, $778,000 in 2016, $735,000 in 2017, $433,000 in 2018 and $2,690,000 thereafter.

8. Director and Employee Stock Compensation Plans

Employee Stock Option Plans

On November 7, 2012, the Company’s stockholders approved the Omnibus Equity Compensation Plan (the “Omnibus Plan”). The Compensation Committee of the Company’s Board of Directors administers the Omnibus Plan and, in that capacity, has the exclusive authority to grant various incentive awards under the Omnibus Plan in the form of stock options, stock awards, stock units, performance units, and other stock-based awards. Up to 2,000,000 shares of the Company’s common stock are available for issuance to participants under the Omnibus Plan. The Omnibus Plan is available to all employees of the Company and its subsidiaries, including employees who are officers or members of the Board, and all non-employee directors and consultants of the Company and its subsidiaries. Prior to the adoption of the Omnibus Plan, the Board of Directors granted options to purchase shares of the Company’s common stock at an exercise price of not less than the fair market value of the common stock on the date of grant, under the Avatech Solutions, Inc. 2002 Stock Option Plan (the “2002 Option Plan”). The 2002 Option Plan, which expired in August 2012, provided for the granting of either incentive or non-qualified stock options to purchase an aggregate of up to 7,800,000 shares of common stock to eligible employees, officers, and directors of the Company and its subsidiaries.

The Company recorded and included in selling, general and administrative expenses, $261,000 and $190,000 of stock compensation expense for the years ended June 30, 2013 and June 30, 2012.

The following are the assumptions made in computing the fair value of stock-based awards:

	Year Ended June 30 2013	Year Ended June 30 2012
Average risk-free interest rate	0.72% – 2.22%	0.72% – 2.22%
Dividend yield	0%	0%
Expected life	5 – 6.25 years	5 – 6.25 years
Expected volatility	.50 – .56	.50 – .56
Weighted average fair value of granted options	$ 0.60	$ 0.39

Expected volatilities are based on historical volatility of the Company’s common stock. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

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A summary of stock option activity during the year ended June 30, 2013 and related information is included in the table below:

	Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding at July 1, 2012		3,481,900		$	0.76
Granted		18,000			0.94
Exercised		(9,597	)		0.30
Forfeited		(1,674	)		0.30
Outstanding at June 30, 2013		3,488,629		$	0.77	$	151,000
Exercisable at June 30, 2013		1,900,252		$	0.78	$	118,000
Weighted-average remaining contractual life		6.1 Years

The aggregate intrinsic value of options exercised was $4,000 and $23,400 during the years ended June 30, 2013 and 2012, respectively.

All options granted have an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Exercise prices for options outstanding as of June 30, 2013 ranged from $0.30 to $1.71 as follows:

Range of Exercise Prices	Options Outstanding	Weighted Average Exercise Prices of Options Outstanding	Weighted Average Remaining Contractual Life of Options Outstanding	Options Exercisable	Weighted Average Exercise Prices of Options Exercisable	Weighted Average Remaining Contractual Life of Options Exercisable
$ 0.30 – 0.50	158,852	$0.43	1.3 years	158,852	$0.43	1.3 years
0.60 – 0.75	1,883,920	0.70	7.7 years	986,560	0.69	7.6 years
0.76 – 0.94	1,207,357	0.81	7.8 years	516,340	0.83	6.2 years
1.05 – 1.71	238,500	1.29	2.6 years	238,500	1.29	2.6 years
	3,488,629			1,900,252

Assuming that no additional share-based payments are granted after June 30, 2013, $535,000 of compensation expense will be recognized in the consolidated statement of operations over a weighted-average period of 2.3 years.

Employee Stock Purchase Plan

The Board of Directors of Rand Worldwide Inc. (then, Avatech Solutions, Inc.) adopted, and its stockholders subsequently approved, the Employee Stock Purchase Plan (the “ESPP”), under which, as amended, 2,000,000 shares of common stock are reserved for issuance. Effective January 1, 2011, the plan was suspended.

As of June 30, 2013, there was no liability for employees’ ESPP withholdings, as all shares of common stock purchased under the ESPP had been issued.

Restricted Stock Award Plan

In May 2003, the Board of Directors of Rand Worldwide, Inc. (then, Avatech Solutions, Inc.) adopted, and its stockholders subsequently approved, the Avatech Solutions, Inc. Restricted Stock Award Plan, which was amended and restated on August 23, 2005 (the “Stock Plan”). Officers, directors, key employees and consultants of the Company are eligible to receive stock awards under the Stock Plan, but employees and consultants may receive grants only if they already are stockholders or hold options to purchase shares of common stock at the

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time of grant. Vesting for restricted stock awards granted under the Stock Plan may vary, but awards will generally vest based on continued service of the recipient or achievement of specific performance goals. The Company has reserved a total of 1,200,000 shares of common stock for issuance under the Stock Plan and 193,921 shares were available for future issuance as of June 30, 2013.

9. Shares Reserved for Future Issuance

At June 30, 2013, the Company has reserved 1,982,000 shares of common stock for future issuance upon the exercise of stock options granted under the Stock Option Plan, the exercise of outstanding common stock purchase warrants, the vesting of restricted stock awards, purchases under the ESPP and the conversion of Series D Stock, and Series E Stock.

10. Income Taxes

The components of income from continuing operations before income taxes are as follows:

	Years ended
	June 30, 2013		June 30, 2012
Domestic	$	3,671,000	$	3,265,000
Foreign		532,000		959,000
Total	$	4,203,000	$	4,224,000

The components of the income tax provision (benefit) are as follows:

	Years ended
	June 30, 2013		June 30, 2012
Federal tax	$	1,447,000	$	(4,193,000	)
State tax		244,000		144,000
Total	$	1,691,000	$	(4,049,000	)
	Years ended
	June 30, 2013		June 30, 2012
Current	$	354,000	$	258,000
Deferred		1,337,000		(4,307,000	)
Total	$	1,691,000	$	(4,049,000	)

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Significant components of the Company’s deferred tax assets and liabilities are as follows:

	Years ended
	June 30, 2013			June 30, 2012
Deferred tax assets:
Net operating loss carryforwards	$	10,717,000		$	13,606,000
Capital loss carryforwards		1,674,000			1,674,000
Accrued expenses		185,000			154,000
Expenses not currently deductible		154,000			152,000
Excess of book over tax depreciation		49,000			99,000
Excess of book over tax amortization		602,000			607,000
Deferred revenue		2,000			2,000
Foreign tax benefit		82,000			—
Total deferred tax assets		13,465,000			16,294,000
Deferred tax liabilities:
Customer list		2,333,000			2,435,000
Other liabilities		21,000			35,000
Total deferred tax liabilities		2,354,000			2,470,000
Deferred tax assets, net of liabilities		11,111,000			13,824,000
Valuation allowance		(9,725,000	)		(11,170,000	)
Net deferred tax asset	$	1,386,000		$	2,654,000

The Company’s provision for income taxes resulted in effective tax rates attributable to loss from continuing operations that varied from the statutory federal income tax rate of 34%, as summarized in the table below.

	Years ended
	June 30, 2013			June 30, 2012
Expected federal income tax expense (benefit) from continuing operations at 34%	$	1,429,000		$	1,436,000
Expenses not deductible for income tax purposes		159,000			182,000
Amendment of prior year return		(67,000	)		11,000
Taxable income from divestiture of foreign subs		260,000			—
State income taxes, net of federal benefit		161,000			122,000
Change in valuation allowance for deferred tax assets		(251,000	)		(5,800,000	)
Income tax expense (benefit)	$	1,691,000		$	(4,049,000	)

The Company recorded tax expense (benefit) of $1,691,000 and $(4,049,000) for the years ended June 30, 2013 and June 30, 2012, respectively.

At June 30, 2013, the Company had US federal net operating loss carryforwards available to reduce future taxable income of approximately $29.9 million, a portion of which may be limited as to annual utilization under Internal Revenue Code Section 382. Because of this limitation, approximately $23.3 million of net operating losses are expected to expire before being utilized. For tax year June 30, 2013 it is projected that approximately $5.4 million of net operating loss carryforwards will be utilized to offset taxable income.

In addition, at June 30, 2013, the Company had foreign net operating loss carryforwards of approximately $17.4 million available to reduce future taxable income. These carryforwards expire between 2014 and 2031.

As of June 30, 2013, the Company has maintained the valuation allowance of its net deferred tax assets of approximately $5.4 million in the Company’s foreign entities, due to insufficient history of profitable quarters. The United States entities maintain a valuation allowance of $4.3 million due to expiration of net operating losses

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carryforward prior to utilization, capital losses and state net operating loss carryforwards. The valuation allowances are evaluated quarterly to determine the appropriate allowance amount.

Rand Worldwide’s Canadian Subsidiary, Rand A Technology Corporation, is currently being audited by the Canada Revenue Agency for tax years 2005 through 2009. Preliminary results from the audit indicate that some deductions may be disallowed. The net effect to deferred tax assets and the related valuation allowance cannot be determined at this time. Management believes that it has properly recorded the tax expense for the periods under review and should the results of the audit stand, the Company expects no material adjustments to its financial statements.

11. Commitments and Contingencies

Operating Leases

The Company leases certain office space and equipment under noncancellable operating lease agreements that expire in various years through 2019, and generally do not contain significant renewal options. Rent expense under operating leases for the years ended June 30, 2013 and June 30, 2012 was $2.2 million and $2.8 million, respectively. Future minimum payments under all noncancellable operating leases with initial terms of one year or more consisted of the following at June 30, 2013:

Year ending June 30:
2014	$	2,434,000
2015		2,058,000
2016		1,459,000
2017		970,000
2018		531,000
Thereafter		298,000
Total minimum lease payments	$	7,750,000

Capital Leases

The Company has various computer equipment used in training facilities and by employees throughout its office locations. These capital lease obligations totaled $616,000 as of June 30, 2013, with approximately $294,000 representing the short-term balance of the lease and shown as Obligations under capital leases in the accompanying balance sheets. Payments for the leases are made either monthly or quarterly through September 2016 and depreciation expense on this equipment was approximately $249,000 as of June 30, 2013. Future minimum payments consisted of the following at June 30, 2013:

Year ending June 30:
2014	$	335,000
2015		209,000
2016		136,000
2017		22,000
Total minimum lease payments		702,000
Less:
Taxes		36,000
Imputed interest		50,000
Present value of future minimum lease payments	$	616,000

Litigation

The Company is party to various litigation matters that management considers routine and incidental to the Company’s business. As of June 30, 2013 and June 30, 2012, the Company had accrued no material amounts related to these matters.

F-24

Guarantees

In the normal course of business, the Company indemnifies third parties and enters into commitments and guarantees (“Agreements”) under which it may be required to make payments. These Agreements include indemnities to the following parties: lenders in connection with the Term Loan; lessors in connection with facility leases; customers in relation to the performance of services; vendors in connection with guarantees of expenses incurred by employees in the normal course of business; former employees in connection with their prior services as a director or officer of the Company or its subsidiary companies; vendors or principals in connection with performance under asset or share purchase and sale agreements and performance under credit facilities and other agreements of the Company’s subsidiaries. The duration of these Agreements varies, and in certain cases, is indefinite. Furthermore, the majority of these Agreements do not limit the Company’s maximum potential payment exposure. In addition, the Company is party to a guarantee with its largest vendor, Autodesk, in relation to all of the Company’s subsidiaries’ obligations to Autodesk. The Company has recorded no accrued liability related to these Agreements, based on its historical experience and information known as of June 30, 2013.

12. Employee Benefit Plans

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan is a defined contribution plan, which covers substantially all U.S.-based employees of the Company, or its wholly-owned subsidiaries, who have completed three months of service. Participants may elect a pre-tax payroll deduction up to IRS maximums. As amended, the 401(k) Plan provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant’s compensation and 50% of the next 2% of a participant’s compensation, or a total possible maximum matching contribution of 4% of a participant’s compensation, for all participants. The Company may also make discretionary profit-sharing contributions to the 401(k) Plan for all participants who are employed on the last day of the plan year but has not done so for the plan year ended December 31, 2012. The Company also has a retirement savings plan (“RSP”) that covers substantially all Canadian-based employees of the Company and its wholly-owned subsidiaries. Upon hire, participants may elect a pre-tax payroll deduction, subject to limitations as prescribed by the Canadian Revenue Agency. The RSP provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant’s compensation and 50% of the next 2% of a participant’s compensation, for a total possible maximum matching contribution of 4% of a participant’s compensation, for all participants who have completed 12 months of service. The total amount recorded by the Company as expense, under both plans, during the years ended June 30, 2013 and June 30, 2012 was approximately $787,000 and $683,000, respectively.

13. Significant Supplier

Approximately 97% of the Company’s inventory purchases for the years ended June 30, 2013 and 2012 were from one vendor and its distributors, and approximately 89% and 91%, respectively, of accounts payable at June 30, 2013 and 2012 were due to this vendor and its distributors. Approximately 96% of the Company’s total product revenues are related to this supplier’s products. The Company is a party to a Value Added Reseller Agreement with Autodesk effective February 1, 2013. The agreement has a term of three years and designates the Company as an authorized reseller of Autodesk software and prescribes the authorized sales territories, authorized products and services, rebate and incentive program details and marketing support.

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14. Discontinued Operations

During the fourth quarter of 2013, the Company disposed of its operations in Australia, Singapore and Malaysia because those divisions did not align with the current strategic direction of the Company. The following table summarizes the financial results of the entities which have been reclassified as discontinued operations for the periods presented:

	Years ended
	June 30, 2013			June 30, 2012
Revenues	$	7,281,000		$	8,233,000
(Loss) income from discontinued operations, net of tax		(241,000	)		92,000
Loss on sale or disposition of discontinued operations, net of tax		370,000			—

15. Liquidity and Capital Resources

The Company had a working capital surplus of $6,617,000 and $3,573,000 as of June 30, 2013 and June 30, 2012, respectively.

16. Segment Information

The Company’s chief operating decision maker, the Chief Executive Officer, performs primary analyses based upon geographic location and operations by geographic segment. The Company’s operations included business in North America, Singapore/Malaysia and Australia. During the fourth quarter of fiscal year 2013, the Company disposed of two of the three geographic segments, therefore leaving only one segment with continuing operations, the results of which are reported in the Consolidated Statement of Operations.

