10-Q

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, 2015

OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 001-35164

ONVIA, INC.

(Exact name of registrant as specified in its charter)

Delaware	91-1859172
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

509 Olive Way, Suite 400, Seattle, Washington 98101

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (206) 282-5170

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. [X] Yes [   ] No

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

Indicate by checkmark 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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer [   ]      Accelerated filer [   ]      Non-accelerated filer [   ]       Smaller reporting company [X]

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

Common stock, par value $.0001 per share: 7,423,567 shares outstanding as of July 31, 2015.

ONVIA, INC.

INDEX

	Page
PART I.  FINANCIAL INFORMATION	1
Item 1.  Unaudited Condensed Consolidated Financial Statements	1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	1
Condensed Consolidated Balance Sheets (Unaudited)	2
Condensed Consolidated Statements of Cash Flows (Unaudited)	3
Notes to Condensed Consolidated Financial Statements (Unaudited)	4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures about Market Risk	18
Item 4. Controls and Procedures	18
PART II. OTHER INFORMATION	18
Item 1.  Legal Proceedings	18
Item 1A.  Risk Factors	18
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.  Defaults Upon Senior Securities	19
Item 4.  Mine Safety Disclosure	19
Item 5.  Other Information	19
Item 6.  Exhibits	20
SIGNATURES	21

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

Onvia, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
	(Unaudited)					(Unaudited)
	(In thousands, except per share data)					(In thousands, except per share data)
Revenue
Subscription	$	5,368	$	5,003		$	10,631		$	10,028
Content license		430		463			892			937
Management information reports		41		42			89			95
Other		55		59			127			123
Total revenue		5,894		5,567			11,739			11,183
Cost of revenue (exclusive of depreciation and amortization included below)		838		849			1,631			1,674
Gross margin		5,056		4,718			10,108			9,509
Operating expenses:
Sales and marketing		3,118		2,891			6,208			5,825
Technology and development		1,062		1,021			2,094			2,141
General and administrative		818		925			2,227			1,754
Total operating expenses		4,998		4,837			10,529			9,720
Income/(loss) from operations		58		(119	)		(421	)		(211	)
Interest and other income, net		22		2			24			5
Net income/(loss)	$	80	$	(117	)	$	(397	)	$	(206	)
Unrealized loss on available-for-sale securities		-		(1	)		-			-
Comprehensive income/(loss)	$	80	$	(118	)	$	(397	)	$	(206	)
Basic net income/(loss) per common share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)
Diluted net income/(loss) per common share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)
Basic weighted average shares outstanding		7,413		7,395			7,404			7,373
Diluted weighted average shares outstanding		7,578		7,395			7,404			7,373

See accompanying notes to the unaudited condensed consolidated financial statements.

1 

Onvia, Inc.

Condensed Consolidated Balance Sheets

	June 30, 2015			December 31, 2014
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,052		$	1,577
Short-term investments, available-for-sale		6,335			6,436
Accounts receivable, net of allowance for doubtful accounts of $31 and $42		1,093			1,735
Prepaid expenses and other current assets		949			682
Total current assets		10,429			10,430
LONG TERM ASSETS:
Property and equipment, net of accumulated depreciation		1,194			1,358
Internal use software, net of accumulated amortization		5,143			5,059
Other long-term assets		179			181
Total long term assets		6,516			6,598
TOTAL ASSETS	$	16,945		$	17,028
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,005		$	873
Accrued expenses		833			1,098
Unearned revenue, current portion		8,608			8,478
Other current liabilities		91			82
Total current liabilities		10,537			10,531
LONG TERM LIABILITIES:
Unearned revenue, net of current portion		576			405
Deferred rent, net of current portion		618			590
Other long-term liabilities		56			69
Total long term liabilities		1,250			1,064
TOTAL LIABILITIES		11,787			11,595
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock; $.0001 par value: 2,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock; $.0001 par value: 11,000,000 shares authorized; 8,666,374 and 8,643,460 shares issued; and 7,423,567 and 7,400,653 shares outstanding		1			1
Treasury stock, at cost: 1,242,807 and 1,242,807 shares		(4,398	)		(4,398	)
Additional paid in capital		353,973			353,852
Accumulated other comprehensive loss		-			(1	)
Accumulated deficit		(344,418	)		(344,021	)
Total stockholders’ equity		5,158			5,433
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	16,945		$	17,028

See accompanying notes to the unaudited condensed consolidated financial statements.

2 

Onvia, Inc.

Condensed Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2015			2014
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(397	)	$	(206	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,222			1,619
Stock-based compensation		44			84
Loss on sale of property and equipment		2			-
Change in operating assets and liabilities:
Accounts receivable		642			214
Prepaid expenses and other assets		(265	)		(130	)
Accounts payable		10			(152	)
Accrued expenses		(265	)		(171	)
Unearned revenue		301			(51	)
Deferred rent		37			46
Net cash provided by operating activities		1,331			1,253
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(110	)		(174	)
Additions to internal use software		(932	)		(1,138	)
Purchases of investments		(4,062	)		(6,201	)
Sales of investments		-			1,570
Maturities of investments		4,163			3,370
Proceeds from sale of equipment		8			-
Net cash used in investing activities		(933	)		(2,573	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligations		-			(126	)
Proceeds from exercise of stock options and purchases under employee stock purchase plan		77			227
Net cash provided by financing activities		77			101
Net increase / (decrease) in cash and cash equivalents		475			(1,219	)
Cash and cash equivalents, beginning of period		1,577			2,073
Cash and cash equivalents, end of period	$	2,052		$	854
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchases under capital lease obligations	$	(6	)	$	-
Property and equipment additions in accounts payable		(114	)		(68	)
Internal use software additions in accounts payable		(192	)		(253	)

See accompanying notes to the unaudited condensed consolidated financial statements.

3 

Onvia, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The interim unaudited Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, or GAAP, and the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying interim unaudited Condensed Consolidated Financial Statements and related notes thereto should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“2014 Annual Report”).

Onvia had a wholly-owned subsidiary in Canada that was dissolved effective December 19, 2014; and there was no business activity in this subsidiary during the three and six month periods ended June 30, 2014. The wholly-owned subsidiary owned no assets or liabilities as of the date of dissolution.

The information furnished is unaudited, but reflects, in the opinion of management, all adjustments, consisting of only normal recurring items, necessary for a fair presentation of the results for the interim periods presented. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation.

Interim results are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of stock-based compensation, allowance for doubtful accounts, capitalization of costs for internally developed software, recoverability of long-lived assets, including internally developed software, and the valuation allowance for Onvia’s net deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from the Company’s estimates. In addition, any significant unanticipated changes in any of the Company’s assumptions could have a material adverse effect on its business, financial condition, and results of operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on the recognition of revenue from contracts with customers. Revenue recognition will 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 guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The guidance was originally effective January 1, 2017 and early adoption was not permitted. In July 2015, the FASB approved a one-year deferral of the effective date to January 1, 2018, with an option of applying the standard on the original effective date. The company is currently evaluating the impact of the new guidance, the effective date and the method of adoption.

4 

2. Stock-Based Compensation

The impact to Onvia’s interim unaudited Condensed Consolidated Statements of Operations for recording stock-based compensation was as follows for the periods presented (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Cost of sales	$	-	$	1		$	-		$	3
Sales and marketing		6		(14	)		(3	)		(5	)
Technology and development		3		5			8			11
General and administrative		13		38			39			75
Total stock-based compensation	$	22	$	30		$	44		$	84

3. Earnings per Share

Basic income/(loss) per share is calculated by dividing the net loss for the period by the weighted average shares of common stock outstanding for the period. Diluted income/(loss) per share is calculated by dividing the net income/(loss) per share by the weighted average common stock outstanding for the period, plus dilutive potential common shares using the treasury stock method. In periods with a net loss, basic and diluted earnings per share are identical because inclusion of potentially dilutive common shares would be anti-dilutive.

