Organization, Consolidation and Presentation of Financial Statements	6 Months Ended
Jun. 30, 2014
Organization, Consolidation and Presentation of Financial Statements:
Consolidation, Policy	1. BASIS OF PRESENTATION The consolidated financial statements at June 30, 2014 and for the six month periods ended June 30, 2014 and 2013 of Astea International Inc. and subsidiaries (“Astea” or the "Company") are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The following unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the SEC for quarterly reports on Form 10-Q. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto, included in the Company’s latest annual report (Form 10-K) and our Form 10-Q’s for the quarters ended March 31, 2013, June 30, 2013, September 30, 2013, and March 31, 2014. The interim financial information presented is not necessarily indicative of results expected for the entire year ending December 31, 2014.
New Accounting Pronouncements, Policy	2. RECENTLY ADOPTED ACCOUNTING GUIDANCE In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance on, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires an entity to present unrecognized tax benefits as a reduction of a deferred tax asset, except in certain circumstances. This guidance is effective for fiscal years and interim periods beginning after December 31, 2013, and early adoption is permitted. Based upon a preliminary review of the guidance, the Company does not anticipate that adoption will have a significant impact on our financial statements. In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2017 and early adoption is not permitted. We anticipate this standard may have a material impact on our consolidated financial statements, and we are currently evaluating its impact.
Liquidity Disclosure	Operating Matters and Liquidity At June 30, 2014, the Company had a working capital ratio of .52:1, with cash and investments available for sale of $1,274,000. The Company believes that it has sufficient cash to meet its anticipated operating cash needs for at least the next 12 months. However, projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our net (loss) income. The Company has projected revenues for the remainder of 2014 that management believes will provide sufficient funds to sustain its continuing operations. However, due to unanticipated delays in the signing of certain license agreements and the cash flow timing impact of the Company’s planned conversion to a subscription-based software delivery model it was determined that the Company needed additional liquidity in the near term. Accordingly, the Company entered into a new line of credit agreement, and has an existing line of credit from its Chief Executive Officer, both of which are described in Note 6. As of June 30, 2014 the Company owed $150,000 against the line of credit from its Chief Executive Officer and $690,000 against the new line of credit from Silicon Valley Bank (“SVB”). The Company was not in compliance with the earnings covenants of the SVB loan agreement as of June 30, 2014, based on the operating results for the quarter ended June 30, 2014. However, SVB provided a forbearance agreement which defers its right to exercise the default provisions of the line of credit until October 1, 2014. During the forbearance period, the Company has agreed to a reduction in the maximum revolving line of credit amount, which may not exceed $1,000,000. SVB shall have no further obligation to make any additional borrowings available to the Company or to provide any other extensions of credit during the forbearance period. However, the Company covenants and agrees that, if in the sole and absolute discretion of SVB, they make any discretionary financial accommodation during the forbearance period, such act shall not constitute (i) a waiver of any of the existing default covenants, which may now exist or which may occur after the date of the forbearance agreement, or (ii) an agreement on the part of SVB to make any further extensions of credit of any kind to the Company at a later date. In addition, in August 2014, the line of credit capacity from the Company’s Chief Executive Officer was reduced from $3,000,000 to $1,000,000. The $1,000,000 line of credit is available in the future if the Company fails to meet any future bank covenants under its line of credit with SVB. The Company is currently working with SVB to re-define the financial covenants in the existing loan agreement do not consider the revenue recognition and cash flow impact of the Company’s hosting arrangements under which revenue cannot be recognized before the projects go live but which do provide current cash flows. Continued compliance with its covenants is dependent on the Company achieving certain earnings as of September 30 2014 and throughout the remaining term of the loan agreement. In the event the Company does not meet its financial covenants after October 1, 2014 and SVB does not extend a waiver or forbearance agreement, and the Company believes that it does not have adequate liquidity to operate, it will implement a cost cutting plan that reduces its expenditures to the appropriate level to be in line with its operating cash flows. The Company does not plan any significant capital expenditures in 2014 other than to replace its existing capital equipment as it becomes obsolete.

Organization, Consolidation and Presentation of Financial Statements

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements:

1. BASIS OF PRESENTATION

The consolidated financial statements at June 30, 2014 and for the six month periods ended June 30, 2014 and 2013 of Astea International Inc. and subsidiaries (“Astea” or the "Company") are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The following unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules and regulations of the SEC for quarterly reports on Form 10-Q. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto, included in the Company’s latest annual report (Form 10-K) and our Form 10-Q’s for the quarters ended March 31, 2013, June 30, 2013, September 30, 2013, and March 31, 2014. The interim financial information presented is not necessarily indicative of results expected for the entire year ending December 31, 2014.