F-26

EXHIBIT INDEX

Exhibit	Description
2.1	Agreement and Plan Merger dated as of August 17, 2010 by and among Avatech Solutions, Inc., ASRW Acquisition Sub, Inc., Rand Worldwide, Inc. and RWWI Holdings LLC (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
3.1(i)	Restated Certificate of Incorporation of Spatial Technology, Inc. (incorporated by reference to Exhibit 3(i).1 to the Registration Statement on Form SB-2 filed by Spatial Technology, Inc. on November 21, 2000, File No. 333-50426)
3.1(ii)	Certificate of Amendment to the Restated Certificate of Incorporation of Spatial Technology, Inc., changing Spatial Technology, Inc.’s name to PlanetCad, Inc. (incorporated by reference to Exhibit 3(i).2 to the Registration Statement on Form SB-2 filed by PlanetCad, Inc. on November 21, 2000, File No. 333-50426)
3.1(iii)	Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 4.2 of the Registration Statement on Form 8-A filed by PlanetCad, Inc. on March 11, 2002, File No. 001-31265)
3.1(iv)	Certificate of Designation, Preferences and Rights of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by PlanetCad, Inc. on May 28, 2002)
3.1(v)	Certificate of Amendment of Restated Certificate of Incorporation of PlanetCad, Inc. (incorporated by reference to Annex G of the Pre-Effective Amendment No. 2 on Form S-4/A filed by PlanetCad, Inc. on September 13, 2002, File No. 333-89386)
3.1(vi)	Certificate of Amendment of Certificate of Incorporation, changing PlanetCad, Inc.’s name to Avatech Solutions, Inc. (incorporated by reference to Annex G of the Pre-Effective Amendment No. 2 on Form S-4/A filed by PlanetCad, Inc. on September 13, 2002, File No. 333-89386)
3.1(vii)	Certificate of Designations – Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.6A of the Pre-Effective Amendment No. 1 on Form S-1/A filed by Avatech Solutions, Inc. on April 11, 2003, File No. 333-104035)
3.1(viii)	Certificate of Amendment to Certificate of Designations – Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.8 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004)
3.1(ix)	Certificate of Designations of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.9 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004)
3.1(x)	Certificate of Elimination of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.10 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004
3.1(xi)	Certificate of Amendment to Certificate of Designation of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.12 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004)
3.1(xii)	Certificate of Elimination of Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.11 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004)
3.1(xiii)	Certificate of Amendment to the Restated Certificate of Incorporation of Avatech Solutions, Inc. (incorporated by reference to Exhibit 3.13 of the Pre-Effective Amendment No. 1 on Form S-1/A filed by Avatech Solutions, Inc. on July 19, 2004, File No. 333-114230)

3.1(xiv)	Certificate of Designations of Series E Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on May 9, 2005)
3.1(xv)	Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions Thereof of Series F 10% Cumulative Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on June 19, 2006)
3.1(xvi)	Certificate of Amendment of Restated Certificate of Incorporation of Avatech Solutions, Inc., changing Avatech’s name to Rand Worldwide, Inc. (incorporated by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q filed by Rand Worldwide, Inc. on May 16, 2011)
3.2	Bylaws (incorporated by reference to Exhibit 3(ii).1 to the Registration Statement on Form SB-2 filed by Spatial Technology, Inc. on November 21, 2000, File No. 333-50426)
4.1	Form of Amended and Restated Warrant (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
4.2	Registration Rights Agreement between Avatech Solutions, Inc. and RWWI Holdings LLC, dated August 17, 2010 (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K of Avatech Solutions, Inc. filed on August 17, 2010)
9.1	Stockholders’ Agreement by and among Avatech Solutions, Inc., RWWI Holdings LLC and certain holders of common stock dated as of August 17, 2010 (incorporated by reference to Exhibit 9.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
10.1	Lease between Merritt-DM1, LLC and Avatech Solutions, Inc. effective June 1, 2004 (incorporated by reference to Exhibit 10.7 to the Pre-Effective Amendment No. 1 on Form S-1/A filed by Avatech Solutions, Inc. on July 19, 2004, File No. 333-114230)
10.2	Form of Preferred Stock Purchase Agreement for Series D Convertible Preferred Stock (incorporated by reference to Exhibit 10.13 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on February 13, 2004)
10.3	Form of Preferred Stock Purchase Agreement for Series E Convertible Preferred Stock (incorporated by reference to Exhibit 10.3 of the Annual Report on Form 10-K filed by Avatech Solutions, Inc. on September 28, 2010)
10.4	Avatech Solutions, Inc. 2002 Stock Option Plan (incorporated by reference to Annex F of the Registration Statement on Form S-4 filed by Avatech Solutions, Inc. on May 30, 2002, File No. 333-89386)
10.5	Form of First Amendment to Stock Option (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
10.6	Avatech Solutions, Inc. Restricted Stock Award Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8 filed by Avatech Solutions, Inc. on February 10, 2006, File No. 333-131721)
10.7	Form of Restricted Stock Award (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on January 12, 2009)
10.8	Avatech Solutions, Inc. Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 4 of the Registration Statement on Form S-8 filed by Avatech Solutions, Inc. on December 4, 2007 File No. 333-147823)
10.9	Rand Worldwide, Inc. Omnibus Equity Compensation Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quartered ended December 31, 2012 filed by Rand Worldwide, Inc. on February 14, 2013)

10.10	Employment Agreement between Avatech Solutions, Inc. and George Davis dated 28, 2010 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on June 29, 2010)
10.11	Employment Agreement between Marc L. Dulude and Rand Worldwide, Inc. dated March 30, 2011 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on April 4, 2011)
10.12	Amended and Restated Employment Agreement between Avatech Solutions, Inc. and Lawrence Rychlak dated August 17, 2010 (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
10.13	Employment Agreement between Robert F. Heeg and Rand Worldwide, Inc. dated May 16, 2008 (incorporated by reference to Exhibit 10.29 of the Annual Report on Form 10-K of Rand Worldwide, Inc. filed on September 28, 2011)
10.14	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
10.15	Revolving Loan Promissory Note issued by Avatech Solutions Subsidiary, Inc. and Avatech Solutions Subsidiary, Inc. to Mercantile Safe-Deposit & Trust Co. dated January 27, 2006 (incorporated by reference to Exhibit 10.50 of the Registration Statement on Form S-1 filed by Avatech Solutions, Inc. on February 10, 2006, File No 333-131720)
10.16	Loan and Security Agreement among Avatech Solutions Subsidiary, Inc., Avatech Solutions Subsidiary, Inc. and Mercantile Safe-Deposit & Trust Co., dated January 27, 2006 (incorporated by reference to Exhibit 10.51 of the Registration Statement on Form S-1 filed by Avatech Solutions, Inc. on February 10, 2006, File No 333-131720)
10.17	Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc. and Mercantile Safe-Deposit & Trust Co. dated May 30, 2006 (incorporated by reference to Exhibit 10.57 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on June 8, 2006)
10.18	Second Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc and Mercantile Bank & Trust Co., dated December 31, 2006 (incorporated by reference to Exhibit 10.16 of the Quarterly Report on Form 10-Q filed by Avatech Solutions, Inc. on November 14, 2007)
10.19	Third Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc and PNC Bank, National Association, dated December 31, 2008 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on January 30, 2009)
10.20	Fourth Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc and PNC Bank, National Association, dated December 23, 2009 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on December 30, 2009)
10.21	Fifth Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc and PNC Bank, National Association, dated August 17, 2010 (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on August 17, 2010)
10.22	Sixth Modification Agreement among Avatech Solutions, Inc., Avatech Solutions Subsidiary, Inc and PNC Bank, National Association, dated December 16, 2010 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Avatech Solutions, Inc. on December 20, 2010)

10.23	Revolving Credit and Security Agreement dated as of August 14, 2009 by and among PNC Bank, National Association and Rand Worldwide US Holdings, Inc., Rand A Technology Corporation, Rand Technologies of Michigan, Inc. and Rand IMAGINiT Technologies, Inc. (incorporated by reference to Exhibit 10.25 of the Transition Report on Form 10-KT filed by Avatech Solutions, Inc. on November 15, 2010)
10.24	First Amendment to Revolving Credit and Security Agreement dated as of January 22, 2010 by and among PNC Bank, National Association and Rand Worldwide US Holdings, Inc., Rand A Technology Corporation, Rand Technologies of Michigan, Inc. and Rand IMAGINiT Technologies, Inc. (incorporated by reference to Exhibit 10.26 of the Transition Report on Form 10-KT filed by Avatech Solutions, Inc. on November 15, 2010)
10.25	Second Amendment to Revolving Credit and Security Agreement dated as of July 23, 2010 by and among PNC Bank, National Association and Rand Worldwide US Holdings, Inc., Rand A Technology Corporation, Rand Technologies of Michigan, Inc. and Rand IMAGINiT Technologies, Inc. (incorporated by reference to Exhibit 10.27 of the Transition Report on Form 10-KT filed by Avatech Solutions, Inc. on November 15, 2010)
10.26	Third Amendment to Revolving Credit and Security Agreement dated as of July 23, 2010 by and among PNC Bank, National Association and Rand Worldwide US Holdings, Inc., Rand A Technology Corporation, Rand Technologies of Michigan, Inc. and Rand IMAGINiT Technologies, Inc. (incorporated by reference to Exhibit 10.28 of the Transition Report on Form 10-KT filed by Avatech Solutions, Inc. on November 15, 2010)
10.27	Fourth Amendment to Revolving Credit and Security Agreement dated as of December 31, 2010 by and among PNC Bank, National Association, Rand A Technology Corporation and Rand Worldwide Subsidiary, Inc. (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on January 5, 2011)
10.28	Committed Line of Credit Note, dated as of February 28, 2012, issued by Rand Worldwide, Inc. and Rand A Technology Corp. to the order of PNC Bank, National Association (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on March 5, 2012)
10.29	Financing and Security Agreement, dated as of February 28, 2012, by and among PNC Bank, National Association, Rand Worldwide, Inc. and Rand A Technology Corp (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on March 5, 2012)
10.30	Form of Guaranty and Security Agreement, dated as of February 28, 2012, by Rand Worldwide Subsidiary, Inc. and Rand Worldwide Foreign Holdings, Inc. in favor of PNC Bank, National Association (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on March 5, 2012)
10.31	Loan Document Modification Agreement dated April 12, 2013 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on April 12, 2013)
10.32	Autodesk Authorized Value Added Reseller Agreement between Rand IMAGINiT Technologies, Inc. and Autodesk, Inc, dated February 1, 2013 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Rand Worldwide, Inc. on September 6, 2013)
10.33	Omnibus Waiver and Termination Agreement among Avatech Solutions, Inc., Pacific Asset Partners and Sigma Opportunity Fund, LLC, dated August 17, 2010 (incorporated by reference to Exhibit 10.22 of the Annual Report on Form 10-K of Avatech Solutions, Inc. filed on September 28, 2010)

10.34	Omnibus Waiver and Termination Agreement among Avatech Solutions, Inc., Sigma Opportunity Fund, LLC, Garnett Y. Clark, Jr., Robert Post and George Davis, dated August 17, 2010 (incorporated by reference to Exhibit 10.23 of the Annual Report on Form 10-K of Avatech Solutions, Inc. filed on September 28, 2010)
21.1	Subsidiaries of Avatech Solutions, Inc. (filed herewith)
23.1	Consent of Stegman & Company (filed herewith)
31.1	Rule 15d-14(a) Certifications by Chief Executive Officer (filed herewith)
31.2	Rule 15d-14(a) Certifications by Chief Financial Officer (filed herewith)
32.1	Section 1350 Certifications (furnished herewith)
101.INS	XBRL Instance Document. (furnished herewith)
101.SCH	XBRL Taxonomy Extension Schema Document. (furnished herewith)
101.CAL	XBRL Taxonomy Calculation Linkbase Document. (furnished herewith)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (furnished herewith)
101.LAB	XBRL Taxonomy Label Linkbase Document. (furnished herewith)
101.PRE	XBRL Taxonomy Presentation Linkbase Document. (furnished herewith)

EX-21.1

Exhibit 21.1

Subsidiaries

Rand Worldwide Subsidiary, Inc. (Delaware)

Rand Worldwide Foreign Holdings, Inc. (Delaware)

—  Rand A Technology Corporation (Ontario, Canada)

Ø  ASJ Computer Graphics of Canada Ltd (Ontario, Canada)

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the following Registration Statements filed by Rand Worldwide, Inc. of our report dated September 30, 2013 with respect to the consolidated financial statements and schedules of Rand Worldwide, Inc., which appears in this Annual Report of Rand Worldwide, Inc. on Form 10-K for the year ended June 30, 2013:

Registration Statements on Form S-8:

FILE NUMBER	NAME
333-131721 (which incorporates by reference Registration Statement on Form S-8, File No. 333-107017)	Amended Restricted Stock Award Plan
333-147823 (which incorporates by reference Registration Statements on Form S-8, File Nos. 333-14429, 333-56079, 333-85939, and 333-117195)	Amended Employee Stock Purchase Plan
333-178693 (which incorporates by reference Registration Statement on Form S-8, File No. 333-108354)	Amended 2002 Stock Option Plan
333-186863	Omnibus Equity Compensation Plan

/s/ Stegman & Company

Baltimore, Maryland

September 30, 2013

EX-31.1

Exhibit 31.1

Certifications of the Chief Executive Officer

Pursuant to Securities Exchange Act Rules 13a-1 and 15d-14

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Marc L. Dulude, certify that:

1. I have reviewed this Annual Report on Form 10-K of Rand Worldwide, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: September 30, 2013	/s/ Marc L. Dulude
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certifications of the Chief Financial Officer

Pursuant to Securities Exchange Act Rules 13a-1 and 15d-14

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Lawrence Rychlak, certify that:

1. I have reviewed this Annual Report on Form 10-K of Rand Worldwide, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: September 30, 2013	/s/ Lawrence Rychlak
	President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certifications of Periodic Report by the Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350

As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Rand Worldwide, Inc. (the “Company”) on Form 10-K for the year ending June 30, 2013 as filed with the Securities and Exchange Commission and to which this Certification is an exhibit (the “Report”), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the periods reflected therein.

