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        <div style="text-align: center;">UNITED STATES</div>
      </div>
      <div style="text-align: center;">SECURITIES AND EXCHANGE COMMISSION</div>
      <div style="text-align: center; font-size: 8pt;">WASHINGTON, D.C. 20549</div>
      <div style="text-align: center; font-size: 8pt;">___________________________________________</div>
      <div><br>
      </div>
      <div style="text-align: center; font-size: 14pt; font-weight: bold;">FORM 10-Q</div>
      <div style="text-align: justify;">(Mark One)</div>
      <div>
        <div>
          <table cellspacing="0" cellpadding="0" id="zc66271399e394a86b89f071bdd9d150b" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
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                <td style="width: 36pt; vertical-align: top; align: right;">[X]</td>
                <td style="width: auto; vertical-align: top;">
                  <div>Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</div>
                </td>
              </tr>
  
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        </div>
      </div>
      <div><br>
      </div>
      <div style="text-indent: -18pt; margin-left: 18pt;">For the quarterly period ended <u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;June 30, 2019</u></div>
      <div style="text-align: center;">or</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z43d20aa008194b37afaf00cbd6f7d130" class="DSPFListTable">
  
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              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify;">[&#160; ]<br>
                </div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify;">Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.</div>
              </td>
            </tr>
  
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      </div>
      <div><br>
      </div>
      <div>For the transition period from ____ to ____<font id="TRGRRTFtoHTMLTab" style="display: inline-block; text-indent: 0px; font-size: 1px; width: 36pt">&#160; </font><font id="TRGRRTFtoHTMLTab" style="display: inline-block; text-indent: 0px; font-size: 1px; width: 36pt"><br>
        </font></div>
      <div><br>
      </div>
      <div style="text-align: center;">Commission File Number: <font style="font-weight: bold;"><u>0-26330</u></font></div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;">ASTEA INTERNATIONAL INC.</div>
      <div style="text-align: center;">(Exact name of registrant as specified in its charter)</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z0f537b1c05784233ab6ed8c8df28a52d" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
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            <td style="width: 53.07%; vertical-align: top;">
              <div style="text-align: center; font-weight: bold;"><u>Delaware <br>
                </u></div>
            </td>
            <td style="width: 46.93%; vertical-align: top;">
              <div style="text-align: center; font-weight: bold;"><u>23-2119058</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 53.07%; vertical-align: top;">
              <div style="text-align: center;">(State or other jurisdiction of</div>
            </td>
            <td style="width: 46.93%; vertical-align: top;">
              <div style="text-align: center;">(I.R.S. Employer</div>
            </td>
          </tr>
          <tr>
            <td style="width: 53.07%; vertical-align: top;">
              <div style="text-align: center;">incorporation or organization)</div>
            </td>
            <td style="width: 46.93%; vertical-align: top;">
              <div style="text-align: center;">Identification No.)</div>
            </td>
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      </table>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="ze6d217eee1f64887902c3207b076b866" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
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            <td style="width: 50%; vertical-align: bottom;">
              <div style="text-align: center; font-weight: bold;"><u>240 Gibraltar Road, Horsham,&#160; PA</u></div>
            </td>
            <td style="width: 50%; vertical-align: bottom;">
              <div style="text-align: center; font-weight: bold;"><u>19044</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 50%; vertical-align: bottom;">
              <div style="text-align: center;">(Address of principal executive offices)</div>
            </td>
            <td style="width: 50%; vertical-align: bottom;">
              <div style="text-align: center;">(Zip Code)</div>
            </td>
          </tr>
  
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      <div><br>
      </div>
      <div style="text-align: center;">Registrant&#8217;s telephone number, including area code: <font style="font-weight: bold;"><u>(215) 682-2500</u></font></div>
      <div><br>
      </div>
      <div style="text-indent: 228.65pt;"><u>N/A</u><font id="TRGRRTFtoHTMLTab" style="display: inline-block; text-indent: 0px; font-size: 1px; width: 306.85pt">&#160;</font></div>
      <div style="text-align: center;">(Former name, former address and former fiscal year, if changed since last report)</div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;">Securities registered pursuant to Section 12(b) of the act:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" border="0" id="z31ca9c9b52fe4890901117c8626aa128" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
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            <td style="width: 34.01%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); border-top: 2px solid rgb(0, 0, 0); border-left: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-weight: bold;">Title of Each Class</div>
            </td>
            <td style="width: 35.53%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); border-top: 2px solid rgb(0, 0, 0); border-left: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-weight: bold;">Trading Symbol</div>
            </td>
            <td style="width: 30.46%; vertical-align: bottom; border-width: 2px; border-style: solid; border-color: rgb(0, 0, 0);">
              <div style="text-align: center; font-weight: bold;">Name of Exchange on Which Registered</div>
            </td>
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            <td style="width: 34.01%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); border-top: 2px solid rgb(0, 0, 0); border-left: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center;">Common Stock, par value $0.01 per share</div>
            </td>
            <td style="width: 35.53%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); border-top: 2px solid rgb(0, 0, 0); border-left: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center;">ATEA</div>
            </td>
            <td style="width: 30.46%; vertical-align: bottom; border-width: 2px; border-style: solid; border-color: rgb(0, 0, 0);">
              <div style="text-align: center;">OTCQB</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify;">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.</div>
      <div style="text-align: justify;">Yes <u>&#160;X&#160;</u>&#160; &#160; No&#160;<u>&#160;&#160;&#160;&#160;</u></div>
      <div style="text-align: justify;">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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).</div>
      <div style="text-align: justify;">&#160;Yes <u>&#160;&#160;X&#160;&#160;</u>&#160; &#160; No&#160;<u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;</u></div>
      <div style="margin-top: 2pt;">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 the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated
        filer,&#8221; &#8220;smaller reporting company&#8221; and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):</div>
      <table cellspacing="0" cellpadding="0" id="z5ca3d1f57ca540faa0acbcae3de31952" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 28.92%; vertical-align: top;">&#160;</td>
            <td style="width: 4.12%; vertical-align: top;">&#160;</td>
            <td style="width: 3.15%; vertical-align: top;">&#160;</td>
            <td style="width: 2.43%; vertical-align: top;">&#160;</td>
            <td style="width: 18.1%; vertical-align: top;">&#160;</td>
            <td style="width: 3.09%; vertical-align: top;">&#160;</td>
            <td style="width: 40.18%; vertical-align: top;" colspan="2">&#160;</td>
          </tr>
          <tr>
            <td style="width: 28.92%; vertical-align: top;">
              <div style="text-align: right; margin-left: 1.5pt;">Large accelerated filer</div>
            </td>
            <td style="width: 4.12%; vertical-align: top;">
              <div style="text-align: center;">&#10065;</div>
              <div>&#160;</div>
            </td>
            <td style="width: 23.69%; vertical-align: top;" colspan="3">
              <div style="text-align: right; margin-left: 1.5pt;">Accelerated filer</div>
            </td>
            <td style="width: 3.09%; vertical-align: top;">
              <div>&#10065;</div>
              <div>&#160;</div>
            </td>
            <td style="width: 36.05%; vertical-align: top;">
              <div style="text-align: right; margin-left: 1.5pt;">Non-accelerated filer</div>
            </td>
            <td style="width: 4.12%; vertical-align: top;">
              <div style="text-align: right;">&#10065;</div>
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 28.92%; vertical-align: top;">
              <div style="text-align: right; margin-right: 1.5pt; margin-left: 1.5pt;">Smaller reporting company</div>
            </td>
            <td style="width: 4.12%; vertical-align: top;">
              <div style="text-align: center; font-family: 'Times New Roman',Times,serif;">&#8999;</div>
              <div>&#160;</div>
            </td>
            <td style="width: 23.69%; vertical-align: top;" colspan="3">
              <div style="text-align: right; margin-left: 1.5pt;">Emerging growth company</div>
            </td>
            <td style="width: 3.09%; vertical-align: top;">
              <div>&#10065;</div>
              <div>&#160;</div>
            </td>
            <td style="width: 40.18%; vertical-align: top;" colspan="2">
              <div style="text-align: right; margin-left: 1.5pt; font-family: 'Times New Roman',Times,serif;">(Do not check if a smaller reporting company)</div>
            </td>
          </tr>
  
      </table>
      <div style="text-align: justify; margin-top: 3.75pt;">If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
        provided pursuant to Section 13(a) of the Exchange Act. &#9633;</div>
      <div style="margin-top: 3.75pt;"><br>
      </div>
      <div>Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</div>
      <div>Yes <u>&#160;&#160; &#160; &#160;</u>&#160; &#160; No&#160;<u>&#160;&#160;X&#160;&#160;</u></div>
      <div><br>
      </div>
      <div style="text-align: justify;">As of August 8, 2019, 3,649,049 shares of the registrant&#8217;s Common Stock, par value $.01 per share, were outstanding.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">1</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; font-size: 12pt; font-weight: bold;">ASTEA INTERNATIONAL INC. AND SUBSIDIARIES</div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;">FORM 10-Q</div>
      <div style="text-align: center; font-weight: bold;">QUARTERLY REPORT</div>
      <div style="text-align: center; font-weight: bold;">INDEX</div>
      <table cellspacing="0" cellpadding="0" id="zcfde24e015a3489c8aac5d3ce40467f3" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom; border-bottom: 2px solid black;">
              <div style="text-align: center; font-weight: bold;">Page No.</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 89.93%; vertical-align: top;" colspan="2">
              <div>Facing Sheet</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">1</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 89.93%; vertical-align: top;" colspan="2">
              <div>Index</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">2</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 89.93%; vertical-align: top;" colspan="2">
              <div style="font-weight: bold;"><u>PART I - FINANCIAL INFORMATION</u></div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 1.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Financial Statements</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Condensed Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">3</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Condensed Consolidated Statements of Operations (unaudited)</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">4</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">5</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Condensed Consolidated Statements of Stockholders&#8217; Deficit (unaudited)</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">6</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Condensed Consolidated Statements of Cash Flows (unaudited)</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">7</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>Notes to Unaudited Condensed Consolidated Financial Statements</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">8</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 2.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Management's Discussion and Analysis of Financial Condition and Results of Operations</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">21</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 3.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Quantitative and Qualitative Disclosure About Market Risk</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">31</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 4.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Controls and Procedures</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">31</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 89.93%; vertical-align: top;" colspan="2">
              <div style="font-weight: bold;"><u>PART II - OTHER INFORMATION</u></div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 1A.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Risk Factors</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">31</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 5.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div>&#160;<font style="font-weight: bold;">Other Information</font></div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">31</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">
              <div style="font-weight: bold;">Item 6.</div>
            </td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Exhibits</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">33</div>
            </td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">&#160;</td>
            <td style="width: 10.07%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 11.69%; vertical-align: top;">&#160;</td>
            <td style="width: 78.24%; vertical-align: top;">
              <div style="font-weight: bold;">Signatures</div>
            </td>
            <td style="width: 10.07%; vertical-align: bottom;">
              <div style="text-align: center;">34</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">2</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div style="font-weight: bold;"><u>PART I - FINANCIAL INFORMATION</u></div>
      <div><br>
      </div>
      <div style="font-weight: bold;"><u>Item 1.</u>&#160; <u>FINANCIAL STATEMENTS</u></div>
      <div style="font-weight: bold;"><u> <br>
        </u></div>
      <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC</u><u>. AND SUBSIDIARIES</u></div>
      <div style="text-align: center; font-weight: bold;"><u>CONDENSED CONSOLIDATED BALANCE SHEETS</u></div>
      <div style="text-align: center; font-weight: bold;"><u> <br>
        </u></div>
      <table cellspacing="0" cellpadding="0" id="zbfda692601e344bd9bc46ef31313d6c0" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: top;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div>&#160;</div>
              <div style="text-align: center; font-weight: bold;">June 30,</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div>&#160;</div>
              <div style="text-align: center; text-indent: -3.75pt; margin-left: 3.75pt; font-weight: bold;">December 31,</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: center; font-weight: bold;">2019</div>
              <div style="text-align: center; font-weight: bold;">(Unaudited)</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: center; font-weight: bold;">2018*</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div style="text-align: center; font-weight: bold;">ASSETS</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Current assets:</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Cash and cash equivalents</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">
              <div>$</div>
            </td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">1,839,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">
              <div style="text-align: center;">$</div>
            </td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">1,276,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Accounts receivables, net of reserves allowance of $91,000 (unaudited)</div>
              <div>&#160;&#160;&#160;&#160;&#160;and $92,000, respectively</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">5,053,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div>&#160;</div>
              <div style="text-align: right;">6,294,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Prepaid expenses and other current assets</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">368,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">429,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Deferred hosting costs</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">1,464,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">992,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div> &#160;</div>
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total current assets</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">8,724,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;"> &#160;</div>
              <div style="text-align: right;">8,991,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Property and equipment, net</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">161,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">89,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Capitalized software development costs, net</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">4,534,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">4,599,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Restricted cash</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">72,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">72,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Other long-term assets</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">528,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">517,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Right-of-use assets</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">2,567,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">-</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: bottom;">
              <div>Total assets</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div>&#160;</div>
              <div>$</div>
            </td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right;">16,586,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 4px double;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: right;">$</div>
            </td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: right;"> &#160;</div>
              <div style="text-align: right;">14,268,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 4px double;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div style="text-align: center; font-weight: bold;">LIABILITIES AND STOCKHOLDERS&#8217; DEFICIT</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Current liabilities:</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Accounts payable and accrued expenses</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">
              <div>$</div>
            </td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">4,101,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: bottom;">&#160;</td>
            <td style="width: 2.08%; vertical-align: bottom;">
              <div style="text-align: right;">$</div>
            </td>
            <td style="width: 14.44%; vertical-align: bottom;">
              <div style="text-align: right;">4,137,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Current lease liabilities</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">1,017,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: bottom;">&#160;</td>
            <td style="width: 2.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 14.44%; vertical-align: bottom;">
              <div style="text-align: right;">-</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Deferred revenues</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">10,613,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">10,521,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div> &#160;</div>
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total current liabilities</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div>&#160;</div>
              <div style="text-align: right;">15,731,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div>&#160;</div>
              <div style="text-align: right;">14,658,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Long-term liabilities:</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: bottom;">
              <div>&#160;&#160;Borrowings under line of credit</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">2,647,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: bottom;">&#160;</td>
            <td style="width: 2.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 14.44%; vertical-align: bottom;">
              <div style="text-align: right;">2,669,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Long-term accrued expenses</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">359,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: bottom;">
              <div style="text-align: right;">323,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Deferred tax liability</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
              <div style="text-align: right;">49,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">49,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;Deferred revenues, net of current portion</div>
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            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">
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            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
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            <td style="width: 2.12%; vertical-align: bottom;">&#160;</td>
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          <tr>
            <td style="width: 62.69%; vertical-align: top; padding-bottom: 2px;">
              <div>&#160;&#160;Lease liabilities, net of current portion</div>
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            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);">
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            <td style="width: 1.48%; vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);">
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            <td style="width: 2.12%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
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          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;</div>
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total long-term liabilities</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">5,864,000</div>
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            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
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              <div style="text-align: right;">3,804,000</div>
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            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
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          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
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          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Commitments and contingencies</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">&#160;</td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
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          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>Stockholders&#8217; deficit:</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: top;">&#160;</td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">&#160;</td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
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            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">8,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div>&#160;</div>
              <div style="text-align: right;">&#160;&#160;8,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;Series B issued and outstanding 797,000 shares</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">8,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">8,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
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              <div style="font-family: 'Times New Roman',Times,serif; text-indent: -18pt; margin-left: 18pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;issued 3,691,000 and 3,659,000 shares; outstanding 3,649,000 and 3,617,000</div>
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            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">37,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: bottom;">
              <div style="text-align: right;"> &#160;</div>
              <div style="text-align: right;">&#160;37,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;&#160;Additional paid-in-capital</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">31,333,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">31,455,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;&#160;Accumulated deficit</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">(34,875,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">
              <div>)</div>
            </td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">&#160;(34,344,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;&#160;Accumulated other comprehensive loss</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom;">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom;">
              <div style="text-align: right;">(1,312,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top;">
              <div>)</div>
            </td>
            <td style="width: 2.08%; vertical-align: top;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top;">
              <div style="text-align: right;">(1,150,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top;">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div>&#160;&#160;&#160;Treasury stock at cost, 42,000 common shares</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">(208,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div>)</div>
            </td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">&#160;(208,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div> &#160;</div>
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total stockholders&#8217; deficit</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right;">(5,009,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div>)</div>
            </td>
            <td style="width: 2.08%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div style="text-align: right;"> &#160;</div>
              <div style="text-align: right;">(4,194,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 2px solid;">
              <div>&#160;</div>
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 62.69%; vertical-align: top;">
              <div> &#160;</div>
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total liabilities and stockholders&#8217; deficit</div>
            </td>
            <td style="width: 2.02%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div>&#160;</div>
              <div>$</div>
            </td>
            <td style="width: 15.18%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right;">16,586,000</div>
            </td>
            <td style="width: 1.48%; vertical-align: bottom; border-bottom: #000000 4px double;">&#160;</td>
            <td style="width: 2.08%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
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            </td>
            <td style="width: 14.44%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: right;">14,268,000</div>
            </td>
            <td style="width: 2.12%; vertical-align: top; border-bottom: #000000 4px double;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 100%; vertical-align: top;" colspan="7">
              <div>&#160;</div>
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              <div>&#160;</div>
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              <div>&#160;</div>
            </td>
          </tr>
  