The following table sets forth the computation of basic and diluted net income/(loss) per share for the three and six months ended June 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Net income/(loss)	$	80	$	(117	)	$	(397	)	$	(206	)
Shares used to compute basic net income/(loss) per share		7,413		7,395			7,404			7,373
Dilutive potential common shares:
Stock options		165		-			-			-
Shares used to compute diluted net income/(loss) per share		7,578		7,395			7,404			7,373
Basic net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)
Diluted net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)

For the three and six months ended June 30, 2015, the weighted average effect of stock options to purchase approximately 290,000 and 877,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because their effect would be anti-dilutive.

For the three and six months ended June 30, 2014, the weighted average effect of stock options to purchase approximately 1,085,000 and 1,105,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because their effect would be anti-dilutive.

5 

4. Investments

Onvia classifies investments in debt securities as available-for-sale, stated at fair value as summarized in the following table (in thousands):

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	390	$	-	$	-	$	390
Certificates of Deposit (1)		5,945		-		-		5,945
Total Investments	$	6,335	$	-	$	-	$	6,335

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	158	$	-	$	-		$	158
Certificates of Deposit (1)		6,279		-		(1	)		6,278
Total Investments	$	6,437	$	-	$	(1	)	$	6,436

⁽¹⁾ The Company evaluated certificates of deposits held as of June 30, 2015 and December 31, 2014 and concluded that they meet the definition of securities as available for sale.

Onvia accounts for investments held as available for sale according to their fair values, which is defined as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Onvia uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

6 

The following table summarizes, by major security type, investments classified as available-for-sale at June 30, 2015 and at December 31, 2014, stated at fair value (in thousands):

	Fair Value Measurements as of June 30, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	390	$	-	$	390
Certificates of Deposit		-		5,945		-		5,945
	$	-	$	6,335	$	-	$	6,335

	Fair Value Measurements as of December 31, 2014
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	158	$	-	$	158
Certificates of Deposit		-		6,278		-		6,278
	$	-	$	6,436	$	-	$	6,436

There were no transfers in or out of Level 2 investments during the first six months of 2015 and fourth quarter of 2014, and there was no activity in Level 1 or Level 3 fair value measurements during those periods.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Prepaid insurance	$	187	$	110
Prepaid software licences and maintenance		430		440
Prepaid expenses - other		295		123
Interest receivable		11		4
Other receivables		26		5
Total prepaid expenses and other current assets	$	949	$	682

6. Property and Equipment

Property and equipment, net of accumulated depreciation, consist of the following (in thousands):

	June 30, 2015			December 31, 2014
Computer equipment	$	3,768		$	3,676
Software		1,855			1,855
Furniture and fixtures		109			109
Leasehold improvements		883			883
Total cost basis		6,615			6,523
Less accumulated depreciation		(5,421	)		(5,165	)
Net book value	$	1,194		$	1,358

Depreciation expense was $153,000 and $317,000 for the three and six months ended June 30, 2015, respectively, compared to $179,000 and $362,000, respectively, for the same periods of 2014.

7 

7. Internal Use Software

Onvia capitalizes qualifying computer software costs incurred during the “application development stage” and other costs. Amortization of these costs begins once the product is ready for its intended use. These costs are amortized on a straight-line basis over the estimated useful life of the product, typically 3 to 5 years. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period.

Onvia periodically evaluates the remaining useful lives and carrying values of internal use software. If management determines that all or a portion of the asset will no longer be used, or the estimated remaining useful life differs from existing estimates, an abandonment will be recorded to reduce the carrying value or adjust the remaining useful life to reflect revised estimates. In addition, if the carrying value of the software exceeds the estimated future cash flows, an impairment will be recorded to reduce the carrying value to the expected realizable value. No impairment has been recorded during the six months ended June 30, 2015 and 2014.

The following table presents a roll-forward of capitalized internal use software for the six months ended June 30, 2015 (in thousands):

	Balance at December 31, 2014			Additions			Balance at June 30, 2015
Capitalized internal use software	$	17,107		$	989		$	18,096
Accumulated amortization		(12,048	)		(905	)		(12,953	)
Internal use software, net	$	5,059		$	84		$	5,143

Amortization expense was $420,000 and $905,000 for the three and six months ended June 30, 2015, respectively, compared to $624,000 and $1,258,000, respectively, for the same periods of 2014. Amortization expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

8. Accrued Expenses and Other Current Liabilities

Accrued expenses consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Payroll and related liabilities	$	784	$	966
Taxes payable and other		49		132
Total accrued expenses	$	833	$	1,098

Other current liabilities consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Obligations under capital leases, current portion		24		24
Deferred rent, current portion		67		58
Total other current  liabilities	$	91	$	82

8 

9. Commitments and Contingencies

Operating Leases

Onvia has a lease agreement for its corporate offices located in Seattle, Washington that expires on April 30, 2021.  Rent expense is being recognized on a straight-line basis over the term of the lease.

Onvia also has a non-cancellable operating lease for office equipment, which expires in July 2019.

As of June 30, 2015, remaining future minimum lease payments required on non-cancellable operating leases are as follows for the years ending December 31 (in thousands):

	Real Estate Operating Leases		Office Equipment Operating Lease		Total Operating Leases
2015	$	414	$	10	$	424
2016		780		20		800
2017		873		20		893
2018		896		20		916
2019		918		9		927
2020 and thereafter		1,261		-		1,261
Total	$	5,142	$	79	$	5,221

Purchase Obligations

Onvia has non-cancellable purchase obligations for software development and license agreements, co-location hosting arrangements, telecom agreements, marketing agreements and third-party content agreements. The agreements expire in dates ranging from April 2015 to 2017. Future required payments under these non-cancellable agreements are as follows for the years ending December 31 (in thousands):

	Purchase Obligations
2015	$	572
2016		722
2017		237
Total	$	1,531

Legal Proceedings

From time to time, legal proceedings may arise in the ordinary course of business. Although the outcomes of legal proceedings are inherently difficult to predict, we are not currently involved in any legal proceeding in which the outcome, in our judgment based on information currently available, is likely to have a material adverse effect on our business or financial position.

10. Provision for Income Taxes

As of June 30, 2015 and December 31, 2014, Onvia has recorded a valuation allowance against its net deferred tax assets because the Company has determined it is not more likely than not that the asset will be realized. Onvia will continue to evaluate the likelihood that these tax benefits may be realized, and may reverse all or a portion of its valuation allowance in the future if it is determined that realization of these benefits is more likely than not.

9 

Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), utilization of net operating loss (NOL) carryforwards to offset future taxable income are subject to substantial annual limitations if we experience a cumulative change in ownership as defined by the Code. In general, an ownership change, as defined by the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.

As of June 30, 2015 and December 31, 2014, Onvia’s Federal NOL carryforwards for income tax purposes were approximately $76.0 million.  The Federal NOL carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. If not utilized, the Federal NOL carryforwards will begin to expire in 2022.  The latest date available for a portion of the Federal NOL carryforwards to be utilized to offset future income is 2033.

11. Security Deposits

Pursuant to Onvia’s lease for its current corporate office space, Onvia has established a stand by letter of credit as security to the lease increasing from $100,000 in April 2013, to $125,000 in January 2014 and to $150,000 on January 2015.  The letter of credit will be returned at lease termination in April 2021, or earlier as discussed above, subject to standard office lease conditions. As of June 30, 2015 and December 31, 2014, the stand by letter of credit is secured by a security deposit of $150,000 and reported as other long-term assets on the unaudited Condensed Consolidated Balance Sheets.