Date: September 30, 2013	/s/ Marc L. Dulude
	Chief Executive Officer
	(Principal Executive Officer)
	/s/ Lawrence Rychlak
	President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Note 10 - Income Taxes

12 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

10. Income Taxes

The components of income from continuing operations before income taxes are as follows:

	Years ended
	June 30, 2013		June 30, 2012
Domestic	$	3,671,000	$	3,265,000
Foreign		532,000		959,000
Total	$	4,203,000	$	4,224,000

The components of the income tax provision (benefit) are as follows:

	Years ended
	June 30, 2013		June 30, 2012
Federal tax	$	1,447,000	$	(4,193,000	)
State tax		244,000		144,000
Total	$	1,691,000	$	(4,049,000	)

	Years ended
	June 30, 2013		June 30, 2012
Current	$	354,000	$	258,000
Deferred		1,337,000		(4,307,000	)
Total	$	1,691,000	$	(4,049,000	)

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	Years ended
	June 30, 2013			June 30, 2012
Deferred tax assets:
Net operating loss carryforwards	$	10,717,000		$	13,606,000
Capital loss carryforwards		1,674,000			1,674,000
Accrued expenses		185,000			154,000
Expenses not currently deductible		154,000			152,000
Excess of book over tax depreciation		49,000			99,000
Excess of book over tax amortization		602,000			607,000
Deferred revenue		2,000			2,000
Foreign tax benefit		82,000			—
Total deferred tax assets		13,465,000			16,294,000
Deferred tax liabilities:
Customer list		2,333,000			2,435,000
Other liabilities		21,000			35,000
Total deferred tax liabilities		2,354,000			2,470,000
Deferred tax assets, net of liabilities	$	11,111,000		$	13,824,000
Valuation allowance		(9,725,000	)		(11,170,000	)
Net deferred tax asset	$	1,386,000		$	2,654,000

The Company’s provision for income taxes resulted in effective tax rates attributable to loss from continuing operations that varied from the statutory federal income tax rate of 34%, as summarized in the table below.

	Years ended
	June 30, 2013			June 30, 2012
Expected federal income tax expense (benefit) from continuing operations at 34%	$	1,429,000		$	1,436,000
Expenses not deductible for income tax purposes		159,000			182,000
Amendment of prior year return		(67,000	)		11,000
Taxable income from divestiture of foreign subs		260,000
State income taxes, net of federal benefit		161,000			122,000
Change in valuation allowance for deferred tax assets		(251,000	)		(5,800,000	)
Income tax expense (benefit)	$	1,691,000		$	(4,049,000	)

The Company recorded tax expense (benefit) of $1,691,000 and $(4,049,000) for the years ended June 30, 2013 and June 30, 2012, respectively.

At June 30, 2013, the Company had US federal net operating loss carryforwards available to reduce future taxable income of approximately $29.9 million, a portion of which may be limited as to annual utilization under Internal Revenue Code Section 382. Because of this limitation, approximately $23.3 million of net operating losses are expected to expire before being utilized. For tax year June 30, 2013 it is projected that approximately $5.4 million of net operating loss carryforwards will be utilized to offset taxable income.

In addition, at June 30, 2013, the Company had foreign net operating loss carryforwards of approximately $17.4 million available to reduce future taxable income. These carryforwards expire between 2014 and 2031.

As of June 30, 2013, the Company has maintained the valuation allowance of its net deferred tax assets of approximately $5.4 million in the Company’s foreign entities, due to insufficient history of profitable quarters. The United States entities maintain a valuation allowance of $4.3 million due to expiration of net operating losses carryforward prior to utilization, capital losses and state net operating loss carryforwards. The valuation allowances are evaluated quarterly to determine the appropriate allowance amount.

Rand Worldwide’s Canadian Subsidiary, Rand A Technology Corporation, is currently being audited by the Canada Revenue Agency for tax years 2005 through 2009. Preliminary results from the audit indicate that some deductions may be disallowed. The net effect to deferred assets and the related valuation allowance connot be determined at this time. Management believes that it has properly recorded the tax expense for the periods under review and should the results of the audit stand, the Company expects no material adjustments to its financial statements.

XML

Note 11 - Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Note 11 - Commitments and Contingencies (Details) [Line Items]
Operating Leases, Rent Expense	$ 2,200,000	$ 2,800,000
Capital Lease Obligations	616,000
Capital Lease Obligations, Current	294,000	290,000
Capital Leases, Income Statement, Interest Expense
Note 11 - Commitments and Contingencies (Details) [Line Items]
Depreciation	$ 249,000

XML

Consolidated Statements of Operations (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Revenues:
Product sales	$ 41,869,000	$ 43,953,000
Service revenue	21,764,000	19,090,000
Commission revenue	18,870,000	18,101,000
Total revenue	82,503,000	81,144,000
Cost of revenue:
Cost of product sales	26,282,000	29,738,000
Cost of service revenue	14,540,000	12,479,000
Total cost of revenue	40,822,000	42,217,000
Gross margin	41,681,000	38,927,000
Other operating expenses:
Selling, general and administrative	35,111,000	32,692,000
Depreciation and amortization	1,891,000	1,533,000
Total operating expenses	37,002,000	34,225,000
Operating income	4,679,000	4,702,000
Other expense:
Interest expense	304,000	359,000
Currency exchange losses	110,000	93,000
Other expense	62,000	26,000
	476,000	478,000
Income from continuing operations before income taxes	4,203,000	4,224,000
Income tax expense (benefit)	1,691,000	(4,049,000)
Income from continuing operations	2,512,000	8,273,000
Preferred stock dividends	(109,000)	(137,000)
Net income from continuing operations available to common stockholders	2,403,000	8,136,000
Income per common share from continuing operations, basic (in Dollars per share)	$ 0.04	$ 0.16
Income per common share from discontinued operations, basic (in Dollars per share)	$ (0.01)
Income per common share, basic (in Dollars per share)	$ 0.03	$ 0.16
Income per common share from continuing operations, diluted (in Dollars per share)	$ 0.04	$ 0.15
Income per common share from discontinued operations, diluted (in Dollars per share)	$ (0.01)
Income per common share, diluted (in Dollars per share)	$ 0.03	$ 0.15
Weighted average shares used in computation - basic (in Shares)	53,951,438	52,625,538
Weighted average shares used in computation - diluted (in Shares)	55,102,436	54,900,931
(Loss) income from discontinued operations, net of tax	(241,000)	92,000
Loss on sale of discontinued operations, net of tax	(370,000)
Net income	$ 1,901,000	$ 8,365,000

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Note 3 - Business Combinations

12 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. Business Combinations

Acquisition of Informative Design Partners

On March 1, 2012, the Company acquired all of the net assets of Inlet Technology, LLC (“Inlet”) a Virginia Beach-based value added reseller. The purchase price was $1,300,000, plus a post-closing adjustment of $252,000 for increases in the working capital level since the previous balance sheet date. The purchase price and working capital adjustment were paid in cash. Goodwill of $794,000 and other intangible assets of $480,000 were recorded as a results of this acquisition. The goodwill represents the results of expected synergies from combining the operations of the acquired business with the Company’s operation and intangible assets that do not qualify for separate recognition, such as an assembled workforce. The impact of this acquisition was not material to the Company’s consolidated balance sheets and results of operations.

The other intangible asset resulting from this acquisition was the Inlet customer list. The estimated fair value of this list was $480,000 as of the acquisition date, and the carrying amount was $448,000 at June 30, 2012. The customer list has an estimated useful life of five years and future expected amortization expense is approximately $96,000 per year for fiscal years 2013 through 2016 and $64,000 for fiscal year 2017.

On July 31, 2012, the Company acquired certain assets of Informative Design Partners (“IDP”) for an initial payment of $1 million, comprised of $600,000 in cash and $400,000 in common stock, plus contingent consideration to be paid over three years based on earnings achieved from the acquired business.

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Accounting Policies, by Policy (Policies)

12 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

Nature of Business and Basis of Presentation

Rand Worldwide, Inc. is a leading supplier in the design automation, facilities and data management software marketplace. Rand Worldwide also provides value-added services, such as training, technical support, hosted data archiving solutions and other consulting and professional services to businesses, government agencies and educational institutions worldwide.

The Company is organized into three divisions: IMAGINiT Technologies ("IMAGINiT"), Enterprise Applications, and ASCENT – Center for Technical Knowledge (“ASCENT”). Executive management performs their primary analyses based upon geographic location and operations by geographic segment are disclosed within Note 16.

The IMAGINiT division is one of the largest value-added resellers of Autodesk, Inc. (“Autodesk”) products in the world, providing Autodesk solutions and value-added services to customers in the manufacturing, infrastructure, building, and media and entertainment industries. IMAGINiT also specializes in computational fluid dynamics analysis consulting and thermal simulation services and sells its own proprietary software products and related services, enhancing its total client solution offerings. IMAGINiT operates in the United States and Canada. 

The Enterprise Applications division is the non-Autodesk component of the business and offers various products and services including data governance solutions, facilities management solutions and 3DExperience products from Dassault Systèmes which include CATIA, ENOVIA, SIMULIA, DELMIA, and DMU.  Enterprise Applications also specializes in training solutions for Dassault Systèmes and PTC products including Pro/ENGINEER, CREO, and Windchill.

ASCENT is the courseware division of Rand Worldwide and is a leading developer of professional training materials and knowledge products for engineering software tools.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventory, Policy [Policy Text Block]

Inventory

Inventory consists of packaged computer software and is stated at the lower of first-in, first-out cost, or market.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment is stated at cost. Depreciation for computer software and equipment and office furniture and equipment is provided for by the straight-line method over estimated useful lives ranging from three to seven years. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the asset using the straight-line method. Repairs and maintenance costs are expensed as incurred.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets Excluding Goodwill

Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the identifiable net assets acquired in purchase business combinations. The Company accounts for goodwill in accordance with ASC 350, Goodwill and Other Intangible Assets. Under ASC 350, goodwill is subject to annual impairment tests or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is the amount determined by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit to which goodwill has been allocated from the estimated fair value of the reporting unit. If the recorded value of goodwill exceeds its implied value, an impairment charge is recorded for the excess.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Options and Stock Granted to Employees

The Company applies ASC 718-10, Share-Based Payment, which requires companies to measure the cost of share-based awards to employees based on the grant-date fair value of the award using an option pricing model, and to recognize that cost over the period during which an employee is required to provide service in exchange for the award. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted to employees and recognizes the compensation cost of employee share-based awards in its statement of operations using the straight-line method over the vesting period of the award, net of estimated forfeitures.

The use of the Black-Scholes option pricing model to estimate the fair value of share-based awards requires that the Company make certain assumptions and estimates for required inputs to the model, including (i) the fair value of the Company’s common stock at each grant date, (ii) the expected volatility of the Company’s common stock value based on industry comparisons, (iii) the expected life of the share-based award, (iv) the risk-free interest rate, and (v) the dividend yield. The Company uses the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition and Accounts Receivable

The Company’s revenue recognition policies are in accordance with ASC 985-685, Software – Revenue Recognition, and ASC 605-20, Revenue Recognition.

Revenue from product sales and the sale of developed software is recognized when the following four criteria are met: (i) an executed proposal or signed purchase order has been obtained; (ii) delivery of the software has occurred; (iii) the fee is fixed or determinable; and (iv) the fee is probable of collection. Software product sales billed and not recognized as revenue are included in deferred revenue. The Company generally does not require collateral for accounts receivable. The Company allows returns from customers in limited situations. The Company has historically not experienced significant returns, and accordingly, allowances for returned products are not recorded.

Product Sales

For revenue derived from license fees for packaged software products, the Company follows ASC 985-605, Software-Revenue Recognition, and ASC 605-10, Revenue Recognition. The Company recognizes revenue from the sale of software licenses and training materials upon shipment of the products, provided that evidence of the arrangement exists, the arrangement fee is fixed or determinable, and collection of the related receivable is probable and free of contingencies.

Service Revenue

Revenue from installation, training and consulting services is recognized upon completion of the requested service, which typically occurs within ninety days of receipt of an order. Support services are sold either in prepaid blocks of hours which typically expire in one year, or as annual contracts for unlimited support for a specified number of users and products supported. Prepaid support service revenue is recognized monthly based upon usage with unused balances recognized in full upon expiration. Annual support contract revenues are recognized ratably over the contract period. Revenue from the Rand Secure Archive hosted data archiving solution is recognized ratably over the contract period. Installation and consulting services provided by the Company are not considered essential to the functionality of any software products sold as those services do not alter the functionality or capabilities of the product and could be performed by customers or other vendors.

Commission Revenue

Fees earned from the resale of Autodesk’s software support agreements are reported as commission revenue and presented net of their related costs. For these transactions, the Company considers Autodesk to be the primary obligor in the arrangement as Autodesk has the responsibility of providing the end-customer all the deliverables under the contract, including software upgrades and various support services. As a result, the Company assumes an agency relationship in these transactions, and recognizes the net fee associated with serving as an agent in revenue.

The Company earns a fixed rebate from its primary supplier, Autodesk, for its qualifying renewal subscriptions, which increase gross profits and the corresponding commission revenues on such sales. The rebates on renewal subscriptions are paid monthly and are accrued in accordance with ASC 605-50, Customer Payments and Incentives¸ in the month the underlying sales are posted .

Commissions revenue also includes referral fees paid by Autodesk for major account and government customer transactions, determined based on specified percentages of the amount billed by Autodesk to the referred customer. These referral fees are recorded as revenue in the period earned, based on reporting by Autodesk, and are typically settled within ten days following the end of the reporting period.

Multiple-Element Arrangements

The Company’s arrangements with its customers may involve the sale of one or more products and services at the same time. The Company considers these to be multiple elements of a single arrangement.  The Company follows ASC 605-25, Multiple-Element Arrangements.  We allocate the total arrangement consideration to each separable element based on the relative selling price of each element in accordance with selling price hierarchy, which includes:  vendor specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; and best estimate of selling price if neither VSOE nor TPE is available. In general, the Company uses VSOE to allocate the selling price to each element. Arrangement consideration allocated to undelivered elements is deferred until delivery of the individual elements.

Fixed or Determinable Fee

Management assesses whether the total fee payable to the Company for the order is fixed or determinable and free of contingencies at the time of delivery. Management considers the payment terms of the transaction, including whether the terms are extended, and its collection experience in similar transactions that did not require concessions, among other factors. If the total consideration payable to the Company is not fixed or determinable, revenue is recognized only as payments become due from the customer, provided that all other revenue recognition criteria are met.

Customer Acceptance Criteria

If an arrangement includes customer acceptance criteria, the Company defers all revenue from the arrangement until acceptance is received or the acceptance period has lapsed, unless those acceptance criteria only require that the product perform in accordance with the software vendor’s standard published product specifications. If a customer’s obligation to pay the Company is contingent upon a future event, such as installation or acceptance, the Company defers all revenue from the arrangement until that event has occurred.