      </table>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">3</font></div>
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      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC</u><u>. AND SUBSIDIARIES</u></div>
      <div style="text-align: center; font-weight: bold;"><u>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</u></div>
      <div style="text-align: center; font-weight: bold;">(Unaudited)</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zbf930c78ebc64f4ca34576b418cba0df">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three Months</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Six Months</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center;"><font style="font-weight: bold;">Ended June 30</font>,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">Ended June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
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            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
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            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>462,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>892,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,162,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,311,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
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            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,233,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>864,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>2,459,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,692,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Services and maintenance</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,720,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,876,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>9,414,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>10,325,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">&#160;&#160;&#160;&#160;Total revenues</div>
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            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>6,415,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>6,632,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>13,035,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>13,328,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Costs of revenues:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Cost of software license fees</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>922,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>497,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,624,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,226,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Cost of subscriptions</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>304,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>191,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>559,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>425,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Cost of services and maintenance</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,120,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,486,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>6,510,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>7,009,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 29.7pt;">Total cost of&#160;&#160;revenues</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,346,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,174,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>8,693,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>8,660,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Gross profit</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,069,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,458,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,342,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,668,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Operating Expenses:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Product development</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>443,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>153,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>606,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>367,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Sales and marketing</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>990,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>977,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,966,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,978,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">General and administrative</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,123,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>948,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,124,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,896,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 29.7pt;">Total operating expenses</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,556,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,078,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,696,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,241,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
              <div>(Loss) income from operations</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(487,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>380,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(354,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>427,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>Interest expense, net</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>65,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>64,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>139,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>99,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">(Loss) income before income taxes</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(552,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>316,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(493,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>328,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div>Income tax expense</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>34,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>12,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>38,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>18,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(586,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>304,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(531,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>310,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Preferred dividend</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>125,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>125,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div>&#160;</div>
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            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(711,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>179,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(781,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>60,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Basic and diluted&#160; (loss) earnings per share&#160;allocable to common stockholders</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.20</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
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            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.05</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.22</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.02</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Weighted average shares outstanding&#160;used in computing basic (loss) earnings per common share</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,594,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,594,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt;">Weighted average shares outstanding&#160;used in computing diluted (loss) earnings per common share</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,773,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,773,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;">See accompanying notes to the unaudited condensed consolidated financial statements.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">4</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC</u><u>. AND SUBSIDIARIES</u></div>
      <div style="text-align: center; font-weight: bold;"><u>CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME</u></div>
      <div style="text-align: center; font-weight: bold;">(Unaudited)</div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zff8bc7e353624373b6e5a26dba089f5c">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three Months Ended</div>
              <div style="text-align: center; font-weight: bold;">June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="7">
              <div style="text-align: center; font-weight: bold;">Six Months Ended</div>
              <div style="text-align: center; font-weight: bold;">June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="3">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="3">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="3">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div>Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>(586,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>304,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>(531,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>310,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div>Other comprehensive (loss) income:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 2px;">
              <div>&#160;&#160;&#160;&#160;&#160;Foreign currency translation adjustment</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(116,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>93,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(162,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(12,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 4px;">
              <div> <br>
              </div>
              <div>Comprehensive (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(702,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>397,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(693,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>298,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; margin-right: 18pt; font-weight: bold;">See accompanying notes to the unaudited condensed consolidated financial statements.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">5</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z54586e29645f4522ad3fe3d1c4dea575" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 100%; vertical-align: bottom;">
              <div>&#160;</div>
              <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC. AND SUBSIDIARIES</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 100%; vertical-align: bottom;">
              <div style="text-align: center; font-weight: bold;"><u>CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#8217; DEFICIT</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 100%; vertical-align: bottom;">
              <div style="text-align: center; font-weight: bold;">(Unaudited)</div>
              <div>&#160;</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z85dbf53519764a57bb8e5979b5fae3ee" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 21.19%; vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Series A</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">convertible</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">preferred</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">stock at par value</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Series B</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">convertible</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">preferred</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">stock at par value</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Common</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">stock</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Additional</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">paid-in-</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">capital</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Accumulated</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">other</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">compre-</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">hensive</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">loss</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Accumulated</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">deficit</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Treasury</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">stock</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">Total</div>
              <div style="text-align: center; font-size: 8pt; font-weight: bold;">stockholders&#8217;</div>
              <div style="text-align: center; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">deficit</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div>&#160;</div>
              <div style="font-size: 8pt; font-weight: bold;">Balances at December 31, 2017</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">36,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,710,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,055,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(35,338,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(4,839,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div><font style="font-weight: bold;">)</font>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div>&#160;</div>
              <div style="font-size: 8pt;">Cumulative effect from change in accounting</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">630,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">630,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Net income</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">6,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">6,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Series A and B preferred stock Dividends</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Stock-based compensation</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">31,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">31,000&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Other comprehensive loss</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">(104,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(104,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-weight: bold;">&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">Balances at March 31, 2018</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">36,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,616,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,159,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(34,702,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(4,401,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;"> <br>
              </div>
              <div style="font-size: 8pt;">Net income</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">304,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">304,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Series A and B preferred stock Dividends</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Stock-based compensation</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">41,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;&#160;41,000&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Other comprehensive income</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">92,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">92,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom; padding-bottom: 4px;">
              <div style="font-size: 8pt; font-weight: bold;">Balances at June 30, 2018</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; padding-bottom: 4px;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">36,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,532,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,067,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(34,398,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(4,089,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: 4px double rgb(0, 0, 0);">
              <div style="font-weight: bold;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div>&#160;</div>
              <div style="font-size: 8pt; font-weight: bold;">Balances at December 31, 2018</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">37,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,455,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,150,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(34,344,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(4,194,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div><font style="font-weight: bold;">)</font>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;"> <br>
              </div>
              <div style="font-size: 8pt;">Net income</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">55,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">55,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Series A and B preferred stock Dividends</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Stock-based compensation</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">17,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;&#160;&#160;17,000&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Other comprehensive loss</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">(46,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(46,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-weight: bold;">&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">Balances at March 31, 2019</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">37,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,347,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,196,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(34,289,000</div>
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            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(4,293,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;"> <br>
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              <div style="font-size: 8pt;">Net loss</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">(586,000</div>
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            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(586,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Exercise of stock options</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">59,000</div>
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            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">59,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.78%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 6.31%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.75%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.98%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.99%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.08%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 7.82%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.69%; vertical-align: bottom;">&#160;</td>
            <td style="width: 0.85%; vertical-align: bottom;">&#160;</td>
            <td style="width: 9.32%; vertical-align: bottom;">&#160;</td>
            <td style="width: 1.32%; vertical-align: bottom;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Series A and B preferred stock Dividends</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(125,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Stock-based compensation</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">52,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">52,000&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div>&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt;">Other comprehensive loss</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">(116,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">&#160;</td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; font-size: 8pt;">&#8212;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt;">(116,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 2px solid;">
              <div style="font-size: 8pt;">)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom;">
              <div style="font-weight: bold;">&#160;</div>
            </td>
          </tr>
          <tr>
            <td style="width: 21.19%; vertical-align: bottom;">
              <div style="font-size: 8pt; font-weight: bold;">Balances at June 30, 2019</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.78%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">8,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 6.31%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">37,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.75%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">31,333,000</div>
            </td>
            <td style="width: 0.98%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">&#160;</div>
            </td>
            <td style="width: 0.99%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.08%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(1,312,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 8.66%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(34,875,000</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 7.82%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; font-size: 8pt; font-weight: bold;">(208,000</div>
            </td>
            <td style="width: 1.69%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
            <td style="width: 0.85%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">$</div>
            </td>
            <td style="width: 9.32%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="text-align: right; margin-right: 0.1pt; font-size: 8pt; font-weight: bold;">(5,009,000</div>
            </td>
            <td style="width: 1.32%; vertical-align: bottom; border-bottom: #000000 4px double;">
              <div style="font-size: 8pt; font-weight: bold;">)</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;">See accompanying notes to the unaudited condensed consolidated financial statements.</div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">6</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC</u><u>. AND SUBSIDIARIES</u></div>
      <div style="text-align: center; font-weight: bold;"><u>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</u></div>
      <div style="text-align: center; font-weight: bold;">(Unaudited)</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="z33d1ef6266fe4debab4243c33e2d95eb">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Six Months Ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center;"><font style="font-weight: bold;"> June 30,</font> </div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;">Cash flows from operating activities:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(531,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>310,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Adjustments to reconcile net (loss) income to net cash provided by operating activities:</div>
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Depreciation and amortization</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,606,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,238,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Non cash lease expense</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>566,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Amortization of deferred financing costs</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>15,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>14,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Amortization of deferred hosting costs</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>179,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>27,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Decrease in provision for doubtful accounts</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(1,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Stock-based compensation</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>69,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>72,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 27pt;">Changes in operating assets and liabilities:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Receivables</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,257,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>715,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Prepaid expenses and other</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>41,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(126,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Deferred hosting costs</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(652,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(641,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Other assets</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(11,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(7,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Accounts payable and accrued expenses</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(170,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(206,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Deferred revenues</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>547,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>27,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 36pt;">Lease liabilities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(566,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
              <div style="text-indent: -9pt; margin-left: 18pt;">Net cash&#160; provided by operating activities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,349,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,423,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;"> <br>
              </div>
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;">Cash flows from investing activities:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Purchases of property and equipment</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(109,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(34,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Capitalized software development costs</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(1,504,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(1,785,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
              <div style="text-indent: -9pt; margin-left: 18pt;">Net cash used in&#160; investing activities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(1,613,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(1,819,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;">Cash flows from financing activities:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Dividend payments on preferred stock</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(200,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(55,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Payment on the term note from Bridge Bank</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(225,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Payment on line of credit from Bridge Bank</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(9,100,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(5,058,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Proceeds on line of credit from Bridge Bank</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>9,078,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>5,150,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Proceeds from exercise of stock options</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>59,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>-</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
              <div style="text-indent: -9pt; margin-left: 18pt;">Net cash used in financing activities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(163,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(188,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 9pt;">&#160;</div>
              <div style="text-indent: -9pt; margin-left: 9pt;">Effect of exchange rate changes on cash</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(10,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>24,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 9pt;">Net increase (decrease) in cash, cash equivalents and restricted cash</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>563,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(560,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 2px;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Cash, cash equivalents and restricted cash, beginning of period</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,348,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,001,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%; padding-bottom: 4px;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Cash, cash equivalents and restricted cash, end of period</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>1,911,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>1,441,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;"> <br>
              </div>
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;">Supplemental disclosure of cash flows information:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Cash paid for interest</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>124,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>97,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="font-weight: bold; text-indent: -9pt; margin-left: 9pt;">Supplemental disclosure of non-cash flows information:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 74%;">
              <div style="text-indent: -9pt; margin-left: 18pt;">Accrued preferred dividends</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;" colspan="8">
              <div> </div>
              <div style="text-align: center; font-weight: bold;"> See accompanying notes to the unaudited condensed consolidated financial statements.</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">7</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="font-weight: bold;"><u>Item 1.</u>&#160;&#160; <u>FINANCIAL STATEMENTS (Continued)</u></div>
      <div><br>
      </div>
      <div style="text-align: center; font-weight: bold;"><u>ASTEA INTERNATIONAL INC. AND SUBSIDIARIES</u></div>
      <div style="text-align: center; margin-right: 18pt; margin-left: 18pt; font-weight: bold;"><u>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</u></div>
      <div style="text-align: center; margin-right: 18pt; margin-left: 18pt; font-weight: bold;"><u>(Unaudited)</u></div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z368d75cff0b848348a9814a068a0ebf2" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div>1.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;"><u>BASIS OF PRESENTATION</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">The condensed consolidated financial statements at June 30, 2019 and for the six month periods ended June 30, 2019 and 2018 of Astea International Inc. and subsidiaries (&#8220;Astea&#8221; 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.&#160; The accompanying unaudited
        financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (&#8220;SEC&#8221;).&#160; 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.&#160; It is suggested that these financial statements be read in conjunction with the financial statements and
        the notes thereto, included in the Company&#8217;s latest annual report (Form 10-K) and our Form 10-Q&#8217;s for the quarters ended June 30, 2018, September 30, 2018 and March 31, 2019. The interim financial information presented is not necessarily indicative
        of results expected for the entire year ending December 31, 2019.</div>
      <div><br>
      </div>
      <div style="text-align: justify; font-style: italic;">Comparability</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The condensed consolidated financial statements for the period ended June 30, 2019 are presented under the new Lease standard, while the comparative period presented has not been adjusted and continues to be reported
        in accordance with the previous standard.&#160; The Lease standard requires lessees to recognize a right-of-use ("ROU") asset and lease liability for all leases on the condensed consolidated balance sheet beginning January 1, 2019 with no modification to
        prior periods.</div>
      <div><br>
      </div>
      <div style="font-style: italic;">Recently Adopted Accounting Standards- Leases</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the
          balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance was effective for the Company on January 1, 2019. The guidance was adopted on a modified retrospective basis and provides for certain practical
          expedients.&#160; The adoption of this guidance changed the way we account for our operating leases, which resulted in the Company recording the future benefits of those leases as an asset and the related minimum lease payments as a liability on our
          condensed consolidated balance sheets. </font>The Company reported a significant balance sheet gross-up for the right-of-use assets and corresponding liabilities, with no impact to its debt covenant. <font style="background-color: #FFFFFF;">&#160;</font><font style="background-color: #FFFFFF;">The Company does not finance purchases of equipment, but it does have operating leases for office space and equipment in all locations.&#160; The Company has identified all material operating lease agreements.&#160; It has
          also reviewed all significant contracts for embedded leases.&#160; No embedded leases were identified during this process.</font></div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">We determine if an arrangement is a lease at inception. All leases to which the Company is a party are operating leases. Beginning January 1, 2019, the operating leases are
          being reported on our condensed consolidated balance sheet as operating lease ROU assets and current and noncurrent operating lease liabilities. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities
          represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities will be recognized at the commencement date based on the present value of the lease payments over the lease term. As none of our
          leases provide an implicit interest rate, we used our incremental borrowing rate based on the information available at the commencement date in calculating the present value of lease payments. The operating lease ROU asset also includes any lease
          payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.</font></div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">8</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div style="text-align: justify;">The new guidance provides a number of optional practical expedients in transition. The Company elected the package of practical expedients which permitted us under the new guidance not to reassess our prior conclusions
        about lease identification, lease classification and initial direct costs. Astea did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. On adoption, we recognized operating
        liabilities of $3,132,000, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.</div>
      <div style="text-align: justify;"> <br>
      </div>
      <div style="text-align: justify;">The new guidance also provides practical expedients for an entity&#8217;s ongoing accounting. We elected the short-term lease recognition exemption for one of our office equipment leases. This means, for those leases that
        qualify, we will not recognize ROU assets or lease liabilities.&#160; This includes not recognizing ROU assets or lease liabilities for existing short-term leases on those assets in transition.&#160; We elected the practical expedient to not separate lease and
        non-lease components for all of our leases. As expected, the adoption of this guidance resulted in additional&#160;lease-related disclosures in the footnotes to our condensed consolidated financial statements (see Note 5).&#160;</div>
      <div><br>
      </div>
      <div style="text-align: justify; font-style: italic;">Cash, cash equivalents and restricted cash</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts presented on the
        condensed consolidated statement of cash flows:</div>
      <table cellspacing="0" cellpadding="0" border="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="za3af326bad094a549671a519ae524ed2">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 40%;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; width: 40%;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-family: 'Times New Roman', Times, serif; font-weight: bold;"> June 30, </div>
              <div style="text-align: center; font-family: 'Times New Roman', Times, serif; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 2px; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-family: 'Times New Roman', Times, serif; font-weight: bold;">December 31, </div>
              <div style="text-align: center; font-family: 'Times New Roman', Times, serif; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 2px; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 40%;">
              <div style="font-family: 'Times New Roman', Times, serif;">Cash and cash equivalents</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,839,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,276,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 40%; padding-bottom: 2px;">
              <div style="font-family: 'Times New Roman', Times, serif;">Restricted cash</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">72,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">72,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 40%; padding-bottom: 4px;">
              <div style="text-indent: -9pt; margin-left: 9pt;"> <br>
              </div>
              <div style="text-indent: -9pt; margin-left: 9pt;">Total cash, cash equivalents, and restricted cash reported on the condensed consolidated statements of cash flows</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,911,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 9%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,348,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify;">Amounts included in restricted cash represent funds required to be set aside by a contractual agreement with the&#160;&#160; building leasing companies in Europe. The restrictions will lapse when the building leases expire.</div>
      <div><br>
      </div>
      <div style="text-align: justify; font-style: italic;">Operating Matters and Liquidity</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;">The Company has a history of net losses and an accumulated deficit of $34,875,000 as of June 30, 2019.&#160; In the first six months of 2019, the Company had a net loss of $531,000 compared to income of $310,000 generated
          in the first six months of 2018.&#160; Further, at June 30, 2019, the Company had a working capital ratio of .57:1, with cash and cash equivalents of $1,839,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000.&#160;
          The increase in cash and cash equivalents for the first six months 2019 was primarily driven by an increase in cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an
          increase in the dividend payment.</div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">As of June 30, 2019, the Company owed $2,647,000 against the line of credit from Western Alliance Bank (&#8220;WAB&#8221;).&#160;&#160; As of June 30, 2019, the availability under the line of credit was $203,000.&#160; The Company has projected
        revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least August 15, 2020. The Second Loan Agreement increased the
        availability under the line of credit from $2,400,000 to $2,850,000 (see Note 4).</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company was in compliance with the WAB financial and liquidity covenant as of June 30, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at
        least the next year.&#160; As a result, the amount due to WAB under the line of credit as of June 30, 2019 were classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with
        WAB.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">Our primary cash requirements are to fund operations</font> 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.&#160; 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.&#160; 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.&#160; However, projections of future cash needs and cash flows are subject to risks and uncertainty.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">9</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Management&#8217;s current operating plan is to maintain and/or reduce operating expenses in order to be aligned with expected revenues.&#160; The primary area of focus will continue to be headcount and costs from outside
        consultants.&#160; The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity.&#160; The
        Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance.&#160;&#160; In 2019, the Company will continue
        to consider ways to reduce operating expenses in certain areas of the Company in order to maintain its liquidity.&#160; However, management has implemented new marketing initiatives which have increased our spending in this area in 2019.&#160; We believe the
        new initiatives will directly contribute to increasing new business, which is essential to our growth.&#160; Operations will generate enough cash to meet obligations at least <font style="background-color: #FFFFFF;">through August 15, 2020.</font>&#160;<font style="background-color: #FFFFFF;">As noted above, if the Company&#8217;s actual results fall short of expectations, the Company will make cost adjustments to improve the Company&#8217;s operating cash flows. </font>In addition,&#160;we plan to maintain the same
        level of investment in software development and we do not expect to increase capital expenditures.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">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.</font></div>
      <div><br>
      </div>
      <div style="text-align: justify; font-style: italic;">Revenue from Contracts with Customers</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">Astea&#8217;s revenue is principally recognized from three sources: (i) licensing arrangements, (ii) subscription services and (iii) services and maintenance.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The Company markets its products primarily through its direct sales force and resellers.&#160; License agreements do not provide for a right of return, and historically, product returns have not been
        significant.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="font-style: italic;">Revenue from Contracts with Customers</font>&#160;outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the
        transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.&#160; The five steps are:</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z8b1ba8d4c7734bbf8eee804f50a2ede1" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">1.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Identify the contract with a customer.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z7a56ea929d0242f18b66c708a98490c2" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">2.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Identify the performance obligations in the contract.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z6058321951a34430896989572f2b34de" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">3.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Determine the transaction price.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="zff0902e573dd498285686f53cc2e4db0" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">4.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Allocate the transaction price to performance obligations in the contract.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z1ba5a3bff6534bdeb0c7fdb867899158" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">5.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Recognize revenue when or as the Company satisfies a performance obligation.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="text-align: justify; margin-top: 13.2pt;">The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good
        or service to a customer.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company recognizes revenue from license sales when the above criteria are met.&#160; The Company generally uses written contracts as a means to establish the terms and conditions by which our products, services and
        maintenance support are sold to our customers.&#160; The Company satisfies the performance obligation when the license key has been delivered electronically to the customer. If these criteria are not met, then revenue is deferred until such criteria are
        met or until the period(s) over which the last performance obligation is delivered.</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;">The Company recognizes revenues from maintenance ratably over the term of the underlying maintenance contract term. The term of the maintenance contract is usually one year. Renewals of maintenance contracts create
          new performance obligations that are satisfied over the contract term.</div>
        <div style="text-align: justify;">&#160;</div>
        <div style="text-align: justify;">Revenues from professional services mostly consist of time and material services.&#160; Certain professional service contracts are performed on a fixed price basis and revenue is recognized using the percentage of
          completion method.&#160; However, fixed price contracts are only utilized on rare occasions.&#160; Performance obligations are satisfied, and revenues are recognized, when the services are provided or when the service term has expired.</div>
        <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
          <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">10</font></div>
          <div id="DSPFPageBreak" style="page-break-after:always;">
            <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
        </div>
        <div><br>
        </div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">In subscription based arrangements, even though customers use the software element, they generally do not have a contractual right to take possession of the software at any time during the hosting
        period without significant penalty to either run the software on its own hardware or contract with an unrelated third party to host the software. Accordingly, these software as a service (&#8220;SaaS&#8221;) arrangements, including the software license fees
        within the arrangements, are accounted for as subscription services provided all other revenue recognition criteria have been met.&#160; The subscription revenue is recognized on a straight-line basis over the performance obligation.&#160; The Company
        recognizes subscription revenue once a customer goes-live ratably over the remaining contract period or customer life whichever is longer. The contract period is typically 1 to 3 years. The average expected life of a customer is 2 years.&#160; The average
        customer takes about 8 to 10 months to go live. The Company expects the average life of a customer to increase as more customers begin to renew their subscription contracts. When implementation, consulting and training services are bundled with the
        subscription based arrangement, these services are recognized over the life of the initial contract (performance obligation), once the project goes live.</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;"><font style="background-color: #FFFFFF;">In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately, if they are distinct. The Company allocates the
            transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at
            which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach. For professional services, the Company determines the standalone selling prices based on
            the price at which the Company separately sells those services.</font></div>
        <div><br>
        </div>
      </div>
      <div style="text-align: justify;">The guidance prefers that revenue in a contract with multiple performance obligations use the adjusted market approach which includes SSP or TPE or expected cost plus margin approach as the methodology for allocating
        revenues to software.&#160; The Company uses the Residual Approach for allocating the revenues from a contract to the license component of the sale.&#160; Due to competition, highly variable pricing, customer demographics, varying size of our customers, and
        other such factors, the Company&#8217;s selling prices are considered uncertain for each perpetual license sale.&#160; Therefore, SSP is not an appropriate methodology as it relates to our license revenue.&#160; In terms of TPE as a basis to price our software, our
        product is unique and expansive in terms of the system&#8217;s inherent functionality. There are no directly comparable products in the marketplace today which we could use as the basis to set our standard license pricing based on a comparison with other
        vendors. In addition, most of the companies with whom we compete, are privately owned, which prevents us from obtaining reliable TPE. Accordingly, the guidance permits the Company to use the Residual Method for allocating selling price if the first
        two preferable choices cannot be used. The residual between the total transaction price and the observable standalone selling prices of those performance obligations with observable standalone selling prices is considered to be the estimated
        standalone selling price of the goods or services underlying the performance obligation.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Astea commonly sells its software products bundled with maintenance and professional services. As noted above, the guidance requires an entity to allocate the transaction price to the distinct performance obligations
        in a contract on a relative SSP basis. Under the guidance, &#8220;&#8230;an entity shall determine the standalone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the
        transaction price in proportion to those standalone selling prices.&#8221; SSP is defined as the price at which an entity would sell a promised good or service separately to a customer.&#160; Astea has a history of selling maintenance renewals and professional
        services on a standalone basis. Therefore, the Company utilizes SSP for its performance obligations as it relates to service and maintenance revenue. In addition, due to the Company having different maintenance and service rates in other parts of the
        world in which it operates, the Company has developed a reasonable range for its SSP for maintenance and services rather than a single point.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The incremental costs of obtaining a customer contract (i.e., those costs related to obtaining the customer contract that would not have been incurred if the customer contract was not obtained), such as a sales
        commission, should be capitalized if the Company expects to recover those costs (based on net future cash flows from the contract and expected contract renewals). The Company may expense the incremental costs of obtaining a contract if the
        amortization period would otherwise be one year or less. Since sales commissions are costs that are incremental and the amortization of sales commissions would be one year or less, the Company will continue to expense these items as incurred.&#160; Costs
        of obtaining a customer contract that are not incremental (i.e., costs related to obtaining the customer contract that would have been incurred regardless of whether the customer contract had been obtained), such as travel costs incurred to present
        the customer proposal, should only be capitalized if those costs are explicitly chargeable to the customer regardless of whether the entity enters into a contract with the customer. Otherwise, such costs are expensed as incurred. The Company will
        continue to expense these costs as they are incurred.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">11</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div><br>
        </div>
      </div>
      <div style="text-align: justify;">Once live, we recognize the deferred implementation costs related to that customer ratably over the remaining expected life of the customer contract or two years, whichever is longer.&#160; At this point, based on the
        Company&#8217;s relatively short time-span as a provider of a hosted solution, our analysis shows that the average lifespan of an Astea hosted customer is 2 years. Therefore, we amortize the deferred cost over 2 years or the remaining life of the contract,
        whichever is longer.&#160; This is consistent with the revenue recognition methodology used for the subscription service revenue for that customer. The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized
        at the time the related performance obligation is satisfied by transferring a promised service to a customer.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">We believe that our accounting estimates used in applying our revenue recognition are critical because:</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z4720541e7f0844d28fe0dbc1d9762353" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; font-family: 'Times New Roman',Times,serif;">the determination that it is probable that the customer will pay for the products and services purchased is inherently judgmental and includes credit risk;</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z250975e1598c481d8aef79cee970e9b7" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">determining the performance obligations and transaction price to certain elements in multiple-element arrangements is complex;</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="zc800ed54fe0c42ddbf0d0cffd63c23c6" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">the determination of whether a service is essential to the functionality of the software is complex and could potentially create a new performance obligation; and</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z94208eb14fa844f99d950c82ab4e1700" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">the estimated customer life of subscription services.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Changes in the aforementioned items could have a material effect on the type and timing of revenue recognized. In addition, Company&#8217;s payment terms and conditions vary by contract and size of customer, although terms
        generally include a requirement of payment within 30 to 60 days.&#160; In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant
        financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, and not to facilitate financing arrangements. The Company generally has not experienced
        any material losses related to receivables from individual customers, or groups of customers.&#160; Due to these factors, no additional credit risk beyond amounts provided by the allowance for doubtful accounts is believed by management to be probable in
        the Company&#8217;s accounts receivable. The Company has not adjusted revenues for customers related to credit risk.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">At June 30, 2019, there was one customer that accounted for 26% of total net accounts receivable. At December&#160;31, 2018, no single customer accounted for 10% or more of net accounts receivable. For the three months
        ended June 30, 2019, there was one customer that accounted for 10% of total revenue.&#160; For the six months ended June 30, 2019 and the three and six months ends June 30, 2018, no individual customer accounted for 10% or more of total revenue.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">We present taxes assessed by a governmental authority including sales, use, value added and excise taxes on a net basis and therefore the presentation of these taxes is excluded from our revenues and is included in
        accrued expenses in the accompanying condensed consolidated balance sheets until such amounts are remitted to the taxing authority.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company is engaged in the design, development, marketing and support of its service management software solutions.&#160; All revenues result from selling of license (perpetual and subscription)
        software products and related professional services and customer support services.&#160; Accordingly, the Company considers itself to have one reporting segment.&#160; The Company&#8217;s chief decision maker further reviews financial information presented on a
        consolidated basis to determine if revenue can be further disaggregated in order to make operating decisions and assessing financial performance. It was determined that all revenue recognized in our consolidated statements of operations is considered
        to be revenue from contracts with customers, which can be disaggregated by both the timing of revenue recognition and geographic regions (see Note 9 of the condensed consolidated financial statements for disaggregated revenues by geographic regions).</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The following tables depicts the Company&#8217;s disaggregation of revenue:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zbdb23291be754a17a314a7c3a09c50ed">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three months ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="7">
              <div style="text-align: center; font-weight: bold;">Six months ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center;"><font style="font-weight: bold;"> June 30</font>,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="7">
              <div style="text-align: center; font-weight: bold;"> June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt; font-weight: bold;">Timing of Revenue Recognition</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred at a point in time</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>462,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>892,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>1,162,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>1,311,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred over time</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>4,405,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>4,698,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>8,886,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>9,937,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred over time initiated at go-live</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,548,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,042,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,987,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,080,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 4px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Total revenues</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,415,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,632,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,035,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,328,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">12</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The performance obligations transferred at a point in time relate to perpetual license revenue for which there is no deferred revenue as of June 30, 2019 or 2018.&#160; The performance obligations
        transferred over time consist of professional services that are recognized based on time and materials, as the services are performed. The performance obligations for support services are recognized ratably over time based on the contract life,
        except for a few fixed price contracts which are recognized based on the achievement of certain milestones. If the customer pays in advance, service revenue is deferred until the performance obligations are met.&#160; For support services, the fee is paid
        in advance of the performance obligation.&#160; Accordingly, the Company has recorded deferred revenue from fixed price contracts and support services of $7,287,000 and $6,744,000 as of June 30, 2019 and 2018, respectively. Performance obligations
        transferred over time, initiated at go-live, relate to our subscription hosting and our subscription professional services for the implementation. No performance obligation is recognized until the customer is live and has access to the subscription
        services. Once live, the performance obligations are recognized over time, which is either 2 years, the average customer life, or the remaining contract life of the customer, whichever is longer. Because subscription fees are paid in advance, and
        professional services fees are paid as the services are performed, the revenue from both are deferred until the date in which the customer goes live. The Company has deferred revenue recorded for performance obligations transferred over time,
        initiated at go-live for hosting and hosting services for $4,585,000 and $4,766,000 as of June 30, 2019 and 2018, respectively.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The long term deferred revenue reported as $1,259,000 and $1,711,000 as of June 30, 2019 and 2018, respectively, consists of the portion of revenue that will be recognized beyond one year of the balance sheet date for
        hosting implementation services.</div>
      <div>
        <div> </div>
      </div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="za2d486b0d62d40729dc6163a228b367d" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify;">2.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify;"><u>NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="text-align: justify;"> <br>
      </div>
      <div style="text-align: justify;">In August 2018, the FASB issued guidance that requires a customer in a cloud computing arrangement (i.e. hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which
        implementation costs to capitalize as assets or expense as incurred. This guidance requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and
        post-implementation stages be expensed as incurred. The guidance is effective for annual periods beginning after December 15, 2019 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our condensed
        consolidated financial statements.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The
        guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any,
        that the adoption of this guidance will have on our condensed consolidated financial statements.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and
        reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for us beginning January 1, 2020. We expect to adopt this accounting standard update on a modified
        retrospective basis and we are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements.</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="zd28ead4d01a847beac16a793d0337033" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div>3.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;"><u>CONCENTRATION OF CREDIT RISK</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">Financial instruments, which potentially subject the Company to credit risk, consist of cash, cash equivalents and accounts receivable.&#160; The Company&#8217;s policy is to limit the amount of credit
        exposure to any one financial institution.&#160; The Company places investments with financial institutions evaluated as being creditworthy, or investing in short-term money market funds which are exposed to minimal interest rate and credit risk.&#160; Cash
        balances are maintained with several banks.&#160; Certain operating accounts may exceed insured limits.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The Company sells its products to customers involved in a variety of industries including information technology, medical devices and diagnostic systems, industrial controls and instrumentation and
        retail systems.&#160; While the Company does not require collateral from its customers, it does perform continuing credit evaluations of its customers&#8217; financial condition.</div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">13</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z8acb12405d4e412d95ef564344c51902" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify; margin-right: 1.8pt;">4.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify; margin-right: 1.8pt;"><u>LINE OF CREDIT and TERM NOTE</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Line of Credit and Term Loan with Western Alliance Bank</div>
      <div><br>
      </div>
      <div style="text-align: justify;">On August 11, 2017, <font style="background-color: #FFFFFF;">the Company entered into a Business Financing Agreement (the &#8220;Financing Agreement&#8221;) with Bridge Bank, a division of WAB, which included a revolving line of
          credit and a term loan. The agreement was to mature on September 1, 2019.</font></div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Financing Agreement with WAB, established a revolving credit line for the Company in the principal amount of up to $2,400,000 (the &#8220;Revolving Credit Line&#8221;) and a Term Loan of $400,000 (the &#8220;Term
        Loan&#8221;).&#160;&#160;Availability under the Revolving Credit Line is tied to a borrowing base formula that is based on 80% of the Company&#8217;s eligible domestic accounts receivable.&#160;&#160;Advances under the Revolving Credit Line (the &#8220;Advances&#8221;) may be repaid and
        reborrowed in accordance with the Loan Agreement.&#160;&#160;Pursuant to the Financing Agreement, the Company agreed to pay to WAB the outstanding principal amount of all Advances, the unpaid interest thereon, and all other obligations incurred with respect to
        the Loan Agreement on September 1, 2019.&#160; Interest accrues and is paid monthly at the Wall Street Journal Prime Rate plus 1.5%.&#160; At June 30, 2019, the interest rate was 7%.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The original Term Loan provided proceeds of $400,000 to the Company. Beginning in August 2017, for the first six months of the term loan the Company was only required to pay interest. Then for the next 18 months, the
        Term Loan was to be amortized into monthly payments of principal and interest.&#160; The interest rate on the original Term Loan was the Wall Street Journal Prime Rate plus 1.75%. The Term Loan was modified in November 2017 by the First Modification&#160; to&#160;
        Business&#160; Financing Agreement&#160; (&#8220;First Modification&#8221;),&#160;&#160; and&#160; as&#160; a result, the Company fully repaid the</div>
      <div style="text-align: justify;">Term Loan by April 30, 2018.&#160; The Company repaid $150,000 of the Term Loan in December 2017, $125,000 in January 2018 and the balance of $125,000 in April 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">On July 24, 2018, the Company entered into a Second Modification to Business Financing Agreement (&#8220;Loan Modification&#8221;) with WAB which amended the First Modification, dated November 22, 2017.&#160; The Loan Modification
        increased the credit limit under Company&#8217;s credit facility to $2,850,000, extended the maturity date of the credit facility through November 15, 2020 and revised and clarified certain covenants and other terms of the credit facility. No other terms
        or conditions were modified.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company expects to be able to continue to comply with the required covenants contained in the agreement with WAB for at least the next year.&#160; As a result, the amounts due to WAB under the line of credit and term
        loan as of June 30, 2019 are classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">As of June 30, 2019 the Company owed $2,647,000 under the revolving line of credit. The Company incurred $44,000 and $64,000 of interest expense to WAB for the three-month period ended June 30, 2019 and 2018.
        respectively and $98,000 and $99,000 of interest expense to WAB in the first six months of 2019 and 2018, respectively.&#160; As of June 30, 2019, there was availability of $203,000 under the line of credit. The Company was in compliance with the
        financial and liquidity covenants of the Loan Modification as of June 30, 2019.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Subject to certain exceptions, the amended Financing Agreement contains covenants prohibiting the Company from, among other things: (a) conveying, selling, leasing, transferring or otherwise disposing of their
        properties or assets; (b) liquidating or dissolving; (c) engaging in any business other than the business currently engaged in or reasonably related thereto; (d) entering into any merger or consolidation, or acquiring all or substantially all of the
        capital stock or property of another entity; (e) becoming liable for any indebtedness; (f) allowing any lien or encumbrance on any of their property; and (g) paying any dividends (other than dividends on outstanding convertible preferred stock); and
        (i) making payment on subordinated debt.&#160; In addition, actual EBITDA, as defined in the Financing Agreement for the trailing 6-month period must be at least $1 as tested quarterly.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The amended Financing Agreement is secured by a first priority perfected security interest in substantially all of the assets of the Company, excluding the intellectual property of the Company.&#160;&#160;The Loan Modification
        contains a negative covenant prohibiting the Company from granting a security interest in their intellectual property to any party.</div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">14</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z9e9779b1ffa0494e8e9db511da0f0f7e" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify;">5.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify;"><u>LEASES</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company adopted the new lease standard on January 1, 2019 using the modified retrospective transition method. Prior periods were not retrospectively adjusted and continue to be reported under the accounting
        standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which among other things, allowed the Company to continue to account for existing
        leases based on the historical lease classification. The Company also elected the practical expedients to combine lease and non-lease components for its office leases, which primarily relate to ancillary expenses such as common area maintenance
        charges and management fees.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company&#8217;s
        leases are primarily related to operating leases for its corporate office and subsidiaries, office equipment and cars. The Company's leases have remaining lease terms of&#160;less than 1&#160;to&#160;4&#160;years, and sometimes include options to renew. Renewal and
        termination options are included in the lease term when it is reasonably certain that the Company will exercise the option. However, it has been the Company&#8217;s experience to renegotiate a lease and not renew based on the terms of the lease.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As all of the Company's leases do not provide an implicit rate, the
        Company uses its incremental borrowing rate plus some additional considerations for the term of the lease, based on the information available at the lease commencement date, to determine the present value of lease payments. Based on the present value
        of lease payments for the Company's existing leases, the Company recorded ROU assets and lease liabilities of approximately&#160;$3,132,000 upon adoption on January 1, 2019.&#160; There was one lease at one of our subsidiaries that was renewed for 2 years
        effective at January 1, 2019 that is included in the lease liability. The Company had no finance leases.</div>
      <div><br>
      </div>
      <div>The impact of the new lease standard on the June 30, 2019 condensed consolidated balance sheet was as follows:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" border="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="z9c027f837fef4647a779724f62b4ca94">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;" colspan="2">
              <div> June 30, </div>
              <div>2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 87.58%; padding-bottom: 4px;">
              <div>&#160;</div>
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Right-of-use assets</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">2,567,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.35%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 87.58%;">
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Current lease liabilities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.04%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,017,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.35%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 87.58%; padding-bottom: 2px;">
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Noncurrent lease liabilities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,550,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.35%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 87.58%; padding-bottom: 4px;">
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Total lease liabilities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">2,567,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.35%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Weighted average remaining lease term</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">
              <div style="text-align: right; font-family: 'Times New Roman', Times, serif;">2.2 years</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 87.58%;">
              <div style="text-align: justify; font-family: 'Times New Roman', Times, serif;">&#160;Weighted average discount rate</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.04%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">7.17</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.35%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">%</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify;">Total operating lease costs for the three and six months ended June 30, 2019 were $320,000 and $640,000, respectively, while the total operating lease costs for the three and six months ended June 30, 2018 were
        $326,000 and $652,000, respectively, which is included in operating costs on the condensed consolidated income statements.</div>
      <div style="margin-top: 1.1pt; margin-bottom: 1.1pt;"><br>
      </div>
      <div style="margin-right: 1.1pt; margin-top: 1.1pt; margin-bottom: 1.1pt;">The following table provides supplemental cash flow information related to our operating leases at June 30, 2019:</div>
      <div style="margin-top: 1.1pt; margin-bottom: 1.1pt;"><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zf434c423a58c45b88f461f7b5a26d5a8">
  