10 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT

In addition to historical information, the discussion and analysis in this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “anticipates,” “should,” “expects,” “plans,” “intends,” “indicates” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about our future results of operations, the progress to be made on the 2015 initiatives, Onvia’s future financial flexibility and future cash flows and Onvia’s future product and content offerings. Such statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors, which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: Onvia fails to increase and retain contract value of customers using the “target market” strategy; Onvia fails to execute properly on new products, or customers fail to adopt these products or services; Onvia’s investment in technology and new content fails to improve sales penetration and client retention rates; and changes made to Onvia’s technology infrastructure fails to handle the increased demands caused by increasing network traffic and the volume of aggregated data.

Additional information on factors that may impact these forward-looking statements can be found under “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as applicable, in this report, in our 2014 Annual Report on Form 10-K for the year ended December 31, 2014.  Onvia assumes no obligation to update forward-looking statements as a result of new information or future events or developments, except as may be required by law.  The following discussion should also be read in conjunction with the interim unaudited Condensed Consolidated Financial Statements and accompanying Notes thereto.

In this Report, the words “we,” “our,” “us,” “Onvia,” or the “Company” refer to Onvia, Inc. and its wholly- owned subsidiary.

Company Overview

Onvia is a leading provider of business information and research solutions that help companies plan, market and sell to government agencies throughout the United States (or U.S.). Onvia’s business solutions provide clients online access to proprietary information about government procurement activity across local, state, and federal government agencies. The business intelligence derived from our solutions allows clients to identify and research new market opportunities, analyze market trends, and obtain valuable insights about their competitors and channel partners. We believe our business solutions provide clients with a distinct competitive advantage, increased revenue opportunities, and strategic insight into the public sector market.

Onvia’s target client prospects operate regionally or nationally, have a long-term strategic interest in the public sector and focus primarily on the decentralized State, Local and Education (SLED) market. We believe this model will produce higher margins, providing the flexibility to price products based upon the value that we create for clients, not based upon the cost of fulfillment.

In 2011, we began executing a business transformation plan intended to leverage the Company’s investment in a rich public sector procurement database. Over the last four years we have repositioned Onvia’s value proposition from an aggregator of public procurement documents to a provider of comprehensive public sector business. We believe the business is now positioned for continuing growth in subscription revenue and Adjusted EBITDA (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below for more information regarding Adjusted EBITDA).

11 

The Onvia solution includes access to the Onvia Database, Spending Forecast Center, Term Contract Center, Vendor Center, Purchase Order Analytics and the Onvia Guide. These services are sometimes bundled with management information reports in multiple element arrangements. We allocate revenue from these bundled sales ratably between the subscription services and the management reports based on established list prices for those offerings. Subscriptions to the Onvia Database are typically prepaid, have a minimum term of one year and revenues are recognized ratably over the term of the subscription. Subscriptions are generally priced based upon the geographic range, nature of content purchased, and the number of users accessing the database.

Most of Onvia’s revenues are generated from sales to companies that leverage our information for their own internal use, and to businesses that license our content for redistribution. Revenue from businesses which license our content for resale is classified as Content License revenue. Content license contracts are generally multi-year arrangements and typically have higher annual contract values than our subscription-based services. Revenue from content license agreements is recognized over the term of the agreement.

Onvia was incorporated in January 2000 in the state of Delaware. Our principal corporate office is located in Seattle, Washington. Our securities trade on The NASDAQ Capital Market under the symbol ONVI.

Strategic Initiatives

In 2015, we are executing three initiatives intended to build on the results achieved in 2014 and further accelerate growth in subscription revenue and Adjusted EBITDA.

· Our first 2015 initiative is to further accelerate year over year bookings growth. This growth is planned in three key areas: sales to new customers, contract enhancements with existing customers and improved retention of our existing customers. The measure of success for this initiative includes the overall growth in new client bookings, growth in Annual Contract Value (ACV) and improvement in dollar retention. For a discussion of these and other key operating metrics refer to the Executive Summary of Operations and Financial Position below.

· Our second 2015 initiative is to enhance the existing Onvia platform and provide improved content which further aligns to customer needs. This initiative includes the continued transition of our target market clients to the Onvia 7 search platform. The Onvia 7 platform is intended to deliver more actionable opportunities to clients than the current limitations of literal keyword searching. Keyword searches against a broad, unstructured dataset can often miss opportunities or return too much irrelevant information depending on the keywords selected. The Onvia 7 platform identifies essence of a project or opportunity using concepts instead of keywords leveraging our proprietary dictionary of terms, technology and business rules. Onvia 7 should become a significant competitive advantage for our clients. We measure success of this initiative through the effectiveness of product releases and the impact on new client Annual Contract Value per Client (ACVC) and dollar retention.

In 2014, we completed the software changes to the Onvia platform to include the new Onvia 7 user interface. In 2015, we plan to complete the construction of proprietary ontologies for each of our target markets served. We expect to migrate the majority of clients in our target markets to the new Onvia 7 search paradigm by the end of 2015. Some of our larger clients that operate in more than one market will likely be migrated in the first quarter of 2016 since all of the ontologies will need to be completed before these larger clients can be migrated.

· Our third and final 2015 initiative is to improve the existing information technology infrastructure as a means to reduce complexity, accelerate product development and reduce costs long-term. We continue to focus this initiative on three major areas. The first focus is moving to an open source search technology which will increase our capacity for search and improve search speed. We have identified the technology of choice, have completed the architecting work and development is in progress. Secondly, we’ll be changing database structures to allow for faster more agile product enhancements in the future.  The technology of choice has been identified and the initial phase of this project has been released. The next phase is intended to be released in the first quarter of 2016. Finally, we are addressing areas where data capture can be further automated to allow for cost effective scaling of data aggregation.  We do not anticipate annual capital expenditures to increase over historical levels as a result of these technology improvements.

12 

Executive Summary of Operations and Financial Position

Our primary clients are businesses that are strategically focused on selling their goods and services into the public sector. As discussed above, we sell into this target market through two sales channels: businesses that leverage our information for their own internal use and businesses that license our content for redistribution (i.e. content license).

We manage the business using the following key client metrics:

Annual Contract Value, or ACV

ACV represents the annualized aggregate revenue value of all subscription contracts as of the end of the quarter. ACV is driven by Annual Contract Value per Client (ACVC) and the number of clients. Most of Onvia’s revenues are generated from subscription contracts. The contract value of multi-year content distribution partnerships, stand-alone management reports, document download services and list rental services are not included in the calculation of ACV.

ACV increased by 8% to $21.9 million in the second quarter of 2015 from $20.3 million for the same period one year ago. The continued growth in ACV indicates that new client acquisitions, contract expansions and improving client retention rates have more than offset the impact of client attrition. The growth rate in ACV can fluctuate from year to year based on timing in the amount of ACV available for renewal in addition to the mix of tenured and first year clients expiring in each period as tenured clients tend to renew at a higher rate than first year clients.

Dollar Retention

Since the first quarter of 2014 we have reported dollar retention which measures the dollars renewed on the available base of expiring contracts over the preceding twelve months. Dollar retention is calculated on a percentage basis by dividing the contract value of subscription contracts renewed, including the value of contract upgrades, during the most recent twelve-month period by the total value of subscription contracts expiring over the same period. Dollar retention measures the percentage of dollars retained from the population of expiring contracts over a twelve month period.

In the twelve months ended June 30, 2015, dollar retention was 89% compared to 86% in the twelve months ended June 30, 2014. Dollar retention can fluctuate from period to period due to the mix of first year and tenured clients expiring in each period. Dollar retention, in conjunction with ACV, provides insight in to our subscription retention rate and ability to generate future subscription revenue.