Deferred Revenue

Deferred product revenue is comprised of amounts that have been invoiced to customers upon delivery of a product, but are not yet recognizable as revenue because one or more of the conditions required for revenue recognition have not yet been met. Deferred service revenue represents amounts invoiced to customers for telephone support contracts or maintenance and support contracts, which are recognized ratably as revenue over the term of the arrangements, or for installation, training or professional services that have not yet been performed.

Product Returns

The Company’s arrangements with customers do not contain any rights of product return, other than those related to standard warranty provisions that permit replacement of defective goods. As of June 30, 2013 and June 30, 2012, the Company had no reserve recorded for product returns because such returns have been insignificant.

Shipping and Handling Fees

The Company records as revenue any amounts billed to customers for shipping and handling costs, and it records as cost of revenue its actual shipping costs incurred.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for Doubtful Accounts

The Company uses estimates to determine the amount of the allowance for doubtful accounts necessary to reduce accounts receivable to its expected net realizable value. The Company estimates the amount of the required allowance by reviewing the status of past-due receivables and analyzing historical bad debt trends. Actual collection experience has not varied significantly from estimates, due primarily to credit policies, collection experience, and a lack of concentration of accounts receivable. The Company charges-off receivables deemed to be uncollectible to the allowance for doubtful accounts.

Cost of Sales, Policy [Policy Text Block]

Cost of Product Sales

Cost of product sales consists of the cost of purchasing products from software suppliers or hardware manufacturers as well as the associated shipping and handling costs. The Company earns a volume incentive rebate from its primary supplier, Autodesk, paid monthly as a percentage of qualifying purchases. The rebate percentage is established based on quarterly purchasing volume. These rebates serve to reduce the cost of product sales. The Company accrues its rebates the month the underlying sales are posted, in accordance with ASC 605-50, Customer Payments and Incentives. The Company has generally been able to focus its sales efforts in a manner to achieve margins on its product sales that are within a relatively narrow range period to period.

Cost of Service Revenue [Policy Text Block]

Cost of Service Revenue

Cost of service revenue consists primarily of direct employee compensation of all service personnel, the cost of subcontracted services and direct expenses billable to customers. Cost of service revenue does not include an allocation of overhead costs.

Advertising Costs, Policy [Policy Text Block]

Advertising and Marketing Costs

The Company’s marketing activities performed and executed over the course of the year include public relations, tradeshows, email campaigns, social media, website development and enhancement, marketing automation initiatives, virtual events, advertising and promotions as well as ongoing branding efforts.  The Company receives funding from its primary vendor, Autodesk, which offsets a portion of the costs incurred for marketing and advertising. Marketing and advertising costs are expensed as incurred, net of vendor funding and are included in selling, general and administrative expenses in the accompanying statements of operations. Advertising expenses, net of reimbursements from suppliers, were immaterial for the years ended June 30, 2013 and June 30, 2012.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income and foreign currency translation adjustments. During the years ended June 30, 2013 and June 30, 2012, unrealized foreign currency translation losses of $102,000 and $283,000, respectively, were recorded in accumulated other comprehensive income within stockholders’ equity.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company uses the liability method to account for income taxes. Income tax expense includes income taxes currently payable and deferred taxes arising from temporary differences between financial reporting and income tax bases of assets and liabilities. Deferred income taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income tax expense, if any, consists of the taxes payable for the current period. Valuation allowances are established when the realization of deferred tax assets are not considered more likely than not. The Company records liabilities from uncertain tax positions in accordance with ASC 740-10, Income Taxes. The Company believes that its income tax filing positions taken or expected to be taken in its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will results in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax position have been recorded. Interest and penalties related to unrecognized tax benefits are recorded as part of income tax expense. The Company’s income tax returns for the past three years are subject to examination by tax authorities, and may change upon examination.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

Assets and liabilities of the Company’s foreign subsidiaries, whose functional currencies are the respective local currencies, are translated into U.S. dollars at the current rates of exchange in effect at the balance sheet dates. Revenues and expenses are translated using the average exchange rates for the period. The resulting translation adjustments are included as a separate component of stockholders’ deficit in the consolidated balance sheets within accumulated other comprehensive income. Foreign currency transaction gains or losses resulting from the re-measurement of monetary assets and liabilities stated in a currency other than the functional currency are included in the Company’s results of operations.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year financial statement amounts have been reclassified to confirm to the current year presentation.

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Note 12 - Employee Benefit Plans (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Compensation and Retirement Disclosure [Abstract]
Description of Defined Contribution Pension and Other Postretirement Plans	The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the "401(k) Plan") . The 401(k) Plan is a defined contribution plan, which covers substantially all U.S.-based employees of the Company, or its wholly-owned subsidiaries, who have completed three months of service. Participants may elect a pre-tax payroll deduction up to IRS maximums. As amended, the 401(k) Plan provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant's compensation and 50% of the next 2% of a participant's compensation, or a total possible maximum matching contribution of 4% of a participant's compensation, for all participants. The Company may also make discretionary profit-sharing contributions to the 401(k) Plan for all participants who are employed on the last day of the plan year but has not done so for the plan year ended December 31, 2012. The Company also has a r etirement savings plan ("RSP") that covers substantially all Canadian-based employees of the Company and its wholly-owned subsidiaries. Upon hire, p articipants may elect a pre-tax payroll deduction, subject to limitations as prescribed by the Canadian Revenue Agency. The RSP provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant's compensation and 50% of the next 2% of a participant's compensation, for a total possible maximum matching contribution of 4% of a participant's compensation, for all participants who have completed 12 months of service.The total amount recorded by the Company as expense, under both plans, during the years ended June 30, 2013 and June 30, 2012 was approximately $787,000 and $683,000, respectively
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	100.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	3.00%
Defined Contribution Plan, Cost Recognized (in Dollars)	$ 787,000	$ 683,000

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Note 11 - Commitments and Contingencies

12 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

11. Commitments and Contingencies

Operating Leases

The Company leases certain office space and equipment under noncancellable operating lease agreements that expire in various years through 2019, and generally do not contain significant renewal options. Rent expense under operating leases for the years ended June 30, 2013 and June 30, 2012 was $2.2 million and $2.8 million, respectively. Future minimum payments under all noncancellable operating leases with initial terms of one year or more consisted of the following at June 30, 2013:

Year ending June 30:
2014	$	2,434,000
2015		2,058,000
2016		1,459,000
2017		970,000
2018		531,000
Thereafter		298,000
Total minimum lease payments	$	7,750,000

Capital Leases

The Company has various computer equipment used in training facilities and by employees throughout its office locations. These capital lease obligations totaled $616,000 as of June 30, 2013, with approximately $294,000 representing the short-term balance of the lease and shown as Obligations under capital leases in the accompanying balance sheets. Payments for the leases are made either monthly or quarterly through September 2016 and depreciation expense on this equipment was approximately $249,000 as of June 30, 2013. Future minimum payments consisted of the following at June 30, 2013:

Year ending June 30:
2014	$	335,000
2015		209,000
2016		136,000
2017		22,000
Total minimum lease payments		702,000
Less:
Taxes		36,000
Imputed interest		50,000
Present value of future minimum lease payments	$	616,000

Litigation

The Company is party to various litigation matters that management considers routine and incidental to the Company’s business. As of June 30, 2013 and June 30, 2012, the Company had accrued no material amounts related to these matters.

Guarantees

In the normal course of business, the Company indemnifies third parties and enters into commitments and guarantees (“Agreements”) under which it may be required to make payments. These Agreements include indemnities to the following parties: lenders in connection with the Term Loan; lessors in connection with facility leases; customers in relation to the performance of services; vendors in connection with guarantees of expenses incurred by employees in the normal course of business; former employees in connection with their prior services as a director or officer of the Company or its subsidiary companies; vendors or principals in connection with performance under asset or share purchase and sale agreements and performance under credit facilities and other agreements of the Company’s subsidiaries. The duration of these Agreements varies, and in certain cases, is indefinite. Furthermore, the majority of these Agreements do not limit the Company’s maximum potential payment exposure. In addition, the Company is party to a guarantee with its largest vendor, Autodesk, in relation to all of the Company’s subsidiaries’ obligations to Autodesk. The Company has recorded no accrued liability related to these Agreements, based on its historical experience and information known as of June 30, 2013.

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Note 10 - Income Taxes (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Note 10 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%
Income Tax Expense (Benefit)	$ 1,691,000	$ (4,049,000)
Deferred Tax Assets, Operating Loss Carryforwards, Domestic	29,900,000
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	23,300,000
Operating Loss Carryforwards, Amount Projected to be Utilized for the Tax Year, Domestic	5,400,000
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	17,400,000
Deferred Tax Assets, Valuation Allowance	(9,725,000)	(11,170,000)
Foreign [Member]
Note 10 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Valuation Allowance	5,400,000
Domestic [Member]
Note 10 - Income Taxes (Details) [Line Items]
Deferred Tax Assets, Valuation Allowance	$ 4,300,000

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Note 13 - Significant Supplier (Details)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Entity Wide Inventory Purchases From One Vendor [Member]
Note 13 - Significant Supplier (Details) [Line Items]
Concentration Risk, Supplier	97%	97%
Entity Wide Accounts Payable Owed to One Vendor [Member]
Note 13 - Significant Supplier (Details) [Line Items]
Concentration Risk, Supplier	89%	91%
Entity Wide Revenue Related to One Vendor's Products [Member]
Note 13 - Significant Supplier (Details) [Line Items]
Concentration Risk, Supplier	96%

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Note 5 - Preferred Stock (Details) - Preferred Stock Included in Equity: (Parentheticals) (USD $)	Jun. 30, 2013 Series D Preferred Stock [Member]	Jun. 30, 2012 Series D Preferred Stock [Member]	Dec. 31, 2004 Series D Preferred Stock [Member]	Jun. 30, 2013 Series E Preferred Stock [Member]	Jun. 30, 2012 Series E Preferred Stock [Member]	Jul. 31, 2005 Series E Preferred Stock [Member]
Note 5 - Preferred Stock (Details) - Preferred Stock Included in Equity: (Parentheticals) [Line Items]
Convertible Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01		$ 0.01	$ 0.01
Convertible Preferred Stock, shares authorized	1,297,537	1,297,537		3,000	3,000
Convertible Preferred Stock, shares issued	1,297,537	1,297,537	813,050	1,191	1,191	1,191
Convertible Preferred Stock, shares outstanding	384,495	384,495		862	862
Convertible Preferred Stock, aggregate liquidation preference (in Dollars)	$ 231,000	$ 231,000		$ 862,000	$ 862,000

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Note 7 - Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	10,234,000	$	6,648,000	$	3,586,000
Trade name		3,931,000		1,247,000		2,684,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	15,489,000	$	9,219,000	$	6,270,000

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	9,395,000	$	6,105,000	$	3,290,000
Trade name		3,931,000		945,000		2,986,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	14,650,000	$	8,374,000	$	6,276,000

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Note 6 - Earnings (Loss) Per Share (Tables)

12 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Years ended
	June 30, 2013			June 30, 2012
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	2,512,000		$	8,273,000
Income (loss) from discontinued operations, net of tax		(241,000	)		92,000
Loss on disposition of discontinued operations, net of tax		(370,000	)		—
Net income		1,901,000			8,365,000
Net income from continuing operations		2,512,000			8,273,000
Payment of preferred stock dividends		(109,000	)		(137,000	)
Net income from continuing operations available to common stockholders	$	2,403,000		$	8,136,000
Weighted average shares used in computing basic net earnings per share:		53,951,438			52,625,538
Assumed conversion of preferred stock		769,630			2,095,784
Effect of outstanding stock options		381,368			179,609
Weighted average shares used in computing diluted net earnings per share:		55,102,436			54,900,931
Earnings per common share from continuing operations, basic	$	0.04		$	0.16
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, basic	$	0.03		$	0.16
Earnings per common share from continuing operations, basic	$	0.04		$	0.15
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, diluted	$	0.03		$	0.15

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Note 8 - Director and Employee Stock Compensation Plans (Details) - Exercise Price for Options Outstanding (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	$ 0.30
Range of Exercise Prices, Upper Limit	$ 1.71
Options Outstanding (in Shares)	3,488,629	3,481,900
Weighted Average Exercise Prices of Options Outstanding	$ 0.77	$ 0.76
Options Exercisable (in Shares)	1,900,252
Weighted Average Exercise Prices of Options Exercisable	$ 0.78
Weighted Average Remaining Contractual Life of Options Exercisable	6 years 36 days
Price Range $0.30 to 0.50 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	$ 0.30
Range of Exercise Prices, Upper Limit	$ 0.50
Options Outstanding (in Shares)	158,852
Weighted Average Exercise Prices of Options Outstanding	$ 0.43
Weighted Average Remaining Contractual Life of Options Outstanding	1 year 109 days
Options Exercisable (in Shares)	158,852
Weighted Average Exercise Prices of Options Exercisable	$ 0.43
Weighted Average Remaining Contractual Life of Options Exercisable	1 year 109 days
Price Range $0.60 to 0.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	$ 0.60
Range of Exercise Prices, Upper Limit	$ 0.75
Options Outstanding (in Shares)	1,883,920
Weighted Average Exercise Prices of Options Outstanding	$ 0.70
Weighted Average Remaining Contractual Life of Options Outstanding	7 years 255 days
Options Exercisable (in Shares)	986,560
Weighted Average Exercise Prices of Options Exercisable	$ 0.69
Weighted Average Remaining Contractual Life of Options Exercisable	7 years 219 days
Price Range $0.76 to 0.94 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	$ 0.76
Range of Exercise Prices, Upper Limit	$ 0.94
Options Outstanding (in Shares)	1,207,357
Weighted Average Exercise Prices of Options Outstanding	$ 0.81
Weighted Average Remaining Contractual Life of Options Outstanding	7 years 292 days
Options Exercisable (in Shares)	516,340
Weighted Average Exercise Prices of Options Exercisable	$ 0.83
Weighted Average Remaining Contractual Life of Options Exercisable	6 years 73 days
Price Range $1.05 to 1.71 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Lower Limit	$ 1.05
Range of Exercise Prices, Upper Limit	$ 1.71
Options Outstanding (in Shares)	238,500
Weighted Average Exercise Prices of Options Outstanding	$ 1.29
Weighted Average Remaining Contractual Life of Options Outstanding	2 years 219 days
Options Exercisable (in Shares)	238,500
Weighted Average Exercise Prices of Options Exercisable	$ 1.29
Weighted Average Remaining Contractual Life of Options Exercisable	2 years 219 days