          <tr>
            <td valign="bottom" style="vertical-align: top; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center;">Six Months Ended</div>
              <div style="text-align: center;">June 30, </div>
              <div style="text-align: center;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div style="margin-right: 1.1pt;">Cash paid for amounts included in the</div>
              <div style="margin-right: 1.1pt;">&#160;&#160;&#160;measurement of operating lease liabilities</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>656,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The following table shows the future maturities of lease liabilities for leases in effect as of June 30, 2019:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" border="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="z3cda5f989dbc4a9fbbcb5dff2b3a6cee">
  
          <tr>
            <td valign="bottom" style="vertical-align: top; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;" colspan="2">
              <div></div>
              <div>Lease Liabilities</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div>&#160;</div>
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">2019 (excluding the six months ended June 30, 2019)</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">640,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">2020</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,049,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">2021</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">837,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">2022</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">452,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%; padding-bottom: 2px;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">2023</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">1,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">Total lease payments</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">2,979,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%; padding-bottom: 2px;">
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">Less: imputed interest</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">(412,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">)</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 87%; padding-bottom: 4px;">
              <div>&#160;</div>
              <div style="margin-right: 18pt; font-family: 'Times New Roman', Times, serif;">Total</div>
            </td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div style="font-family: 'Times New Roman', Times, serif;">2,567,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">15</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z69d63a29c0204d568277197b78c11fb5" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify;">6.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify;"><u>INCOME TAXES</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company has identified its federal tax return and its state returns in Pennsylvania and California as &#8220;major&#8221; tax jurisdictions.&#160; Based on the Company&#8217;s evaluation, it concluded that there are no significant
        uncertain tax positions requiring recognition in the Company&#8217;s financial statements.&#160; The Company&#8217;s evaluation was performed for tax years ended 2014 through 2018, the only periods subject to examination. The Company believes that its income tax
        positions and deductions will be sustained on a tax authority audit and does not anticipate any adjustments that will result in a material change to its financial position.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company&#8217;s policy for recording interest and penalties associated with audits is to record such items as a component of income before income taxes.&#160; Penalties are recorded in general and administrative expenses and
        interest accrued is recorded in interest expense or interest income, respectively, in the condensed consolidated statement of operations.&#160; For the three and six months ended June 30, 2019 and 2018, there were no interest or penalties related to
        uncertain tax positions.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the
        enacted tax rates and laws that will be in effect when the difference and carryforwards are expected to be recovered or settled.&#160; A valuation allowance for deferred tax assets is provided when we estimate that it is more likely than not that all or a
        portion of the deferred tax assets may not be realized through future operations.&#160; This assessment is based upon consideration of available positive and negative evidence which includes, among other things, our most recent results of operations and
        expected future profitability.&#160; We consider our actual historical results to have a stronger weight than other more subjective indicators when considering whether to establish or reduce a valuation allowance on deferred tax assets.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">As of June 30, 2019, we had approximately $10.9 million of net deferred tax assets, against which we provided a 100% valuation allowance.&#160; Our net deferred tax assets were generated primarily by operating losses.&#160;
        Accordingly, it is more likely than not, that we will not realize these assets through future operations.</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="zf8b171309a5c47d7afba39b4ae5af8fc" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify;">7.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify;"><u>EQUITY</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="font-style: italic;">Share-Based Awards</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Compensation costs include share-based payments granted to employees and directors based on the estimated grant date fair value. The Company estimates the fair value of stock options granted using the
        Black-Scholes-Merton (&#8220;Black-Scholes&#8221;) option-pricing formula and amortizes the estimated option value using an accelerated amortization method where each option grant is split into tranches based on vesting periods.&#160; The Company&#8217;s expected term
        represents the period that the Company&#8217;s share-based awards are expected to be outstanding and was determined based on historical experience regarding similar awards, giving consideration to the contractual terms of the share-based awards and
        employee termination data.&#160; Executive level employees who hold a majority of options outstanding, and non-executive level employees each have similar historical option exercise and termination behavior and thus were grouped for valuation purposes.&#160;
        The Company&#8217;s expected volatility is based on the historical volatility of its traded common stock and places exclusive reliance on historical volatilities to estimate our stock volatility over the expected term of its awards.&#160; The Company has
        historically not paid dividends to common stockholders and has no foreseeable plans to issue dividends.&#160; The risk-free interest rate is based on the yield from the U.S. Treasury zero-coupon bonds with an equivalent term.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">As of June 30, 2019, the total unrecognized compensation cost related to non-vested options amounted to $527,000, which is expected to be recognized over the options&#8217; weighted average remaining
        vesting period of 3.34 years.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The Company has Stock Option Plans (the &#8220;Plans&#8221;) under which incentive and non-qualified stock options may be granted to its employees, officers, directors and others. Generally, incentive stock
        options are granted at fair value, become exercisable over a four-year period, have a 10-year contractual term and are subject to the employee&#8217;s continued employment.&#160; Non-qualified options are granted at exercise prices determined by the Board of
        Directors and vest over varying periods.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">16</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div>Activity under the Company&#8217;s stock option plans for the six months ended June 30, 2019 is as follows:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zfebccd14b2184104be10908275fb3994">
  
          <tr>
            <td valign="bottom" style="vertical-align: top; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">OPTIONS OUTSTANDING</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="text-align: right; vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div> </div>
              <div style="font-weight: bold;"> Shares</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: top; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold; text-indent: 18pt;">Weighted Average Exercise Price Per Share</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 74%;">
              <div style="margin-right: 18pt;">Balance, December 31, 2018</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>762,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>2.54</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 74%;">
              <div style="margin-right: 18pt;">&#160;&#160;&#160;&#160;Granted</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>205,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>5.86</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 74%;">
              <div style="margin-right: 18pt;">&#160;&#160;&#160;&#160;Exercised</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(33,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1.83</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 74%; padding-bottom: 2px;">
              <div style="margin-right: 18pt;">&#160;&#160;&#160;&#160;Forfeited</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>(60,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1.76<br>
              </div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: top; width: 74%; padding-bottom: 4px;">
              <div>&#160;</div>
              <div style="margin-right: 18pt;">Balance, June 30, 2019</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div></div>
              <div>874,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3.20</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.7pt;">There are 328,000 shares available for granting future options as of June 30, 2019.&#160; It is the Company&#8217;s policy to issue shares from authorized but unissued common stock when stock options are
        exercised.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The following table summarizes outstanding options under the Company&#8217;s stock option plans as of June 30, 2019:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="z1a72a809280944dfa620ef4134f7426f" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 34.89%; vertical-align: top;">&#160;</td>
            <td style="width: 11.28%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;">
              <div>&#160;</div>
              <div style="margin-right: 1.8pt; font-family: 'Times New Roman',Times,serif; font-weight: bold;">Number of Shares</div>
            </td>
            <td style="width: 1%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;">
              <div style="margin-right: 1.8pt; font-family: 'Times New Roman',Times,serif; font-weight: bold;">Weighted Average Exercise Price Per Share</div>
            </td>
            <td style="width: 1%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;">
              <div style="margin-right: 1.8pt; font-family: 'Times New Roman',Times,serif; font-weight: bold;">Weighted Average Remaining Contractual Term (in years)</div>
            </td>
            <td style="width: 1%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0); text-align: center;">
              <div>&#160;</div>
              <div style="margin-right: 1.8pt; font-family: 'Times New Roman',Times,serif; font-weight: bold;">Aggregate Intrinsic Value</div>
            </td>
          </tr>
          <tr>
            <td style="width: 34.89%; vertical-align: top;">
              <div>&#160;</div>
              <div style="margin-right: 1.8pt;">Outstanding Options</div>
            </td>
            <td style="width: 11.28%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: center; margin-right: 1.8pt;">874,000</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: center; margin-right: 1.8pt;">$3.20</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: center; margin-right: 1.8pt;">6.03</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: top; border-bottom: #000000 4px double;">
              <div>&#160;</div>
              <div style="text-align: center; margin-right: 1.8pt;">$2,552,000</div>
            </td>
          </tr>
          <tr>
            <td style="width: 34.89%; vertical-align: top;">&#160;</td>
            <td style="width: 11.28%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 34.89%; vertical-align: top;">
              <div style="text-align: justify; margin-right: 1.8pt;">Ending Vested and Exercisable</div>
            </td>
            <td style="width: 11.28%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">540,000</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">$2.44</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">4.28</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">&#160;$1,838,000</div>
            </td>
          </tr>
          <tr>
            <td style="width: 34.89%; vertical-align: top;">&#160;</td>
            <td style="width: 11.28%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: top;">&#160;</td>
            <td style="width: 1%; vertical-align: top;" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 34.89%; vertical-align: top;">
              <div style="text-align: justify; margin-right: 1.8pt;">Options Vested and Expected to Vest</div>
            </td>
            <td style="width: 11.28%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">757,000</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 17.19%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">$3.03</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 21.61%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">5.62</div>
            </td>
            <td style="width: 1%; vertical-align: top; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td style="width: 15.03%; vertical-align: top; border-bottom: #000000 4px double;">
              <div style="text-align: center; margin-right: 1.8pt;">$2,154,000</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Convertible Preferred Stock</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.1pt; font-weight: bold;">Series A</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.1pt;">On September 24, 2008, the Company issued 826,000 shares of Series-A Convertible Preferred Stock (&#8220;Series A Preferred Stock&#8221;) to its Chief Executive Officer at a price of $3.63 per share for a
        total of $3,000,000.&#160;&#160;Dividends accrue daily on the Series A Preferred at a rate of 10% and are payable only when, and if, declared by the Company&#8217;s Board of Directors, quarterly in arrears. At June 30, 2019, there were accrued dividends of $579,000.</div>
      <div>&#160;</div>
      <div style="text-align: justify; margin-right: 1.1pt;">The Series A Preferred Stock may be converted into common stock at the rate of one share of common for each share of Series A Preferred Stock. The Company has rights to cause conversion of all of
        the shares of Series A Preferred Stock outstanding.&#160;The Company may redeem, subject to board approval, all of the shares of Series A Preferred Stock then outstanding at a price equal to the greater of (i) 130% of the purchase price plus all accrued
        and unpaid dividends and (ii) the fair market value of such number of shares of common stock which the holder of the Series A Preferred Stock would be entitled to receive had the redeemed Series A Preferred Stock been converted immediately prior to
        the redemption. Each and every outstanding share of Series A Preferred Stock is subject to mandatory and automatic conversion into shares of common stock if the closing price of the common stock as reported by the principal exchange or quotation
        system on which such common stock is traded or reported exceeds 300% of the then current conversion price for 30 consecutive trading days.&#160;&#160; In the event of a liquidation of the Company, the holder of the Series A and Series B preferred stock shall
        be entitled to receive in preference to the holders of the common stock, the original amount invested in the preferred stock plus any unpaid and accrued dividends. Preferred stock dividends on the Series A are declared quarterly by the Board of
        Directors.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.1pt;">The Company reports the Series A Preferred Stock on the Company&#8217;s condensed consolidated balance sheet within stockholders&#8217; deficit.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">17</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.1pt;"><font style="font-weight: bold;">Series </font><font style="font-weight: bold;">B</font></div>
      <div><br>
      </div>
      <div style="text-align: justify;">On June 20, 2014, the Company&#160;issued 797,000 of Series-B Convertible Preferred Stock (&#8220;Series B Preferred Stock&#8221;)&#160;to&#160;its Chief Executive Officer at a price of $2.51 per share in exchange for the cancellation
        of&#160;$2,000,000 of outstanding principal owed to its Chief Executive Officer under a Revolving Promissory Note dated&#160;March 26, 2014.</div>
      <div style="text-align: justify; font-weight: bold;">&#160;</div>
      <div style="text-align: justify;">The Series B Preferred Stock may be converted into shares of common stock on a one-to-one ratio, subject to customary anti-dilution provisions.&#160;&#160;The Series B Preferred Stock is entitled to a quarterly dividend, which
        accrues at an annual rate of 10%.&#160;&#160;The Company&#8217;s Chief Executive Officer may convert 100% of his shares of the Series B Preferred Stock into shares of common stock. Each and every outstanding share of Series B Preferred Stock is subject to mandatory
        and automatic conversion into shares of common stock if the closing price of the common stock as reported by the principal exchange or quotation system on which such common stock is traded or reported exceeds 300% of the then current conversion price
        for 30 consecutive trading days.&#160;&#160;The Company may redeem all of the outstanding shares of the Series B Preferred Stock issued at a price per share equal to 300% of the purchase price.&#160; The Series B Preferred Stock ranks senior to the common stock and
        on parity with the Company&#8217;s Series A Preferred Stock.&#160; In the event of a liquidation of the Company, the holder of the Series B and Series A Preferred Stock shall be entitled to receive in preference to the holders of the common stock, the original
        amount invested in the preferred stock plus any unpaid and accrued dividends.&#160; Preferred stock dividends on the Series B are declared quarterly by the Board of Directors.&#160; At June 30, 2019, there were accrued dividends of $366,000.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company reports the Series B Preferred Stock on the Company&#8217;s condensed consolidated balance sheet within stockholders&#8217; deficit.</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z3603b9ff5d0a4183ae44e5831ba3ba26" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: justify; margin-right: 1.8pt;">8.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify; margin-right: 1.8pt;"><u>(LOSS) EARNINGS PER SHARE</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">(Loss) earnings per share is computed on the basis of the weighted average number of shares and common stock equivalents outstanding during the period.&#160; In the calculation of diluted earnings per
        share, shares outstanding are adjusted to assume conversion of the Company&#8217;s non-interest bearing convertible stock and exercise of options as if they were dilutive.&#160; In the calculation of basic (loss) earnings e per share, weighted average numbers
        of shares outstanding are used as the denominator.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The Company had net loss allowable to the common stockholders for the three and six months ended June 30, 2019 and net income available to stockholders for the three and six months ended June 30,
        2018. In the three and six months ended June 30, 2018, there were 179,000 of net additional dilutive stock options assumed to be converted into common stock shares and in the three and six months ended June 30, 2019, the outstanding stock options
        would have been antidilutive due to the net loss incurred during those periods.&#160; In addition, 100% of the outstanding convertible preferred stock, 1,623,000 shares, were eligible to be converted into common stock. For purpose of this calculation, if
        converted, it was assumed that upon conversion, the related dividends were not paid. However, as of the three and six months ended June 30, 2019 and 2018 shares of common stock issuable on the assumed conversion of the eligible preferred stock were
        excluded from the diluted earnings per common shares calculation as the inclusion of these shares would have been antidilutive.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">18</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="z8d2ecf2c467842c28cc685f2f3351696">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three Months Ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Six Months Ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center;"><font style="font-weight: bold;">Ended June 30</font>,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">Ended June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt; font-weight: bold;">Numerator:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(586,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>304,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(531,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>310,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Preferred dividend</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>125,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>125,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>250,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Net (loss) income available to</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">&#160;&#160;&#160;common stockholders</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(711,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>179,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(781,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>60,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="font-weight: bold;">Denominator:</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Basic weighted average number of common</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">&#160;&#160;&#160;&#160;shares outstanding</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>3,594,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>3,594,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Effect of dilutive stock options</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>179,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>-</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>179,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Diluted weighted average number of</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">&#160;&#160;&#160;&#160;common shares outstanding</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,773,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,617,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>3,773,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Basic earnings per common share</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.20</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.05</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.22</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.02</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Diluted earnings per common share</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.20</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.05</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(0.22</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>0.02</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">19</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="za51cbe3cf9164b20b278c77d8ef39872" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 36pt;">
                <div style="text-align: left;">9.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: left;"><u>GEOGRAPHIC REGION DATA</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company and its subsidiaries are engaged in the design, development, marketing and support of its service management software solutions.&#160; Substantially all revenues result from the license of the Company&#8217;s software
        products and related professional services and customer support services.&#160; The Company&#8217;s chief executive officer reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic
        region for purposes of making operating decisions and assessing financial performance.&#160; Accordingly, the Company considers itself to have three geographic segments as follows:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="zc6f224e46d7148c59d8491a6a98aa217">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three Months</div>
              <div style="text-align: center; font-weight: bold;">Ended June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center; font-weight: bold;">Six Months</div>
              <div style="text-align: center; font-weight: bold;">Ended June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;"> 2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div>Revenues</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">
              <div style="margin-left: 19.8pt;">Software license fees</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="2">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">United States</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>227,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>123,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>596,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>448,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="margin-left: 29.7pt;">Europe</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>55,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>103,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>107,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>152,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">Asia Pacific</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>180,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>666,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>459,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>711,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 39.6pt;">Total foreign software license fees revenue</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>235,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>769,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>566,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>863,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 39.6pt;">&#160;&#160;&#160;&#160;</div>
              <div style="margin-left: 39.6pt;">Total software license fees</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>462,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>892,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,162,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,311,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Subscriptions</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">United States</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>678,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>409,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,357,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>824,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="margin-left: 29.7pt;">Europe</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>266,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>315,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>542,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>587,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">Asia Pacific</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>289,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>140,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>560,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>281,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 45pt;">Total foreign subscriptions</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>555,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>455,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,102,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>868,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 48.6pt;"><br>
              </div>
              <div style="margin-left: 48.6pt;">Total subscription revenue</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,233,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>864,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,459,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,692,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Services and maintenance</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">&#160;United States</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,009,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,048,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>5,998,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>6,383,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="margin-left: 29.7pt;">Europe</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>605,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>594,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,235,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>1,184,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">Asia Pacific</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,106,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,234,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,181,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,758,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="margin-left: 39.6pt;">Total foreign services and</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
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          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 45pt;">maintenance revenue</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,711,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,828,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,417,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>3,942,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div> &#160;</div>
              <div style="margin-left: 45pt;">Total services and maintenance revenue</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,720,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>4,876,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>9,414,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>10,325,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div>Total revenue</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,415,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,632,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
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            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,035,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,328,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
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          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;United States</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(282,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">)</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>170,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(71,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>109,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div style="margin-left: 29.7pt;">Europe</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(316,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(159,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(516,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">
              <div>(215,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">
              <div>)</div>
            </td>
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          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 2px;">
              <div style="margin-left: 29.7pt;">Asia Pacific</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 2px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>12,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>293,000</div>
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            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>56,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>416,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%;">
              <div>&#160;</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%;" colspan="1">&#160;</td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48%; padding-bottom: 4px;">
              <div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Net (loss) income</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; padding-bottom: 4px;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(586,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">)</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>304,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>(531,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>)</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>310,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">20</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div>
        <div>
          <table cellspacing="0" cellpadding="0" id="za2b9d7a80cdd4477ab0c0fdf27123ea2" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
              <tr>
                <td style="width: 72pt; vertical-align: top; align: right; font-weight: bold;"><u>Item 2.</u></td>
                <td style="width: auto; vertical-align: top;">
                  <div style="font-weight: bold;"><u>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</u></div>
                </td>
              </tr>
  
          </table>
        </div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;"><u>Overview</u></div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">This document contains various forward-looking statements and information that are based on management's beliefs, assumptions made by management and information currently available to management.&#160;
        Such statements are subject to various risks and uncertainties, which could cause actual results to vary materially from those contained in such forward-looking statements.&#160; Should one or more of these risks or uncertainties materialize, or should
        underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected or projected.&#160;&#160; Certain of these, as well as other risks and uncertainties are described in more detail herein and in Astea
        International Inc.&#8217;s (&#8220;Astea or the Company&#8221;) Annual Report on Form 10-K for the fiscal year ended December 31, 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Astea is a global provider of service management software that addresses the unique needs of companies who manage capital equipment, mission critical assets and human capital.&#160; Clients include
        Fortune 500 to mid-size companies which Astea services through company facilities in the United States, United Kingdom, Australia, Japan, the Netherlands and Israel.&#160; Since its inception in 1979, Astea has licensed applications to companies in a wide
        range of sectors including information technology, telecommunications, instruments and controls, business systems, and medical devices.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Astea Alliance, the Company&#8217;s service management suite of solutions, supports the complete service lifecycle, from lead generation and project quotation to service and billing through asset
        retirement.&#160; It integrates and optimizes critical business processes for Campaigns, Call Center, Depot Repair, Field Service, Logistics, Projects and Sales, and Order Processing applications.&#160; Astea extends its application suite with mobile workforce
        management, dynamic scheduling optimization, third party vendor and customer self-service portals, and business intelligence.&#160; In order to ensure customer satisfaction, Astea also offers infrastructure tools and services. Astea Alliance provides
        service organizations with technology-enabled business solutions that improve profitability, stabilize cash-flows, and reduce operational costs through automating and integrating key service, sales and marketing processes.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The FieldCentrix Enterprise is a service management solution that runs on a wide range of mobile devices (handheld computers, laptops and PCs, and Pocket PC devices), and integrates seamlessly with
        popular customer relationship management (&#8220;CRM&#8221;) and ERP applications.&#160; Add-on features include a web-based customer self-service portal, workforce optimization capabilities, and equipment-centric functionality.&#160;&#160; FieldCentrix has licensed
        applications to companies in a wide range of sectors including HVAC, building and real estate services, manufacturing and process instruments and controls, and medical equipment.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company&#8217;s sales and marketing efforts are primarily focused on new software licensing (on premise and cloud solutions) and support services for its latest generation of Astea Alliance and
        FieldCentrix products.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;"><u>Critical Accounting Policies and Estimates</u></div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company&#8217;s significant accounting policies are described in its &#8220;Summary of Accounting Policies,&#8221; Note 2, in the Company&#8217;s 2018 Annual Report on Form 10-K.&#160; The preparation of financial
        statements in conformity with accounting principles generally accepted within the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying financial statements and
        related notes.&#160; In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality.&#160; The Company does not believe there is a
        great likelihood that materially different amounts would be reported related to the accounting policies described below; however, application of these accounting policies involves the exercise of judgments and the use of assumptions as to future
        uncertainties and, as a result, actual results could differ from these estimates.</div>
      <div style="text-align: justify; margin-right: 0.9pt;"> <br>
      </div>
      <div style="text-align: justify; font-style: italic;">Revenue from Contracts with Customers</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">Astea&#8217;s revenue is principally recognized from three sources: (i) licensing arrangements, (ii) subscription services and (iii) services and maintenance.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The Company markets its products primarily through its direct sales force and resellers.&#160; License agreements do not provide for a right of return, and historically, product returns have not been
        significant.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">21</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="font-style: italic;">Revenue from Contracts with Customers</font>&#160;outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the
        transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.&#160; The five steps are:</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z37b5f48096f94c9c92beb1ce10eca08e" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">1.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Identify the contract with a customer.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z1a38c7d8809e426b81dba143fda0227e" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">2.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Identify the performance obligations in the contract.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z37077f83838c40ba81d7d8ca66d661bf" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">3.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Determine the transaction price.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="za80923f807764f889ecfaf4be213905f" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">4.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Allocate the transaction price to performance obligations in the contract.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="ze20828ec6ed24b4f820fe07605ac3cf8" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-bottom: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 81pt; vertical-align: top; align: right;">
                <div style="margin-left: 63pt; margin-bottom: 10pt;">5.</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify; margin-bottom: 10pt;">Recognize revenue when or as the Company satisfies a performance obligation.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="text-align: justify; margin-top: 13.2pt;">The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good
        or service to a customer.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company recognizes revenue from license sales when the above criteria are met.&#160; The Company generally uses written contracts as a means to establish the terms and conditions by which our products, services and
        maintenance support are sold to our customers.&#160; The Company satisfies the performance obligation when the license key has been delivered electronically to the customer. If these criteria are not met, then revenue is deferred until such criteria are
        met or until the period(s) over which the last performance obligation is delivered.</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;">The Company recognizes revenues from maintenance ratably over the term of the underlying maintenance contract term. The term of the maintenance contract is usually one year. Renewals of maintenance contracts create
          new performance obligations that are satisfied over the contract term.</div>
        <div style="text-align: justify;">&#160;</div>
        <div style="text-align: justify;">Revenues from professional services mostly consist of time and material services.&#160; Certain professional service contracts are performed on a fixed price basis and revenue is recognized using the percentage of
          completion method.&#160; However, fixed price contracts are only utilized on rare occasions.&#160; Performance obligations are satisfied, and revenues are recognized, when the services are provided or when the service term has expired.</div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">In subscription based arrangements, even though customers use the software element, they generally do not have a contractual right to take possession of the software at any time during the hosting
        period without significant penalty to either run the software on its own hardware or contract with an unrelated third party to host the software. Accordingly, these software as a service (&#8220;SaaS&#8221;) arrangements, including the software license fees
        within the arrangements, are accounted for as subscription services provided all other revenue recognition criteria have been met.&#160; The subscription revenue is recognized on a straight-line basis over the performance obligation.&#160; The Company
        recognizes subscription revenue once a customer goes-live ratably over the remaining contract period or customer life whichever is longer. The contract period is typically 1 to 3 years. The average expected life of a customer is 2 years.&#160; The average
        customer takes about 8 to 10 months to go live. The Company expects the average life of a customer to increase as more customers begin to renew their subscription contracts. When implementation, consulting and training services are bundled with the
        subscription based arrangement, these services are recognized over the life of the initial contract (performance obligation), once the project goes live.</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;"><font style="background-color: #FFFFFF;">In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately, if they are distinct. The Company allocates the
            transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at
            which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach. For professional services, the Company determines the standalone selling prices based on
            the price at which the Company separately sells those services.</font></div>
        <div><br>
        </div>
      </div>
      <div style="text-align: justify;">The guidance prefers that revenue in a contract with multiple performance obligations use the adjusted market approach which includes SSP or TPE or expected cost plus margin approach as the methodology for allocating
        revenues to software.&#160; The Company uses the Residual Approach for allocating the revenues from a contract to the license component of the sale.&#160; Due to competition, highly variable pricing, customer demographics, varying size of our customers, and
        other such factors, the Company&#8217;s selling prices are considered uncertain for each perpetual license sale.&#160; Therefore, SSP is not an appropriate methodology as it relates to our license revenue.&#160; In terms of TPE as a basis to price our software, our
        product is unique and expansive in terms of the system&#8217;s inherent functionality. There are no directly comparable products in the marketplace today which we could use as the basis to set our standard license pricing based on a comparison with other
        vendors. In addition, most of the companies with whom we compete, are privately owned, which prevents us from obtaining reliable TPE. Accordingly, the guidance permits the Company to use the Residual Method for allocating selling price if the first
        two preferable choices cannot be used. The residual between the total transaction price and the observable standalone selling prices of those performance obligations with observable standalone selling prices is considered to be the estimated
        standalone selling price of the goods or services underlying the performance obligation.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">22</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Astea commonly sells its software products bundled with maintenance and professional services. As noted above, the guidance requires an entity to allocate the transaction price to the distinct performance obligations
        in a contract on a relative SSP basis. Under the guidance, &#8220;&#8230;an entity shall determine the standalone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the
        transaction price in proportion to those standalone selling prices.&#8221; SSP is defined as the price at which an entity would sell a promised good or service separately to a customer.&#160; Astea has a history of selling maintenance renewals and professional
        services on a standalone basis. Therefore, the Company utilizes SSP for its performance obligations as it relates to service and maintenance revenue. In addition, due to the Company having different maintenance and service rates in other parts of the
        world in which it operates, the Company has developed a reasonable range for its SSP for maintenance and services rather than a single point.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The incremental costs of obtaining a customer contract (i.e., those costs related to obtaining the customer contract that would not have been incurred if the customer contract was not obtained), such as a sales
        commission, should be capitalized if the Company expects to recover those costs (based on net future cash flows from the contract and expected contract renewals). The Company may expense the incremental costs of obtaining a contract if the
        amortization period would otherwise be one year or less. Since sales commissions are costs that are incremental and the amortization of sales commissions would be one year or less, the Company will continue to expense these items as incurred.&#160; Costs
        of obtaining a customer contract that are not incremental (i.e., costs related to obtaining the customer contract that would have been incurred regardless of whether the customer contract had been obtained), such as travel costs incurred to present
        the customer proposal, should only be capitalized if those costs are explicitly chargeable to the customer regardless of whether the entity enters into a contract with the customer. Otherwise, such costs are expensed as incurred. The Company will
        continue to expense these costs as they are incurred.</div>
      <div style="background-color: #FFFFFF;">
        <div><br>
        </div>
      </div>
      <div style="text-align: justify;">Once live, we recognize the deferred implementation costs related to that customer ratably over the remaining expected life of the customer contract or two years, whichever is longer.&#160; At this point, based on the
        Company&#8217;s relatively short time-span as a provider of a hosted solution, our analysis shows that the average lifespan of an Astea hosted customer is 2 years. Therefore, we amortize the deferred cost over 2 years or the remaining life of the contract,
        whichever is longer.&#160; This is consistent with the revenue recognition methodology used for the subscription service revenue for that customer. The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized
        at the time the related performance obligation is satisfied by transferring a promised service to a customer.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">We believe that our accounting estimates used in applying our revenue recognition are critical because:</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="ze68373ceabdc472da86b879767d6f80b" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">the determination that it is probable that the customer will pay for the products and services purchased is inherently judgmental and includes credit risk;</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z91ac98385d8c4c73a5316db667b61da3" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">determining the performance obligations and transaction price to certain elements in multiple-element arrangements is complex;</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="zdf421d9c1c24454f983544e94ea1f9b2" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">the determination of whether a service is essential to the functionality of the software is complex and could potentially create a new performance obligation; and</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z14f5fbae7161417599a12ded28e31e87" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 36pt; vertical-align: top; align: right;">
                <div style="margin-left: 18pt;">&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">the estimated customer life of subscription services.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Changes in the aforementioned items could have a material effect on the type and timing of revenue recognized. In addition, Company&#8217;s payment terms and conditions vary by contract and size of customer, although terms
        generally include a requirement of payment within 30 to 60 days.&#160; In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant
        financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, and not to facilitate financing arrangements. The Company generally has not experienced
        any material losses related to receivables from individual customers, or groups of customers.&#160; Due to these factors, no additional credit risk beyond amounts provided by the allowance for doubtful accounts is believed by management to be probable in
        the Company&#8217;s accounts receivable. The Company has not adjusted revenues for customers related to credit risk.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">At June 30, 2019, there was one customer that accounted for 26% of total net accounts receivable. At December&#160;31, 2018, no single customer accounted for 10% or more of net accounts receivable. For the three months
        ended June 30, 2019, there was one customer that accounted for 10% of total revenue.&#160; For the six months ended June 30, 2019 and the three and six months ends June 30, 2018, no individual customer accounted for 10% or more of total revenue.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">23</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">We present taxes assessed by a governmental authority including sales, use, value added and excise taxes on a net basis and therefore the presentation of these taxes is excluded from our revenues and is included in
        accrued expenses in the accompanying condensed consolidated balance sheets until such amounts are remitted to the taxing authority.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company is engaged in the design, development, marketing and support of its service management software solutions.&#160; All revenues result from selling of license (perpetual and subscription)
        software products and related professional services and customer support services.&#160; Accordingly, the Company considers itself to have one reporting segment. The Company&#8217;s chief decision maker further reviews financial information presented on a
        consolidated basis to determine if revenue can be further disaggregated in order to make operating decisions and assessing financial performance. It was determined that all revenue recognized in our consolidated statements of operations is considered
        to be revenue from contracts with customers, which can be disaggregated by both the timing of revenue recognition and geographic regions (see Note 9 of the condensed consolidated financial statements for disaggregated revenues by geographic regions).</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The following tables depicts the Company&#8217;s disaggregation of revenue:</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" style="font-family: 'Times New Roman',Times,serif; font-size: 10pt; text-align: left; color: rgb(0, 0, 0); width: 100%;" id="z68839b1b92ec45f8b9754524d88b6ff1">
  
