Organization, Consolidation and Presentation of Financial Statements	6 Months Ended
Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements:
Additional Financial Information Disclosure	Operating Matters and Liquidity The Company has a history of net losses and an accumulated deficit of $36,343,000 as of June 30, 2017. In the first six months of 2017, the Company generated a net loss of $906,000 compared to a net loss of $1,745,000 generated in the first six months of 2016. Further, at June 30, 2017, the Company had a working capital ratio of 0.45:1, with cash and cash equivalents of $1,277,000 compared to December 31, 2016 when the Company had cash and cash equivalents of $661,000. The increase in cash and cash equivalents for the first six months of 2017 was primarily driven by increases in cash provided by operations and offset by cash used for the Company’s line of credit and preferred stock dividends. The increase in cash provided by operating activities was primarily due to increased noncash expenses as well as increased collections of accounts receivable and an increase in deferred revenues. As of June 30, 2017 the Company owed $1,555,000 against the line of credit from Silicon Valley Bank (“SVB”). The availability under the SVB line of credit is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable. As of June 30, 2017, the availability under the line of credit was $445,000. In April 2017, the Company extended its Revolving Loan Agreement and associated Revolving Promissory Note with its Chief Executive Officer/Director. The loan provides an unsecured $1,000,000 revolving line of credit to the Company. The proceeds of the borrowings, if needed, will be used by the Company for operating activities. When the revolving line of credit is close to expiration, the Company will evaluate its cash needs and if necessary, extend the line of credit expiration at that time. The Company has projected revenues that management believes will provide sufficient funds along with available borrowings under its lines of credit to sustain its continuing operations through at least September 30, 2018. The SVB line of credit was to expire in April 2018. In August 2017, the Company obtained a new line of credit and term loan from Western Alliance Bank (“WAB”) and repaid its outstanding borrowings with SVB. The term of the WAB line of credit and term loan extend through August 2019. The Company was in compliance with the financial covenants for the line of credit with SVB as of June 30, 2017. In the event the Company does not meet its financial covenants in the future and Western Alliance does not extend a waiver or forbearance agreement, and the Company does not believe that it has adequate liquidity to operate, the Company will implement additional cost adjustments, as necessary, that will reduce its expenditures to the appropriate level that matches its operating cash flows. Our primary cash requirements are to fund operations which mainly include personnel-related costs, marketing costs, third party costs related to hosting and software, general and administrative costs associated with being a public company, travel costs, and quarterly preferred stock dividends. The Company expects to continue to incur operating expenses for research and development and investment in software development costs to achieve its projected revenue growth. We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our results of operations. However, projections of future cash needs and cash flows are subject to risks and uncertainty. Management’s current operating plan reflects a reduction in operating expenses which occurred at the end of the first quarter of 2017 in order to align its expenditures with its expected revenues. The primary area of cost reduction, which occurred at the end of the first quarter of 2017, was to reduce company headcount by eliminating non-revenue generating personnel throughout the Company. The Company remains focused on maximizing revenue from its revenue generating resources, including repurposing certain personnel to become revenue generators to help the Company improve its liquidity. The Company has a substantial professional services backlog that resulted from the acquisition of new customers in the second half of 2016 as well as upgrade projects for existing customers as they move to the latest version of Alliance. Management also initiated cost containment programs in other areas including the elimination or reduction of non-essential marketing activities, space reduction in areas in which the Company has excess office capacity, focusing marketing activities only on those programs that directly drive new business and eliminating contractors who are not essential to growth. In addition, we do not expect to spend a significant amount on capital expenditures. Overall, we have already implemented steps to reduce total operating expenses without impairing our ability to grow the business by obtaining new customers and increasing sales to existing customers. We expect our revenues and cost reductions to generate sufficient cash from operations. As noted above, if the Company’s actual results fall short of expectations, the Company will make further cost adjustments to improve the Company’s operating cash flows. Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on our significant and existing customer base, closing license and subscription sales in a timely manner, lack of a history of consistently generating net income and uncertainty of future profitability, and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business.