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Note 3 - Business Combinations (Details) (USD $)	12 Months Ended				1 Months Ended		1 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2012 Inlet [Member] Customer Lists [Member]	Mar. 02, 2012 Inlet [Member] Customer Lists [Member]	Mar. 31, 2012 Inlet [Member]	Mar. 02, 2012 Inlet [Member]	Jul. 31, 2012 IDP [Member]
Note 3 - Business Combinations (Details) [Line Items]
Business Combination, Consideration Transferred					$ 1,300,000		$ 1,000,000
Business Acquisition Post-Closing Adjustment					252,000
Goodwill	17,700,000	15,954,000				794,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill						480,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles				480,000
Finite-lived Intangible Assets Acquired			448,000
Finite-Lived Intangible Asset, Useful Life			5 years
Amortization of Intangible Assets	845,000	678,000	96,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	2,690,000		64,000
Payments to Acquire Businesses, Gross							600,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned							$ 400,000
Business Acquisition Contingent Consideration Term							3 years

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Note 6 - Earnings (Loss) Per Share (Details) - Computations of Basic and Diluted Loss Per Common Share: (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Computations of Basic and Diluted Loss Per Common Share: [Abstract]
Net income from continuing operations	$ 2,512,000	$ 8,273,000
Payment of preferred stock dividends	(109,000)	(137,000)
Net income from continuing operations available to common stockholders	2,403,000	8,136,000
Weighted average shares used in computing basic net earnings per share: (in Shares)	53,951,438	52,625,538
Assumed conversion of preferred stock (in Shares)	769,630	2,095,784
Effect of outstanding stock options (in Shares)	381,368	179,609
Weighted average shares used in computing diluted net earnings per share: (in Shares)	55,102,436	54,900,931
Earnings per common share from continuing operations, basic (in Dollars per share)	$ 0.04	$ 0.16
Earnings (loss) per common share from discontinued operations, basic (in Dollars per share)	$ (0.01)
Earnings per common share, basic (in Dollars per share)	$ 0.03	$ 0.16
Earnings per common share from continuing operations, basic (in Dollars per share)	$ 0.04	$ 0.15
Earnings (loss) per common share from discontinued operations, basic (in Dollars per share)	$ (0.01)
Earnings per common share, diluted (in Dollars per share)	$ 0.03	$ 0.15
Income (loss) from discontinued operations, net of tax	(241,000)	92,000
Loss on disposition of discontinued operations, net of tax	(370,000)
Net income	$ 1,901,000	$ 8,365,000

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Note 10 - Income Taxes (Details) - Components of Losses From Continuing Operations Before Income Taxes: (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Components of Losses From Continuing Operations Before Income Taxes: [Abstract]
Domestic	$ 3,671,000	$ 3,265,000
Foreign	532,000	959,000
Total	$ 4,203,000	$ 4,224,000

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Note 14 - Discontinued Operations (Tables)

12 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Schedule Of Entities Reclassified As Discontinued Operations [Table Text Block]

	Years ended
	June 30, 2013			June 30, 2012
Revenues	$	7,281,000		$	8,233,000
(Loss) income from discontinued operations, net of tax		(241,000	)		92,000
Loss on sale or disposition of discontinued operations, net of tax		370,000			—

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Note 8 - Director and Employee Stock Compensation Plans (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Nov. 07, 2012 Omnibus Equity Compensation Plan [Member]	Jun. 30, 2012 Avatech Solutions, Inc. 2002 Stock Option Plan (the "Plan") [Member]	Dec. 31, 2010 Employee Stock Purchase Plan (the "ESPP") [Member]	Jun. 30, 2013 Restricted Stock Award Plan ("Stock Plan") [Member]
Note 8 - Director and Employee Stock Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			2,000,000	7,800,000	2,000,000	1,200,000
Share-based Compensation (in Dollars)	$ 261,000	$ 190,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value (in Dollars)	4,000	23,400
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in Dollars per share)	$ 0.30
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in Dollars per share)	$ 1.71
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars)	$ 535,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 109 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant						193,921

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Note 5 - Preferred Stock (Tables)

12 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Schedule of Stockholders Equity [Table Text Block]

	June 30
	2013		2012
Series D Convertible Preferred Stock, $0.01 par value; 1,297,537 shares authorized and issued; and 384,495 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $231,000 at June 30, 2013 and 2012,	$	4,000	$	4,000
Series E Convertible Preferred Stock, $0.01 par value; 3,000 shares authorized; 1,191 shares issued; 862 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $862,000 at June 30, 2013 and 2012, respectively		—		—
Total Preferred Stock	$	4,000	$	4,000

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Consolidated Statement of Stockholders’ Equity (USD $)	Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Jun. 30, 2011	$ 11,000	$ 519,000	$ 64,864,000	$ (44,065,000)	$ 1,343,000	$ 22,672,000
Balance (in Shares) at Jun. 30, 2011	1,090,150	51,882,678
Stock based compensation			190,000			190,000
Preferred stock dividends			(137,000)			(137,000)
Issuance of common stock upon the exercise of options		1,000	38,000			39,000
Issuance of common stock upon the exercise of options (in Shares)		84,400
Conversion of preferred stock into common stock	(7,000)	15,000	(8,000)
Conversion of preferred stock into common stock (in Shares)	(704,793)	1,525,999
Foreign currency translation adjustment					(283,000)	(283,000)
Net income				8,365,000		8,365,000
Balance at Jun. 30, 2012	4,000	535,000	64,947,000	(35,700,000)	1,060,000	30,846,000
Balance (in Shares) at Jun. 30, 2012	385,357	53,493,077
Stock based compensation			261,000			261,000
Preferred stock dividends			(109,000)			(109,000)
Issuance of common stock upon the exercise of options			3,000			3,000
Issuance of common stock upon the exercise of options (in Shares)		9,597
Issuance of common stock for acquisition		5,000	395,000			400,000
Issuance of common stock for acquisition (in Shares)		497,512
Foreign currency translation adjustment					(102,000)	(102,000)
Net income				1,901,000		1,901,000
Balance at Jun. 30, 2013	$ 4,000	$ 540,000	$ 65,497,000	$ (33,799,000)	$ 958,000	$ 33,200,000
Balance (in Shares) at Jun. 30, 2013	385,357	54,000,186

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Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies

When used throughout these notes, the terms “Rand Worldwide”, “the Company”, “we”, “us” and “our” refer to Rand Worldwide, Inc. and, unless the context clearly indicates otherwise, its consolidated subsidiaries.

Nature of Business and Basis of Presentation

Rand Worldwide, Inc. is a leading supplier in the design automation, facilities and data management software marketplace. Rand Worldwide also provides value-added services, such as training, technical support, hosted data archiving solutions and other consulting and professional services to businesses, government agencies and educational institutions worldwide.

The Company is organized into three divisions: IMAGINiT Technologies ("IMAGINiT"), Enterprise Applications, and ASCENT – Center for Technical Knowledge (“ASCENT”). Executive management performs their primary analyses based upon geographic location and operations by geographic segment are disclosed within Note 16.

The IMAGINiT division is one of the largest value-added resellers of Autodesk, Inc. (“Autodesk”) products in the world, providing Autodesk solutions and value-added services to customers in the manufacturing, infrastructure, building, and media and entertainment industries. IMAGINiT also specializes in computational fluid dynamics analysis consulting and thermal simulation services and sells its own proprietary software products and related services, enhancing its total client solution offerings. IMAGINiT operates in the United States and Canada. 

The Enterprise Applications division is the non-Autodesk component of the business and offers various products and services including data governance solutions, facilities management solutions and 3DExperience products from Dassault Systèmes which include CATIA, ENOVIA, SIMULIA, DELMIA, and DMU.  Enterprise Applications also specializes in training solutions for Dassault Systèmes and PTC products including Pro/ENGINEER, CREO, and Windchill.

ASCENT is the courseware division of Rand Worldwide and is a leading developer of professional training materials and knowledge products for engineering software tools.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventory

Inventory consists of packaged computer software and is stated at the lower of first-in, first-out cost, or market.

Property and Equipment

Property and equipment is stated at cost. Depreciation for computer software and equipment and office furniture and equipment is provided for by the straight-line method over estimated useful lives ranging from three to seven years. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the asset using the straight-line method. Repairs and maintenance costs are expensed as incurred.

Impairment of Long-Lived Assets Excluding Goodwill

Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk.

Goodwill

Goodwill is the excess of the purchase price paid over the fair value of the identifiable net assets acquired in purchase business combinations. The Company accounts for goodwill in accordance with ASC 350, Goodwill and Other Intangible Assets. Under ASC 350, goodwill is subject to annual impairment tests or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is the amount determined by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit to which goodwill has been allocated from the estimated fair value of the reporting unit. If the recorded value of goodwill exceeds its implied value, an impairment charge is recorded for the excess.

The carrying amount of goodwill was $17,700,000 and $15,954,000 as of June 30, 2013 and 2012, respectively.

Stock Options and Stock Granted to Employees

The Company applies ASC 718-10, Share-Based Payment, which requires companies to measure the cost of share-based awards to employees based on the grant-date fair value of the award using an option pricing model, and to recognize that cost over the period during which an employee is required to provide service in exchange for the award. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted to employees and recognizes the compensation cost of employee share-based awards in its statement of operations using the straight-line method over the vesting period of the award, net of estimated forfeitures.

The use of the Black-Scholes option pricing model to estimate the fair value of share-based awards requires that the Company make certain assumptions and estimates for required inputs to the model, including (i) the fair value of the Company’s common stock at each grant date, (ii) the expected volatility of the Company’s common stock value based on industry comparisons, (iii) the expected life of the share-based award, (iv) the risk-free interest rate, and (v) the dividend yield. The Company uses the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

Revenue Recognition and Accounts Receivable

The Company’s revenue recognition policies are in accordance with ASC 985-685, Software – Revenue Recognition, and ASC 605-20, Revenue Recognition.

Revenue from product sales and the sale of developed software is recognized when the following four criteria are met: (i) an executed proposal or signed purchase order has been obtained; (ii) delivery of the software has occurred; (iii) the fee is fixed or determinable; and (iv) the fee is probable of collection. Software product sales billed and not recognized as revenue are included in deferred revenue. The Company generally does not require collateral for accounts receivable. The Company allows returns from customers in limited situations. The Company has historically not experienced significant returns, and accordingly, allowances for returned products are not recorded.

Product Sales

For revenue derived from license fees for packaged software products, the Company follows ASC 985-605, Software-Revenue Recognition, and ASC 605-10, Revenue Recognition. The Company recognizes revenue from the sale of software licenses and training materials upon shipment of the products, provided that evidence of the arrangement exists, the arrangement fee is fixed or determinable, and collection of the related receivable is probable and free of contingencies.

Service Revenue

Revenue from installation, training and consulting services is recognized upon completion of the requested service, which typically occurs within ninety days of receipt of an order. Support services are sold either in prepaid blocks of hours which typically expire in one year, or as annual contracts for unlimited support for a specified number of users and products supported. Prepaid support service revenue is recognized monthly based upon usage with unused balances recognized in full upon expiration. Annual support contract revenues are recognized ratably over the contract period. Revenue from the Rand Secure Archive hosted data archiving solution is recognized ratably over the contract period. Installation and consulting services provided by the Company are not considered essential to the functionality of any software products sold as those services do not alter the functionality or capabilities of the product and could be performed by customers or other vendors.

Commission Revenue

Fees earned from the resale of Autodesk’s software support agreements are reported as commission revenue and presented net of their related costs. For these transactions, the Company considers Autodesk to be the primary obligor in the arrangement as Autodesk has the responsibility of providing the end-customer all the deliverables under the contract, including software upgrades and various support services. As a result, the Company assumes an agency relationship in these transactions, and recognizes the net fee associated with serving as an agent in revenue.

The Company earns a fixed rebate from its primary supplier, Autodesk, for its qualifying renewal subscriptions, which increase gross profits and the corresponding commission revenues on such sales. The rebates on renewal subscriptions are paid monthly and are accrued in accordance with ASC 605-50, Customer Payments and Incentives¸ in the month the underlying sales are posted .

Commissions revenue also includes referral fees paid by Autodesk for major account and government customer transactions, determined based on specified percentages of the amount billed by Autodesk to the referred customer. These referral fees are recorded as revenue in the period earned, based on reporting by Autodesk, and are typically settled within ten days following the end of the reporting period.

Multiple-Element Arrangements

The Company’s arrangements with its customers may involve the sale of one or more products and services at the same time. The Company considers these to be multiple elements of a single arrangement.  The Company follows ASC 605-25, Multiple-Element Arrangements.  We allocate the total arrangement consideration to each separable element based on the relative selling price of each element in accordance with selling price hierarchy, which includes:  vendor specific objective evidence (“VSOE”) if available; third party evidence (“TPE”) if VSOE is not available; and best estimate of selling price if neither VSOE nor TPE is available. In general, the Company uses VSOE to allocate the selling price to each element. Arrangement consideration allocated to undelivered elements is deferred until delivery of the individual elements.

Fixed or Determinable Fee

Management assesses whether the total fee payable to the Company for the order is fixed or determinable and free of contingencies at the time of delivery. Management considers the payment terms of the transaction, including whether the terms are extended, and its collection experience in similar transactions that did not require concessions, among other factors. If the total consideration payable to the Company is not fixed or determinable, revenue is recognized only as payments become due from the customer, provided that all other revenue recognition criteria are met.

Customer Acceptance Criteria

If an arrangement includes customer acceptance criteria, the Company defers all revenue from the arrangement until acceptance is received or the acceptance period has lapsed, unless those acceptance criteria only require that the product perform in accordance with the software vendor’s standard published product specifications. If a customer’s obligation to pay the Company is contingent upon a future event, such as installation or acceptance, the Company defers all revenue from the arrangement until that event has occurred.

Deferred Revenue

Deferred product revenue is comprised of amounts that have been invoiced to customers upon delivery of a product, but are not yet recognizable as revenue because one or more of the conditions required for revenue recognition have not yet been met. Deferred service revenue represents amounts invoiced to customers for telephone support contracts or maintenance and support contracts, which are recognized ratably as revenue over the term of the arrangements, or for installation, training or professional services that have not yet been performed.

Product Returns

The Company’s arrangements with customers do not contain any rights of product return, other than those related to standard warranty provisions that permit replacement of defective goods. As of June 30, 2013 and June 30, 2012, the Company had no reserve recorded for product returns because such returns have been insignificant.