          <tr>
            <td valign="bottom" style="vertical-align: bottom;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="6">
              <div style="text-align: center; font-weight: bold;">Three months ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom;" colspan="7">
              <div style="text-align: center; font-weight: bold;">Six months ended</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="6">
              <div style="text-align: center;"><font style="font-weight: bold;"> June 30</font>,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="7">
              <div style="text-align: center; font-weight: bold;"> June 30,</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 9.9pt; font-weight: bold;">Timing of Revenue Recognition</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="2">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2019</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="3">
              <div style="text-align: center; font-weight: bold;">2018</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred at a point in time</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>462,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>892,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>1,162,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>1,311,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred over time</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>4,405,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>4,698,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>8,886,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%;" colspan="1">
              <div>9,937,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%;" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 2px;">
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Performance obligations transferred over time initiated at go-live</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,548,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>1,042,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,987,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">
              <div>2,080,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 2px solid rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" style="vertical-align: bottom; width: 48.45%; padding-bottom: 4px;">
              <div>&#160;</div>
              <div style="text-indent: -9.9pt; margin-left: 19.8pt;">Total revenues</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,415,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>6,632,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,035,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
            <td valign="bottom" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>$</div>
            </td>
            <td valign="bottom" style="vertical-align: bottom; text-align: right; width: 10.14%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">
              <div>13,328,000</div>
            </td>
            <td valign="bottom" nowrap="nowrap" style="vertical-align: bottom; width: 1.04%; border-bottom: 4px double rgb(0, 0, 0);" colspan="1">&#160;</td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The performance obligations transferred at a point in time relate to perpetual license revenue for which there is no deferred revenue as of June 30, 2019 or 2018.&#160; The performance obligations
        transferred over time consist of professional services that are recognized based on time and materials, as the services are performed. The performance obligations for support services are recognized ratably over time based on the contract life,
        except for a few fixed price contracts which are recognized based on the achievement of certain milestones. If the customer pays in advance, service revenue is deferred until the performance obligations are met.&#160; For support services, the fee is paid
        in advance of the performance obligation.&#160; Accordingly, the Company has recorded deferred revenue from fixed price contracts and support services of $7,287,000 and $6,744,000 as of June 30, 2019 and 2018, respectively. Performance obligations
        transferred over time, initiated at go-live, relate to our subscription hosting and our subscription professional services for the implementation. No performance obligation is recognized until the customer is live and has access to the subscription
        services. Once live, the performance obligations are recognized over time, which is either 2 years, the average customer life, or the remaining contract life of the customer, whichever is longer. Because subscription fees are paid in advance, and
        professional services fees are paid as the services are performed, the revenue from both are deferred until the date in which the customer goes live. The Company has deferred revenue recorded for performance obligations transferred over time,
        initiated at go-live for hosting and hosting services for $4,585,000 and $4,766,000 as of June 30, 2019 and 2018, respectively.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The long term deferred revenue reported as $1,259,000 and $1,711,000 as of June 30, 2019 and 2018, respectively, consists of the portion of revenue that will be recognized beyond one year of the
        balance sheet date for hosting implementation services.</div>
      <div><br>
      </div>
      <div style="text-align: justify; font-style: italic;">Capitalized Software Research and Development Costs</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company capitalizes software development costs incurred during the period subsequent to the establishment of technological feasibility through the product's availability for general release. Costs incurred prior to
        the establishment of technological feasibility are charged to product development expense as they are incurred. Product development expense includes payroll, employee benefits, other headcount-related costs associated with product development and any
        related costs to third parties under sub-contracting or net of any collaborative arrangements.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">24</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Capitalized software development costs are amortized on a product-by-product basis over the greater of the ratio of current revenues to total anticipated revenues or on a straight-line basis over the estimated useful
        lives of the products beginning with the initial release to customers.&#160; The Company's estimated life for its capitalized software products is two years based on current sales trends and the rate of product release.&#160; The Company continually evaluates
        whether events or circumstances have occurred that indicate that the remaining useful life of the capitalized software development costs should be revised or that the remaining balance of such assets may not be recoverable. The Company evaluates the
        recoverability of capitalized software based on the net realizable value of each product, which includes the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product,
        including the costs of performing maintenance and customer support required to satisfy the Company's responsibility set forth at the time of sale. As of June 30, 2019, management believes that no revisions to the remaining useful lives or write-downs
        of capitalized software development costs are required.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt; font-style: italic;">Currency Translation</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 0.9pt;">The international subsidiaries and foreign branch operations translate their assets and liabilities from international operations by using the exchange rate in effect at the balance sheet date. The
        results of operations are translated at average exchange rates during the period. The effects of exchange rate fluctuations in translating assets and liabilities of international operations into U.S. dollars are accumulated and reflected as a
        currency translation adjustment as a component of other comprehensive loss in the accompanying condensed consolidated statements of changes in stockholders&#8217; deficit.&#160; Foreign exchange transaction gains and losses are included in general and
        administrative expenses in the condensed consolidated statements of operations. General and administrative expenses include a foreign exchange transaction loss of $29,000 for the six months ended June 30, 2019 and a $4,000 gain for the six months
        ended June 30, 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;"><u>Results of Operations</u></div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: -13.5pt; margin-right: 1.8pt; margin-left: 13.5pt; font-style: italic; font-weight: bold;">Comparison of Three Months Ended June 30, 2019 and 2018</div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: -13.5pt; margin-right: 1.8pt; margin-left: 13.5pt; font-weight: bold;">Revenues</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Total revenues decreased by $217,000 or 3%, to $6,415,000 for the three months ended June 30, 2019 from $6,632,000 for the three months ended June 30, 2018.&#160; Software license fee revenues decreased
        $430,000, or 48%, from the same quarter in 2018.&#160; Subscription revenues increased $369,000 or 43% to $1,233,000 from $864,000 for the same period last year. Services and maintenance revenues for the three months ended June 30, 2019 decreased $156,000
        or 3% from the same quarter in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 2.15pt;">Software license fee revenue decreased 48% to $462,000 in the second quarter of 2019 from $892,000 in the second quarter of 2018.&#160; This is primarily due to Astea Alliance license revenues
        decreasing by $523,000 or 61% to $339,000 in the second quarter of 2019 from $862,000 in the second quarter of 2018. The decrease was primarily due to lower perpetual license sales in all regions due to the Company increasing its sales focus on
        selling subscription services to new customers and only selling perpetual licenses to its existing customers. We expect license sales to decrease in the future due to this strategic shift in the sales process.&#160; FieldCentrix license sales were
        $123,000 in the second quarter of 2019 compared to $30,000 in the second quarter of 2018. The increase was due to additional license sales to existing customers in the second quarter of 2019 compared to the same quarter in 2018.</div>
      <div style="text-align: justify; margin-right: 2.15pt;"> <br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Subscription revenue increased 43% to $1,233,000 in the second quarter of 2019 from $864,000 in the second quarter of 2018.&#160; The primary reason for the increase resulted from additional hosted
        customers going live in the first and second quarters of 2019 for which the annual hosting revenue had previously been deferred. Previously deferred hosting revenues were recognized as the service periods for those hosting services had lapsed.&#160; The
        Company continues to sell Software as a Service (SaaS) for which hosting revenue may not be recognized until the customers go-live. In addition, the Company&#8217;s focus going forward will be on selling subscription licenses to new customers. As such, we
        expect deferred revenues and subscription revenues to increase going forward.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Services and maintenance revenues decreased by 3% to $4,720,000 in the second quarter of 2019 compared to $4,876,000 in the second quarter of 2018.&#160; This is primarily due to Astea Alliance service
        and maintenance revenues decreasing by $76,000 or 2% compared to the second quarter of 2018.&#160; The decrease was mainly attributable to a decrease in service revenue in the Asia Pacific region offset by an increase in service revenues in U.S due to a
        strong backlog of professional services required by new customer implementations and upgrades of current customers.&#160;Service and maintenance revenues generated by FieldCentrix decreased by $81,000 or 15% to $473,000 in the second quarter of 2019
        compared to $554,000 during the same period in 2018.&#160; The decrease in service revenue is due to a reduction in upgrade projects for existing customers and the decrease in maintenance is due to cancellation by a few customers.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">25</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Costs of Revenues</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of software license fees increased 86% to $922,000 in the second quarter of 2019 from $497,000 in the second quarter of 2018.&#160; Included in the cost of software license fees is the amortization
        of capitalized software costs and the third party software embedded in the Company&#8217;s software licenses sold to customers.&#160; Amortization of capitalized software development costs was $894,000 for the quarter ended June 30, 2019 compared to $485,000
        for the same quarter in 2018. The increase was due to the amortization of Alliance Version 15 that was released in September 2018 and Version 15.1, released in March 2019.&#160; Amortization of both versions did not occur during the quarter ended June 30,
        2018.&#160; The gross margin percentage on software license sales was (100%) in the second quarter of 2019 compared to 2% in the second quarter of 2018.&#160; The decline in the 2019 license margin resulted from the combination of lower revenues and higher
        cost of sales.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of subscriptions increased 59% to $304,000 in the second quarter of 2019 from $191,000 in the second quarter of 2018. The increase in cost of subscriptions is mainly attributed to adding more
        live hosted customers and increased hosting compliance costs in the second quarter of 2019 compared to the same period in 2018. The cost would have been higher in the second quarter of 2019 but the Company transitioned to a lower cost provider of
        SaaS cloud services. &#160; The gross margin percentage on hosting was 75% in the second quarter of 2019 compared to 78% in the second quarter of 2018. The decline in the gross margin is mainly due to the increase in subscription costs offset by an
        increase in subscription revenues.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of services and maintenance decreased 11% to $3,120,000 in the second quarter of 2019 from $3,486,000 in the second quarter of 2018. The decrease in cost of service and maintenance is mainly
        attributed to a decrease in headcount in the U.S. and decreases in travel expenses in all regions, partially offset by an increase in recruiting costs.&#160; The gross margin percentage was 34% in the second quarter of 2019 and 29% in 2018.&#160; The growth in
        the services and maintenance gross margin was mainly due to lower service and maintenance costs in the second quarter of 2019.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Gross Profit</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Total gross profit decreased 16% to $2,069,000 in the second quarter of 2019 from $2,458,000 in the second quarter of 2018 primarily due to decreases in license and service and maintenance revenues
        as well as increases in costs of license and subscriptions.&#160;As a percentage of revenue, gross profit in the second quarter of 2019 was 32% compared to 37% in the second quarter of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Operating Expenses</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Product Development</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Product development expenses increased 190% to $443,000 in the second quarter of 2019 from $153,000 in the second quarter of 2018.&#160; Fluctuations in product development expense from period to period result from the
        amount of product development expense that is capitalized.&#160; Development costs of $677,000 were capitalized in the second quarter of 2019 compared to $885,000 during the same period in 2018 due to less resources working on developing the latest
        version of Alliance software.&#160; Gross product development expense was $1,120,000 in the second quarter of June 30, 2019 which is 8% higher than $1,038,000 during the same quarter in 2018. &#160;The increase was due to increase in salary and benefits and an
        unfavorable exchange rate on the Israeli shekel relative to the U.S. dollar, as the majority of development work is performed in Israel. Product development expense as a percentage of revenues was 7% in the second quarter of 2019 and 2% in the second
        quarter of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Sales and Marketing</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Sales and marketing expense increased 1% to $990,000 in the second quarter of 2019 from $977,000 in the second quarter of 2018.&#160; The increase in sales and marketing expense resulted from higher
        third party marketing costs and increased headcount in the U.S., offset by lower sales commissions due to a decrease in license revenue. The increase in third party marketing costs is due to the Company strategy of expanding its marketing presence
        through additional efforts to increase awareness of our products in order to improve lead generation and sales opportunities.&#160; Increased awareness will occur through additional webinars in all regions focused on the vertical industries in which the
        Company operates, attendance at more trade shows, and new strategies to improve lead generation for the Company&#8217;s sales force.&#160; As a percentage of revenues, sales and marketing expense was 15% in both the second quarter of 2019 and 2018.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">26</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
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      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">General and Administrative</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">General and administrative expenses consist of salaries, benefits and related costs for the Company&#8217;s finance, administrative and executive management personnel, legal costs, accounting costs, bad
        debt expense and various costs associated with the Company&#8217;s status as a public company. General and administrative expenses increased 19% to $1,123,000 during the second quarter of 2019 from $948,000 in the second quarter of 2018 due to increased
        professional fees which we did not incur during the same period in 2018.&#160; As a percentage of revenue, general and administrative expenses were 18% in the second quarter of 2019 compared to 14% in the second quarter of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Net Interest Expense</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Net interest expense was $65,000 in the second quarter of 2019 compared to $64,000 in the second quarter of 2018.&#160; The increase in interest expense is mainly due an increase in the interest rate
        charged by Bridge Bank due to an increase in the prime rate offset by a lower average line of credit during the second quarter of 2019 compared to the same period in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Income Tax Expense</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company recorded a provision for income tax of $34,000 for the second quarter of 2019 compared to $12,000 during the second quarter of 2018.&#160; The tax expense increase resulted from income taxes
        paid in the Asia Pacific region during the second quarter of 2019 compared to no tax provision in the same period in 2018.&#160; In the past, there has been no tax expense in this Region due to the carryforward of operating losses in the prior periods
        that have now been used and no longer available. We expect to pay taxes in the future in the APAC region as long as they remain profitable.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">International Operations</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company&#8217;s international operations generated revenues of $2,501,000 in the second quarter of 2019, a decrease of 18% from the same quarter in 2018.&#160; Revenues from international operations
        comprised 39% of the Company&#8217;s total revenue for the second quarter in 2019, compared to 46% of total revenues for the same quarter in 2018.&#160; The decrease in international revenues compared to the same period in 2018 is primarily due to decreases in
        software license sales and professional services in all international regions, partially offset by an increase in subscription revenue, as the Company continues to increase its focus on subscription services.</div>
      <div><br>
      </div>
      <div style="font-style: italic; font-weight: bold;">Comparison of Six Months Ended June 30, 2019 and 2018</div>
      <div style="text-align: justify; margin-right: 1.8pt;"> <br>
      </div>
      <div style="text-align: justify; text-indent: -13.5pt; margin-right: 1.8pt; margin-left: 13.5pt; font-weight: bold;">Revenues</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Total revenues decreased by $293,000 or 2%, to $13,035,000 for the six months ended June 30, 2019 from $13,328,000 for the six months ended June 30, 2018.&#160; Software license fee revenues decreased
        $149,000, or 11%, from the same period in 2018.&#160; Subscription revenues increased $767,000 or 45% to $2,459,000 from the same period last year. Services and maintenance revenue for the six months ended June 30, 2019 decreased $911,000 or 9% from the
        same period in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 2.15pt;">Software license fee revenues decreased 11% to $1,162,000 in the first six months of 2019 from $1,311,000 in the first six months of 2018.&#160; This is primarily due to Astea Alliance license revenue
        decreasing by $227,000 or 18%, to $1,018,000 in the first six months of 2019 from $1,245,000 in the first six months of 2018.&#160; The decrease was primarily due to lower perpetual license sales in Japan and EMEA and partially offset by higher sales in
        the U.S. FieldCentrix license sales were $144,000 in the first six months of 2019 compared to $66,000 in the first six months of 2018. The increase was due to an increase in licenses sold to existing customers in the first six months of 2019 compared
        to the same period in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Subscription revenue increased 45% to $2,459,000 in the first six months of 2019 from $1,692,000 in the first six months of 2018.&#160; The increase resulted from a number of hosted customers who went
        live in late 2018 and the first six months of 2019.&#160; The Company continues to add new hosting customers.&#160; Even though the Company signed new Software as a Service (SaaS) customers in the first six months of 2019, the associated hosting revenue may
        not be recognized until the new customers go-live.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">27</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
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      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Services and maintenance revenues decreased by 9% to $9,414,000 in the first six months of 2019 compared to $10,325,000 in the first six months of 2018.&#160; This is primarily due to Astea Alliance
        service and maintenance decreasing by $715,000 or 8% compared to the first six months of 2018.&#160; The decrease was mainly attributable to a hosted customer in Japan that went live in the first six months of 2018 for which the hosting service revenue
        had previously been deferred. In addition, there was a decrease in maintenance revenue in the U.S. for a few customers that transitioned from on-premise to subscription services.&#160; Service and maintenance revenues generated by FieldCentrix decreased
        by $196,000 or 17% to $976,000 in the first six months of 2019 compared to $1,172,000 during the same period in 2018.&#160; The decrease is due to an increase in upgrade projects for several existing customers. The decrease in service revenue is due to a
        reduction in upgrade projects for existing customers and decreases in maintenance due to cancelation by a few customers.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Costs of Revenues</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of software license fees increased by 33% to $1,624,000 in the first six months of 2019 from $1,226,000 in the first six months of 2018.&#160; Included in the cost of software license fees are the
        costs of capitalized software amortization and the cost of all third party software embedded in the Company&#8217;s software licenses which are sold to customers.&#160; Amortization of capitalized software development costs was $1,569,000 for the first six
        months in 2019 compared to $1,201,000 for the same period in 2018. The increase in amortization was due to the amortization of Alliance Version 15 that began being amortized during the 4th quarter of 2018 that will continue for 2 years as well as
        amortization of Version 15.1 that was released in March 2019.&#160; The gross margin percentage on software license sales was (40%) in the first six months of 2019 compared to 6% in the first six months of 2018.&#160; The decline in the license margin resulted
        primarily from the increase in amortization of software license fees in the first six months of 2019.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of subscriptions increased by 32% to $559,000 in the first six months of 2019 from $425,000 in the first six months of 2018. The increase in cost of subscriptions is mainly attributed to the
        addition of more customers to the SaaS environment and increased hosting compliance costs in the first six months of 2019 compared to the same period in 2018. The cost would have been higher in the first six months of 2019 but the Company
        transitioned to a lower cost provider of SaaS cloud services. The gross margin percentage on hosting was 77% in the first six months of 2019 compared to 75% in the first six months of 2018. The growth in the subscription margin was primarily due to
        the reduction in cost and the increase in subscription revenues as customers continue to go live.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Cost of services and maintenance decreased 7% to $6,510,000 in the first six months of 2019 from $7,009,000 in the first six months of 2018. The decrease in cost of service and maintenance is
        mainly attributed to a decrease in headcount in the U.S. and decreases in travel expenses in all regions partially offset by an increase in recruiting costs.&#160; The gross margin percentage was 31% in the first six months of 2019 compared to 32% in the
        first six months of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Gross Profit</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Gross profit decreased 7% to $4,342,000 in the first six months of 2019 from $4,668,000 in the first six months of 2018 primarily due to a decrease of license and service and maintenance revenues
        and an increase in software license and subscription costs partially offset by an increase in subscription revenue and decrease in service and maintenance costs.&#160; As a percentage of revenue, gross profit in the first six months of 2019 was 33%
        compared to 35% in the first six months of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Operating Expenses</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Product Development</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Product development expenses increased 65% to $606,000 in the first six months of 2019 from $367,000 in the first six months of 2018.&#160; Fluctuations in product development expense from period to period result from the
        amount of product development expense that is capitalized.&#160; Development costs of $1,504,000 were capitalized in the first six months of 2019 compared to $1,785,000 during the same period in 2018 due to additional resources working on Version 15 in
        2018. In 2018, there had been extra time and resources allocated to Version 15 due to all the additional functionality and upgrades being made to this version. Gross product development expense was $2,110,000 in the first six months of 2019 compared
        to $2,152,000 during the same period in 2018. The decrease was primarily due to a favorable exchange rate in the first six months of 2019 compared to the same period in 2018 on the Israeli shekel relative to the U.S. dollar, as the majority of
        development work is performed in Israel. Product development expense as a percentage of revenues was 5% in the first six months of 2019 and 3% in the first six months of 2018.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">28</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
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      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">Sales and Marketing</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Sales and marketing expense decreased slightly by less than 1% to $1,966,000 in the first six months of 2019 from $1,978,000 in the first six months of 2018.&#160; The decrease in sales and marketing
        expense resulted from lower sales commissions and travel costs due to a decrease in license sales partially offset by an increase in third party marketing costs and increased headcount in the U.S. The increase in third party marketing costs is due to
        the Company&#8217;s strategy of expanding its marketing presence through additional efforts to increase awareness of our products in order to improve lead generation and sales opportunities.&#160; Increased awareness occurs through additional webinars in all
        regions focused on the vertical industries in which the Company operates, attendance at more trade shows, and new strategies to improve lead generation for the Company&#8217;s sales force.&#160; As a percentage of revenues, sales and marketing expense was 15%
        in both the first six months of 2019 and 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">General and Administrative</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">General and administrative expenses consist of salaries, benefits and related costs for the Company&#8217;s finance, administrative and executive management personnel, legal costs, accounting costs, and
        various costs associated with the Company&#8217;s status as a public company. General and administrative expenses increased 12% to $2,124,000 during the first six months of 2019 from $1,896,000 in the first six months of 2018 mainly due to increased
        professional fees which we did not incur during the same period in 2018.&#160; As a percentage of revenue, general and administrative expenses were 16% in the first six months of 2019 compared to 14% in the first six months of 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Net Interest Expense</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Net interest expense was $139,000 in the first six months of 2019 compared to $99,000 in the first six months of 2018.&#160; The increase in interest expense is mainly due to interest paid on accrued,
        but unpaid preferred dividends compared to the same period in 2018. Per the preferred stock agreements, unpaid accrued preferred dividends incur an interest charge calculated at 10% per annum.&#160; In addition, the interest rate charged by Bridge Bank on
        the Company&#8217;s line of credit due to an increase in the prime rate offset by a lower average line of credit during the first six months of 2019 compared to the same period in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">Income Tax Expense</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company recorded a provision for income tax of $38,000 for first six months of 2019 compared to $18,000 for the same quarter in 2018. The tax expense increase resulted from income tax paid in
        Australia during the first six months of 2019 compared to no tax provision in the same period in 2018.&#160; In the past, there has been no tax expense in the Region due to the utilization of operating losses from prior periods that are no longer
        available. We expect to pay taxes in the future in the APAC region, as long as they remain profitable. The effective tax rate in the APAC region is 30%.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;">International Operations</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company&#8217;s international operations generated revenues of $5,086,000 in the first six months of 2019, a decrease of 10% compared to the same quarter in 2018.&#160; Revenues from international
        operations comprised 39% of the Company&#8217;s total revenue for the first six months in 2019 compared to 43% in the first six months of 2018.&#160;&#160; The decrease in international revenues is primarily due to a decrease in software license fees revenue and
        service revenue in all international regions, partially offset by an increase in subscription revenue.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;"><u>Liquidity and Capital Resources</u></div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">&#160;&#160;&#160;&#160;Operating Activities</div>
      <div style="text-align: justify;"> <br>
      </div>
      <div style="text-align: justify;">The Company generated $2,349,000 of cash from operating activities in the first six months of 2019 compared to $1,423,000 in the first six months of 2018.&#160; The increase in operating cash flows of $926,000 was primarily
        due to an increase in cash generated by the collection of accounts receivable of $542,000, and increases of $520,000 for deferred revenues and $167,000 for prepaid expenses, offset by a decrease in cash generated by net income (loss) $841,000 netted
        by an increase in non-cash charges of $515,000.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">29</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
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      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: 10pt; margin-right: 1.8pt; font-style: italic;">Investing Activities</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company used $1,613,000 for investing activities in the first six months of 2019 compared to $1,819,000 for the first six months of 2018.&#160; The decrease in cash used for investing activities is primarily
        attributable to a decrease of $281,000 in capitalized software development costs partially offset by an increase of $75,000 for the acquisition of property and equipment.</div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: -4.5pt; margin-right: 1.8pt; margin-left: 13.5pt; font-style: italic;">Financing Activities</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company used $163,000 in cash for financing activities in the first six months of 2019, which is $25,000 less than the $188,000 used in 2018.&#160;&#160;There were $200,000 of preferred stock dividend
        payments in the first six months of 2019 compared to $55,000 payments in the first six months of 2018.&#160;&#160; In addition, the Company borrowed $9,078,000 and repaid $9,100,000 on its line of credit from WAB in the first six months of 2019 and the Company
        borrowed $5,150,000 and repaid $5,058,000 on its line of credit 2018. The Company repaid $225,000 on the term loan with WAB in 2018.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The effect of exchange rates on cash related to the U.S. dollar exchange rates for most other currencies in which the Company operates, primarily the Australian dollar, Japanese yen, the Euro, the
        British pound sterling and Israel shekel, provided a reduction in cash of $10,000 in the first six months of 2019 compared to an increase of $24,000 in the first six months of 2018.</div>
      <div style="text-align: justify; margin-right: 1.8pt;"> <br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">&#160;&#160; Operating Matters and Liquidity</div>
      <div><br>
      </div>
      <div style="background-color: #FFFFFF;">
        <div style="text-align: justify;">The Company has a history of net losses and an accumulated deficit of $34,875,000 as of June 30, 2019.&#160; In the first six months of 2019, the Company had a net loss of $531,000 compared to income of $310,000 generated
          in the first six months of 2018.&#160; Further, at June 30, 2019, the Company had a working capital ratio of .57:1, with cash and cash equivalents of $1,839,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000.&#160;
          The increase in cash and cash equivalents for the first six months 2019 was primarily driven by an increase of cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an
          increase in the dividend payment.</div>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">As of June 30, 2019, the Company owed $2,647,000 against the line of credit from Western Alliance Bank (&#8220;WAB&#8221;).&#160;&#160; As of June 30, 2019, the availability under the line of credit was $203,000.&#160; The Company has projected
        revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least August 15, 2020.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company was in compliance with the WAB financial and liquidity covenant as of June 30, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at
        least the next year.&#160; As a result, the amount due to WAB under the line of credit as of June 30, 2019 were classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with
        WAB.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">Our primary cash requirements are to fund operations</font> 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.&#160; 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.&#160; 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.&#160; However, projections of future cash needs and cash flows are subject to risks and uncertainty.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">Management&#8217;s current operating plan is to maintain and/or reduce operating expenses in order to be aligned with expected revenues.&#160; The primary area of focus will continue to be headcount and costs from outside
        consultants.&#160; The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity.&#160; The
        Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance.&#160;&#160; In 2019, the Company will continue
        to consider ways to reduce operating expenses in certain areas of the Company in order to maintain our liquidity.&#160; However, management has implemented new marketing initiatives which have increased our spending in this area in 2019.&#160; We believe the
        new initiatives will directly contribute to increasing new business, which is essential to our growth.&#160; Operations will generate enough cash to meet obligations at least <font style="background-color: #FFFFFF;">through August 15, 2020.</font>&#160;<font style="background-color: #FFFFFF;">As noted above, if the Company&#8217;s actual results fall short of expectations, the Company will make cost adjustments to improve the Company&#8217;s operating cash flows. </font>In addition,&#160;we plan to maintain the same
        level of investment in software development and we do not expect to increase capital expenditures.</div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">30</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="background-color: #FFFFFF;">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.</font></div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic;">&#160;&#160;&#160;Off-Balance Sheet Arrangement Transactions</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">The Company is not involved in off-balance sheet arrangements that have or are reasonably likely to have a material current or future impact on our financial condition, changes in financial
        condition, revenues or expenses result in operations, liquidity, capital expenditures or capital resources.</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="zaf9c2745ed0949e8b415e36313e30255" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 72pt;">
                <div style="text-align: left; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>Item </u></font><font style="font-weight: bold;"><u>3.</u></font></div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: left; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.&#160; Our market risk exposure is primarily a result of
        fluctuations in interest rates and foreign currency.&#160; &#160; We do not hold financial instruments for trading purposes.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="font-style: italic;">Interest Rate Risk.</font><font style="font-weight: bold;">&#160;</font>Our exposure to market risk for changes in interest rates relates primarily to our balances outstanding on our
        revolving line of credit with WAB, as the interest rate is variable.&#160; At June 30, 2019, the outstanding balances on our line of credit under the revolving credit facility with WAB was $2,647,000.</div>
      <div><br>
      </div>
      <div style="text-align: justify;"><font style="font-style: italic;">Foreign Currency Risk.</font>&#160; All costs associated with the Company&#8217;s foreign operations in the United Kingdom, Australia, Japan and Israel are denominated in their respective local
        currencies and translated into U.S. dollars for financial reporting.&#160; As a result, the Company is exposed to risks to the extent that the rate of inflation in many of itws foreign operating regions differs from the rate of revaluation of their
        related currencies in relation to the U.S. dollar of if the timing of such revaluations lags behind inflation in these regions.&#160; In such an event, the costs of the Company&#8217;s operations in these regions, measured in U.S. dollars, will change and the
        U.S. dollar measured results of operations will be affected.</div>
      <div><br>
      </div>
      <div style="text-align: justify;">The Company does not use foreign currency forward exchange contracts or purchased currency options to hedge local currency cash flows or for trading purposes.&#160; All sales arrangements with international customers are
        denominated in foreign currency.&#160; For the six months ended June 30, 2019, approximately 39% of the Company&#8217;s overall revenue resulted from sales to customers outside the United States.&#160; A 10% change in the value of the U.S. dollar relative to each of
        the currencies of the Company&#8217;s non-U.S.-generated sales would not have resulted in a material change to its results of operations.&#160; The Company does not expect any material loss with respect to foreign currency risk.</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z76aa98b8cc28493db2e139b9a5a69f94" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 72pt;">
                <div style="text-align: left; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>Item 4.</u></font></div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: left; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>CONTROLS AND PROCEDURES</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">Our management has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rules 13a-15 as of the end of the period covered by this report. Based on that evaluation, the Chief
        Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.</div>
      <div><br>
      </div>
      <div style="font-weight: bold;">Changes in Internal Control Over Financial Reporting</div>
      <div><br>
      </div>
      <div style="text-align: justify;">During the quarter ended June 30, 2019, we implemented internal controls for the new accounting standard adopted during the period, Leases, but there were no changes in our internal control over financial reporting
        during the fiscal quarter ended June 30, 2019 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.</div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">31</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div style="font-weight: bold;"><u>PART II - OTHER INFORMATION</u></div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z6732bda2cda346d981b29c4416251e3d" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 72pt;">
                <div style="text-align: justify; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>Item 1A.</u></font></div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify; margin-right: 1.8pt;"><font style="font-weight: bold;"><u>RISK FACTORS</u></font></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">In addition to the risk factors set forth in this report, you should carefully consider the factors discussed in Part I, &#8220;Item 1A. Risk Factors&#8221; in the Company&#8217;s Annual Report on Form 10-K for the year ended December
        31, 2018, which could materially affect the Company&#8217;s business, financial condition or future results. The risks described in this report and in the Company&#8217;s Annual Report on Form 10-K for the year ended December 31, 2018 are not the only risks
        facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company&#8217;s business, financial condition and/or operating results.</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt; font-style: italic; font-weight: bold;">Variability of Quarterly Results</div>
      <div><br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">Risks to the Company on a quarterly basis, and which may vary from quarter to quarter, include but are not limited to the following:</div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="z5cc5a2f3e48f43dd94a193989c7b0867" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 18pt; vertical-align: top; align: right;">
                <div>&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">The Company&#8217;s quarterly operating results have varied in the past, and may vary significantly in the future depending on factors such as the size, timing and recognition of revenue from significant orders,
                  the timing of new product releases and product enhancements, and market acceptance of these new releases and enhancements, increases in operating expenses, and seasonality of its business.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" id="zfeeff1406ca34ff4bebc5020e6a20552" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
            <tr>
              <td style="width: 18pt; vertical-align: top; align: right;">
                <div>&#8226;</div>
              </td>
              <td style="width: auto; vertical-align: top;">
                <div style="text-align: justify;">The market price of the Company&#8217;s common stock could be subject to significant fluctuations in response to, and may be adversely affected by, variations in quarterly operating results, changes in earnings
                  estimates by analysts, developments in the software industry, adverse earnings or other financial announcements of the Company&#8217;s customers and general stock market conditions, as well as other factors.</div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z68be2574770d4e3bb1a9ab5bf27acc4a" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 72pt;">
                <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;"><u>Item 5</u>.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: justify; margin-right: 1.8pt; font-weight: bold;"><u>OTHER INFORMATION</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;"> <br>
      </div>
      <div style="text-align: justify; margin-right: 1.8pt;">On August 8, 2019, the Company entered into indemnification agreements with each of the current directors and executive officers and certain non-executive management of the Company (an
        &#8220;Indemnification Agreement&#8221;). The form of the Indemnification Agreement has been approved by the Board. The Indemnification Agreement requires the Company to indemnify directors and executive officers and certain non-executive management to the
        fullest extent permitted by Delaware law and is in addition to protections provided in the Company&#8217;s Certificate of Incorporation and Bylaws. Under the Indemnification Agreement, directors and executive officers and certain non-executive management
        will be indemnified for certain liabilities and will be advanced certain expenses that have been incurred as a result of actions brought, or threatened to be brought, against such individuals in connection with their duties. The Indemnification
        Agreement also contains various covenants by the Company as to the maintenance of directors&#8217; and officers&#8217; liability insurance. This description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by
        reference to the form of Indemnification Agreement, which is incorporated herein by reference to Exhibit 10.26# to this Form 10-Q. The Indemnification Agreements entered into by the Company and each director, executive officer and certain
        non-executive management are the same, except for each counterparty&#8217;s name and information for notices.</div>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">32</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="z83ce072334994e4dae83e64460ef05e1" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="vertical-align: top; width: 81pt;">
                <div style="text-align: left; font-weight: bold;"><u>Item 6</u>.</div>
              </td>
              <td style="align: left; vertical-align: top; width: auto;">
                <div style="text-align: left; font-weight: bold;"><u>EXHIBITS</u></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div>
        <table cellspacing="0" cellpadding="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;" id="zf14e26b564f04a3296e3463894a85919" class="DSPFListTable">
  