New Accounting Pronouncements, Policy

2. RECENTLY ADOPTED ACCOUNTING GUIDANCE

In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance on, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires an entity to present unrecognized tax benefits as a reduction of a deferred tax asset, except in certain circumstances. This guidance is effective for fiscal years and interim periods beginning after December 31, 2013, and early adoption is permitted. Based upon a preliminary review of the guidance, the Company does not anticipate that adoption will have a significant impact on our financial statements.

In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2017 and early adoption is not permitted. We anticipate this standard may have a material impact on our consolidated financial statements, and we are currently evaluating its impact.

Liquidity Disclosure

Operating Matters and Liquidity

At June 30, 2014, the Company had a working capital ratio of .52:1, with cash and investments available for sale of $1,274,000. The Company believes that it has sufficient cash to meet its anticipated operating cash needs for at least the next 12 months. However, projections of future cash needs and cash flows are subject to substantial uncertainty. We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our net (loss) income. The Company has projected revenues for the remainder of 2014 that management believes will provide sufficient funds to sustain its continuing operations. However, due to unanticipated delays in the signing of certain license agreements and the cash flow timing impact of the Company’s planned conversion to a subscription-based software delivery model it was determined that the Company needed additional liquidity in the near term. Accordingly, the Company entered into a new line of credit agreement, and has an existing line of credit from its Chief Executive Officer, both of which are described in Note 6. As of June 30, 2014 the Company owed $150,000 against the line of credit from its Chief Executive Officer and $690,000 against the new line of credit from Silicon Valley Bank (“SVB”). The Company was not in compliance with the earnings covenants of the SVB loan agreement as of June 30, 2014, based on the operating results for the quarter ended June 30, 2014. However, SVB provided a forbearance agreement which defers its right to exercise the default provisions of the line of credit until October 1, 2014. During the forbearance period, the Company has agreed to a reduction in the maximum revolving line of credit amount, which may not exceed $1,000,000. SVB shall have no further obligation to make any additional borrowings available to the Company or to provide any other extensions of credit during the forbearance period. However, the Company covenants and agrees that, if in the sole and absolute discretion of SVB, they make any discretionary financial accommodation during the forbearance period, such act shall not constitute (i) a waiver of any of the existing default covenants, which may now exist or which may occur after the date of the forbearance agreement, or (ii) an agreement on the part of SVB to make any further extensions of credit of any kind to the Company at a later date. In addition, in August 2014, the line of credit capacity from the Company’s Chief Executive Officer was reduced from $3,000,000 to $1,000,000. The $1,000,000 line of credit is available in the future if the Company fails to meet any future bank covenants under its line of credit with SVB.

The Company is currently working with SVB to re-define the financial covenants in the existing loan agreement do not consider the revenue recognition and cash flow impact of the Company’s hosting arrangements under which revenue cannot be recognized before the projects go live but which do provide current cash flows. Continued compliance with its covenants is dependent on the Company achieving certain earnings as of September 30 2014 and throughout the remaining term of the loan agreement. In the event the Company does not meet its financial covenants after October 1, 2014 and SVB does not extend a waiver or forbearance agreement, and the Company believes that it does not have adequate liquidity to operate, it will implement a cost cutting plan that reduces its expenditures to the appropriate level to be in line with its operating cash flows.

The Company does not plan any significant capital expenditures in 2014 other than to replace its existing capital equipment as it becomes obsolete.

- Definition

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02, 03

-Article 3A

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 810

-SubTopic 10

-URI http://asc.fasb.org/subtopic&trid=2197480

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 860

-SubTopic 40

-Section 45

-URI http://asc.fasb.org/section&trid=2197723

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 323

-SubTopic 10

-URI http://asc.fasb.org/subtopic&trid=2196966

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 325

-SubTopic 20

-URI http://asc.fasb.org/subtopic&trid=2197087

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 810

-SubTopic 10

-Section S99

-Paragraph 2

-Subparagraph (SX 210.3A-02)

-URI http://asc.fasb.org/extlink&oid=27015204&loc=d3e355033-122828

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 323

-SubTopic 10

-Section 45

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=16385135&loc=d3e33801-111570

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 810

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph k

-Article 1

+ Details

- Definition

Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. Disclose appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations.

+ References+ Details