Shipping and Handling Fees

The Company records as revenue any amounts billed to customers for shipping and handling costs, and it records as cost of revenue its actual shipping costs incurred.

Allowance for Doubtful Accounts

The Company uses estimates to determine the amount of the allowance for doubtful accounts necessary to reduce accounts receivable to its expected net realizable value. The Company estimates the amount of the required allowance by reviewing the status of past-due receivables and analyzing historical bad debt trends. Actual collection experience has not varied significantly from estimates, due primarily to credit policies, collection experience, and a lack of concentration of accounts receivable. The Company charges-off receivables deemed to be uncollectible to the allowance for doubtful accounts.

Cost of Product Sales

Cost of product sales consists of the cost of purchasing products from software suppliers or hardware manufacturers as well as the associated shipping and handling costs. The Company earns a volume incentive rebate from its primary supplier, Autodesk, paid monthly as a percentage of qualifying purchases. The rebate percentage is established based on quarterly purchasing volume. These rebates serve to reduce the cost of product sales. The Company accrues its rebates the month the underlying sales are posted, in accordance with ASC 605-50, Customer Payments and Incentives. The Company has generally been able to focus its sales efforts in a manner to achieve margins on its product sales that are within a relatively narrow range period to period.

Cost of Service Revenue

Cost of service revenue consists primarily of direct employee compensation of all service personnel, the cost of subcontracted services and direct expenses billable to customers. Cost of service revenue does not include an allocation of overhead costs.

Advertising and Marketing Costs

The Company’s marketing activities performed and executed over the course of the year include public relations, tradeshows, email campaigns, social media, website development and enhancement, marketing automation initiatives, virtual events, advertising and promotions as well as ongoing branding efforts.  The Company receives funding from its primary vendor, Autodesk, which offsets a portion of the costs incurred for marketing and advertising. Marketing and advertising costs are expensed as incurred, net of vendor funding and are included in selling, general and administrative expenses in the accompanying statements of operations. Advertising expenses, net of reimbursements from suppliers, were immaterial for the years ended June 30, 2013 and June 30, 2012.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income and foreign currency translation adjustments. During the years ended June 30, 2013 and June 30, 2012, unrealized foreign currency translation losses of $102,000 and $283,000, respectively, were recorded in accumulated other comprehensive income within stockholders’ equity.

Income Taxes

The Company uses the liability method to account for income taxes. Income tax expense includes income taxes currently payable and deferred taxes arising from temporary differences between financial reporting and income tax bases of assets and liabilities. Deferred income taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Income tax expense, if any, consists of the taxes payable for the current period. Valuation allowances are established when the realization of deferred tax assets are not considered more likely than not. The Company records liabilities from uncertain tax positions in accordance with ASC 740-10, Income Taxes. The Company believes that its income tax filing positions taken or expected to be taken in its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will results in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax position have been recorded. Interest and penalties related to unrecognized tax benefits are recorded as part of income tax expense. The Company’s income tax returns for the past three years are subject to examination by tax authorities, and may change upon examination.

Foreign Currency Translation

Assets and liabilities of the Company’s foreign subsidiaries, whose functional currencies are the respective local currencies, are translated into U.S. dollars at the current rates of exchange in effect at the balance sheet dates. Revenues and expenses are translated using the average exchange rates for the period. The resulting translation adjustments are included as a separate component of stockholders’ deficit in the consolidated balance sheets within accumulated other comprehensive income. Foreign currency transaction gains or losses resulting from the re-measurement of monetary assets and liabilities stated in a currency other than the functional currency are included in the Company’s results of operations.

In addition, for the years ended June 30, 2013 and June 30, 2012, realized currency transaction losses from operations of $110,000 and $93,000, respectively, were recorded in the statement of operations.

Reclassifications

Certain prior year financial statement amounts have been reclassified to confirm to the current year presentation.

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Note 4 - Borrowings Under Line of Credit

12 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4. Borrowings Under Line of Credit

On February 29, 2012, the Company entered into an $8 million line of credit facility, including a $1,000,000 sublimit for the issuance of standby or trade letters of credit, with PNC Bank, National Association. The interest rate is the “Eurodollar Rate”, which is calculated by using the LIBOR rate, plus a margin of 2.0%. The Company had no outstanding borrowings from the bank under its credit line as of June 30, 2013 and had $3.1 million outstanding as of June 30, 2012. The Company has pledged its U.S. trade accounts receivable as collateral against the line of credit. The line expires on November 30, 2014.

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Note 2 - Supplemental Disclosure of Cash Flow Information

12 Months Ended

Jun. 30, 2013

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

2. Supplemental Disclosure of Cash Flow Information

The Company paid interest of approximately $81,000 and $236,000, and paid federal and state taxes of approximately $124,000 and $503,000, respectively, for the years ended June 30, 2013 and June 30, 2012. Total cash purchases of property and equipment were approximately $1,032,000 and $640,000, respectively, for the years ended June 30, 2013 and June 30, 2012. Total non-cash purchases of property and equipment were $1,051,000 for the year ended June 30, 2012. There were no non-cash purchases of property and equipment for the year ended June 30, 2013.

In connection with the acquisition of Informative Design Partners on July 31, 2012, the Company issued 497,512 shares of its common stock for $400,000.

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Note 7 - Intangible Assets (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 845,000	$ 678,000
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	828,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	807,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	778,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	735,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	433,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 2,690,000

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Note 8 - Director and Employee Stock Compensation Plans (Tables)

12 Months Ended

Jun. 30, 2013

Share-based Arrangements with Employees and Nonemployees [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Year Ended June 30			Year Ended June 30
	2013			2012
Average risk-free interest rate	0.72%	–	2.22%	0.72%	–	2.22%
Dividend yield	0%			0%
Expected life (years)	5	–	6.25	5	–	6.25
Expected volatility	.50	–	.56	.50	–	.56
Weighted average fair value of granted options	$0.60			$0.39

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value
Outstanding at July 1, 2012		3,481,900		$	0.76
Granted		18,000			0.94
Exercised		(9,597	)		0.30
Forfeited		(1,674	)		0.30
Outstanding at June 30, 2013		3,488,629		$	0.77	$	151,000
Exercisable at June 30, 2013		1,900,252		$	0.78	$	118,000
Weighted-average remaining contractual life (years)		6.1

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Range of Exercise Prices			Options Outstanding		Weighted Average Exercise Prices of Options Outstanding		Weighted Average Remaining Contractual Life of Options Outstanding (years)		Options Exercisable		Weighted Average Exercise Prices of Options Exercisable		Weighted Average Remaining Contractual Life of Options Exercisable (years)
$0.30	–	0.50		158,852	$	0.43		1.3		158,852	$	0.43		1.3
0.60	–	0.75		1,883,920		0.70		7.7		986,560		0.69		7.6
0.76	–	0.94		1,207,357		0.81		7.8		516,340		0.83		6.2
1.05	–	1.71		238,500		1.29		2.6		238,500		1.29		2.6
				3,488,629						1,900,252

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Note 1 - Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Operating Segments	3
Goodwill (in Dollars)	$ 17,700,000	$ 15,954,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax (in Dollars)	(102,000)	(283,000)
Foreign Currency Transaction Gain (Loss), before Tax (in Dollars)	$ (110,000)	$ (93,000)
Computer Software and Equipment & Office Furniture and Equipment [Member] | Minimum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Computer Software and Equipment & Office Furniture and Equipment [Member] | Maximum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life	7 years

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Note 5 - Preferred Stock (Details) - Preferred Stock Included in Equity: (USD $)	Jun. 30, 2013	Jun. 30, 2012
Note 5 - Preferred Stock (Details) - Preferred Stock Included in Equity: [Line Items]
Convertible Preferred Stock, Value Outstanding	$ 4,000	$ 4,000
Series D Preferred Stock [Member]
Note 5 - Preferred Stock (Details) - Preferred Stock Included in Equity: [Line Items]
Convertible Preferred Stock, Value Outstanding	$ 4,000	$ 4,000

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Note 11 - Commitments and Contingencies (Details) - Future Minimum Capital Lease Payments (USD $)	Jun. 30, 2013
Future Minimum Capital Lease Payments [Abstract]
2014	$ 335,000
2015	209,000
2016	136,000
2017	22,000
Total minimum lease payments	702,000
Taxes	36,000
Imputed interest	50,000
Present value of future minimum lease payments	$ 616,000

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Note 10 - Income Taxes (Details) - Components of Income Tax Provision (Benefit): (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Components of Income Tax Provision (Benefit): [Abstract]
Federal tax	$ 1,447,000	$ (4,193,000)
State tax	244,000	144,000
Total	1,691,000	(4,049,000)
Current	354,000	258,000
Deferred	$ 1,337,000	$ (4,307,000)

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Note 8 - Director and Employee Stock Compensation Plans (Details) - Summary of Stock Option Activity and Related Information: (USD $)	12 Months Ended
	Jun. 30, 2013
Summary of Stock Option Activity and Related Information: [Abstract]
Outstanding at July 1, 2012	3,481,900
Outstanding at July 1, 2012 (in Dollars per share)	$ 0.76
Granted	18,000
Granted (in Dollars per share)	$ 0.94
Exercised	(9,597)
Exercised (in Dollars per share)	$ 0.30
Forfeited	(1,674)
Forfeited (in Dollars per share)	$ 0.30
Outstanding at June 30, 2013	3,488,629
Outstanding at June 30, 2013 (in Dollars per share)	$ 0.77
Outstanding at June 30, 2013 (in Dollars)	$ 151,000
Exercisable at June 30, 2013	1,900,252
Exercisable at June 30, 2013 (in Dollars per share)	$ 0.78
Exercisable at June 30, 2013 (in Dollars)	$ 118,000
Weighted-average remaining contractual life (years)	6 years 36 days

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Consolidated Balance Sheets (Parentheticals) (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Accounts receivable, allowance (in Dollars)	$ 253,000	$ 405,000
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	54,000,186	53,493,077
Common stock, shares outstanding	54,000,186	53,493,077
Convertible Preferred Stock [Member]
Convertible Preferred Stock, shares authorized	1,300,537	1,300,537
Convertible Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Convertible Preferred Stock, shares issued	1,298,728	1,298,728
Convertible Preferred Stock, shares outstanding	385,357	385,357
Convertible Preferred Stock, aggregate liquidation preference (in Dollars)	1,093,000	1,093,000
Customer Lists [Member]
Finite Lived Intangible Assets, Accumulated Amortization (in Dollars)	6,648,000	6,105,000
Trade Names [Member]
Finite Lived Intangible Assets, Accumulated Amortization (in Dollars)	$ 1,247,000	$ 945,000

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Note 7 - Intangible Assets

12 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

7. Intangible Assets

The following is a summary of the carrying amount, accumulated amortization and the resulting net book value of intangible assets:

June 30, 2013

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	10,234,000	$	6,648,000	$	3,586,000
Trade name		3,931,000		1,247,000		2,684,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	15,489,000	$	9,219,000	$	6,270,000

June 30, 2012

	Carrying amount		Accumulated amortization		Net book value
Customer list	$	9,395,000	$	6,105,000	$	3,290,000
Trade name		3,931,000		945,000		2,986,000
Intellectual property		1,324,000		1,324,000		—
Total intangible assets	$	14,650,000	$	8,374,000	$	6,276,000

Amortization expense for intangible assets for the years ended June 30, 2013 and June 30, 2012 were $845,000 and $678,000, respectively. Future estimated amortization expense for intangibles assets is as follows: $828,000 in 2014, $807,000 in 2015, $778,000 in 2016, $735,000 in 2017, $433,000 in 2018 and $2,690,000 thereafter.

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Consolidated Statements of Comprehensive Income (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Net income	$ 1,901,000	$ 8,365,000
Other comprehensive income, net of tax:
Net change in cumulative foreign currency translation gain	(102,000)	(283,000)
Comprehensive income	$ 1,799,000	$ 8,082,000

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Note 14 - Discontinued Operations (Details) - Financial results of entities which have been reclassified as discontinued operations (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Financial results of entities which have been reclassified as discontinued operations [Abstract]
Revenues	$ 7,281,000	$ 8,233,000
(Loss) income from discontinued operations, net of tax	(241,000)	92,000
Loss on sale or disposition of discontinued operations, net of tax	$ 370,000

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Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Jun. 30, 2012
Current assets:
Cash	$ 1,214,000	$ 1,680,000
Accounts receivable, less allowance of $253,000 and $405,000 in 2013 and 2012	13,097,000	18,099,000
Income tax receivable	851,000	281,000
Other receivables	2,227,000	994,000
Inventory	27,000	107,000
Prepaid expenses and other current assets	2,520,000	2,084,000
Deferred tax assets	141,000	78,000
Total current assets	20,077,000	23,323,000
Property and equipment:
Computer software and equipment	8,432,000	8,231,000
Office furniture and equipment	1,900,000	1,974,000
Leasehold improvements	685,000	699,000
	11,017,000	10,904,000
Less accumulated depreciation and amortization	(8,379,000)	(8,193,000)
	2,638,000	2,711,000
Deferred income taxes	1,245,000	2,576,000
Other assets	236,000	370,000
Total assets	48,166,000	51,210,000
Goodwill (in Dollars)	17,700,000	15,954,000
Current liabilities:
Borrowings under line of credit		3,140,000
Accounts payable and accrued expenses	7,458,000	9,850,000
Accrued compensation and related benefits	1,453,000	1,804,000
Deferred revenue	4,255,000	4,666,000
Obligations under capital leases	294,000	290,000
Total current liabilities	13,460,000	19,750,000
Obligations under capital leases	322,000	614,000
Other long-term liabilities	1,184,000
Total liabilities	14,966,000	20,364,000
Commitments and contingencies (Note 11)
Stockholders’ equity:
Convertible Preferred Stock, $0.01 par value; 1,300,537 shares authorized, 1,298,728 shares issued; 385,357 shares outstanding at June 30, 2013 and June 30, 2012; aggregate liquidation preference of $1,093,000 at June 30, 2013 and June 30, 2012	4,000	4,000
Common stock, $0.01 par value; 80,000,000 shares authorized; issued and outstanding shares of 54,000,186 and 53,493,077 at June 30, 2013 and June 30, 2012, respectively	540,000	535,000
Additional paid-in capital	65,497,000	64,947,000
Accumulated deficit	(33,799,000)	(35,700,000)
Accumulated other comprehensive income	958,000	1,060,000
Total stockholders’ equity	33,200,000	30,846,000
Total liabilities and stockholders’ equity	48,166,000	51,210,000
Customer Lists [Member]
Property and equipment:
Finite Lived Intangible Assets, Net	3,586,000	3,290,000
Trade Names [Member]
Property and equipment:
Finite Lived Intangible Assets, Net	$ 2,684,000	$ 2,986,000