            <tr style="vertical-align: top;">
              <td style="align: right; vertical-align: top; width: 9pt;">
                <div style="text-align: justify; text-indent: -36pt; margin-right: 1.8pt; margin-left: 72pt;"><a href="ex10-26.htm">10.26#</a></div>
              </td>
              <td style="vertical-align: top; width: auto;">
                <div style="text-align: justify;"><a href="ex10-26.htm">Form of Indemnification</a></div>
              </td>
            </tr>
  
        </table>
      </div>
      <div><br>
      </div>
      <div style="text-align: justify;">
        <div>
          <table cellspacing="0" cellpadding="0" id="ze89559d63f8444f8a9faed16cd152a87" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
              <tr>
                <td style="width: 36pt;"><br>
                </td>
                <td style="width: 36pt; vertical-align: top; align: right;"><a href="ex31-1.htm">31.1</a></td>
                <td style="width: auto; vertical-align: top; text-align: justify;">
                  <div><a href="ex31-1.htm">Certification Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
                      1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></div>
                </td>
              </tr>
  
          </table>
        </div>
      </div>
      <div style="text-align: justify;">
        <div>
          <table cellspacing="0" cellpadding="0" id="z392e7dc7cd7b4f189004dc9978438f6c" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
              <tr>
                <td style="width: 36pt;"><br>
                </td>
                <td style="width: 36pt; vertical-align: top; align: right;"><a href="ex31-2.htm">31.2</a></td>
                <td style="width: auto; vertical-align: top; text-align: justify;">
                  <div><a href="ex31-2.htm">Certification Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
                      1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></div>
                </td>
              </tr>
  
          </table>
        </div>
      </div>
      <div style="text-align: justify;">
        <div>
          <table cellspacing="0" cellpadding="0" id="z02224325675946d4a6f784c64a0d6cc6" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
              <tr>
                <td style="width: 36pt;"><br>
                </td>
                <td style="width: 36pt; vertical-align: top; align: right;"><a href="ex32-1.htm">32.1</a></td>
                <td style="width: auto; vertical-align: top; text-align: justify;">
                  <div><a href="ex32-1.htm">Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      &#8211; Chief Executive Officer</a></div>
                </td>
              </tr>
  
          </table>
        </div>
      </div>
      <div style="text-align: justify;">
        <div>
          <table cellspacing="0" cellpadding="0" id="z6ddae541b1174425b6d2d8ad498cecd0" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
              <tr>
                <td style="width: 36pt;"><br>
                </td>
                <td style="width: 36pt; vertical-align: top; align: right;"><a href="ex32-2.htm">32.2</a></td>
                <td style="width: auto; vertical-align: top; text-align: justify;">
                  <div><a href="ex32-2.htm">Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      &#8211; Chief Financial Officer</a></div>
                </td>
              </tr>
  
          </table>
        </div>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">33</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; margin-right: 1.8pt; font-weight: bold;">SIGNATURES</div>
      <div><br>
      </div>
      <div style="text-align: justify; text-indent: 36pt; margin-right: 1.8pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
        authorized.</div>
      <div><br>
      </div>
      <table cellspacing="0" cellpadding="0" id="zb45b7a6ed0414054ac05d65e47b9b983" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">ASTEA INTERNATIONAL INC.</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Date:&#160; August 13, 2019</div>
            </td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;"><u>/s/Zack Bergreen</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Zack Bergreen</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Chief Executive Officer</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">(Principal Executive Officer)</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Date:&#160; August 13, 2019</div>
            </td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;"><u>/s/Rick Etskovitz</u></div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Rick Etskovitz</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">Chief Financial Officer</div>
            </td>
          </tr>
          <tr>
            <td style="width: 50.8%; vertical-align: top;">&#160;</td>
            <td style="width: 49.2%; vertical-align: top;">
              <div style="margin-right: 1.8pt;">(Principal Financial and Chief Accounting Officer)</div>
            </td>
          </tr>
  
      </table>
      <div><br>
      </div>
      <div id="DSPFPageBreakArea" style="clear: both; margin-top: 10pt; margin-bottom: 10pt;">
        <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">34</font></div>
        <div id="DSPFPageBreak" style="page-break-after:always;">
          <hr noshade="noshade" style="margin: 4px 0px; width: 100%; border-width: 0; height: 2px; color: #000000; background-color: #000000; clear: both;"></div>
      </div>
      <div><br>
      </div>
      <div><br>
      </div>
      <div style="text-align: center; margin-right: 1.8pt; font-weight: bold;"><u>EXHIBIT INDEX</u></div>
      <div><br>
      </div>
      <div></div>
      <table cellspacing="0" cellpadding="0" id="z2afae904aac0450cbf33aabdf4622ccb" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">
  