Number of Clients

Number of clients represents the number of individual businesses subscribing to our products.

At the end of the second quarter, our total client base decreased 6% to 3,200 clients compared to 3,400 clients in the same year-ago period and decreased 2% compared to the first quarter of 2015. Our strategy is to continue to improve profitability by acquiring and managing fewer, but more strategic clients at higher ACVC. The decline in clients was isolated to non-targeted clients; the number of clients in our target market increased for the first time in the second quarter of 2015. We continue to believe that ACV is a better measure of sales effectiveness than the number of clients.

Annual Contract Value per Client, or ACVC

Annual contract value per client is the ACV divided by the number of clients and indicates the average value of each of our subscriptions.

ACVC increased 15% to $6,883 in the second quarter of 2015 compared to $5,999 in the second quarter of 2014. ACVC for new clients decreased 21% to $12,464 from $15,759 in the second quarter of 2014. Management anticipates new client ACVC will fluctuate from period to period based on the mix of product levels included in acquisition bookings for a particular period. Growth in overall ACVC demonstrates that an increasing number of clients have a strategic interest in the public sector at a regional or national level. Companies within this target market typically have higher ACVC and renew at higher rates, which are key attributes of a profitable long-term client.

13 

Adjusted EBITDA

Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of the company’s liquidity. Onvia defines Adjusted EBITDA as net income/(loss) before interest expense and other non-cash financing costs; taxes; depreciation; amortization; and non-cash stock-based compensation. Other companies (including Onvia’s competitors) may define Adjusted EBITDA differently. Onvia presents Adjusted EBITDA because it believes Adjusted EBITDA to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in similar industries and size. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Onvia nor is it intended to be predictive of potential future results. Investors should not consider Adjusted EBITDA in isolation or as a substitute for analysis of results as reported under GAAP.

The following table provides a reconciliation of GAAP net income/(loss) to Adjusted EBITDA for the periods indicated (in thousands of dollars):

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2015			2014			2015			2014
GAAP net income/(loss)	$	80		$	(117	)	$	(397	)	$	(206	)
Reconciling items from GAAP to adjusted EBITDA
Interest and other income, net		(22	)		(2	)		(24	)		(5	)
Depreciation and amortization		573			803			1,222			1,619
Amortization of stock-based compensation		22			30			44			84
Adjusted EBITDA	$	653		$	714		$	845		$	1,492

Seasonality

Our client acquisition business is subject to some seasonal fluctuations. The second and third quarters are generally slower than the first and fourth quarters for client acquisition. Infrastructure is our single largest market and these prospects are typically engaged on projects during the spring and summer months, not prospecting for new work, which causes new client acquisition to decline compared to the first and fourth quarters in the year. For this reason, comparisons of the performance of our business quarter to consecutive quarter may not provide the most relevant information, and so in addition to sequential quarter comparisons, our quarterly results and metrics should be considered on the basis of results for the whole year or by comparing results in a quarter with the results in the same quarter of the previous year.

14 

Results of Operations for the Three and Six Months Ended June 30, 2015 Compared to the Three and Six Months Ended June 30, 2014

Revenue and Cost of Revenue

The following table provides a breakdown of revenue for the periods presented as a percentage of total revenue:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue	$	5,894		$	5,567		$	11,739		$	11,183
Revenue:
Subscription		91	%		90	%		90	%		90	%
Content license		7	%		8	%		8	%		8	%
Management information reports		1	%		1	%		1	%		1	%
Other		1	%		1	%		1	%		1	%
Total revenue		100	%		100	%		100	%		100	%

Subscription revenue for the three and six months ended June 30, 2015 grew 7% and 6% to $5.4 million and $10.6 million, respectively, over the same periods in 2014. The growth in subscription revenue reflects a sustained growth in ACV over the past year and improved retention of existing clients compared to the same period last year.

Total revenue for the three and six months ended June 30, 2015 was $5.9 million and $11.7 million, up by 6% and 5%, respectively, compared to the same periods last year. In addition to subscription revenue, total revenue includes content license and report revenue.

Cost of revenue for the three and six months ended June 30, 2015 and 2014 was as follows (in thousands of dollars):

							Increase / (Decrease)
	2014			2013			Amount			Percent
Three months ended June 30,	$	838		$	849		$	(11	)		(1	%)
Percentage of Revenue		14	%		15	%
Six months ended June 30,		1,631			1,674			(43	)		(3	%)
Percentage of Revenue		14	%		15	%

Our cost of revenue primarily represents payroll-related expenses associated with the research and aggregation of the data in our proprietary database and third-party content fees, and also includes credit card processing fees. The decrease for the comparable three and six month periods was due to individually immaterial changes.

Certain amounts in cost of revenue for 2014 have been reclassified as operating expenses to conform to current period presentation. The reclassification is a result of organization changes made in the first quarter of 2015 to adopt our current content strategy and, as a result, certain payroll-related expenses are now reflected in operating expenses as technology and development and sales and marketing.

15 

Sales and Marketing

Sales and marketing expenses for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands of dollars):

							Increase / (Decrease)
	2014			2013			Amount		Percent
Three months ended June 30,	$	3,118		$	2,891		$	227		8	%
Percentage of Revenue		53	%		52	%
Six months ended June 30,		6,208			5,825			383		7	%
Percentage of Revenue		53	%		52	%

The increase in expenses for the comparable three month periods is primarily due to payroll related investments incurred to support our initiatives in marketing and product development.

The increase in expenses for the comparable six month periods is primarily related to payroll related investments incurred to support our initiatives in marketing and product development, an increase in commission expenses as a result of improved sales and additional costs for consultants and contract labor necessary to support our ongoing product development.

Technology and Development

Technology and development expenses for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands of dollars):

							Increase / (Decrease)
	2014			2013			Amount			Percent
Three months ended June 30,	$	1,062		$	1,021		$	41			4	%
Percentage of Revenue		18	%		18	%
Six months ended June 30,		2,094			2,141			(47	)		(2	%)
Percentage of Revenue		18	%		19	%

The increase in expenses for the comparable three month periods is primarily comprised of an increase in payroll related costs incurred to fill software development positions open in the same period last year, partially offset by a decrease in amortization costs.

The decrease in expenses for the comparable six month periods is primarily attributed to a decrease in amortization costs, partially offset by an increase in payroll related costs incurred to software development positions open in same period last year.

General and Administrative

General and administrative expenses for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands of dollars):

							Increase / (Decrease)
	2014			2013			Amount			Percent
Three months ended June 30,	$	818		$	925		$	(107	)		(12	%)
Percentage of Revenue		14	%		17	%
Six months ended June 30,		2,227			1,754			473			27	%
Percentage of Revenue		19	%		16	%

The decrease in expenses for the comparable three month periods was primarily due to a $46,000 decrease in payroll related costs due to lower headcount, a $35,000 decrease in business taxes and other individually immaterial changes.

16 

The increase in expenses for the comparable six month periods is primarily due to $435,000 of non-recurring legal and consulting fees authorized by our Board of Directors in the first quarter of 2015. Beginning with Onvia 7, we expect to significantly enhance the value of content sourced from the public domain. We performed a complete review of our content capture, content processing and content enhancement methods, processes and systems. We incurred these incremental costs to ensure that our intellectual property rights to the enhanced content are properly protected. This expense was largely confined to the first quarter with some residual costs incurred in the second quarter of 2015.

Critical Accounting Policies and Management Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, but not limited to, those affecting the fair value of stock-based compensation, allowance for doubtful accounts, capitalization of costs for internally developed software, recoverability of long-lived assets, including internally developed software, and the valuation allowance for net deferred tax assets. The brief discussion below is intended to highlight some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed in our Annual Report on Form 10-K for the year ended December 31, 2014 and elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise required by law, we do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2014.