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Note 10 - Income Taxes (Details) - Significant Components of Deferred Tax Assets and Liabilities: (USD $)	Jun. 30, 2013	Jun. 30, 2012
Significant Components of Deferred Tax Assets and Liabilities: [Abstract]
Net operating loss carryforwards	$ 10,717,000	$ 13,606,000
Capital loss carryforwards	1,674,000	1,674,000
Accrued expenses	185,000	154,000
Expenses not currently deductible	154,000	152,000
Excess of book over tax depreciation	49,000	99,000
Excess of book over tax amortization	602,000	607,000
Deferred revenue	2,000	2,000
Foreign tax benefit	82,000
Total deferred tax assets	13,465,000	16,294,000
Customer list	2,333,000	2,435,000
Other liabilities	21,000	35,000
Total deferred tax liabilities	2,354,000	2,470,000
Deferred tax assets, net of liabilities	11,111,000	13,824,000
Valuation allowance	(9,725,000)	(11,170,000)
Net deferred tax asset	$ 1,386,000	$ 2,654,000

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Note 10 - Income Taxes (Tables)

12 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	Years ended
	June 30, 2013		June 30, 2012
Domestic	$	3,671,000	$	3,265,000
Foreign		532,000		959,000
Total	$	4,203,000	$	4,224,000

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Years ended
	June 30, 2013		June 30, 2012
Federal tax	$	1,447,000	$	(4,193,000	)
State tax		244,000		144,000
Total	$	1,691,000	$	(4,049,000	)

	Years ended
	June 30, 2013		June 30, 2012
Current	$	354,000	$	258,000
Deferred		1,337,000		(4,307,000	)
Total	$	1,691,000	$	(4,049,000	)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	Years ended
	June 30, 2013			June 30, 2012
Deferred tax assets:
Net operating loss carryforwards	$	10,717,000		$	13,606,000
Capital loss carryforwards		1,674,000			1,674,000
Accrued expenses		185,000			154,000
Expenses not currently deductible		154,000			152,000
Excess of book over tax depreciation		49,000			99,000
Excess of book over tax amortization		602,000			607,000
Deferred revenue		2,000			2,000
Foreign tax benefit		82,000			—
Total deferred tax assets		13,465,000			16,294,000
Deferred tax liabilities:
Customer list		2,333,000			2,435,000
Other liabilities		21,000			35,000
Total deferred tax liabilities		2,354,000			2,470,000
Deferred tax assets, net of liabilities	$	11,111,000		$	13,824,000
Valuation allowance		(9,725,000	)		(11,170,000	)
Net deferred tax asset	$	1,386,000		$	2,654,000

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Years ended
	June 30, 2013			June 30, 2012
Expected federal income tax expense (benefit) from continuing operations at 34%	$	1,429,000		$	1,436,000
Expenses not deductible for income tax purposes		159,000			182,000
Amendment of prior year return		(67,000	)		11,000
Taxable income from divestiture of foreign subs		260,000
State income taxes, net of federal benefit		161,000			122,000
Change in valuation allowance for deferred tax assets		(251,000	)		(5,800,000	)
Income tax expense (benefit)	$	1,691,000		$	(4,049,000	)

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Note 16 - Segment Information

12 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

16. Segment Information

The Company’s chief operating decision maker, the Chief Executive Officer, performs primary analyses based upon geographic location and operations by geographic segment. The Company’s operations included business in North America, Singapore/Malaysia and Australia. During the fourth quarter of fiscal year 2013, the Company disposed of two of the three geographic segments, therefore leaving only one segment with continuing operations, the results of which are reported in the Consolidated Statement of Operations.

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Note 8 - Director and Employee Stock Compensation Plans (Details) - Assumptions Made in Computing Fair Value of Stock-Based Awards: (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Minimum [Member]
Note 8 - Director and Employee Stock Compensation Plans (Details) - Assumptions Made in Computing Fair Value of Stock-Based Awards: [Line Items]
Average risk-free interest rate	0.72%	0.72%
Dividend yield	0.00%	0.00%
Expected life (years)	5 years	5 years
Expected volatility	0.50%	0.50%
Weighted average fair value of granted options (in Dollars per share)	$ 0.60	$ 0.39
Maximum [Member]
Note 8 - Director and Employee Stock Compensation Plans (Details) - Assumptions Made in Computing Fair Value of Stock-Based Awards: [Line Items]
Average risk-free interest rate	2.22%	2.22%
Expected life (years)	6 years 3 months	6 years 3 months
Expected volatility	0.56%	0.56%

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Note 11 - Commitments and Contingencies (Details) - Future Minimum Operating Lease Payments (USD $)	Jun. 30, 2013
Future Minimum Operating Lease Payments [Abstract]
2014	$ 2,434,000
2015	2,058,000
2016	1,459,000
2017	970,000
2018	531,000
Thereafter	298,000
Total minimum lease payments	$ 7,750,000

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Note 6 - Earnings (Loss) Per Share (Details)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share [Abstract]
Number of Common Shares Issuable Upon the Conversion or Exercise of Options, Warrants, and Preferred Stock	5,584,413	5,577,684
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,850,651	1,427,860

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Note 4 - Borrowings Under Line of Credit (Details) (USD $)		1 Months Ended
	Jun. 30, 2013	Feb. 29, 2012 "Eurodollar Rate" - LIBOR plus spread [Member] Minimum [Member] PNC Bank, National Association [Member]	Feb. 29, 2012 Sublimit For The Issuance of Standy Or Trade Letters Of Credit [Member] PNC Bank, National Association [Member]	Jun. 30, 2012 PNC Bank, National Association [Member]	Feb. 29, 2012 PNC Bank, National Association [Member]
Note 4 - Borrowings Under Line of Credit (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 1,000,000		$ 8,000,000
Debt Instrument, Basis Spread on Variable Rate		2.00%
Line of Credit Facility, Amount Outstanding	$ 0			$ 3,100,000

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Note 5 - Preferred Stock (Details) (USD $)		1 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended		12 Months Ended
	Jun. 30, 2003 Series C Preferred Stock [Member]	Dec. 31, 2003 Series C Convertible Preferred Stock Converted Into Series D Convertible Preferred Stock [Member]	Jun. 30, 2013 Series D Preferred Stock [Member]	Dec. 31, 2004 Series D Preferred Stock [Member]	Jun. 30, 2012 Series D Preferred Stock [Member]	Jul. 31, 2005 Series E Preferred Stock [Member]	Jun. 30, 2013 Series E Preferred Stock [Member]	Jun. 30, 2012 Series E Preferred Stock [Member]	Dec. 31, 2004 Decrease in Notes Payable to Related Party in Exchange for Issuance of Series D Convertible Preferred Stock [Member]
Note 5 - Preferred Stock (Details) [Line Items]
Preferred Stock, Shares Outstanding	172,008		384,495		384,495		862	862
Stock Issued During Period, Shares, Conversion of Convertible Securities		484,487
Preferred Stock, Shares Issued			1,297,537	813,050	1,297,537	1,191	1,191	1,191
Proceeds from Issuance of Convertible Preferred Stock (in Dollars)				$ 330,000		$ 1,191,000
Increase (Decrease) in Notes Payable, Related Parties (in Dollars)									$ 98,000
Preferred Stock, Redemption Price Per Share (in Dollars per share)			$ 0.30				$ 0.65
Preferred Stock, Dividend Rate, Percentage			10.00%				10.00%
Convertible Preferred Stock, Shares Issued upon Conversion			2				1,538.5
Preferred Stock, Liquidation Preference Per Share (in Dollars per share)			$ 0.60				$ 0.65

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Note 6 - Earnings (Loss) Per Share

12 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

6. Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Such outstanding shares include those issued through equity compensation plans, Board compensation, and the exercise of stock warrants. Diluted earnings (loss) per common share include the potential dilution that would occur from common shares issuable upon the exercise of outstanding stock options and warrants and the conversion of preferred stock. As of June 30, 2013 and 2012, 5,584,413 and 5,577,684 shares of common stock, respectively, were issuable upon the conversion or exercise of options and preferred stock. For the years ended June 30, 2013 and 2012, there were 1,850,651 and 1,427,860 shares of common stock equivalents, respectively, excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The following summarizes the computations of basic and diluted earnings per common share:

	Years ended
	June 30, 2013			June 30, 2012
Numerator for basic and diluted earnings per share:
Net income from continuing operations	$	2,512,000		$	8,273,000
Income (loss) from discontinued operations, net of tax		(241,000	)		92,000
Loss on disposition of discontinued operations, net of tax		(370,000	)		—
Net income		1,901,000			8,365,000
Net income from continuing operations		2,512,000			8,273,000
Payment of preferred stock dividends		(109,000	)		(137,000	)
Net income from continuing operations available to common stockholders	$	2,403,000		$	8,136,000
Weighted average shares used in computing basic net earnings per share:		53,951,438			52,625,538
Assumed conversion of preferred stock		769,630			2,095,784
Effect of outstanding stock options		381,368			179,609
Weighted average shares used in computing diluted net earnings per share:		55,102,436			54,900,931
Earnings per common share from continuing operations, basic	$	0.04		$	0.16
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, basic	$	0.03		$	0.16
Earnings per common share from continuing operations, basic	$	0.04		$	0.15
Earnings (loss) per common share from discontinued operations, basic		(0.01	)		—
Earnings per common share, diluted	$	0.03		$	0.15

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Note 11 - Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Year ending June 30:
2014	$	2,434,000
2015		2,058,000
2016		1,459,000
2017		970,000
2018		531,000
Thereafter		298,000
Total minimum lease payments	$	7,750,000

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

Year ending June 30:
2014	$	335,000
2015		209,000
2016		136,000
2017		22,000
Total minimum lease payments		702,000
Less:
Taxes		36,000
Imputed interest		50,000
Present value of future minimum lease payments	$	616,000

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Note 7 - Intangible Assets (Details) - Carrying Amount, Accumulated Amortization and the Resulting Net Book Value of Intangible Assets: (USD $)	Jun. 30, 2013	Jun. 30, 2012
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount	$ 10,234,000	$ 9,395,000
Accumulated amortization	6,648,000	6,105,000
Net book value	3,586,000	3,290,000
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount	3,931,000	3,931,000
Accumulated amortization	1,247,000	945,000
Net book value	2,684,000	2,986,000
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount	1,324,000	1,324,000
Accumulated amortization	1,324,000	1,324,000
Total [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying amount	15,489,000	14,650,000
Accumulated amortization	9,219,000	8,374,000
Net book value	$ 6,270,000	$ 6,276,000

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Note 9 - Shares Reserved for Future Issuance

12 Months Ended

Jun. 30, 2013

Shares Reserved For Future Issuance [Abstract]

Shares Reserved For Future Issuance [Text Block]

9. Shares Reserved for Future Issuance

At June 30, 2013, the Company has reserved 1,982,000 shares of common stock for future issuance upon the exercise of stock options granted under the Stock Option Plan, the exercise of outstanding common stock purchase warrants, the vesting of restricted stock awards, purchases under the ESPP and the conversion of Series D Stock, and Series E Stock.

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Note 5 - Preferred Stock

12 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

5. Preferred Stock

The Company’s preferred stock included in the equity section of the accompanying consolidated balance sheets consists of the following as of June 30, 2013 and 2012:

	June 30
	2013		2012
Series D Convertible Preferred Stock, $0.01 par value; 1,297,537 shares authorized and issued; and 384,495 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $231,000 at June 30, 2013 and 2012,	$	4,000	$	4,000
Series E Convertible Preferred Stock, $0.01 par value; 3,000 shares authorized; 1,191 shares issued; 862 shares outstanding at June 30, 2013 and 2012; aggregate liquidation preference of $862,000 at June 30, 2013 and 2012, respectively		—		—
Total Preferred Stock	$	4,000	$	4,000

Convertible Preferred Stock

At June 30, 2003, the Company had issued and outstanding 172,008 shares of Series C Convertible Preferred Stock (the “Series C shares”). On December 31, 2003, the Series C shares were converted into 484,487 shares of newly authorized Series D Convertible Preferred Stock (the “Series D shares”). In 2004, the Company issued 813,050 shares of Series D Convertible Preferred Stock for cash proceeds totaling $330,000 and a reduction in notes payable to a related party of $98,000. At June 30, 2013 and 2012, 384,495 shares of Series D Convertible Preferred Stock were outstanding with the following terms:

Redemption Feature- The Series D shares are redeemable in the event that the Company is engaged in a business combination that is approved by the Board of Directors and subsequently submitted and approved by a vote of the Company’s stockholders. The 2010 merger with pre-merger Rand Worldwide did not trigger any redemption provisions of the Series D shares. Any director who holds shares of Series D is not eligible to vote on the proposed business combination. The redemption price is $0.30 (upon conversion) per share plus an amount equal to all declared and unpaid dividends accrued on such shares since the original issue date.

Voting Rights- Each holder of the Series D shares shall vote together with all other classes and series of stock of the Company as a single class on all actions. Each share shall entitle the holder to one vote per share of common stock into which the preferred stock is then convertible on each such action. In addition, these holders have special voting rights in connection with certain matters, including the issuance of senior stock or debentures, certain mergers, the dissolution of the Company and any amendment to the charter or the terms of the securities that would impair their rights.

Dividend Rate- The holders of the Series D shares are entitled to receive cumulative dividends at a rate of 10% per annum when and as declared by the Board of Directors. Dividends are paid quarterly to preferred stockholders.

Conversion Feature- The Series D shares are convertible at any time beginning 120 days after the original issuance date at the option of the holder and automatically converts into common stock if the common stock trades for more than $2.25 per share for 60 consecutive trading days. Each Series D share is convertible into shares of common stock by multiplying the appropriate conversion rate in effect by the number of shares of preferred stock being converted. As of June 30, 2012, the conversion rate would yield two shares of common stock for each share of Series D share; however, this rate may be adjusted due to stock splits, dividends, and other events defined in the stock purchase agreement between the Company and the holders of the Series D shares.