          <tr>
            <td style="width: 10.71%; vertical-align: top;" rowspan="1"><u>No.</u></td>
            <td style="width: 4.67%; vertical-align: bottom;" rowspan="1">&#160;</td>
            <td style="width: 84.62%; vertical-align: top;" rowspan="1"><u>Description</u></td>
          </tr>
          <tr>
            <td style="width: 10.71%; vertical-align: top;" rowspan="1">&#160;</td>
            <td style="width: 4.67%; vertical-align: bottom;" rowspan="1">&#160;</td>
            <td style="width: 84.62%; vertical-align: top;" rowspan="1">&#160;</td>
          </tr>
          <tr>
            <td style="width: 10.71%; vertical-align: top;">
              <div style="margin-right: 0.8pt;"><a href="ex10-26.htm">10.26#</a></div>
            </td>
            <td style="width: 4.67%; vertical-align: bottom;">&#160;</td>
            <td style="width: 84.62%; vertical-align: top;"><a href="ex10-26.htm">Form of Indemnification</a><br>
            </td>
          </tr>
          <tr>
            <td style="width: 10.71%; vertical-align: top;">&#160;</td>
            <td style="width: 4.67%; vertical-align: bottom;">&#160;</td>
            <td style="width: 84.62%; vertical-align: top;">&#160;</td>
          </tr>
          <tr>
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                  Securities Exchange Act of 1934 as adopted pursuant to Section 302 of&#160; the Sarbanes-Oxley Act of 2002</a></div>
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            </td>
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                  Sarbanes-Oxley Act of 2002 &#8211; Chief Executive Officer</a></div>
            </td>
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            <td style="width: 4.67%; vertical-align: bottom;">
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            </td>
            <td style="width: 4.67%; vertical-align: bottom;">
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    </div>
    <div id="DSPFPageNumberArea" style="text-align: center;"><font id="DSPFPageNumber" style="color: #000000; font-weight: normal; font-style: normal;">35</font></div>
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text: UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549
  ___________________________________________
  FORM 10-Q
  (Mark One)
  [X]
  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the quarterly period ended
  June 30, 2019
  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:
  0-26330
  ASTEA INTERNATIONAL INC.
  (Exact name of registrant as specified in its charter)
  Delaware
  23-2119058
  (State or other jurisdiction of
  (I.R.S. Employer
  incorporation or organization)
  Identification No.)
  240 Gibraltar Road, Horsham,  PA
  19044
  (Address of principal executive offices)
  (Zip Code)
  Registrant's telephone number, including area code:
  (215) 682-2500
  N/A
  (Former name, former address and former fiscal year, if changed since last report)
  Securities registered pursuant to Section 12(b) of the act:
  Title of Each Class
  Trading Symbol
  Name of Exchange on Which Registered
  Common Stock, par value $0.01 per share
  ATEA
  OTCQB
  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 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated
        filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
  Large accelerated filer
  ❑
  Accelerated filer
  ❑
  Non-accelerated filer
  ❑
  Smaller reporting company
  ⌧
  Emerging growth company
  ❑
  (Do not check if a smaller reporting company)
  If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
        provided pursuant to Section 13(a) of the Exchange Act. □
  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
  Yes
  No
  X
  As of August 8, 2019, 3,649,049 shares of the registrant's Common Stock, par value $.01 per share, were outstanding.
  1
  ASTEA INTERNATIONAL INC. AND SUBSIDIARIES
  FORM 10-Q
  QUARTERLY REPORT
  INDEX
  Page No.
  Facing Sheet
  1
  Index
  2
  PART I - FINANCIAL INFORMATION
  Item 1.
  Financial Statements
  Condensed Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018
  3
  Condensed Consolidated Statements of Operations (unaudited)
  4
  Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)
  5
  Condensed Consolidated Statements of Stockholders' Deficit (unaudited)
  6
  Condensed Consolidated Statements of Cash Flows (unaudited)
  7
  Notes to Unaudited Condensed Consolidated Financial Statements
  8
  Item 2.
  Management's Discussion and Analysis of Financial Condition and Results of Operations
  21
  Item 3.
  Quantitative and Qualitative Disclosure About Market Risk
  31
  Item 4.
  Controls and Procedures
  31
  PART II - OTHER INFORMATION
  Item 1A.
  Risk Factors
  31
  Item 5.
  Other Information
  31
  Item 6.
  Exhibits
  33
  Signatures
  34
  2
  PART I - FINANCIAL INFORMATION
  Item 1.
  FINANCIAL STATEMENTS
  ASTEA INTERNATIONAL INC
  . AND SUBSIDIARIES
  CONDENSED CONSOLIDATED BALANCE SHEETS
  June 30,
  December 31,
  2019
  (Unaudited)
  2018*
  ASSETS
  Current assets:
  Cash and cash equivalents
  $
  1,839,000
  $
  1,276,000
  Accounts receivables, net of reserves allowance of $91,000 (unaudited)
  and $92,000, respectively
  5,053,000
  6,294,000
  Prepaid expenses and other current assets
  368,000
  429,000
  Deferred hosting costs
  1,464,000
  992,000
  Total current assets
  8,724,000
  8,991,000
  Property and equipment, net
  161,000
  89,000
  Capitalized software development costs, net
  4,534,000
  4,599,000
  Restricted cash
  72,000
  72,000
  Other long-term assets
  528,000
  517,000
  Right-of-use assets
  2,567,000
  -
  Total assets
  $
  16,586,000
  $
  14,268,000
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  Current liabilities:
  Accounts payable and accrued expenses
  $
  4,101,000
  $
  4,137,000
  Current lease liabilities
  1,017,000
  -
  Deferred revenues
  10,613,000
  10,521,000
  Total current liabilities
  15,731,000
  14,658,000
  Long-term liabilities:
  Borrowings under line of credit
  2,647,000
  2,669,000
  Long-term accrued expenses
  359,000
  323,000
  Deferred tax liability
  49,000
  49,000
  Deferred revenues, net of current portion
  1,259,000
  763,000
  Lease liabilities, net of current portion
  1,550,000
  -
  Total long-term liabilities
  5,864,000
  3,804,000
  Commitments and contingencies
  Stockholders' deficit:
  Convertible preferred stock, $.01 par value, shares authorized 5,000,000:
  Series A issued and outstanding 826,000 shares
  8,000
  8,000
  Series B issued and outstanding 797,000 shares
  8,000
  8,000
  Common stock $.01 par value, 25,000,000 shares authorized;
  issued 3,691,000 and 3,659,000 shares; outstanding 3,649,000 and 3,617,000
  shares, respectively
  37,000
  37,000
  Additional paid-in-capital
  31,333,000
  31,455,000
  Accumulated deficit
  (34,875,000
  )
  (34,344,000
  )
  Accumulated other comprehensive loss
  (1,312,000
  )
  (1,150,000
  )
  Treasury stock at cost, 42,000 common shares
  (208,000
  )
  (208,000
  )
  Total stockholders' deficit
  (5,009,000
  )
  (4,194,000
  )
  Total liabilities and stockholders' deficit
  $
  16,586,000
  $
  14,268,000
  *Derived from audited financial statements
  See accompanying notes to the unaudited condensed consolidated financial statements.
  3
  ASTEA INTERNATIONAL INC
  . AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  (Unaudited)
  Three Months
  Six Months
  Ended June 30
  ,
  Ended June 30,
  2019
  2018
  2019
  2018
  Revenues:
  Software license fees
  $
  462,000
  $
  892,000
  $
  1,162,000
  $
  1,311,000
  Subscriptions
  1,233,000
  864,000
  2,459,000
  1,692,000
  Services and maintenance
  4,720,000
  4,876,000
  9,414,000
  10,325,000
  Total revenues
  6,415,000
  6,632,000
  13,035,000
  13,328,000
  Costs of revenues:
  Cost of software license fees
  922,000
  497,000
  1,624,000
  1,226,000
  Cost of subscriptions
  304,000
  191,000
  559,000
  425,000
  Cost of services and maintenance
  3,120,000
  3,486,000
  6,510,000
  7,009,000
  Total cost of  revenues
  4,346,000
  4,174,000
  8,693,000
  8,660,000
  Gross profit
  2,069,000
  2,458,000
  4,342,000
  4,668,000
  Operating Expenses:
  Product development
  443,000
  153,000
  606,000
  367,000
  Sales and marketing
  990,000
  977,000
  1,966,000
  1,978,000
  General and administrative
  1,123,000
  948,000
  2,124,000
  1,896,000
  Total operating expenses
  2,556,000
  2,078,000
  4,696,000
  4,241,000
  (Loss) income from operations
  (487,000
  )
  380,000
  (354,000
  )
  427,000
  Interest expense, net
  65,000
  64,000
  139,000
  99,000
  (Loss) income before income taxes
  (552,000
  )
  316,000
  (493,000
  )
  328,000
  Income tax expense
  34,000
  12,000
  38,000
  18,000
  Net (loss) income
  (586,000
  )
  304,000
  (531,000
  )
  310,000
  Preferred dividend
  125,000
  125,000
  250,000
  250,000
  Net (loss) income  allocable to common stockholders
  $
  (711,000
  )
  $
  179,000
  $
  (781,000
  )
  $
  60,000
  Basic and diluted  (loss) earnings per share allocable to common stockholders
  $
  (0.20
  )
  $
  0.05
  $
  (0.22
  )
  $
  0.02
  Weighted average shares outstanding used in computing basic (loss) earnings per common share
  3,617,000
  3,594,000
  3,617,000
  3,594,000
  Weighted average shares outstanding used in computing diluted (loss) earnings per common share
  3,617,000
  3,773,000
  3,617,000
  3,773,000
  See accompanying notes to the unaudited condensed consolidated financial statements.
  4
  ASTEA INTERNATIONAL INC
  . AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
  (Unaudited)
  Three Months Ended
  June 30,
  Six Months Ended
  June 30,
  2019
  2018
  2019
  2018
  Net (loss) income
  $
  (586,000
  )
  $
  304,000
  $
  (531,000
  )
  $
  310,000
  Other comprehensive (loss) income:
  Foreign currency translation adjustment
  (116,000
  )
  93,000
  (162,000
  )
  (12,000
  )
  Comprehensive (loss) income
  $
  (702,000
  )
  $
  397,000
  $
  (693,000
  )
  $
  298,000
  See accompanying notes to the unaudited condensed consolidated financial statements.
  5
  ASTEA INTERNATIONAL INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
  (Unaudited)
  Series A
  convertible
  preferred
  stock at par value
  Series B
  convertible
  preferred
  stock at par value
  Common
  stock
  Additional
  paid-in-
  capital
  Accumulated
  other
  compre-
  hensive
  loss
  Accumulated
  deficit
  Treasury
  stock
  Total
  stockholders'
  deficit
  Balances at December 31, 2017
  $
  8,000
  $
  8,000
  $
  36,000
  $
  31,710,000
  $
  (1,055,000
  )
  $
  (35,338,000
  )
  $
  (208,000
  )
  $
  (4,839,000
  )
  Cumulative effect from change in accounting
  —
  —
  —
  —
  —
  630,000
  —
  630,000
  Net income
  —
  —
  —
  —
  —
  6,000
  —
  6,000
  Series A and B preferred stock Dividends
  —
  —
  —
  (125,000
  )
  —
  —
  —
  (125,000
  )
  Stock-based compensation
  —
  —
  —
  31,000
  —
  —
  —
  31,000
  Other comprehensive loss
  —
  —
  —
  —
  (104,000
  )
  —
  —
  (104,000
  )
  Balances at March 31, 2018
  8,000
  8,000
  36,000
  31,616,000
  (1,159,000
  )
  (34,702,000
  )
  (208,000
  )
  (4,401,000
  )
  Net income
  —
  —
  —
  —
  —
  304,000
  —
  304,000
  Series A and B preferred stock Dividends
  —
  —
  —
  (125,000
  )
  —
  —
  —
  (125,000
  )
  Stock-based compensation
  —
  —
  —
  41,000
  —
  —
  —
  41,000
  Other comprehensive income
  —
  —
  —
  —
  92,000
  —
  —
  92,000
  Balances at June 30, 2018
  $
  8,000
  $
  8,000
  $
  36,000
  $
  31,532,000
  $
  (1,067,000
  )
  $
  (34,398,000
  )
  $
  (208,000
  )
  $
  (4,089,000
  )
  Balances at December 31, 2018
  $
  8,000
  $
  8,000
  $
  37,000
  $
  31,455,000
  $
  (1,150,000
  )
  $
  (34,344,000
  )
  $
  (208,000
  )
  $
  (4,194,000
  )
  Net income
  —
  —
  —
  —
  —
  55,000
  —
  55,000
  Series A and B preferred stock Dividends
  —
  —
  —
  (125,000
  )
  —
  —
  —
  (125,000
  )
  Stock-based compensation
  —
  —
  —
  17,000
  —
  —
  —
  17,000
  Other comprehensive loss
  —
  —
  —
  —
  (46,000
  )
  —
  —
  (46,000
  )
  Balances at March 31, 2019
  8,000
  8,000
  37,000
  31,347,000
  (1,196,000
  )
  (34,289,000
  )
  (208,000
  )
  (4,293,000
  )
  Net loss
  —
  —
  —
  —
  —
  (586,000
  )
  —
  (586,000
  )
  Exercise of stock options
  —
  —
  —
  59,000
  —
  —
  —
  59,000
  Series A and B preferred stock Dividends
  —
  —
  —
  (125,000
  )
  —
  —
  —
  (125,000
  )
  Stock-based compensation
  —
  —
  —
  52,000
  —
  —
  —
  52,000
  Other comprehensive loss
  —
  —
  —
  —
  (116,000
  )
  —
  —
  (116,000
  )
  Balances at June 30, 2019
  $
  8,000
  $
  8,000
  $
  37,000
  $
  31,333,000
  $
  (1,312,000
  )
  $
  (34,875,000
  )
  $
  (208,000
  )
  $
  (5,009,000
  )
  See accompanying notes to the unaudited condensed consolidated financial statements.
  6
  ASTEA INTERNATIONAL INC
  . AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)
  Six Months Ended
  June 30,
  2019
  2018
  Cash flows from operating activities:
  Net (loss) income
  $
  (531,000
  )
  $
  310,000
  Adjustments to reconcile net (loss) income to net cash provided by operating activities:
  Depreciation and amortization
  1,606,000
  1,238,000
  Non cash lease expense
  566,000
  -
  Amortization of deferred financing costs
  15,000
  14,000
  Amortization of deferred hosting costs
  179,000
  27,000
  Decrease in provision for doubtful accounts
  (1,000
  )
  -
  Stock-based compensation
  69,000
  72,000
  Changes in operating assets and liabilities:
  Receivables
  1,257,000
  715,000
  Prepaid expenses and other
  41,000
  (126,000
  )
  Deferred hosting costs
  (652,000
  )
  (641,000
  )
  Other assets
  (11,000
  )
  (7,000
  )
  Accounts payable and accrued expenses
  (170,000
  )
  (206,000
  )
  Deferred revenues
  547,000
  27,000
  Lease liabilities
  (566,000
  )
  -
  Net cash  provided by operating activities
  2,349,000
  1,423,000
  Cash flows from investing activities:
  Purchases of property and equipment
  (109,000
  )
  (34,000
  )
  Capitalized software development costs
  (1,504,000
  )
  (1,785,000
  )
  Net cash used in  investing activities
  (1,613,000
  )
  (1,819,000
  )
  Cash flows from financing activities:
  Dividend payments on preferred stock
  (200,000
  )
  (55,000
  )
  Payment on the term note from Bridge Bank
  -
  (225,000
  )
  Payment on line of credit from Bridge Bank
  (9,100,000
  )
  (5,058,000
  )
  Proceeds on line of credit from Bridge Bank
  9,078,000
  5,150,000
  Proceeds from exercise of stock options
  59,000
  -
  Net cash used in financing activities
  (163,000
  )
  (188,000
  )
  Effect of exchange rate changes on cash
  (10,000
  )
  24,000
  Net increase (decrease) in cash, cash equivalents and restricted cash
  563,000
  (560,000
  )
  Cash, cash equivalents and restricted cash, beginning of period
  1,348,000
  2,001,000
  Cash, cash equivalents and restricted cash, end of period
  $
  1,911,000
  $
  1,441,000
  Supplemental disclosure of cash flows information:
  Cash paid for interest
  $
  124,000
  $
  97,000
  Supplemental disclosure of non-cash flows information:
  Accrued preferred dividends
  $
  250,000
  $
  250,000
  See accompanying notes to the unaudited condensed consolidated financial statements.
  7
  Item 1.
  FINANCIAL STATEMENTS (Continued)
  ASTEA INTERNATIONAL INC. AND SUBSIDIARIES
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (Unaudited)
  1.
  BASIS OF PRESENTATION
  The condensed consolidated financial statements at June 30, 2019 and for the six month periods ended June 30, 2019 and 2018 of Astea International Inc. and subsidiaries ("Astea" or the "Company") are unaudited and
        reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods.  The accompanying unaudited
        financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").  Certain information and note disclosures normally included in annual financial statements prepared in accordance with
        generally accepted accounting principles have been omitted pursuant to the rules and regulations of the SEC for quarterly reports on Form 10-Q.  It is suggested that these financial statements be read in conjunction with the financial statements and
        the notes thereto, included in the Company's latest annual report (Form 10-K) and our Form 10-Q's for the quarters ended June 30, 2018, September 30, 2018 and March 31, 2019. The interim financial information presented is not necessarily indicative
        of results expected for the entire year ending December 31, 2019.
  Comparability
  The condensed consolidated financial statements for the period ended June 30, 2019 are presented under the new Lease standard, while the comparative period presented has not been adjusted and continues to be reported
        in accordance with the previous standard.  The Lease standard requires lessees to recognize a right-of-use ("ROU") asset and lease liability for all leases on the condensed consolidated balance sheet beginning January 1, 2019 with no modification to
        prior periods.
  Recently Adopted Accounting Standards- Leases
  In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the
          balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance was effective for the Company on January 1, 2019. The guidance was adopted on a modified retrospective basis and provides for certain practical
          expedients.  The adoption of this guidance changed the way we account for our operating leases, which resulted in the Company recording the future benefits of those leases as an asset and the related minimum lease payments as a liability on our
          condensed consolidated balance sheets.
  The Company reported a significant balance sheet gross-up for the right-of-use assets and corresponding liabilities, with no impact to its debt covenant.
  The Company does not finance purchases of equipment, but it does have operating leases for office space and equipment in all locations.  The Company has identified all material operating lease agreements.  It has
          also reviewed all significant contracts for embedded leases.  No embedded leases were identified during this process.
  We determine if an arrangement is a lease at inception. All leases to which the Company is a party are operating leases. Beginning January 1, 2019, the operating leases are
          being reported on our condensed consolidated balance sheet as operating lease ROU assets and current and noncurrent operating lease liabilities. The ROU assets represent our right to use an underlying asset for the lease term and lease liabilities
          represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities will be recognized at the commencement date based on the present value of the lease payments over the lease term. As none of our
          leases provide an implicit interest rate, we used our incremental borrowing rate based on the information available at the commencement date in calculating the present value of lease payments. The operating lease ROU asset also includes any lease
          payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.
  8
  The new guidance provides a number of optional practical expedients in transition. The Company elected the package of practical expedients which permitted us under the new guidance not to reassess our prior conclusions
        about lease identification, lease classification and initial direct costs. Astea did not elect the use-of hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. On adoption, we recognized operating
        liabilities of $3,132,000, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.
  The new guidance also provides practical expedients for an entity's ongoing accounting. We elected the short-term lease recognition exemption for one of our office equipment leases. This means, for those leases that
        qualify, we will not recognize ROU assets or lease liabilities.  This includes not recognizing ROU assets or lease liabilities for existing short-term leases on those assets in transition.  We elected the practical expedient to not separate lease and
        non-lease components for all of our leases. As expected, the adoption of this guidance resulted in additional lease-related disclosures in the footnotes to our condensed consolidated financial statements (see Note 5).
  Cash, cash equivalents and restricted cash
  The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts presented on the
        condensed consolidated statement of cash flows:
  June 30,
  2019
  December 31,
  2018
  Cash and cash equivalents
  $
  1,839,000
  $
  1,276,000
  Restricted cash
  72,000
  72,000
  Total cash, cash equivalents, and restricted cash reported on the condensed consolidated statements of cash flows
  $
  1,911,000
  $
  1,348,000
  Amounts included in restricted cash represent funds required to be set aside by a contractual agreement with the   building leasing companies in Europe. The restrictions will lapse when the building leases expire.
  Operating Matters and Liquidity
  The Company has a history of net losses and an accumulated deficit of $34,875,000 as of June 30, 2019.  In the first six months of 2019, the Company had a net loss of $531,000 compared to income of $310,000 generated
          in the first six months of 2018.  Further, at June 30, 2019, the Company had a working capital ratio of .57:1, with cash and cash equivalents of $1,839,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000. 
          The increase in cash and cash equivalents for the first six months 2019 was primarily driven by an increase in cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an
          increase in the dividend payment.
  As of June 30, 2019, the Company owed $2,647,000 against the line of credit from Western Alliance Bank ("WAB").   As of June 30, 2019, the availability under the line of credit was $203,000.  The Company has projected
        revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least August 15, 2020. The Second Loan Agreement increased the
        availability under the line of credit from $2,400,000 to $2,850,000 (see Note 4).
  The Company was in compliance with the WAB financial and liquidity covenant as of June 30, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at
        least the next year.  As a result, the amount due to WAB under the line of credit as of June 30, 2019 were classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with
        WAB.
  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.
  9
  Management's current operating plan is to maintain and/or reduce operating expenses in order to be aligned with expected revenues.  The primary area of focus will continue to be headcount and costs from outside
        consultants.  The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity.  The
        Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance.   In 2019, the Company will continue
        to consider ways to reduce operating expenses in certain areas of the Company in order to maintain its liquidity.  However, management has implemented new marketing initiatives which have increased our spending in this area in 2019.  We believe the
        new initiatives will directly contribute to increasing new business, which is essential to our growth.  Operations will generate enough cash to meet obligations at least
  through August 15, 2020.
  As noted above, if the Company's actual results fall short of expectations, the Company will make cost adjustments to improve the Company's operating cash flows.
  In addition, we plan to maintain the same
        level of investment in software development and we do not expect to increase capital expenditures.
  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.
  Revenue from Contracts with Customers
  Astea's revenue is principally recognized from three sources: (i) licensing arrangements, (ii) subscription services and (iii) services and maintenance.
  The Company markets its products primarily through its direct sales force and resellers.  License agreements do not provide for a right of return, and historically, product returns have not been
        significant.
  Revenue from Contracts with Customers
  outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the
        transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The five steps are:
  1.
  Identify the contract with a customer.
  2.
  Identify the performance obligations in the contract.
  3.
  Determine the transaction price.
  4.
  Allocate the transaction price to performance obligations in the contract.
  5.
  Recognize revenue when or as the Company satisfies a performance obligation.
  The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good
        or service to a customer.
  The Company recognizes revenue from license sales when the above criteria are met.  The Company generally uses written contracts as a means to establish the terms and conditions by which our products, services and
        maintenance support are sold to our customers.  The Company satisfies the performance obligation when the license key has been delivered electronically to the customer. If these criteria are not met, then revenue is deferred until such criteria are
        met or until the period(s) over which the last performance obligation is delivered.
  The Company recognizes revenues from maintenance ratably over the term of the underlying maintenance contract term. The term of the maintenance contract is usually one year. Renewals of maintenance contracts create
          new performance obligations that are satisfied over the contract term.
  Revenues from professional services mostly consist of time and material services.  Certain professional service contracts are performed on a fixed price basis and revenue is recognized using the percentage of
          completion method.  However, fixed price contracts are only utilized on rare occasions.  Performance obligations are satisfied, and revenues are recognized, when the services are provided or when the service term has expired.
  10
  In subscription based arrangements, even though customers use the software element, they generally do not have a contractual right to take possession of the software at any time during the hosting
        period without significant penalty to either run the software on its own hardware or contract with an unrelated third party to host the software. Accordingly, these software as a service ("SaaS") arrangements, including the software license fees
        within the arrangements, are accounted for as subscription services provided all other revenue recognition criteria have been met.  The subscription revenue is recognized on a straight-line basis over the performance obligation.  The Company
        recognizes subscription revenue once a customer goes-live ratably over the remaining contract period or customer life whichever is longer. The contract period is typically 1 to 3 years. The average expected life of a customer is 2 years.  The average
        customer takes about 8 to 10 months to go live. The Company expects the average life of a customer to increase as more customers begin to renew their subscription contracts. When implementation, consulting and training services are bundled with the
        subscription based arrangement, these services are recognized over the life of the initial contract (performance obligation), once the project goes live.
  In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately, if they are distinct. The Company allocates the
            transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at
            which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach. For professional services, the Company determines the standalone selling prices based on
            the price at which the Company separately sells those services.
  The guidance prefers that revenue in a contract with multiple performance obligations use the adjusted market approach which includes SSP or TPE or expected cost plus margin approach as the methodology for allocating
        revenues to software.  The Company uses the Residual Approach for allocating the revenues from a contract to the license component of the sale.  Due to competition, highly variable pricing, customer demographics, varying size of our customers, and
        other such factors, the Company's selling prices are considered uncertain for each perpetual license sale.  Therefore, SSP is not an appropriate methodology as it relates to our license revenue.  In terms of TPE as a basis to price our software, our
        product is unique and expansive in terms of the system's inherent functionality. There are no directly comparable products in the marketplace today which we could use as the basis to set our standard license pricing based on a comparison with other
        vendors. In addition, most of the companies with whom we compete, are privately owned, which prevents us from obtaining reliable TPE. Accordingly, the guidance permits the Company to use the Residual Method for allocating selling price if the first
        two preferable choices cannot be used. The residual between the total transaction price and the observable standalone selling prices of those performance obligations with observable standalone selling prices is considered to be the estimated
        standalone selling price of the goods or services underlying the performance obligation.
  Astea commonly sells its software products bundled with maintenance and professional services. As noted above, the guidance requires an entity to allocate the transaction price to the distinct performance obligations
        in a contract on a relative SSP basis. Under the guidance, "…an entity shall determine the standalone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the
        transaction price in proportion to those standalone selling prices." SSP is defined as the price at which an entity would sell a promised good or service separately to a customer.  Astea has a history of selling maintenance renewals and professional
        services on a standalone basis. Therefore, the Company utilizes SSP for its performance obligations as it relates to service and maintenance revenue. In addition, due to the Company having different maintenance and service rates in other parts of the
        world in which it operates, the Company has developed a reasonable range for its SSP for maintenance and services rather than a single point.
  The incremental costs of obtaining a customer contract (i.e., those costs related to obtaining the customer contract that would not have been incurred if the customer contract was not obtained), such as a sales
        commission, should be capitalized if the Company expects to recover those costs (based on net future cash flows from the contract and expected contract renewals). The Company may expense the incremental costs of obtaining a contract if the
        amortization period would otherwise be one year or less. Since sales commissions are costs that are incremental and the amortization of sales commissions would be one year or less, the Company will continue to expense these items as incurred.  Costs
        of obtaining a customer contract that are not incremental (i.e., costs related to obtaining the customer contract that would have been incurred regardless of whether the customer contract had been obtained), such as travel costs incurred to present
        the customer proposal, should only be capitalized if those costs are explicitly chargeable to the customer regardless of whether the entity enters into a contract with the customer. Otherwise, such costs are expensed as incurred. The Company will
        continue to expense these costs as they are incurred.
  11
  Once live, we recognize the deferred implementation costs related to that customer ratably over the remaining expected life of the customer contract or two years, whichever is longer.  At this point, based on the
        Company's relatively short time-span as a provider of a hosted solution, our analysis shows that the average lifespan of an Astea hosted customer is 2 years. Therefore, we amortize the deferred cost over 2 years or the remaining life of the contract,
        whichever is longer.  This is consistent with the revenue recognition methodology used for the subscription service revenue for that customer. The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized
        at the time the related performance obligation is satisfied by transferring a promised service to a customer.
  We believe that our accounting estimates used in applying our revenue recognition are critical because:
  •
  the determination that it is probable that the customer will pay for the products and services purchased is inherently judgmental and includes credit risk;
  •
  determining the performance obligations and transaction price to certain elements in multiple-element arrangements is complex;
  •
  the determination of whether a service is essential to the functionality of the software is complex and could potentially create a new performance obligation; and
  •
  the estimated customer life of subscription services.
  Changes in the aforementioned items could have a material effect on the type and timing of revenue recognized. In addition, Company's payment terms and conditions vary by contract and size of customer, although terms
        generally include a requirement of payment within 30 to 60 days.  In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant
        financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, and not to facilitate financing arrangements. The Company generally has not experienced
        any material losses related to receivables from individual customers, or groups of customers.  Due to these factors, no additional credit risk beyond amounts provided by the allowance for doubtful accounts is believed by management to be probable in
        the Company's accounts receivable. The Company has not adjusted revenues for customers related to credit risk.
  At June 30, 2019, there was one customer that accounted for 26% of total net accounts receivable. At December 31, 2018, no single customer accounted for 10% or more of net accounts receivable. For the three months
        ended June 30, 2019, there was one customer that accounted for 10% of total revenue.  For the six months ended June 30, 2019 and the three and six months ends June 30, 2018, no individual customer accounted for 10% or more of total revenue.
  We present taxes assessed by a governmental authority including sales, use, value added and excise taxes on a net basis and therefore the presentation of these taxes is excluded from our revenues and is included in
        accrued expenses in the accompanying condensed consolidated balance sheets until such amounts are remitted to the taxing authority.
  The Company is engaged in the design, development, marketing and support of its service management software solutions.  All revenues result from selling of license (perpetual and subscription)
        software products and related professional services and customer support services.  Accordingly, the Company considers itself to have one reporting segment.  The Company's chief decision maker further reviews financial information presented on a
        consolidated basis to determine if revenue can be further disaggregated in order to make operating decisions and assessing financial performance. It was determined that all revenue recognized in our consolidated statements of operations is considered
        to be revenue from contracts with customers, which can be disaggregated by both the timing of revenue recognition and geographic regions (see Note 9 of the condensed consolidated financial statements for disaggregated revenues by geographic regions).
  The following tables depicts the Company's disaggregation of revenue:
  Three months ended
  Six months ended
  June 30
  ,
  June 30,
  Timing of Revenue Recognition
  2019
  2018
  2019
  2018
  Performance obligations transferred at a point in time
  $
  462,000
  $
  892,000
  $
  1,162,000
  $
  1,311,000
  Performance obligations transferred over time
  4,405,000
  4,698,000
  8,886,000
  9,937,000
  Performance obligations transferred over time initiated at go-live
  1,548,000
  1,042,000
  2,987,000
  2,080,000
  Total revenues
  $
  6,415,000
  $
  6,632,000
  $
  13,035,000
  $
  13,328,000
  12
  The performance obligations transferred at a point in time relate to perpetual license revenue for which there is no deferred revenue as of June 30, 2019 or 2018.  The performance obligations
        transferred over time consist of professional services that are recognized based on time and materials, as the services are performed. The performance obligations for support services are recognized ratably over time based on the contract life,
        except for a few fixed price contracts which are recognized based on the achievement of certain milestones. If the customer pays in advance, service revenue is deferred until the performance obligations are met.  For support services, the fee is paid
        in advance of the performance obligation.  Accordingly, the Company has recorded deferred revenue from fixed price contracts and support services of $7,287,000 and $6,744,000 as of June 30, 2019 and 2018, respectively. Performance obligations
        transferred over time, initiated at go-live, relate to our subscription hosting and our subscription professional services for the implementation. No performance obligation is recognized until the customer is live and has access to the subscription
        services. Once live, the performance obligations are recognized over time, which is either 2 years, the average customer life, or the remaining contract life of the customer, whichever is longer. Because subscription fees are paid in advance, and
        professional services fees are paid as the services are performed, the revenue from both are deferred until the date in which the customer goes live. The Company has deferred revenue recorded for performance obligations transferred over time,
        initiated at go-live for hosting and hosting services for $4,585,000 and $4,766,000 as of June 30, 2019 and 2018, respectively.
  The long term deferred revenue reported as $1,259,000 and $1,711,000 as of June 30, 2019 and 2018, respectively, consists of the portion of revenue that will be recognized beyond one year of the balance sheet date for
        hosting implementation services.
  2.
  NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
  In August 2018, the FASB issued guidance that requires a customer in a cloud computing arrangement (i.e. hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which
        implementation costs to capitalize as assets or expense as incurred. This guidance requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and
        post-implementation stages be expensed as incurred. The guidance is effective for annual periods beginning after December 15, 2019 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our condensed
        consolidated financial statements.
  In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The
        guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any,
        that the adoption of this guidance will have on our condensed consolidated financial statements.
  In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and
        reasonable and supportable forecasts that affect the collectability of the reported amount. The accounting standard update will be effective for us beginning January 1, 2020. We expect to adopt this accounting standard update on a modified
        retrospective basis and we are currently evaluating the impact of this accounting standard update on our condensed consolidated financial statements.