There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report.

See Note 1 to the interim unaudited Consolidated Financial Statements for the disclosure of recently issued accounting pronouncements.

Liquidity and Capital Resources

Our principal sources of liquidity are cash, cash equivalents and available for sale investments. Our combined cash and cash equivalents and available for sale investments were $8.4 million at June 30, 2015. At June 30, 2015, we held $6.3 million in available for sale investments, primarily in FDIC insured or U.S. government backed securities.

If we engage in merger or acquisition transactions or our overall operating plans change, we may require additional equity or debt financing to meet future working capital needs, which may have a dilutive effect on existing stockholders or may include securities that have rights, preferences or privileges senior to those of the rights of our common stock. We cannot make assurances that if additional financing is required, it will be available, or that such financing can be obtained on satisfactory terms.

From December 31, 2014 to June 30, 2015, cash, cash equivalents and available for sale investments increased by $374,000 for the reasons described below.

17 

Operating Activities

Net cash provided by operating activities was $1.3 million for the six months ended June 30, 2015 and June 30, 2014.

Investing Activities

Net cash used in investing activities was $933,000 in the six months ended June 30, 2015, compared to $2.6 million in the same period in 2014. The decrease of $1.6 million in cash used in investing activities is attributable to a $2.1 million decrease in purchases of investments and a $270,000 decrease in additions to property and equipment and internal use software offset by a $777,000 decrease in sales and maturities of investments.

Financing Activities

Net cash provided by financing activities was $77,000 for the six months ended June 30, 2015, compared to $101,000 in the same period in the prior year. The decrease in cash provided by financing activities is due to a $150,000 decrease in proceeds from stock options exercises and purchases under employee stock purchase plan offset by $126,000 of principal payments on capital leases in the sixth month ended June 30, 2014.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The disclosures under this Item are not required for smaller reporting companies.

Item 4. Controls and Procedures

The Company conducted an evaluation (pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the "Exchange Act")), under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e)) as of June 30, 2015.  Based on the evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of June 30, 2015.

We made no change in our internal control over financial reporting during the fiscal quarter ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We intend to continue to refine our internal control over financial reporting on an ongoing basis, as we deem appropriate with a view towards continuous improvement.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, legal proceedings may arise in the ordinary course of business. Although the outcomes of legal proceedings are inherently difficult to predict, we are not currently involved in any legal proceeding in which the outcome, in our judgment based on information currently available, is likely to have a material adverse effect on our business or financial position.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

18 

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None.

19 

Item 6. Exhibits

Number	Description
3.2	Amended and  Restated Bylaws of Onvia effective June 30, 2015 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on July 2, 2015)
31.1++	Certification of Henry G. Riner, Chief Executive Officer and President of Onvia, Inc., Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2++	Certification of Cameron S. Way, Chief Financial Officer and Principal Accounting Officer of Onvia, Inc., Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1++	Certification of Henry G. Riner, Chief Executive Officer and President of Onvia, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2++	Certification of Cameron S. Way, Senior Vice President and Chief Financial Officer of Onvia, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101++	101.INS        XBRL Instance Document
	101.SCH      XBRL Taxonomy Extension Schema
	101.CAL      XBRL Taxonomy Extension Calculation Linkbase
	101.LAB      XBRL Taxonomy Extension Label Linkbase
	101.PRE      XBRL Taxonomy Extension Presentation Linkbase
	101.DEF      XBRL Taxonomy Extension Definition Linkbase

++ Furnished herewith

20 

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.

ONVIA, INC.
By:	/s/ Henry G. Riner
	Henry G. Riner President and Chief Executive Officer
By:	/s/ Cameron S. Way
	Cameron S. Way Chief Financial Officer and Principal Accounting Officer

Date: August 13, 2015

21

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. Rule 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Henry G. Riner, certify that:

1. I have reviewed this quarterly Report on Form 10-Q for the period ending June 30, 2015 of Onvia, Inc.;

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

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

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

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

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

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d. Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

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

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

 /s/ Henry G. Riner

Henry G. Riner

President and Chief Executive Officer

August 13, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. Rule 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cameron S. Way, certify that:

1. I have reviewed this quarterly Report on Form 10-Q for the period ending June 30, 2015 of Onvia, Inc.;

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

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

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

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

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

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d. Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

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

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

 /s/ Cameron S. Way

Cameron S. Way

Chief Financial Officer and Principal Accounting Officer

August 13, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Onvia, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Henry G. Riner, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 /s/ Henry G. Riner

Henry G. Riner

President and Chief Executive Officer

August 13, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Onvia, Inc. and will be retained by Onvia, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Onvia, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Cameron S. Way, Chief Financial Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 /s/ Cameron S. Way

Cameron S. Way

Chief Financial Officer and Principal Accounting Officer

August 13, 2015

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Onvia, Inc. and will be retained by Onvia, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Note 9 - Commitments and Contingencies - Non-cancellable Purchase Obligations for Software Development and License Agreements (Details) $ in Thousands	Jun. 30, 2015 USD ($)
2015	$ 572
2016	722
2017	237
Total	$ 1,531

XML

Note 6 - Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Computer equipment	$ 3,768	$ 3,676
Software	1,855	1,855
Furniture and fixtures	109	109
Leasehold improvements	883	883
Total cost basis	6,615	6,523
Less accumulated depreciation	(5,421)	(5,165)
Net book value	$ 1,194	$ 1,358

XML

Note 9 - Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

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

	Real Estate Operating Leases		Office Equipment Operating Lease		Total Operating Leases
2015	$	414	$	10	$	424
2016		780		20		800
2017		873		20		893
2018		896		20		916
2019		918		9		927
2020 and thereafter		1,261		-		1,261
Total	$	5,142	$	79	$	5,221

Long-term Purchase Commitment [Table Text Block]

	Purchase Obligations
2015	$	572
2016		722
2017		237
Total	$	1,531

XML

Note 8 - Accrued Expenses and Other Current Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Obligations under capital leases, current portion	$ 24	$ 24
Deferred rent, current portion	67	58
Total other current liabilities	$ 91	$ 82

XML

Note 4 - Investments

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

4. Investments

Onvia classifies investments in debt securities as available-for-sale, stated at fair value as summarized in the following table (in thousands):

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	390	$	-	$	-	$	390
Certificates of Deposit (1)		5,945		-		-		5,945
Total Investments	$	6,335	$	-	$	-	$	6,335

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	158	$	-	$	-		$	158
Certificates of Deposit (1)		6,279		-		(1	)		6,278
Total Investments	$	6,437	$	-	$	(1	)	$	6,436

(1)

The Company evaluated certificates of deposits held as of June 30, 2015 and December 31, 2014 and concluded that they meet the definition of securities as available for sale

.

Onvia accounts for investments held as available for sale according to their fair values, which is defined as the exchange price that would be received for an asset, or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following are the three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Onvia uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The following table summarizes, by major security type, investments classified as available-for-sale at June 30, 2015 and at December 31, 2014, stated at fair value (in thousands):

	Fair Value Measurements as of June 30, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	390	$	-	$	390
Certificates of Deposit		-		5,945		-		5,945
	$	-	$	6,335	$	-	$	6,335

	Fair Value Measurements as of December 31, 2014
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	158	$	-	$	158
Certificates of Deposit		-		6,278		-		6,278
	$	-	$	6,436	$	-	$	6,436

There were no transfers in or out of Level 2 investments during the first six months of 2015 and fourth quarter of 2014, and there was no activity in Level 1 or Level 3 fair value measurements during those periods.