Liquidation Preference- In the event of a liquidation, dissolution or winding up of the Company, the holders of Series D shares are entitled to receive for each share, prior and in preference to any distribution of any of the assets or surplus funds to the holders of common stock, an amount equal to $0.60 per share plus all accumulated but unpaid dividends. If upon the occurrence of such event, the assets and funds thus distributed among the holders are insufficient to permit the payment of the preferential amount, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the preferred stockholders.

In July 2005, the Company issued 1,191 shares of Series E Convertible Preferred Stock which raised $1,191,000 for working capital purposes. At June 30, 2013 and 2012, 862 shares of Series E Convertible Preferred Stock (the “Series E shares”) were outstanding with the following terms:

Redemption Feature- The Series E shares are redeemable in the event that the Company is engaged in a business combination that is approved by the Board of Directors and subsequently submitted and approved by a vote of the Company’s stockholders. The 2010 merger with pre-merger Rand Worldwide did not trigger any redemption provisions of the Series E shares. Any director who holds shares of Series E is not eligible to vote on the proposed business combination. The redemption price is $0.65 per share (upon conversion) plus an amount equal to all declared and unpaid dividends accrued on such shares since the original issue date.

Voting Rights- Each holder of the Series E shares shall vote together with all other classes and series of stock of the Company as a single class on all actions. Each share shall entitle the holder to one vote per share of common stock into which the preferred stock is then convertible on each such action. In addition, these holders have special voting rights in connection with certain matters, including the issuance of senior stock or debentures, certain mergers, the dissolution of the Company and any amendment to the charter or the terms of the securities that would impair their rights.

Dividend Rate- The holders of the Series E shares are entitled to receive cumulative dividends at a rate of 10% per annum when and as declared by the Board of Directors. Dividends are paid quarterly to preferred stockholders.

Conversion Feature- The Series E shares are convertible at any time beginning 120 days after the original issuance date at the option of the holder and automatically converts into common stock if the common stock trades for more than $2.25 per share for 60 consecutive trading days. Each Series E share is convertible into shares of common stock by multiplying the appropriate conversion rate in effect by the number of shares of preferred stock being converted. As of June 30, 2013, the conversion rate would yield 1,538.5 shares of common stock for each share of Series E; however, this rate may be adjusted due to stock splits, dividends, and other events defined in the stock purchase agreements between the Company and the holders of the Series E shares.

Liquidation Preference- In the event of a liquidation, dissolution or winding up of the Company, the holders of Series E shares are entitled to receive for each share, prior and in preference to any distribution of any of the assets or surplus funds to the holders of common stock, an amount equal to $0.65 per share (upon conversion) plus all accumulated but unpaid dividends. If upon the occurrence of such event, the assets and funds thus distributed among the holders are insufficient to permit the payment of the preferential amount, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the preferred stockholders.

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Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities
Net income	$ 1,901,000	$ 8,365,000
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt (recoveries) expense	110,000	(34,000)
Gain on sale of property and equipment		(1,000)
Depreciation and amortization	1,891,000	1,595,000
Stock-based compensation	261,000	190,000
Deferred income taxes	1,268,000	(4,307,000)
Accounts receivable and other receivables	3,659,000	1,263,000
Income tax receivable	(570,000)	(194,000)
Inventory	80,000	25,000
Prepaid expenses and other current assets	(436,000)	(1,158,000)
Other assets	134,000	33,000
Accounts payable and accrued expenses	(3,030,000)	(3,885,000)
Accrued compensation and related benefits	(351,000)	(651,000)
Deferred revenue	(411,000)	1,512,000
Other long-term liabilities	139,000
Net cash provided by operating activities	4,645,000	2,753,000
Cash flows from investing activities
Purchases of property and equipment	(1,032,000)	(640,000)
Acquisition of Business	(600,000)	(1,552,000)
Net cash used in by investing activities	(1,632,000)	(2,192,000)
Cash flows from financing activities
Proceeds from borrowings under line of credit	63,992,000	103,752,000
Repayment of borrowings under line of credit	(67,132,000)	(104,551,000)
Principal payments on capital lease obligations	(288,000)	(252,000)
Proceeds from issuance of common stock to employees	3,000	39,000
Payment of preferred stock dividends	(109,000)	(137,000)
Net cash used in financing activities	(3,534,000)	(1,149,000)
Effect of exchange rate changes on cash from continuing operations	55,000	(363,000)
Net change in cash	(466,000)	(951,000)
Cash - beginning of year	1,680,000	2,631,000
Cash - end of year	$ 1,214,000	$ 1,680,000

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Note 10 - Income Taxes (Details) - Reconciliation of Combined Federal and State Statutory Income Taxes Rate: (USD $)	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Reconciliation of Combined Federal and State Statutory Income Taxes Rate: [Abstract]
Expected federal income tax expense (benefit) from continuing operations at 34%	$ 1,429,000	$ 1,436,000
Expenses not deductible for income tax purposes	159,000	182,000
Amendment of prior year return	(67,000)	11,000
Taxable income from divestiture of foreign subs	260,000
State income taxes, net of federal benefit	161,000	122,000
Change in valuation allowance for deferred tax assets	(251,000)	(5,800,000)
Income tax expense (benefit)	$ 1,691,000	$ (4,049,000)

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Note 9 - Shares Reserved for Future Issuance (Details)	Jun. 30, 2013
Shares Reserved For Future Issuance [Abstract]
Common Stock, Capital Shares Reserved for Future Issuance	1,982,000

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Note 2 - Supplemental Disclosure of Cash Flow Information (Details) (USD $)	12 Months Ended		1 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jul. 31, 2012 IDP [Member]
Note 2 - Supplemental Disclosure of Cash Flow Information (Details) [Line Items]
Interest Paid	$ 81,000	$ 236,000
Income Taxes Paid	124,000	503,000
Property, Plant and Equipment, Additions	1,032,000	640,000
Noncash or Part Noncash Acquisition, Fixed Assets Acquired	0	1,051,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares)			497,512
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 400,000

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Note 15 - Liquidity and Capital Resources (Details) (USD $)	Jun. 30, 2013	Jun. 30, 2012
Policy Text Block [Abstract]
Working Capital Surplus	$ 6,617,000	$ 3,573,000

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Note 12 - Employee Benefit Plans

12 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

12. Employee Benefit Plans

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan is a defined contribution plan, which covers substantially all U.S.-based employees of the Company, or its wholly-owned subsidiaries, who have completed three months of service. Participants may elect a pre-tax payroll deduction up to IRS maximums. As amended, the 401(k) Plan provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant’s compensation and 50% of the next 2% of a participant’s compensation, or a total possible maximum matching contribution of 4% of a participant’s compensation, for all participants. The Company may also make discretionary profit-sharing contributions to the 401(k) Plan for all participants who are employed on the last day of the plan year but has not done so for the plan year ended December 31, 2012. The Company also has a retirement savings plan (“RSP”) that covers substantially all Canadian-based employees of the Company and its wholly-owned subsidiaries. Upon hire, participants may elect a pre-tax payroll deduction, subject to limitations as prescribed by the Canadian Revenue Agency. The RSP provides that the Company will match 100% of the participant salary deferrals up to 3% of a participant’s compensation and 50% of the next 2% of a participant’s compensation, for a total possible maximum matching contribution of 4% of a participant’s compensation, for all participants who have completed 12 months of service.   The total amount recorded by the Company as expense, under both plans, during the years ended June 30, 2013 and June 30, 2012 was approximately $787,000 and $683,000, respectively.

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Note 8 - Director and Employee Stock Compensation Plans

12 Months Ended

Jun. 30, 2013

Share-based Arrangements with Employees and Nonemployees [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

8. Director and Employee Stock Compensation Plans

Employee Stock Option Plans

On November 7, 2012, the Company’s stockholders approved the Omnibus Equity Compensation Plan (the “Omnibus Plan”). The Compensation Committee of the Company’s Board of Directors administers the Omnibus Plan and, in that capacity, has the exclusive authority to grant various incentive awards under the Omnibus Plan in the form of stock options, stock awards, stock units, performance units, and other stock-based awards. Up to 2,000,000 shares of the Company’s common stock are available for issuance to participants under the Omnibus Plan. The Omnibus Plan is available to all employees of the Company and its subsidiaries, including employees who are officers or members of the Board, and all non-employee directors and consultants of the Company and its subsidiaries. Prior to the adoption of the Omnibus Plan, the Board of Directors granted options to purchase shares of the Company’s common stock at an exercise price of not less than the fair market value of the common stock on the date of grant, under the Avatech Solutions, Inc. 2002 Stock Option Plan (the “2002 Option Plan”). The 2002 Option Plan, which expired in August 2012, provided for the granting of either incentive or non-qualified stock options to purchase an aggregate of up to 7,800,000 shares of common stock to eligible employees, officers, and directors of the Company and its subsidiaries.

The Company recorded and included in selling, general and administrative expenses, $261,000 and $190,000 of stock compensation expense for the years ended June 30, 2013 and June 30, 2012.

The following are the assumptions made in computing the fair value of stock-based awards:

	Year Ended June 30			Year Ended June 30
	2013			2012
Average risk-free interest rate	0.72%	–	2.22%	0.72%	–	2.22%
Dividend yield	0%			0%
Expected life (years)	5	–	6.25	5	–	6.25
Expected volatility	.50	–	.56	.50	–	.56
Weighted average fair value of granted options	$0.60			$0.39

Expected volatilities are based on historical volatility of the Company’s common stock. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of stock option activity during the year ended June 30, 2013 and related information is included in the table below:

	Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value
Outstanding at July 1, 2012		3,481,900		$	0.76
Granted		18,000			0.94
Exercised		(9,597	)		0.30
Forfeited		(1,674	)		0.30
Outstanding at June 30, 2013		3,488,629		$	0.77	$	151,000
Exercisable at June 30, 2013		1,900,252		$	0.78	$	118,000
Weighted-average remaining contractual life (years)		6.1

The aggregate intrinsic value of options exercised was $4,000 and $23,400 during the years ended June 30, 2013 and 2012, respectively.

All options granted have an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Exercise prices for options outstanding as of June 30, 2013 ranged from $0.30 to $1.71 as follows:

Range of Exercise Prices			Options Outstanding		Weighted Average Exercise Prices of Options Outstanding		Weighted Average Remaining Contractual Life of Options Outstanding (years)		Options Exercisable		Weighted Average Exercise Prices of Options Exercisable		Weighted Average Remaining Contractual Life of Options Exercisable (years)
$0.30	–	0.50		158,852	$	0.43		1.3		158,852	$	0.43		1.3
0.60	–	0.75		1,883,920		0.70		7.7		986,560		0.69		7.6
0.76	–	0.94		1,207,357		0.81		7.8		516,340		0.83		6.2
1.05	–	1.71		238,500		1.29		2.6		238,500		1.29		2.6
				3,488,629						1,900,252

Assuming that no additional share-based payments are granted after June 30, 2013, $535,000 of compensation expense will be recognized in the consolidated statement of operations over a weighted-average period of 2.3 years.

Employee Stock Purchase Plan 

The Board of Directors of Rand Worldwide Inc. (then, Avatech Solutions, Inc.) adopted, and its stockholders subsequently approved, the Employee Stock Purchase Plan (the “ESPP”), under which, as amended, 2,000,000 shares of common stock are reserved for issuance. Effective January 1, 2011, the plan was suspended.

As of June 30, 2013, there was no liability for employees’ ESPP withholdings, as all shares of common stock purchased under the ESPP had been issued.

Restricted Stock Award Plan

In May 2003, the Board of Directors of Rand Worldwide, Inc. (then, Avatech Solutions, Inc.) adopted, and its stockholders subsequently approved, the Avatech Solutions, Inc. Restricted Stock Award Plan, which was amended and restated on August 23, 2005 (the “Stock Plan”). Officers, directors, key employees and consultants of the Company are eligible to receive stock awards under the Stock Plan, but employees and consultants may receive grants only if they already are stockholders or hold options to purchase shares of common stock at the time of grant. Vesting for restricted stock awards granted under the Stock Plan may vary, but awards will generally vest based on continued service of the recipient or achievement of specific performance goals. The Company has reserved a total of 1,200,000 shares of common stock for issuance under the Stock Plan and 193,921 shares were available for future issuance as of June 30, 2013.

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Note 15 - Liquidity and Capital Resources

12 Months Ended

Jun. 30, 2013

Policy Text Block [Abstract]

Liquidity Disclosure [Policy Text Block]

15. Liquidity and Capital Resources

The Company had a working capital surplus of $6,617,000 and $3,573,000 as of June 30, 2013 and June 30, 2012, respectively.

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Note 13 - Significant Supplier

12 Months Ended

Jun. 30, 2013

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

13. Significant Supplier

Approximately 97% of the Company’s inventory purchases for the years ended June 30, 2013 and 2012 were from one vendor and its distributors, and approximately 89% and 91%, respectively, of accounts payable at June 30, 2013 and 2012 were due to this vendor and its distributors. Approximately 96% of the Company’s total product revenues are related to this supplier’s products. The Company is a party to a Value Added Reseller Agreement with Autodesk effective February 1, 2013. The agreement has a term of three years and designates the Company as an authorized reseller of Autodesk software and prescribes the authorized sales territories, authorized products and services, rebate and incentive program details and marketing support.

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Document And Entity Information (USD $)	12 Months Ended
	Jun. 30, 2013	Sep. 17, 2013	Dec. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	RAND WORLDWIDE INC
Document Type	10-K
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		54,019,525
Entity Public Float			$ 39,953,036
Amendment Flag	false
Entity Central Index Key	0000852437
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

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Note 14 - Discontinued Operations

12 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

14. Discontinued Operations

During the fourth quarter of 2013, the Company disposed of its operations in Australia, Singapore and Malaysia because those divisions did not align with the current strategic direction of the Company. The following table summarizes the financial results of the entities which have been reclassified as discontinued operations for the periods presented:

	Years ended
	June 30, 2013			June 30, 2012
Revenues	$	7,281,000		$	8,233,000
(Loss) income from discontinued operations, net of tax		(241,000	)		92,000
Loss on sale or disposition of discontinued operations, net of tax		370,000			—

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Note 16 - Segment Information (Details)	3 Months Ended
	Jun. 30, 2013
Note 16 - Segment Information (Details) [Line Items]
Number of Reportable Segments	3
Segments Disposed [Member]
Note 16 - Segment Information (Details) [Line Items]
Number of Reportable Segments	2
Remaining Segments [Member]
Note 16 - Segment Information (Details) [Line Items]
Number of Reportable Segments	1