  3.
  CONCENTRATION OF CREDIT RISK
  Financial instruments, which potentially subject the Company to credit risk, consist of cash, cash equivalents and accounts receivable.  The Company's policy is to limit the amount of credit
        exposure to any one financial institution.  The Company places investments with financial institutions evaluated as being creditworthy, or investing in short-term money market funds which are exposed to minimal interest rate and credit risk.  Cash
        balances are maintained with several banks.  Certain operating accounts may exceed insured limits.
  The Company sells its products to customers involved in a variety of industries including information technology, medical devices and diagnostic systems, industrial controls and instrumentation and
        retail systems.  While the Company does not require collateral from its customers, it does perform continuing credit evaluations of its customers' financial condition.
  13
  4.
  LINE OF CREDIT and TERM NOTE
  Line of Credit and Term Loan with Western Alliance Bank
  On August 11, 2017,
  the Company entered into a Business Financing Agreement (the "Financing Agreement") with Bridge Bank, a division of WAB, which included a revolving line of
          credit and a term loan. The agreement was to mature on September 1, 2019.
  The Financing Agreement with WAB, established a revolving credit line for the Company in the principal amount of up to $2,400,000 (the "Revolving Credit Line") and a Term Loan of $400,000 (the "Term
        Loan").  Availability under the Revolving Credit Line is tied to a borrowing base formula that is based on 80% of the Company's eligible domestic accounts receivable.  Advances under the Revolving Credit Line (the "Advances") may be repaid and
        reborrowed in accordance with the Loan Agreement.  Pursuant to the Financing Agreement, the Company agreed to pay to WAB the outstanding principal amount of all Advances, the unpaid interest thereon, and all other obligations incurred with respect to
        the Loan Agreement on September 1, 2019.  Interest accrues and is paid monthly at the Wall Street Journal Prime Rate plus 1.5%.  At June 30, 2019, the interest rate was 7%.
  The original Term Loan provided proceeds of $400,000 to the Company. Beginning in August 2017, for the first six months of the term loan the Company was only required to pay interest. Then for the next 18 months, the
        Term Loan was to be amortized into monthly payments of principal and interest.  The interest rate on the original Term Loan was the Wall Street Journal Prime Rate plus 1.75%. The Term Loan was modified in November 2017 by the First Modification  to 
        Business  Financing Agreement  ("First Modification"),   and  as  a result, the Company fully repaid the
  Term Loan by April 30, 2018.  The Company repaid $150,000 of the Term Loan in December 2017, $125,000 in January 2018 and the balance of $125,000 in April 2018.
  On July 24, 2018, the Company entered into a Second Modification to Business Financing Agreement ("Loan Modification") with WAB which amended the First Modification, dated November 22, 2017.  The Loan Modification
        increased the credit limit under Company's credit facility to $2,850,000, extended the maturity date of the credit facility through November 15, 2020 and revised and clarified certain covenants and other terms of the credit facility. No other terms
        or conditions were modified.
  The Company expects to be able to continue to comply with the required covenants contained in the agreement with WAB for at least the next year.  As a result, the amounts due to WAB under the line of credit and term
        loan as of June 30, 2019 are classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement.
  As of June 30, 2019 the Company owed $2,647,000 under the revolving line of credit. The Company incurred $44,000 and $64,000 of interest expense to WAB for the three-month period ended June 30, 2019 and 2018.
        respectively and $98,000 and $99,000 of interest expense to WAB in the first six months of 2019 and 2018, respectively.  As of June 30, 2019, there was availability of $203,000 under the line of credit. The Company was in compliance with the
        financial and liquidity covenants of the Loan Modification as of June 30, 2019.
  Subject to certain exceptions, the amended Financing Agreement contains covenants prohibiting the Company from, among other things: (a) conveying, selling, leasing, transferring or otherwise disposing of their
        properties or assets; (b) liquidating or dissolving; (c) engaging in any business other than the business currently engaged in or reasonably related thereto; (d) entering into any merger or consolidation, or acquiring all or substantially all of the
        capital stock or property of another entity; (e) becoming liable for any indebtedness; (f) allowing any lien or encumbrance on any of their property; and (g) paying any dividends (other than dividends on outstanding convertible preferred stock); and
        (i) making payment on subordinated debt.  In addition, actual EBITDA, as defined in the Financing Agreement for the trailing 6-month period must be at least $1 as tested quarterly.
  The amended Financing Agreement is secured by a first priority perfected security interest in substantially all of the assets of the Company, excluding the intellectual property of the Company.  The Loan Modification
        contains a negative covenant prohibiting the Company from granting a security interest in their intellectual property to any party.
  14
  5.
  LEASES
  The Company adopted the new lease standard on January 1, 2019 using the modified retrospective transition method. Prior periods were not retrospectively adjusted and continue to be reported under the accounting
        standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which among other things, allowed the Company to continue to account for existing
        leases based on the historical lease classification. The Company also elected the practical expedients to combine lease and non-lease components for its office leases, which primarily relate to ancillary expenses such as common area maintenance
        charges and management fees.
  The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company's
        leases are primarily related to operating leases for its corporate office and subsidiaries, office equipment and cars. The Company's leases have remaining lease terms of less than 1 to 4 years, and sometimes include options to renew. Renewal and
        termination options are included in the lease term when it is reasonably certain that the Company will exercise the option. However, it has been the Company's experience to renegotiate a lease and not renew based on the terms of the lease.
  ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As all of the Company's leases do not provide an implicit rate, the
        Company uses its incremental borrowing rate plus some additional considerations for the term of the lease, based on the information available at the lease commencement date, to determine the present value of lease payments. Based on the present value
        of lease payments for the Company's existing leases, the Company recorded ROU assets and lease liabilities of approximately $3,132,000 upon adoption on January 1, 2019.  There was one lease at one of our subsidiaries that was renewed for 2 years
        effective at January 1, 2019 that is included in the lease liability. The Company had no finance leases.
  The impact of the new lease standard on the June 30, 2019 condensed consolidated balance sheet was as follows:
  June 30,
  2019
  Right-of-use assets
  $
  2,567,000
  Current lease liabilities
  $
  1,017,000
  Noncurrent lease liabilities
  1,550,000
  Total lease liabilities
  $
  2,567,000
  Weighted average remaining lease term
  2.2 years
  Weighted average discount rate
  7.17
  %
  Total operating lease costs for the three and six months ended June 30, 2019 were $320,000 and $640,000, respectively, while the total operating lease costs for the three and six months ended June 30, 2018 were
        $326,000 and $652,000, respectively, which is included in operating costs on the condensed consolidated income statements.
  The following table provides supplemental cash flow information related to our operating leases at June 30, 2019:
  Six Months Ended
  June 30,
  2019
  Cash paid for amounts included in the
  measurement of operating lease liabilities
  $
  656,000
  The following table shows the future maturities of lease liabilities for leases in effect as of June 30, 2019:
  Lease Liabilities
  2019 (excluding the six months ended June 30, 2019)
  $
  640,000
  2020
  1,049,000
  2021
  837,000
  2022
  452,000
  2023
  1,000
  Total lease payments
  2,979,000
  Less: imputed interest
  (412,000
  )
  Total
  $
  2,567,000
  15
  6.
  INCOME TAXES
  The Company has identified its federal tax return and its state returns in Pennsylvania and California as "major" tax jurisdictions.  Based on the Company's evaluation, it concluded that there are no significant
        uncertain tax positions requiring recognition in the Company's financial statements.  The Company's evaluation was performed for tax years ended 2014 through 2018, the only periods subject to examination. The Company believes that its income tax
        positions and deductions will be sustained on a tax authority audit and does not anticipate any adjustments that will result in a material change to its financial position.
  The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income before income taxes.  Penalties are recorded in general and administrative expenses and
        interest accrued is recorded in interest expense or interest income, respectively, in the condensed consolidated statement of operations.  For the three and six months ended June 30, 2019 and 2018, there were no interest or penalties related to
        uncertain tax positions.
  Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the
        enacted tax rates and laws that will be in effect when the difference and carryforwards are expected to be recovered or settled.  A valuation allowance for deferred tax assets is provided when we estimate that it is more likely than not that all or a
        portion of the deferred tax assets may not be realized through future operations.  This assessment is based upon consideration of available positive and negative evidence which includes, among other things, our most recent results of operations and
        expected future profitability.  We consider our actual historical results to have a stronger weight than other more subjective indicators when considering whether to establish or reduce a valuation allowance on deferred tax assets.
  As of June 30, 2019, we had approximately $10.9 million of net deferred tax assets, against which we provided a 100% valuation allowance.  Our net deferred tax assets were generated primarily by operating losses. 
        Accordingly, it is more likely than not, that we will not realize these assets through future operations.
  7.
  EQUITY
  Share-Based Awards
  Compensation costs include share-based payments granted to employees and directors based on the estimated grant date fair value. The Company estimates the fair value of stock options granted using the
        Black-Scholes-Merton ("Black-Scholes") option-pricing formula and amortizes the estimated option value using an accelerated amortization method where each option grant is split into tranches based on vesting periods.  The Company's expected term
        represents the period that the Company's share-based awards are expected to be outstanding and was determined based on historical experience regarding similar awards, giving consideration to the contractual terms of the share-based awards and
        employee termination data.  Executive level employees who hold a majority of options outstanding, and non-executive level employees each have similar historical option exercise and termination behavior and thus were grouped for valuation purposes. 
        The Company's expected volatility is based on the historical volatility of its traded common stock and places exclusive reliance on historical volatilities to estimate our stock volatility over the expected term of its awards.  The Company has
        historically not paid dividends to common stockholders and has no foreseeable plans to issue dividends.  The risk-free interest rate is based on the yield from the U.S. Treasury zero-coupon bonds with an equivalent term.
  As of June 30, 2019, the total unrecognized compensation cost related to non-vested options amounted to $527,000, which is expected to be recognized over the options' weighted average remaining
        vesting period of 3.34 years.
  The Company has Stock Option Plans (the "Plans") under which incentive and non-qualified stock options may be granted to its employees, officers, directors and others. Generally, incentive stock
        options are granted at fair value, become exercisable over a four-year period, have a 10-year contractual term and are subject to the employee's continued employment.  Non-qualified options are granted at exercise prices determined by the Board of
        Directors and vest over varying periods.
  16
  Activity under the Company's stock option plans for the six months ended June 30, 2019 is as follows:
  OPTIONS OUTSTANDING
  Shares
  Weighted Average Exercise Price Per Share
  Balance, December 31, 2018
  762,000
  $
  2.54
  Granted
  205,000
  $
  5.86
  Exercised
  (33,000
  )
  $
  1.83
  Forfeited
  (60,000
  )
  $
  1.76
  Balance, June 30, 2019
  874,000
  $
  3.20
  There are 328,000 shares available for granting future options as of June 30, 2019.  It is the Company's policy to issue shares from authorized but unissued common stock when stock options are
        exercised.
  The following table summarizes outstanding options under the Company's stock option plans as of June 30, 2019:
  Number of Shares
  Weighted Average Exercise Price Per Share
  Weighted Average Remaining Contractual Term (in years)
  Aggregate Intrinsic Value
  Outstanding Options
  874,000
  $3.20
  6.03
  $2,552,000
  Ending Vested and Exercisable
  540,000
  $2.44
  4.28
  $1,838,000
  Options Vested and Expected to Vest
  757,000
  $3.03
  5.62
  $2,154,000
  Convertible Preferred Stock
  Series A
  On September 24, 2008, the Company issued 826,000 shares of Series-A Convertible Preferred Stock ("Series A Preferred Stock") to its Chief Executive Officer at a price of $3.63 per share for a
        total of $3,000,000.  Dividends accrue daily on the Series A Preferred at a rate of 10% and are payable only when, and if, declared by the Company's Board of Directors, quarterly in arrears. At June 30, 2019, there were accrued dividends of $579,000.
  The Series A Preferred Stock may be converted into common stock at the rate of one share of common for each share of Series A Preferred Stock. The Company has rights to cause conversion of all of
        the shares of Series A Preferred Stock outstanding. The Company may redeem, subject to board approval, all of the shares of Series A Preferred Stock then outstanding at a price equal to the greater of (i) 130% of the purchase price plus all accrued
        and unpaid dividends and (ii) the fair market value of such number of shares of common stock which the holder of the Series A Preferred Stock would be entitled to receive had the redeemed Series A Preferred Stock been converted immediately prior to
        the redemption. Each and every outstanding share of Series A Preferred Stock is subject to mandatory and automatic conversion into shares of common stock if the closing price of the common stock as reported by the principal exchange or quotation
        system on which such common stock is traded or reported exceeds 300% of the then current conversion price for 30 consecutive trading days.   In the event of a liquidation of the Company, the holder of the Series A and Series B preferred stock shall
        be entitled to receive in preference to the holders of the common stock, the original amount invested in the preferred stock plus any unpaid and accrued dividends. Preferred stock dividends on the Series A are declared quarterly by the Board of
        Directors.
  The Company reports the Series A Preferred Stock on the Company's condensed consolidated balance sheet within stockholders' deficit.
  17
  Series
  B
  On June 20, 2014, the Company issued 797,000 of Series-B Convertible Preferred Stock ("Series B Preferred Stock") to its Chief Executive Officer at a price of $2.51 per share in exchange for the cancellation
        of $2,000,000 of outstanding principal owed to its Chief Executive Officer under a Revolving Promissory Note dated March 26, 2014.
  The Series B Preferred Stock may be converted into shares of common stock on a one-to-one ratio, subject to customary anti-dilution provisions.  The Series B Preferred Stock is entitled to a quarterly dividend, which
        accrues at an annual rate of 10%.  The Company's Chief Executive Officer may convert 100% of his shares of the Series B Preferred Stock into shares of common stock. Each and every outstanding share of Series B Preferred Stock is subject to mandatory
        and automatic conversion into shares of common stock if the closing price of the common stock as reported by the principal exchange or quotation system on which such common stock is traded or reported exceeds 300% of the then current conversion price
        for 30 consecutive trading days.  The Company may redeem all of the outstanding shares of the Series B Preferred Stock issued at a price per share equal to 300% of the purchase price.  The Series B Preferred Stock ranks senior to the common stock and
        on parity with the Company's Series A Preferred Stock.  In the event of a liquidation of the Company, the holder of the Series B and Series A Preferred Stock shall be entitled to receive in preference to the holders of the common stock, the original
        amount invested in the preferred stock plus any unpaid and accrued dividends.  Preferred stock dividends on the Series B are declared quarterly by the Board of Directors.  At June 30, 2019, there were accrued dividends of $366,000.
  The Company reports the Series B Preferred Stock on the Company's condensed consolidated balance sheet within stockholders' deficit.
  8.
  (LOSS) EARNINGS PER SHARE
  (Loss) earnings per share is computed on the basis of the weighted average number of shares and common stock equivalents outstanding during the period.  In the calculation of diluted earnings per
        share, shares outstanding are adjusted to assume conversion of the Company's non-interest bearing convertible stock and exercise of options as if they were dilutive.  In the calculation of basic (loss) earnings e per share, weighted average numbers
        of shares outstanding are used as the denominator.
  The Company had net loss allowable to the common stockholders for the three and six months ended June 30, 2019 and net income available to stockholders for the three and six months ended June 30,
        2018. In the three and six months ended June 30, 2018, there were 179,000 of net additional dilutive stock options assumed to be converted into common stock shares and in the three and six months ended June 30, 2019, the outstanding stock options
        would have been antidilutive due to the net loss incurred during those periods.  In addition, 100% of the outstanding convertible preferred stock, 1,623,000 shares, were eligible to be converted into common stock. For purpose of this calculation, if
        converted, it was assumed that upon conversion, the related dividends were not paid. However, as of the three and six months ended June 30, 2019 and 2018 shares of common stock issuable on the assumed conversion of the eligible preferred stock were
        excluded from the diluted earnings per common shares calculation as the inclusion of these shares would have been antidilutive.
  18
  Three Months Ended
  Six Months Ended
  Ended June 30
  ,
  Ended June 30,
  2019
  2018
  2019
  2018
  Numerator:
  Net (loss) income
  $
  (586,000
  )
  $
  304,000
  $
  (531,000
  )
  $
  310,000
  Preferred dividend
  125,000
  125,000
  250,000
  250,000
  Net (loss) income available to
  common stockholders
  $
  (711,000
  )
  $
  179,000
  $
  (781,000
  )
  $
  60,000
  Denominator:
  Basic weighted average number of common
  shares outstanding
  3,617,000
  3,594,000
  3,617,000
  3,594,000
  Effect of dilutive stock options
  -
  179,000
  -
  179,000
  Diluted weighted average number of
  common shares outstanding
  3,617,000
  3,773,000
  3,617,000
  3,773,000
  Basic earnings per common share
  $
  (0.20
  )
  $
  0.05
  $
  (0.22
  )
  $
  0.02
  Diluted earnings per common share
  $
  (0.20
  )
  $
  0.05
  $
  (0.22
  )
  $
  0.02
  19
  9.
  GEOGRAPHIC REGION DATA
  The Company and its subsidiaries are engaged in the design, development, marketing and support of its service management software solutions.  Substantially all revenues result from the license of the Company's software
        products and related professional services and customer support services.  The Company's chief executive officer reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic
        region for purposes of making operating decisions and assessing financial performance.  Accordingly, the Company considers itself to have three geographic segments as follows:
  Three Months
  Ended June 30,
  Six Months
  Ended June 30,
  2019
  2018
  2019
  2018
  Revenues
  Software license fees
  United States
  $
  227,000
  $
  123,000
  $
  596,000
  $
  448,000
  Europe
  55,000
  103,000
  107,000
  152,000
  Asia Pacific
  180,000
  666,000
  459,000
  711,000
  Total foreign software license fees revenue
  235,000
  769,000
  566,000
  863,000
  Total software license fees
  462,000
  892,000
  1,162,000
  1,311,000
  Subscriptions
  United States
  678,000
  409,000
  1,357,000
  824,000
  Europe
  266,000
  315,000
  542,000
  587,000
  Asia Pacific
  289,000
  140,000
  560,000
  281,000
  Total foreign subscriptions
  555,000
  455,000
  1,102,000
  868,000
  Total subscription revenue
  1,233,000
  864,000
  2,459,000
  1,692,000
  Services and maintenance
  United States
  3,009,000
  3,048,000
  5,998,000
  6,383,000
  Europe
  605,000
  594,000
  1,235,000
  1,184,000
  Asia Pacific
  1,106,000
  1,234,000
  2,181,000
  2,758,000
  Total foreign services and
  maintenance revenue
  1,711,000
  1,828,000
  3,417,000
  3,942,000
  Total services and maintenance revenue
  4,720,000
  4,876,000
  9,414,000
  10,325,000
  Total revenue
  $
  6,415,000
  $
  6,632,000
  $
  13,035,000
  $
  13,328,000
  Net (loss) income
  United States
  $
  (282,000
  )
  $
  170,000
  $
  (71,000
  )
  $
  109,000
  Europe
  (316,000
  )
  (159,000
  )
  (516,000
  )
  (215,000
  )
  Asia Pacific
  12,000
  293,000
  56,000
  416,000
  Net (loss) income
  $
  (586,000
  )
  $
  304,000
  $
  (531,000
  )
  $
  310,000
  20
  Item 2.
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
  This document contains various forward-looking statements and information that are based on management's beliefs, assumptions made by management and information currently available to management. 
        Such statements are subject to various risks and uncertainties, which could cause actual results to vary materially from those contained in such forward-looking statements.  Should one or more of these risks or uncertainties materialize, or should
        underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected or projected.   Certain of these, as well as other risks and uncertainties are described in more detail herein and in Astea
        International Inc.'s ("Astea or the Company") Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
  Astea is a global provider of service management software that addresses the unique needs of companies who manage capital equipment, mission critical assets and human capital.  Clients include
        Fortune 500 to mid-size companies which Astea services through company facilities in the United States, United Kingdom, Australia, Japan, the Netherlands and Israel.  Since its inception in 1979, Astea has licensed applications to companies in a wide
        range of sectors including information technology, telecommunications, instruments and controls, business systems, and medical devices.
  Astea Alliance, the Company's service management suite of solutions, supports the complete service lifecycle, from lead generation and project quotation to service and billing through asset
        retirement.  It integrates and optimizes critical business processes for Campaigns, Call Center, Depot Repair, Field Service, Logistics, Projects and Sales, and Order Processing applications.  Astea extends its application suite with mobile workforce
        management, dynamic scheduling optimization, third party vendor and customer self-service portals, and business intelligence.  In order to ensure customer satisfaction, Astea also offers infrastructure tools and services. Astea Alliance provides
        service organizations with technology-enabled business solutions that improve profitability, stabilize cash-flows, and reduce operational costs through automating and integrating key service, sales and marketing processes.
  The FieldCentrix Enterprise is a service management solution that runs on a wide range of mobile devices (handheld computers, laptops and PCs, and Pocket PC devices), and integrates seamlessly with
        popular customer relationship management ("CRM") and ERP applications.  Add-on features include a web-based customer self-service portal, workforce optimization capabilities, and equipment-centric functionality.   FieldCentrix has licensed
        applications to companies in a wide range of sectors including HVAC, building and real estate services, manufacturing and process instruments and controls, and medical equipment.
  The Company's sales and marketing efforts are primarily focused on new software licensing (on premise and cloud solutions) and support services for its latest generation of Astea Alliance and
        FieldCentrix products.
  Critical Accounting Policies and Estimates
  The Company's significant accounting policies are described in its "Summary of Accounting Policies," Note 2, in the Company's 2018 Annual Report on Form 10-K.  The preparation of financial
        statements in conformity with accounting principles generally accepted within the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying financial statements and
        related notes.  In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality.  The Company does not believe there is a
        great likelihood that materially different amounts would be reported related to the accounting policies described below; however, application of these accounting policies involves the exercise of judgments and the use of assumptions as to future
        uncertainties and, as a result, actual results could differ from these estimates.
  Revenue from Contracts with Customers
  Astea's revenue is principally recognized from three sources: (i) licensing arrangements, (ii) subscription services and (iii) services and maintenance.
  The Company markets its products primarily through its direct sales force and resellers.  License agreements do not provide for a right of return, and historically, product returns have not been
        significant.
  21
  Revenue from Contracts with Customers
  outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the
        transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The five steps are:
  1.
  Identify the contract with a customer.
  2.
  Identify the performance obligations in the contract.
  3.
  Determine the transaction price.
  4.
  Allocate the transaction price to performance obligations in the contract.
  5.
  Recognize revenue when or as the Company satisfies a performance obligation.
  The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good
        or service to a customer.
  The Company recognizes revenue from license sales when the above criteria are met.  The Company generally uses written contracts as a means to establish the terms and conditions by which our products, services and
        maintenance support are sold to our customers.  The Company satisfies the performance obligation when the license key has been delivered electronically to the customer. If these criteria are not met, then revenue is deferred until such criteria are
        met or until the period(s) over which the last performance obligation is delivered.
  The Company recognizes revenues from maintenance ratably over the term of the underlying maintenance contract term. The term of the maintenance contract is usually one year. Renewals of maintenance contracts create
          new performance obligations that are satisfied over the contract term.
  Revenues from professional services mostly consist of time and material services.  Certain professional service contracts are performed on a fixed price basis and revenue is recognized using the percentage of
          completion method.  However, fixed price contracts are only utilized on rare occasions.  Performance obligations are satisfied, and revenues are recognized, when the services are provided or when the service term has expired.
  In subscription based arrangements, even though customers use the software element, they generally do not have a contractual right to take possession of the software at any time during the hosting
        period without significant penalty to either run the software on its own hardware or contract with an unrelated third party to host the software. Accordingly, these software as a service ("SaaS") arrangements, including the software license fees
        within the arrangements, are accounted for as subscription services provided all other revenue recognition criteria have been met.  The subscription revenue is recognized on a straight-line basis over the performance obligation.  The Company
        recognizes subscription revenue once a customer goes-live ratably over the remaining contract period or customer life whichever is longer. The contract period is typically 1 to 3 years. The average expected life of a customer is 2 years.  The average
        customer takes about 8 to 10 months to go live. The Company expects the average life of a customer to increase as more customers begin to renew their subscription contracts. When implementation, consulting and training services are bundled with the
        subscription based arrangement, these services are recognized over the life of the initial contract (performance obligation), once the project goes live.
  In contracts with multiple performance obligations, the Company accounts for individual performance obligations separately, if they are distinct. The Company allocates the
            transaction price to each performance obligation based on its relative standalone selling price out of total consideration of the contract. For maintenance and support, the Company determines the standalone selling price based on the price at
            which the Company separately sells a renewal contract. The Company determines the standalone selling price for sales of licenses using the residual approach. For professional services, the Company determines the standalone selling prices based on
            the price at which the Company separately sells those services.
  The guidance prefers that revenue in a contract with multiple performance obligations use the adjusted market approach which includes SSP or TPE or expected cost plus margin approach as the methodology for allocating
        revenues to software.  The Company uses the Residual Approach for allocating the revenues from a contract to the license component of the sale.  Due to competition, highly variable pricing, customer demographics, varying size of our customers, and
        other such factors, the Company's selling prices are considered uncertain for each perpetual license sale.  Therefore, SSP is not an appropriate methodology as it relates to our license revenue.  In terms of TPE as a basis to price our software, our
        product is unique and expansive in terms of the system's inherent functionality. There are no directly comparable products in the marketplace today which we could use as the basis to set our standard license pricing based on a comparison with other
        vendors. In addition, most of the companies with whom we compete, are privately owned, which prevents us from obtaining reliable TPE. Accordingly, the guidance permits the Company to use the Residual Method for allocating selling price if the first
        two preferable choices cannot be used. The residual between the total transaction price and the observable standalone selling prices of those performance obligations with observable standalone selling prices is considered to be the estimated
        standalone selling price of the goods or services underlying the performance obligation.
  22
  Astea commonly sells its software products bundled with maintenance and professional services. As noted above, the guidance requires an entity to allocate the transaction price to the distinct performance obligations
        in a contract on a relative SSP basis. Under the guidance, "…an entity shall determine the standalone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the
        transaction price in proportion to those standalone selling prices." SSP is defined as the price at which an entity would sell a promised good or service separately to a customer.  Astea has a history of selling maintenance renewals and professional
        services on a standalone basis. Therefore, the Company utilizes SSP for its performance obligations as it relates to service and maintenance revenue. In addition, due to the Company having different maintenance and service rates in other parts of the
        world in which it operates, the Company has developed a reasonable range for its SSP for maintenance and services rather than a single point.
  The incremental costs of obtaining a customer contract (i.e., those costs related to obtaining the customer contract that would not have been incurred if the customer contract was not obtained), such as a sales
        commission, should be capitalized if the Company expects to recover those costs (based on net future cash flows from the contract and expected contract renewals). The Company may expense the incremental costs of obtaining a contract if the
        amortization period would otherwise be one year or less. Since sales commissions are costs that are incremental and the amortization of sales commissions would be one year or less, the Company will continue to expense these items as incurred.  Costs
        of obtaining a customer contract that are not incremental (i.e., costs related to obtaining the customer contract that would have been incurred regardless of whether the customer contract had been obtained), such as travel costs incurred to present
        the customer proposal, should only be capitalized if those costs are explicitly chargeable to the customer regardless of whether the entity enters into a contract with the customer. Otherwise, such costs are expensed as incurred. The Company will
        continue to expense these costs as they are incurred.
  Once live, we recognize the deferred implementation costs related to that customer ratably over the remaining expected life of the customer contract or two years, whichever is longer.  At this point, based on the
        Company's relatively short time-span as a provider of a hosted solution, our analysis shows that the average lifespan of an Astea hosted customer is 2 years. Therefore, we amortize the deferred cost over 2 years or the remaining life of the contract,
        whichever is longer.  This is consistent with the revenue recognition methodology used for the subscription service revenue for that customer. The Company satisfies performance obligations as discussed in further detail below. Revenue is recognized
        at the time the related performance obligation is satisfied by transferring a promised service to a customer.
  We believe that our accounting estimates used in applying our revenue recognition are critical because:
  •
  the determination that it is probable that the customer will pay for the products and services purchased is inherently judgmental and includes credit risk;
  •
  determining the performance obligations and transaction price to certain elements in multiple-element arrangements is complex;
  •
  the determination of whether a service is essential to the functionality of the software is complex and could potentially create a new performance obligation; and
  •
  the estimated customer life of subscription services.
  Changes in the aforementioned items could have a material effect on the type and timing of revenue recognized. In addition, Company's payment terms and conditions vary by contract and size of customer, although terms
        generally include a requirement of payment within 30 to 60 days.  In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant
        financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, and not to facilitate financing arrangements. The Company generally has not experienced
        any material losses related to receivables from individual customers, or groups of customers.  Due to these factors, no additional credit risk beyond amounts provided by the allowance for doubtful accounts is believed by management to be probable in
        the Company's accounts receivable. The Company has not adjusted revenues for customers related to credit risk.
  At June 30, 2019, there was one customer that accounted for 26% of total net accounts receivable. At December 31, 2018, no single customer accounted for 10% or more of net accounts receivable. For the three months
        ended June 30, 2019, there was one customer that accounted for 10% of total revenue.  For the six months ended June 30, 2019 and the three and six months ends June 30, 2018, no individual customer accounted for 10% or more of total revenue.
  23
  We present taxes assessed by a governmental authority including sales, use, value added and excise taxes on a net basis and therefore the presentation of these taxes is excluded from our revenues and is included in
        accrued expenses in the accompanying condensed consolidated balance sheets until such amounts are remitted to the taxing authority.
  The Company is engaged in the design, development, marketing and support of its service management software solutions.  All revenues result from selling of license (perpetual and subscription)
        software products and related professional services and customer support services.  Accordingly, the Company considers itself to have one reporting segment. The Company's chief decision maker further reviews financial information presented on a
        consolidated basis to determine if revenue can be further disaggregated in order to make operating decisions and assessing financial performance. It was determined that all revenue recognized in our consolidated statements of operations is considered
        to be revenue from contracts with customers, which can be disaggregated by both the timing of revenue recognition and geographic regions (see Note 9 of the condensed consolidated financial statements for disaggregated revenues by geographic regions).