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Note 4 - Investments - Short-term Investments in Debt Securities as Available-for-sale at Fair Value (Details) - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
US Government Agencies Debt Securities [Member]
Amortized Cost		$ 390	$ 158
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value		$ 390	$ 158
Certificate of Deposit [Member]
Amortized Cost	[1]	$ 5,945	$ 6,279
Gross Unrealized Gains	[1]
Gross Unrealized Losses	[1]		$ (1)
Fair Value	[1]	$ 5,945	6,278
Amortized Cost		$ 6,335	$ 6,437
Gross Unrealized Gains
Gross Unrealized Losses			$ (1)
Fair Value		$ 6,335	$ 6,436

[1] The Company evaluated certificates of deposits held as of June 30, 2015 and December 31, 2014 and concluded that they meet the definition of securities as available for sale.

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Note 3 - Earnings per Share - Basic and Diluted Net Loss Per Share Calculation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net income/(loss)	$ 80	$ (117)	$ (397)	$ (206)
Shares used to compute basic net income/(loss) per share (in shares)	7,413	7,395	7,404	7,373
Dilutive potential common shares:
Stock options (in shares)	165,000
Shares used to compute diluted net income/(loss) per share (in shares)	7,578	7,395	7,404	7,373
Basic net income/(loss) per share (in dollars per share)	$ 0.01	$ (0.02)	$ (0.05)	$ (0.03)
Diluted net income/(loss) per share (in dollars per share)	$ 0.01	$ (0.02)	$ (0.05)	$ (0.03)

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Note 4 - Investments - Short-term Investments Classified as Available-for-sale Stated at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Inputs, Level 1 [Member]
U.S. Government backed securities
Fair Value, Inputs, Level 2 [Member]
U.S. Government backed securities	$ 5,945	$ 158
Fair Value, Inputs, Level 3 [Member]
U.S. Government backed securities
U.S. Government backed securities	$ 5,945	$ 158

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Note 5 - Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Prepaid insurance	$ 187	$ 110
Prepaid software licences and maintenance	430	440
Prepaid expenses - other	295	123
Interest receivable	11	4
Other receivables	26	5
Total prepaid expenses and other current assets	$ 949	$ 682

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Note 3 - Earnings per Share

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Earnings Per Share [Text Block]

3. Earnings per Share

Basic income/(loss) per share is calculated by dividing the net loss for the period by the weighted average shares of common stock outstanding for the period. Diluted income/(loss) per share is calculated by dividing the net income/(loss) per share by the weighted average common stock outstanding for the period, plus dilutive potential common shares using the treasury stock method. In periods with a net loss, basic and diluted earnings per share are identical because inclusion of potentially dilutive common shares would be anti-dilutive.

The following table sets forth the computation of basic and diluted net income/(loss) per share for the three and six months ended June 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Net income/(loss)	$	80	$	(117	)	$	(397	)	$	(206	)
Shares used to compute basic net income/(loss) per share		7,413		7,395			7,404			7,373
Dilutive potential common shares:
Stock options		165		-			-			-
Shares used to compute diluted net income/(loss) per share		7,578		7,395			7,404			7,373
Basic net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)
Diluted net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)

For the three and six months ended June 30, 2015, the weighted average effect of stock options to purchase approximately 290,000 and 877,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because their effect would be anti-dilutive.

For the three and six months ended June 30, 2014, the weighted average effect of stock options to purchase approximately 1,085,000 and 1,105,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because their effect would be anti-dilutive.

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Note 6 - Property and Equipment (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Depreciation	$ 153,000	$ 179,000	$ 317,000	$ 362,000

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Note 10 - Provision for Income Taxes (Details Textual) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Operating Loss Carryforwards	$ 76	$ 76

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Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue
Subscription	$ 5,368	$ 5,003	$ 10,631	$ 10,028
Content license	430	463	892	937
Management information reports	41	42	89	95
Other	55	59	127	123
Total revenue	5,894	5,567	11,739	11,183
Cost of revenue (exclusive of depreciation and amortization included below)	838	849	1,631	1,674
Gross margin	5,056	4,718	10,108	9,509
Operating expenses:
Sales and marketing	3,118	2,891	6,208	5,825
Technology and development	1,062	1,021	2,094	2,141
General and administrative	818	925	2,227	1,754
Total operating expenses	4,998	4,837	10,529	9,720
Income/(loss) from operations	58	(119)	(421)	(211)
Interest and other income, net	22	2	24	5
Net income/(loss)	$ 80	(117)	$ (397)	$ (206)
Unrealized loss on available-for-sale securities		(1)
Comprehensive income/(loss)	$ 80	$ (118)	$ (397)	$ (206)
Basic net income/(loss) per share (in dollars per share)	$ 0.01	$ (0.02)	$ (0.05)	$ (0.03)
Diluted net income/(loss) per share (in dollars per share)	$ 0.01	$ (0.02)	$ (0.05)	$ (0.03)
Basic weighted average shares outstanding (in shares)	7,413	7,395	7,404	7,373
Diluted weighted average shares outstanding (in shares)	7,578	7,395	7,404	7,373

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Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Basis of Presentation

The interim unaudited Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, or GAAP, and the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying interim unaudited Condensed Consolidated Financial Statements and related notes thereto should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“2014 Annual Report”).

Onvia had a wholly-owned subsidiary in Canada that was dissolved effective December 19, 2014; and there was no business activity in this subsidiary during the three and six month periods ended June 30, 2014. The wholly-owned subsidiary owned no assets or liabilities as of the date of dissolution.

The information furnished is unaudited, but reflects, in the opinion of management, all adjustments, consisting of only normal recurring items, necessary for a fair presentation of the results for the interim periods presented. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation.

Interim results are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of stock-based compensation, allowance for doubtful accounts, capitalization of costs for internally developed software, recoverability of long-lived assets, including internally developed software, and the valuation allowance for Onvia’s net deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from the Company’s estimates. In addition, any significant unanticipated changes in any of the Company’s assumptions could have a material adverse effect on its business, financial condition, and results of operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on the recognition of revenue from contracts with customers. Revenue recognition will 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 guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The guidance was originally effective January 1, 2017 and early adoption was not permitted. In July 2015, the FASB approved a one-year deferral of the effective date to January 1, 2018, with an option of applying the standard on the original effective date. The company is currently evaluating the impact of the new guidance, the effective date and the method of adoption.

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Note 7 - Internal Use Software - Roll-forward of Capitalized Internal Use Software (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Capitalized internal use software	$ 17,107
Capitalized internal use software	989
Capitalized internal use software	18,096
Accumulated amortization	(12,953)	$ (12,048)
Accumulated amortization	(905)
Internal use software, net	5,059
Internal use software, net	84
Internal use software, net	$ 5,143

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Note 6 - Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 30, 2015			December 31, 2014
Computer equipment	$	3,768		$	3,676
Software		1,855			1,855
Furniture and fixtures		109			109
Leasehold improvements		883			883
Total cost basis		6,615			6,523
Less accumulated depreciation		(5,421	)		(5,165	)
Net book value	$	1,194		$	1,358

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Note 8 - Accrued Expenses and Other Current Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Payroll and related liabilities	$ 784	$ 966
Taxes payable and other	49	132
Total accrued expenses	$ 833	$ 1,098

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Note 8 - Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	June 30, 2015		December 31, 2014
Payroll and related liabilities	$	784	$	966
Taxes payable and other		49		132
Total accrued expenses	$	833	$	1,098

Schedule of Other Assets and Other Liabilities [Table Text Block]

	June 30, 2015		December 31, 2014
Obligations under capital leases, current portion		24		24
Deferred rent, current portion		67		58
Total other current  liabilities	$	91	$	82

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Note 2 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