Organization, Consolidation and Presentation of Financial Statements

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements:

Additional Financial Information Disclosure

Operating Matters and Liquidity

The Company has a history of net losses and an accumulated deficit of $36,343,000 as of June 30, 2017. In the first six months of 2017, the Company generated a net loss of $906,000 compared to a net loss of $1,745,000 generated in the first six months of 2016. Further, at June 30, 2017, the Company had a working capital ratio of 0.45:1, with cash and cash equivalents of $1,277,000 compared to December 31, 2016 when the Company had cash and cash equivalents of $661,000. The increase in cash and cash equivalents for the first six months of 2017 was primarily driven by increases in cash provided by operations and offset by cash used for the Company’s line of credit and preferred stock dividends. The increase in cash provided by operating activities was primarily due to increased noncash expenses as well as increased collections of accounts receivable and an increase in deferred revenues.

As of June 30, 2017 the Company owed $1,555,000 against the line of credit from Silicon Valley Bank (“SVB”). The availability under the SVB line of credit is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable. As of June 30, 2017, the availability under the line of credit was $445,000. In April 2017, the Company extended its Revolving Loan Agreement and associated Revolving Promissory Note with its Chief Executive Officer/Director. The loan provides an unsecured $1,000,000 revolving line of credit to the Company. The proceeds of the borrowings, if needed, will be used by the Company for operating activities. When the revolving line of credit is close to expiration, the Company will evaluate its cash needs and if necessary, extend the line of credit expiration at that time. The Company has projected revenues that management believes will provide sufficient funds along with available borrowings under its lines of credit to sustain its continuing operations through at least September 30, 2018. The SVB line of credit was to expire in April 2018. In August 2017, the Company obtained a new line of credit and term loan from Western Alliance Bank (“WAB”) and repaid its outstanding borrowings with SVB. The term of the WAB line of credit and term loan extend through August 2019.

The Company was in compliance with the financial covenants for the line of credit with SVB as of June 30, 2017. In the event the Company does not meet its financial covenants in the future and Western Alliance does not extend a waiver or forbearance agreement, and the Company does not believe that it has adequate liquidity to operate, the Company will implement additional cost adjustments, as necessary, that will reduce its expenditures to the appropriate level that matches its operating cash flows.

Our primary cash requirements are to fund operations which mainly include personnel-related costs, marketing costs, third party costs related to hosting and software, general and administrative costs associated with being a public company, travel costs, and quarterly preferred stock dividends. The Company expects to continue to incur operating expenses for research and development and investment in software development costs to achieve its projected revenue growth. We continually evaluate our operating cash flows which can vary subject to the actual timing of expected new sales compared to our expectations of those sales and are sensitive to many factors, including changes in working capital and our results of operations. However, projections of future cash needs and cash flows are subject to risks and uncertainty.

Management’s current operating plan reflects a reduction in operating expenses which occurred at the end of the first quarter of 2017 in order to align its expenditures with its expected revenues. The primary area of cost reduction, which occurred at the end of the first quarter of 2017, was to reduce company headcount by eliminating non-revenue generating personnel throughout the Company. The Company remains focused on maximizing revenue from its revenue generating resources, including repurposing certain personnel to become revenue generators to help the Company improve its liquidity. The Company has a substantial professional services backlog that resulted from the acquisition of new customers in the second half of 2016 as well as upgrade projects for existing customers as they move to the latest version of Alliance. Management also initiated cost containment programs in other areas including the elimination or reduction of non-essential marketing activities, space reduction in areas in which the Company has excess office capacity, focusing marketing activities only on those programs that directly drive new business and eliminating contractors who are not essential to growth. In addition, we do not expect to spend a significant amount on capital expenditures. Overall, we have already implemented steps to reduce total operating expenses without impairing our ability to grow the business by obtaining new customers and increasing sales to existing customers. We expect our revenues and cost reductions to generate sufficient cash from operations. As noted above, if the Company’s actual results fall short of expectations, the Company will make further cost adjustments to improve the Company’s operating cash flows.

Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on our significant and existing customer base, closing license and subscription sales in a timely manner, lack of a history of consistently generating net income and uncertainty of future profitability, and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business.