  The following tables depicts the Company's disaggregation of revenue:
  Three months ended
  Six months ended
  June 30
  ,
  June 30,
  Timing of Revenue Recognition
  2019
  2018
  2019
  2018
  Performance obligations transferred at a point in time
  $
  462,000
  $
  892,000
  $
  1,162,000
  $
  1,311,000
  Performance obligations transferred over time
  4,405,000
  4,698,000
  8,886,000
  9,937,000
  Performance obligations transferred over time initiated at go-live
  1,548,000
  1,042,000
  2,987,000
  2,080,000
  Total revenues
  $
  6,415,000
  $
  6,632,000
  $
  13,035,000
  $
  13,328,000
  The performance obligations transferred at a point in time relate to perpetual license revenue for which there is no deferred revenue as of June 30, 2019 or 2018.  The performance obligations
        transferred over time consist of professional services that are recognized based on time and materials, as the services are performed. The performance obligations for support services are recognized ratably over time based on the contract life,
        except for a few fixed price contracts which are recognized based on the achievement of certain milestones. If the customer pays in advance, service revenue is deferred until the performance obligations are met.  For support services, the fee is paid
        in advance of the performance obligation.  Accordingly, the Company has recorded deferred revenue from fixed price contracts and support services of $7,287,000 and $6,744,000 as of June 30, 2019 and 2018, respectively. Performance obligations
        transferred over time, initiated at go-live, relate to our subscription hosting and our subscription professional services for the implementation. No performance obligation is recognized until the customer is live and has access to the subscription
        services. Once live, the performance obligations are recognized over time, which is either 2 years, the average customer life, or the remaining contract life of the customer, whichever is longer. Because subscription fees are paid in advance, and
        professional services fees are paid as the services are performed, the revenue from both are deferred until the date in which the customer goes live. The Company has deferred revenue recorded for performance obligations transferred over time,
        initiated at go-live for hosting and hosting services for $4,585,000 and $4,766,000 as of June 30, 2019 and 2018, respectively.
  The long term deferred revenue reported as $1,259,000 and $1,711,000 as of June 30, 2019 and 2018, respectively, consists of the portion of revenue that will be recognized beyond one year of the
        balance sheet date for hosting implementation services.
  Capitalized Software Research and Development Costs
  The Company capitalizes software development costs incurred during the period subsequent to the establishment of technological feasibility through the product's availability for general release. Costs incurred prior to
        the establishment of technological feasibility are charged to product development expense as they are incurred. Product development expense includes payroll, employee benefits, other headcount-related costs associated with product development and any
        related costs to third parties under sub-contracting or net of any collaborative arrangements.
  24
  Capitalized software development costs are amortized on a product-by-product basis over the greater of the ratio of current revenues to total anticipated revenues or on a straight-line basis over the estimated useful
        lives of the products beginning with the initial release to customers.  The Company's estimated life for its capitalized software products is two years based on current sales trends and the rate of product release.  The Company continually evaluates
        whether events or circumstances have occurred that indicate that the remaining useful life of the capitalized software development costs should be revised or that the remaining balance of such assets may not be recoverable. The Company evaluates the
        recoverability of capitalized software based on the net realizable value of each product, which includes the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product,
        including the costs of performing maintenance and customer support required to satisfy the Company's responsibility set forth at the time of sale. As of June 30, 2019, management believes that no revisions to the remaining useful lives or write-downs
        of capitalized software development costs are required.
  Currency Translation
  The international subsidiaries and foreign branch operations translate their assets and liabilities from international operations by using the exchange rate in effect at the balance sheet date. The
        results of operations are translated at average exchange rates during the period. The effects of exchange rate fluctuations in translating assets and liabilities of international operations into U.S. dollars are accumulated and reflected as a
        currency translation adjustment as a component of other comprehensive loss in the accompanying condensed consolidated statements of changes in stockholders' deficit.  Foreign exchange transaction gains and losses are included in general and
        administrative expenses in the condensed consolidated statements of operations. General and administrative expenses include a foreign exchange transaction loss of $29,000 for the six months ended June 30, 2019 and a $4,000 gain for the six months
        ended June 30, 2018.
  Results of Operations
  Comparison of Three Months Ended June 30, 2019 and 2018
  Revenues
  Total revenues decreased by $217,000 or 3%, to $6,415,000 for the three months ended June 30, 2019 from $6,632,000 for the three months ended June 30, 2018.  Software license fee revenues decreased
        $430,000, or 48%, from the same quarter in 2018.  Subscription revenues increased $369,000 or 43% to $1,233,000 from $864,000 for the same period last year. Services and maintenance revenues for the three months ended June 30, 2019 decreased $156,000
        or 3% from the same quarter in 2018.
  Software license fee revenue decreased 48% to $462,000 in the second quarter of 2019 from $892,000 in the second quarter of 2018.  This is primarily due to Astea Alliance license revenues
        decreasing by $523,000 or 61% to $339,000 in the second quarter of 2019 from $862,000 in the second quarter of 2018. The decrease was primarily due to lower perpetual license sales in all regions due to the Company increasing its sales focus on
        selling subscription services to new customers and only selling perpetual licenses to its existing customers. We expect license sales to decrease in the future due to this strategic shift in the sales process.  FieldCentrix license sales were
        $123,000 in the second quarter of 2019 compared to $30,000 in the second quarter of 2018. The increase was due to additional license sales to existing customers in the second quarter of 2019 compared to the same quarter in 2018.
  Subscription revenue increased 43% to $1,233,000 in the second quarter of 2019 from $864,000 in the second quarter of 2018.  The primary reason for the increase resulted from additional hosted
        customers going live in the first and second quarters of 2019 for which the annual hosting revenue had previously been deferred. Previously deferred hosting revenues were recognized as the service periods for those hosting services had lapsed.  The
        Company continues to sell Software as a Service (SaaS) for which hosting revenue may not be recognized until the customers go-live. In addition, the Company's focus going forward will be on selling subscription licenses to new customers. As such, we
        expect deferred revenues and subscription revenues to increase going forward.
  Services and maintenance revenues decreased by 3% to $4,720,000 in the second quarter of 2019 compared to $4,876,000 in the second quarter of 2018.  This is primarily due to Astea Alliance service
        and maintenance revenues decreasing by $76,000 or 2% compared to the second quarter of 2018.  The decrease was mainly attributable to a decrease in service revenue in the Asia Pacific region offset by an increase in service revenues in U.S due to a
        strong backlog of professional services required by new customer implementations and upgrades of current customers. Service and maintenance revenues generated by FieldCentrix decreased by $81,000 or 15% to $473,000 in the second quarter of 2019
        compared to $554,000 during the same period in 2018.  The decrease in service revenue is due to a reduction in upgrade projects for existing customers and the decrease in maintenance is due to cancellation by a few customers.
  25
  Costs of Revenues
  Cost of software license fees increased 86% to $922,000 in the second quarter of 2019 from $497,000 in the second quarter of 2018.  Included in the cost of software license fees is the amortization
        of capitalized software costs and the third party software embedded in the Company's software licenses sold to customers.  Amortization of capitalized software development costs was $894,000 for the quarter ended June 30, 2019 compared to $485,000
        for the same quarter in 2018. The increase was due to the amortization of Alliance Version 15 that was released in September 2018 and Version 15.1, released in March 2019.  Amortization of both versions did not occur during the quarter ended June 30,
        2018.  The gross margin percentage on software license sales was (100%) in the second quarter of 2019 compared to 2% in the second quarter of 2018.  The decline in the 2019 license margin resulted from the combination of lower revenues and higher
        cost of sales.
  Cost of subscriptions increased 59% to $304,000 in the second quarter of 2019 from $191,000 in the second quarter of 2018. The increase in cost of subscriptions is mainly attributed to adding more
        live hosted customers and increased hosting compliance costs in the second quarter of 2019 compared to the same period in 2018. The cost would have been higher in the second quarter of 2019 but the Company transitioned to a lower cost provider of
        SaaS cloud services.   The gross margin percentage on hosting was 75% in the second quarter of 2019 compared to 78% in the second quarter of 2018. The decline in the gross margin is mainly due to the increase in subscription costs offset by an
        increase in subscription revenues.
  Cost of services and maintenance decreased 11% to $3,120,000 in the second quarter of 2019 from $3,486,000 in the second quarter of 2018. The decrease in cost of service and maintenance is mainly
        attributed to a decrease in headcount in the U.S. and decreases in travel expenses in all regions, partially offset by an increase in recruiting costs.  The gross margin percentage was 34% in the second quarter of 2019 and 29% in 2018.  The growth in
        the services and maintenance gross margin was mainly due to lower service and maintenance costs in the second quarter of 2019.
  Gross Profit
  Total gross profit decreased 16% to $2,069,000 in the second quarter of 2019 from $2,458,000 in the second quarter of 2018 primarily due to decreases in license and service and maintenance revenues
        as well as increases in costs of license and subscriptions. As a percentage of revenue, gross profit in the second quarter of 2019 was 32% compared to 37% in the second quarter of 2018.
  Operating Expenses
  Product Development
  Product development expenses increased 190% to $443,000 in the second quarter of 2019 from $153,000 in the second quarter of 2018.  Fluctuations in product development expense from period to period result from the
        amount of product development expense that is capitalized.  Development costs of $677,000 were capitalized in the second quarter of 2019 compared to $885,000 during the same period in 2018 due to less resources working on developing the latest
        version of Alliance software.  Gross product development expense was $1,120,000 in the second quarter of June 30, 2019 which is 8% higher than $1,038,000 during the same quarter in 2018.  The increase was due to increase in salary and benefits and an
        unfavorable exchange rate on the Israeli shekel relative to the U.S. dollar, as the majority of development work is performed in Israel. Product development expense as a percentage of revenues was 7% in the second quarter of 2019 and 2% in the second
        quarter of 2018.
  Sales and Marketing
  Sales and marketing expense increased 1% to $990,000 in the second quarter of 2019 from $977,000 in the second quarter of 2018.  The increase in sales and marketing expense resulted from higher
        third party marketing costs and increased headcount in the U.S., offset by lower sales commissions due to a decrease in license revenue. The increase in third party marketing costs is due to the Company strategy of expanding its marketing presence
        through additional efforts to increase awareness of our products in order to improve lead generation and sales opportunities.  Increased awareness will occur through additional webinars in all regions focused on the vertical industries in which the
        Company operates, attendance at more trade shows, and new strategies to improve lead generation for the Company's sales force.  As a percentage of revenues, sales and marketing expense was 15% in both the second quarter of 2019 and 2018.
  26
  General and Administrative
  General and administrative expenses consist of salaries, benefits and related costs for the Company's finance, administrative and executive management personnel, legal costs, accounting costs, bad
        debt expense and various costs associated with the Company's status as a public company. General and administrative expenses increased 19% to $1,123,000 during the second quarter of 2019 from $948,000 in the second quarter of 2018 due to increased
        professional fees which we did not incur during the same period in 2018.  As a percentage of revenue, general and administrative expenses were 18% in the second quarter of 2019 compared to 14% in the second quarter of 2018.
  Net Interest Expense
  Net interest expense was $65,000 in the second quarter of 2019 compared to $64,000 in the second quarter of 2018.  The increase in interest expense is mainly due an increase in the interest rate
        charged by Bridge Bank due to an increase in the prime rate offset by a lower average line of credit during the second quarter of 2019 compared to the same period in 2018.
  Income Tax Expense
  The Company recorded a provision for income tax of $34,000 for the second quarter of 2019 compared to $12,000 during the second quarter of 2018.  The tax expense increase resulted from income taxes
        paid in the Asia Pacific region during the second quarter of 2019 compared to no tax provision in the same period in 2018.  In the past, there has been no tax expense in this Region due to the carryforward of operating losses in the prior periods
        that have now been used and no longer available. We expect to pay taxes in the future in the APAC region as long as they remain profitable.
  International Operations
  The Company's international operations generated revenues of $2,501,000 in the second quarter of 2019, a decrease of 18% from the same quarter in 2018.  Revenues from international operations
        comprised 39% of the Company's total revenue for the second quarter in 2019, compared to 46% of total revenues for the same quarter in 2018.  The decrease in international revenues compared to the same period in 2018 is primarily due to decreases in
        software license sales and professional services in all international regions, partially offset by an increase in subscription revenue, as the Company continues to increase its focus on subscription services.
  Comparison of Six Months Ended June 30, 2019 and 2018
  Revenues
  Total revenues decreased by $293,000 or 2%, to $13,035,000 for the six months ended June 30, 2019 from $13,328,000 for the six months ended June 30, 2018.  Software license fee revenues decreased
        $149,000, or 11%, from the same period in 2018.  Subscription revenues increased $767,000 or 45% to $2,459,000 from the same period last year. Services and maintenance revenue for the six months ended June 30, 2019 decreased $911,000 or 9% from the
        same period in 2018.
  Software license fee revenues decreased 11% to $1,162,000 in the first six months of 2019 from $1,311,000 in the first six months of 2018.  This is primarily due to Astea Alliance license revenue
        decreasing by $227,000 or 18%, to $1,018,000 in the first six months of 2019 from $1,245,000 in the first six months of 2018.  The decrease was primarily due to lower perpetual license sales in Japan and EMEA and partially offset by higher sales in
        the U.S. FieldCentrix license sales were $144,000 in the first six months of 2019 compared to $66,000 in the first six months of 2018. The increase was due to an increase in licenses sold to existing customers in the first six months of 2019 compared
        to the same period in 2018.
  Subscription revenue increased 45% to $2,459,000 in the first six months of 2019 from $1,692,000 in the first six months of 2018.  The increase resulted from a number of hosted customers who went
        live in late 2018 and the first six months of 2019.  The Company continues to add new hosting customers.  Even though the Company signed new Software as a Service (SaaS) customers in the first six months of 2019, the associated hosting revenue may
        not be recognized until the new customers go-live.
  27
  Services and maintenance revenues decreased by 9% to $9,414,000 in the first six months of 2019 compared to $10,325,000 in the first six months of 2018.  This is primarily due to Astea Alliance
        service and maintenance decreasing by $715,000 or 8% compared to the first six months of 2018.  The decrease was mainly attributable to a hosted customer in Japan that went live in the first six months of 2018 for which the hosting service revenue
        had previously been deferred. In addition, there was a decrease in maintenance revenue in the U.S. for a few customers that transitioned from on-premise to subscription services.  Service and maintenance revenues generated by FieldCentrix decreased
        by $196,000 or 17% to $976,000 in the first six months of 2019 compared to $1,172,000 during the same period in 2018.  The decrease is due to an increase in upgrade projects for several existing customers. The decrease in service revenue is due to a
        reduction in upgrade projects for existing customers and decreases in maintenance due to cancelation by a few customers.
  Costs of Revenues
  Cost of software license fees increased by 33% to $1,624,000 in the first six months of 2019 from $1,226,000 in the first six months of 2018.  Included in the cost of software license fees are the
        costs of capitalized software amortization and the cost of all third party software embedded in the Company's software licenses which are sold to customers.  Amortization of capitalized software development costs was $1,569,000 for the first six
        months in 2019 compared to $1,201,000 for the same period in 2018. The increase in amortization was due to the amortization of Alliance Version 15 that began being amortized during the 4th quarter of 2018 that will continue for 2 years as well as
        amortization of Version 15.1 that was released in March 2019.  The gross margin percentage on software license sales was (40%) in the first six months of 2019 compared to 6% in the first six months of 2018.  The decline in the license margin resulted
        primarily from the increase in amortization of software license fees in the first six months of 2019.
  Cost of subscriptions increased by 32% to $559,000 in the first six months of 2019 from $425,000 in the first six months of 2018. The increase in cost of subscriptions is mainly attributed to the
        addition of more customers to the SaaS environment and increased hosting compliance costs in the first six months of 2019 compared to the same period in 2018. The cost would have been higher in the first six months of 2019 but the Company
        transitioned to a lower cost provider of SaaS cloud services. The gross margin percentage on hosting was 77% in the first six months of 2019 compared to 75% in the first six months of 2018. The growth in the subscription margin was primarily due to
        the reduction in cost and the increase in subscription revenues as customers continue to go live.
  Cost of services and maintenance decreased 7% to $6,510,000 in the first six months of 2019 from $7,009,000 in the first six months of 2018. The decrease in cost of service and maintenance is
        mainly attributed to a decrease in headcount in the U.S. and decreases in travel expenses in all regions partially offset by an increase in recruiting costs.  The gross margin percentage was 31% in the first six months of 2019 compared to 32% in the
        first six months of 2018.
  Gross Profit
  Gross profit decreased 7% to $4,342,000 in the first six months of 2019 from $4,668,000 in the first six months of 2018 primarily due to a decrease of license and service and maintenance revenues
        and an increase in software license and subscription costs partially offset by an increase in subscription revenue and decrease in service and maintenance costs.  As a percentage of revenue, gross profit in the first six months of 2019 was 33%
        compared to 35% in the first six months of 2018.
  Operating Expenses
  Product Development
  Product development expenses increased 65% to $606,000 in the first six months of 2019 from $367,000 in the first six months of 2018.  Fluctuations in product development expense from period to period result from the
        amount of product development expense that is capitalized.  Development costs of $1,504,000 were capitalized in the first six months of 2019 compared to $1,785,000 during the same period in 2018 due to additional resources working on Version 15 in
        2018. In 2018, there had been extra time and resources allocated to Version 15 due to all the additional functionality and upgrades being made to this version. Gross product development expense was $2,110,000 in the first six months of 2019 compared
        to $2,152,000 during the same period in 2018. The decrease was primarily due to a favorable exchange rate in the first six months of 2019 compared to the same period in 2018 on the Israeli shekel relative to the U.S. dollar, as the majority of
        development work is performed in Israel. Product development expense as a percentage of revenues was 5% in the first six months of 2019 and 3% in the first six months of 2018.
  28
  Sales and Marketing
  Sales and marketing expense decreased slightly by less than 1% to $1,966,000 in the first six months of 2019 from $1,978,000 in the first six months of 2018.  The decrease in sales and marketing
        expense resulted from lower sales commissions and travel costs due to a decrease in license sales partially offset by an increase in third party marketing costs and increased headcount in the U.S. The increase in third party marketing costs is due to
        the Company's strategy of expanding its marketing presence through additional efforts to increase awareness of our products in order to improve lead generation and sales opportunities.  Increased awareness occurs through additional webinars in all
        regions focused on the vertical industries in which the Company operates, attendance at more trade shows, and new strategies to improve lead generation for the Company's sales force.  As a percentage of revenues, sales and marketing expense was 15%
        in both the first six months of 2019 and 2018.
  General and Administrative
  General and administrative expenses consist of salaries, benefits and related costs for the Company's finance, administrative and executive management personnel, legal costs, accounting costs, and
        various costs associated with the Company's status as a public company. General and administrative expenses increased 12% to $2,124,000 during the first six months of 2019 from $1,896,000 in the first six months of 2018 mainly due to increased
        professional fees which we did not incur during the same period in 2018.  As a percentage of revenue, general and administrative expenses were 16% in the first six months of 2019 compared to 14% in the first six months of 2018.
  Net Interest Expense
  Net interest expense was $139,000 in the first six months of 2019 compared to $99,000 in the first six months of 2018.  The increase in interest expense is mainly due to interest paid on accrued,
        but unpaid preferred dividends compared to the same period in 2018. Per the preferred stock agreements, unpaid accrued preferred dividends incur an interest charge calculated at 10% per annum.  In addition, the interest rate charged by Bridge Bank on
        the Company's line of credit due to an increase in the prime rate offset by a lower average line of credit during the first six months of 2019 compared to the same period in 2018.
  Income Tax Expense
  The Company recorded a provision for income tax of $38,000 for first six months of 2019 compared to $18,000 for the same quarter in 2018. The tax expense increase resulted from income tax paid in
        Australia during the first six months of 2019 compared to no tax provision in the same period in 2018.  In the past, there has been no tax expense in the Region due to the utilization of operating losses from prior periods that are no longer
        available. We expect to pay taxes in the future in the APAC region, as long as they remain profitable. The effective tax rate in the APAC region is 30%.
  International Operations
  The Company's international operations generated revenues of $5,086,000 in the first six months of 2019, a decrease of 10% compared to the same quarter in 2018.  Revenues from international
        operations comprised 39% of the Company's total revenue for the first six months in 2019 compared to 43% in the first six months of 2018.   The decrease in international revenues is primarily due to a decrease in software license fees revenue and
        service revenue in all international regions, partially offset by an increase in subscription revenue.
  Liquidity and Capital Resources
  Operating Activities
  The Company generated $2,349,000 of cash from operating activities in the first six months of 2019 compared to $1,423,000 in the first six months of 2018.  The increase in operating cash flows of $926,000 was primarily
        due to an increase in cash generated by the collection of accounts receivable of $542,000, and increases of $520,000 for deferred revenues and $167,000 for prepaid expenses, offset by a decrease in cash generated by net income (loss) $841,000 netted
        by an increase in non-cash charges of $515,000.
  29
  Investing Activities
  The Company used $1,613,000 for investing activities in the first six months of 2019 compared to $1,819,000 for the first six months of 2018.  The decrease in cash used for investing activities is primarily
        attributable to a decrease of $281,000 in capitalized software development costs partially offset by an increase of $75,000 for the acquisition of property and equipment.
  Financing Activities
  The Company used $163,000 in cash for financing activities in the first six months of 2019, which is $25,000 less than the $188,000 used in 2018.  There were $200,000 of preferred stock dividend
        payments in the first six months of 2019 compared to $55,000 payments in the first six months of 2018.   In addition, the Company borrowed $9,078,000 and repaid $9,100,000 on its line of credit from WAB in the first six months of 2019 and the Company
        borrowed $5,150,000 and repaid $5,058,000 on its line of credit 2018. The Company repaid $225,000 on the term loan with WAB in 2018.
  The effect of exchange rates on cash related to the U.S. dollar exchange rates for most other currencies in which the Company operates, primarily the Australian dollar, Japanese yen, the Euro, the
        British pound sterling and Israel shekel, provided a reduction in cash of $10,000 in the first six months of 2019 compared to an increase of $24,000 in the first six months of 2018.
  Operating Matters and Liquidity
  The Company has a history of net losses and an accumulated deficit of $34,875,000 as of June 30, 2019.  In the first six months of 2019, the Company had a net loss of $531,000 compared to income of $310,000 generated
          in the first six months of 2018.  Further, at June 30, 2019, the Company had a working capital ratio of .57:1, with cash and cash equivalents of $1,839,000 compared to December 31, 2018 when the Company had cash and cash equivalents of $1,276,000. 
          The increase in cash and cash equivalents for the first six months 2019 was primarily driven by an increase of cash provided by operations in 2019 compared to 2018 and a decrease in capitalized software development costs, partially offset by an
          increase in the dividend payment.
  As of June 30, 2019, the Company owed $2,647,000 against the line of credit from Western Alliance Bank ("WAB").   As of June 30, 2019, the availability under the line of credit was $203,000.  The Company has projected
        revenues that management believes will provide sufficient funds along with the additional borrowings available under its line of credit to sustain its continuing operations through at least August 15, 2020.
  The Company was in compliance with the WAB financial and liquidity covenant as of June 30, 2019 and expects to be able to continue to comply with the required covenants under the modified agreement with WAB for at
        least the next year.  As a result, the amount due to WAB under the line of credit as of June 30, 2019 were classified in the accompanying condensed consolidated balance sheet in accordance with the repayment terms stipulated in the agreement with
        WAB.
  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 is to maintain and/or reduce operating expenses in order to be aligned with expected revenues.  The primary area of focus will continue to be headcount and costs from outside
        consultants.  The Company remains focused on maximizing revenue from its revenue generating resources and will continue to repurpose, if necessary, certain personnel to become billable so the Company can continue to improve its liquidity.  The
        Company has a substantial professional services backlog that resulted from new customers added in 2018 as well as upgrade projects from our existing customers as they move to the latest version of Astea Alliance.   In 2019, the Company will continue
        to consider ways to reduce operating expenses in certain areas of the Company in order to maintain our liquidity.  However, management has implemented new marketing initiatives which have increased our spending in this area in 2019.  We believe the
        new initiatives will directly contribute to increasing new business, which is essential to our growth.  Operations will generate enough cash to meet obligations at least
  through August 15, 2020.
  As noted above, if the Company's actual results fall short of expectations, the Company will make cost adjustments to improve the Company's operating cash flows.
  In addition, we plan to maintain the same
        level of investment in software development and we do not expect to increase capital expenditures.
  30
  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.
  Off-Balance Sheet Arrangement Transactions
  The Company is not involved in off-balance sheet arrangements that have or are reasonably likely to have a material current or future impact on our financial condition, changes in financial
        condition, revenues or expenses result in operations, liquidity, capital expenditures or capital resources.
  Item
  3.
  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.  Our market risk exposure is primarily a result of
        fluctuations in interest rates and foreign currency.    We do not hold financial instruments for trading purposes.
  Interest Rate Risk.
  Our exposure to market risk for changes in interest rates relates primarily to our balances outstanding on our
        revolving line of credit with WAB, as the interest rate is variable.  At June 30, 2019, the outstanding balances on our line of credit under the revolving credit facility with WAB was $2,647,000.
  Foreign Currency Risk.
  All costs associated with the Company's foreign operations in the United Kingdom, Australia, Japan and Israel are denominated in their respective local
        currencies and translated into U.S. dollars for financial reporting.  As a result, the Company is exposed to risks to the extent that the rate of inflation in many of itws foreign operating regions differs from the rate of revaluation of their
        related currencies in relation to the U.S. dollar of if the timing of such revaluations lags behind inflation in these regions.  In such an event, the costs of the Company's operations in these regions, measured in U.S. dollars, will change and the
        U.S. dollar measured results of operations will be affected.
  The Company does not use foreign currency forward exchange contracts or purchased currency options to hedge local currency cash flows or for trading purposes.  All sales arrangements with international customers are
        denominated in foreign currency.  For the six months ended June 30, 2019, approximately 39% of the Company's overall revenue resulted from sales to customers outside the United States.  A 10% change in the value of the U.S. dollar relative to each of
        the currencies of the Company's non-U.S.-generated sales would not have resulted in a material change to its results of operations.  The Company does not expect any material loss with respect to foreign currency risk.
  Item 4.
  CONTROLS AND PROCEDURES
  Our management has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rules 13a-15 as of the end of the period covered by this report. Based on that evaluation, the Chief
        Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.
  Changes in Internal Control Over Financial Reporting
  During the quarter ended June 30, 2019, we implemented internal controls for the new accounting standard adopted during the period, Leases, but there were no changes in our internal control over financial reporting
        during the fiscal quarter ended June 30, 2019 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
  31
  PART II - OTHER INFORMATION
  Item 1A.
  RISK FACTORS
  In addition to the risk factors set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December
        31, 2018, which could materially affect the Company's business, financial condition or future results. The risks described in this report and in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 are not the only risks
        facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company's business, financial condition and/or operating results.
  Variability of Quarterly Results
  Risks to the Company on a quarterly basis, and which may vary from quarter to quarter, include but are not limited to the following:
  •
  The Company's quarterly operating results have varied in the past, and may vary significantly in the future depending on factors such as the size, timing and recognition of revenue from significant orders,
                  the timing of new product releases and product enhancements, and market acceptance of these new releases and enhancements, increases in operating expenses, and seasonality of its business.
  •
  The market price of the Company's common stock could be subject to significant fluctuations in response to, and may be adversely affected by, variations in quarterly operating results, changes in earnings
                  estimates by analysts, developments in the software industry, adverse earnings or other financial announcements of the Company's customers and general stock market conditions, as well as other factors.
  Item 5
  .
  OTHER INFORMATION
  On August 8, 2019, the Company entered into indemnification agreements with each of the current directors and executive officers and certain non-executive management of the Company (an
        "Indemnification Agreement"). The form of the Indemnification Agreement has been approved by the Board. The Indemnification Agreement requires the Company to indemnify directors and executive officers and certain non-executive management to the
        fullest extent permitted by Delaware law and is in addition to protections provided in the Company's Certificate of Incorporation and Bylaws. Under the Indemnification Agreement, directors and executive officers and certain non-executive management
        will be indemnified for certain liabilities and will be advanced certain expenses that have been incurred as a result of actions brought, or threatened to be brought, against such individuals in connection with their duties. The Indemnification
        Agreement also contains various covenants by the Company as to the maintenance of directors' and officers' liability insurance. This description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by
        reference to the form of Indemnification Agreement, which is incorporated herein by reference to Exhibit 10.26# to this Form 10-Q. The Indemnification Agreements entered into by the Company and each director, executive officer and certain
        non-executive management are the same, except for each counterparty's name and information for notices.
  32
  Item 6
  .
  EXHIBITS
  10.26#
  Form of Indemnification
  31.1
  Certification Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
                      1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2
  Certification Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
                      1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32.1
  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      – Chief Executive Officer
  32.2
  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                      – Chief Financial Officer
  33
  SIGNATURES
  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
        authorized.
  ASTEA INTERNATIONAL INC.
  Date:  August 13, 2019
  /s/Zack Bergreen
  Zack Bergreen
  Chief Executive Officer
  (Principal Executive Officer)
  Date:  August 13, 2019
  /s/Rick Etskovitz
  Rick Etskovitz
  Chief Financial Officer
  (Principal Financial and Chief Accounting Officer)
  34
  EXHIBIT INDEX
  No.
  Description
  10.26#
  Form of Indemnification
  31.1
  Certification Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
                  Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2
  Certification Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the
                  Securities Exchange Act of 1934 as adopted pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002
  32.1
  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 – Chief Executive Officer
  32.2
  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 – Chief Financial Officer
  101.INS
  XBRL Instance Document
  101.SCH
  XBRL Taxonomy Extension Schema
  101.CAL
  XBRL Taxonomy Extension Calculation Linkbase
  101.DEF
  XBRL Taxonomy Extension Definition Linkbase
  101.LAB
  XBRL Taxonomy Extension Label Linkbase
  101.PRE
  XBRL Taxonomy Extension Presentation Linkbase
  35