2. Stock-Based Compensation

The impact to Onvia’s interim unaudited Condensed Consolidated Statements of Operations for recording stock-based compensation was as follows for the periods presented (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Cost of sales	$	-	$	1		$	-		$	3
Sales and marketing		6		(14	)		(3	)		(5	)
Technology and development		3		5			8			11
General and administrative		13		38			39			75
Total stock-based compensation	$	22	$	30		$	44		$	84

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 2,052,000	$ 1,577,000
Short-term investments, available-for-sale	6,335,000	6,436,000
Accounts receivable, net of allowance for doubtful accounts of $31 and $42	1,093,000	1,735,000
Prepaid expenses and other current assets	949,000	682,000
Total current assets	10,429,000	10,430,000
LONG TERM ASSETS:
Property and equipment, net of accumulated depreciation	1,194,000	1,358,000
Internal use software, net of accumulated amortization	5,143,000	5,059,000
Other long-term assets	179,000	181,000
Total long term assets	6,516,000	6,598,000
TOTAL ASSETS	16,945,000	17,028,000
CURRENT LIABILITIES:
Accounts payable	1,005,000	873,000
Accrued expenses	833,000	1,098,000
Unearned revenue, current portion	8,608,000	8,478,000
Other current liabilities	91,000	82,000
Total current liabilities	10,537,000	10,531,000
LONG TERM LIABILITIES:
Unearned revenue, net of current portion	576,000	405,000
Deferred rent, net of current portion	618,000	590,000
Other long-term liabilities	56,000	69,000
Total long term liabilities	1,250,000	1,064,000
TOTAL LIABILITIES	$ 11,787,000	11,595,000
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock; $.0001 par value: 2,000,000 shares authorized; no shares issued or outstanding	$ 0	0
Common stock; $.0001 par value: 11,000,000 shares authorized; 8,666,374 and 8,643,460 shares issued; and 7,423,567 and 7,400,653 shares outstanding	1,000	1,000
Treasury stock, at cost: 1,242,807 and 1,242,807 shares	(4,398,000)	(4,398,000)
Additional paid in capital	$ 353,973,000	353,852,000
Accumulated other comprehensive loss		(1,000)
Accumulated deficit	$ (344,418,000)	(344,021,000)
Total stockholders’ equity	5,158,000	5,433,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 16,945,000	$ 17,028,000

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The interim unaudited Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, or GAAP, and the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. The accompanying interim unaudited Condensed Consolidated Financial Statements and related notes thereto should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“2014 Annual Report”).

Onvia had a wholly-owned subsidiary in Canada that was dissolved effective December 19, 2014; and there was no business activity in this subsidiary during the three and six month periods ended June 30, 2014. The wholly-owned subsidiary owned no assets or liabilities as of the date of dissolution.

The information furnished is unaudited, but reflects, in the opinion of management, all adjustments, consisting of only normal recurring items, necessary for a fair presentation of the results for the interim periods presented. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation.

Interim results are not necessarily indicative of results for a full year.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of stock-based compensation, allowance for doubtful accounts, capitalization of costs for internally developed software, recoverability of long-lived assets, including internally developed software, and the valuation allowance for Onvia’s net deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from the Company’s estimates. In addition, any significant unanticipated changes in any of the Company’s assumptions could have a material adverse effect on its business, financial condition, and results of operations.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on the recognition of revenue from contracts with customers. Revenue recognition will 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 guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The guidance was originally effective January 1, 2017 and early adoption was not permitted. In July 2015, the FASB approved a one-year deferral of the effective date to January 1, 2018, with an option of applying the standard on the original effective date. The company is currently evaluating the impact of the new guidance, the effective date and the method of adoption.

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Entity Registrant Name	ONVIA INC
Entity Central Index Key	0001100917
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		7,423,567
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Note 2 - Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Cost of sales	$	-	$	1		$	-		$	3
Sales and marketing		6		(14	)		(3	)		(5	)
Technology and development		3		5			8			11
General and administrative		13		38			39			75
Total stock-based compensation	$	22	$	30		$	44		$	84

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Allowance for doubtful accounts	$ 31	$ 42
Preferred stock par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	11,000,000	11,000,000
Common stock, shares issued (in shares)	8,666,374	8,643,460
Common stock, shares outstanding (in shares)	7,423,567	7,400,653
Treasury stock, Shares (in shares)	1,242,807	1,242,807

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Note 7 - Internal Use Software

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Internal Use Software Disclosure [Text Block]

7. Internal Use Software

Onvia capitalizes qualifying computer software costs incurred during the “application development stage” and other costs. Amortization of these costs begins once the product is ready for its intended use. These costs are amortized on a straight-line basis over the estimated useful life of the product, typically 3 to 5 years. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period.

Onvia periodically evaluates the remaining useful lives and carrying values of internal use software. If management determines that all or a portion of the asset will no longer be used, or the estimated remaining useful life differs from existing estimates, an abandonment will be recorded to reduce the carrying value or adjust the remaining useful life to reflect revised estimates. In addition, if the carrying value of the software exceeds the estimated future cash flows, an impairment will be recorded to reduce the carrying value to the expected realizable value. No impairment has been recorded during the six months ended June 30, 2015 and 2014.

The following table presents a roll-forward of capitalized internal use software for the six months ended June 30, 2015 (in thousands):

	Balance at December 31, 2014			Additions			Balance at June 30, 2015
Capitalized internal use software	$	17,107		$	989		$	18,096
Accumulated amortization		(12,048	)		(905	)		(12,953	)
Internal use software, net	$	5,059		$	84		$	5,143

Amortization expense was $420,000 and $905,000 for the three and six months ended June 30, 2015, respectively, compared to $624,000 and $1,258,000, respectively, for the same periods of 2014. Amortization expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

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Note 6 - Property and Equipment

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

6. Property and Equipment

Property and equipment, net of accumulated depreciation, consist of the following (in thousands):

	June 30, 2015			December 31, 2014
Computer equipment	$	3,768		$	3,676
Software		1,855			1,855
Furniture and fixtures		109			109
Leasehold improvements		883			883
Total cost basis		6,615			6,523
Less accumulated depreciation		(5,421	)		(5,165	)
Net book value	$	1,194		$	1,358

Depreciation expense was $153,000 and $317,000 for the three and six months ended June 30, 2015, respectively, compared to $179,000 and $362,000, respectively, for the same periods of 2014.

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Note 7 - Internal Use Software (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Capitalized Internal Use Software Roll Forward [Table Text Block]

	Balance at December 31, 2014			Additions			Balance at June 30, 2015
Capitalized internal use software	$	17,107		$	989		$	18,096
Accumulated amortization		(12,048	)		(905	)		(12,953	)
Internal use software, net	$	5,059		$	84		$	5,143

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Note 3 - Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
Net income/(loss)	$	80	$	(117	)	$	(397	)	$	(206	)
Shares used to compute basic net income/(loss) per share		7,413		7,395			7,404			7,373
Dilutive potential common shares:
Stock options		165		-			-			-
Shares used to compute diluted net income/(loss) per share		7,578		7,395			7,404			7,373
Basic net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)
Diluted net income/(loss) per share	$	0.01	$	(0.02	)	$	(0.05	)	$	(0.03	)

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Note 10 - Provision for Income Taxes

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. Provision for Income Taxes

As of June 30, 2015 and December 31, 2014, Onvia has recorded a valuation allowance against its net deferred tax assets because the Company has determined it is not more likely than not that the asset will be realized. Onvia will continue to evaluate the likelihood that these tax benefits may be realized, and may reverse all or a portion of its valuation allowance in the future if it is determined that realization of these benefits is more likely than not.

Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), utilization of net operating loss (NOL) carryforwards to offset future taxable income are subject to substantial annual limitations if we experience a cumulative change in ownership as defined by the Code. In general, an ownership change, as defined by the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.

As of June 30, 2015 and December 31, 2014, Onvia’s Federal NOL carryforwards for income tax purposes were approximately $76.0 million.  The Federal NOL carryforwards are subject to limitations under Section 382 of the Internal Revenue Code. If not utilized, the Federal NOL carryforwards will begin to expire in 2022.  The latest date available for a portion of the Federal NOL carryforwards to be utilized to offset future income is 2033.

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Note 8 - Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

8. Accrued Expenses and Other Current Liabilities

Accrued expenses consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Payroll and related liabilities	$	784	$	966
Taxes payable and other		49		132
Total accrued expenses	$	833	$	1,098

Other current liabilities consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Obligations under capital leases, current portion		24		24
Deferred rent, current portion		67		58
Total other current  liabilities	$	91	$	82

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Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9. Commitments and Contingencies

Operating Leases

Onvia has a lease agreement for its corporate offices located in Seattle, Washington that expires on April 30, 2021.  Rent expense is being recognized on a straight-line basis over the term of the lease.

Onvia also has a non-cancellable operating lease for office equipment, which expires in July 2019.

As of June 30, 2015, remaining future minimum lease payments required on non-cancellable operating leases are as follows for the years ending December 31 (in thousands):

	Real Estate Operating Leases		Office Equipment Operating Lease		Total Operating Leases
2015	$	414	$	10	$	424
2016		780		20		800
2017		873		20		893
2018		896		20		916
2019		918		9		927
2020 and thereafter		1,261		-		1,261
Total	$	5,142	$	79	$	5,221

Purchase Obligations

Onvia has non-cancellable purchase obligations for software development and license agreements, co-location hosting arrangements, telecom agreements, marketing agreements and third-party content agreements. The agreements expire in dates ranging from April 2015 to 2017. Future required payments under these non-cancellable agreements are as follows for the years ending December 31 (in thousands):

	Purchase Obligations
2015	$	572
2016		722
2017		237
Total	$	1,531

Legal Proceedings

From time to time, legal proceedings may arise in the ordinary course of business. Although the outcomes of legal proceedings are inherently difficult to predict, we are not currently involved in any legal proceeding in which the outcome, in our judgment based on information currently available, is likely to have a material adverse effect on our business or financial position.

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Note 11 - Security Deposits

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Lease Security Deposit [Text Block]

11. Security Deposits

Pursuant to Onvia’s lease for its current corporate office space, Onvia has established a stand by letter of credit as security to the lease increasing from $100,000 in April 2013, to $125,000 in January 2014 and to $150,000 on January 2015.  The letter of credit will be returned at lease termination in April 2021, or earlier as discussed above, subject to standard office lease conditions. As of June 30, 2015 and December 31, 2014, the stand by letter of credit is secured by a security deposit of $150,000 and reported as other long-term assets on the unaudited Condensed Consolidated Balance Sheets.

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Note 7 - Internal Use Software (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Minimum [Member]
Capitalized Internal Use Software Usefu Life			3 years
Maximum [Member]
Capitalized Internal Use Software Usefu Life			5 years
Operating Expense [Member]
Amortization of Intangible Assets	$ 420,000	$ 624,000	$ 905,000	$ 1,258,000
Asset Impairment Charges			$ 0	$ 0

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Note 5 - Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

	June 30, 2015		December 31, 2014
Prepaid insurance	$	187	$	110
Prepaid software licences and maintenance		430		440
Prepaid expenses - other		295		123
Interest receivable		11		4
Other receivables		26		5
Total prepaid expenses and other current assets	$	949	$	682

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Note 2 - Stock-Based Compensation - Impact on Results of Operations of Recording Stock Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015
Cost of Sales [Member]
Cost of sales		$ 1
Selling and Marketing Expense [Member]
Cost of sales	$ 6	(14)	$ (3)
Technology and Development [Member]
Cost of sales	3	5	8
General and Administrative Expense [Member]
Cost of sales	13	38	39
Cost of sales	$ 22	$ 84	$ 44

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Note 11 - Security Deposits (Details Textual) - USD ($)	Jun. 30, 2015	Jan. 31, 2015	Dec. 31, 2014	Jan. 31, 2014	Apr. 30, 2013
Other Noncurrent Assets [Member]
Security Deposit	$ 150,000		$ 150,000
Secured by Standby Letter of Credit [Member]
Letters of Credit Outstanding, Amount		$ 150,000		$ 125,000	$ 100,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$ (397,000)	$ (206,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,222,000	1,619,000
Stock-based compensation	44,000	$ 84,000
Loss on sale of property and equipment	2,000
Change in operating assets and liabilities:
Accounts receivable	642,000	$ 214,000
Prepaid expenses and other assets	(265,000)	(130,000)
Accounts payable	10,000	(152,000)
Accrued expenses	(265,000)	(171,000)
Unearned revenue	301,000	(51,000)
Deferred rent	37,000	46,000
Net cash provided by operating activities	1,331,000	1,253,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(110,000)	(174,000)
Additions to internal use software	(932,000)	(1,138,000)
Purchases of investments	$ (4,062,000)	(6,201,000)
Sales of investments		1,570,000
Maturities of investments	$ 4,163,000	$ 3,370,000
Proceeds from sale of equipment	8,000
Net cash used in investing activities	$ (933,000)	$ (2,573,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligations		(126,000)
Proceeds from exercise of stock options and purchases under employee stock purchase plan	$ 77,000	227,000
Net cash provided by financing activities	77,000	101,000
Net increase / (decrease) in cash and cash equivalents	475,000	(1,219,000)
Cash and cash equivalents, beginning of period	1,577,000	2,073,000
Cash and cash equivalents, end of period	2,052,000	$ 854,000
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchases under capital lease obligations	(6,000)
Property and equipment additions in accounts payable	(114,000)	$ (68,000)
Internal use software additions in accounts payable	$ (192,000)	$ (253,000)

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Note 5 - Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Other Current Assets [Text Block]

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	June 30, 2015		December 31, 2014
Prepaid insurance	$	187	$	110
Prepaid software licences and maintenance		430		440
Prepaid expenses - other		295		123
Interest receivable		11		4
Other receivables		26		5
Total prepaid expenses and other current assets	$	949	$	682

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Note 3 - Earnings per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	290,000	1,085,000	877,000	1,105,000

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Note 9 - Commitments and Contingencies - Remaining Future Minimum Operating Lease Payments (Details) $ in Thousands	Jun. 30, 2015 USD ($)
Real Estate Operating Leases [Member]
2015	$ 414
2016	780
2017	873
2018	896
2019	918
2020 and thereafter	1,261
Total	5,142
Office Equipment Operating Lease [Member]
2015	10
2016	20
2017	20
2018	20
2019	$ 9
2020 and thereafter
Total	$ 79
2015	424
2016	800
2017	893
2018	916
2019	927
2020 and thereafter	1,261
Total	$ 5,221

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Note 4 - Investments (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	390	$	-	$	-	$	390
Certificates of Deposit (1)		5,945		-		-		5,945
Total Investments	$	6,335	$	-	$	-	$	6,335

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	158	$	-	$	-		$	158
Certificates of Deposit (1)		6,279		-		(1	)		6,278
Total Investments	$	6,437	$	-	$	(1	)	$	6,436

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair Value Measurements as of June 30, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	390	$	-	$	390
Certificates of Deposit		-		5,945		-		5,945
	$	-	$	6,335	$	-	$	6,335

	Fair Value Measurements as of December 31, 2014
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	158	$	-	$	158
Certificates of Deposit		-		6,278		-		6,278
	$	-	$	6,436	$	-	$	6,436