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 September 30, 2016

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: 7,131,956 shares outstanding as of October 31, 2016.

ONVIA, INC.

INDEX

	Page
PART I.  FINANCIAL INFORMATION	1
Item 1.  Unaudited Condensed Consolidated Financial Statements	1
Condensed Consolidated Balance Sheets (Unaudited)	1
Condensed Consolidated Statements of Operations and Comprehensive Loss (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	12
Item 3. Quantitative and Qualitative Disclosures about Market Risk	19
Item 4. Controls and Procedures	19
PART II. OTHER INFORMATION	19
Item 1.  Legal Proceedings	19
Item 1A.  Risk Factors	19
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.  Defaults Upon Senior Securities	20
Item 4.  Mine Safety Disclosure	20
Item 5.  Other Information	20
Item 6.  Exhibits	21
SIGNATURES	22

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

Onvia, Inc.

Condensed Consolidated Balance Sheets

	September 30, 2016			December 31, 2015
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,082		$	1,483
Short-term investments, available-for-sale		5,564			5,275
Accounts receivable, net of allowance for doubtful accounts of $36 and $32		1,293			1,298
Prepaid expenses and other current assets		682			1,075
Total current assets		9,621			9,131
LONG TERM ASSETS:
Property and equipment, net of accumulated depreciation		871			1,036
Internal use software, net of accumulated amortization		5,438			5,091
Other long-term assets		233			260
Total long term assets		6,542			6,387
TOTAL ASSETS	$	16,163		$	15,518
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	933		$	499
Accrued expenses		1,206			937
Unearned revenue, current portion		9,432			9,040
Other current liabilities		128			103
Total current liabilities		11,699			10,579
LONG TERM LIABILITIES:
Unearned revenue, net of current portion		48			64
Deferred rent, net of current portion		556			575
Other long-term liabilities		23			43
Total long term liabilities		627			682
TOTAL LIABILITIES		12,326			11,261
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; 8,724,260 and 8,717,788 shares issued; and 7,131,956 and 7,125,484 shares outstanding		1			1
Treasury stock, at cost: 1,592,304 and 1,592,304 shares		(5,446	)		(5,446	)
Additional paid in capital		354,386			354,212
Accumulated other comprehensive gain/(loss)		1			(3	)
Accumulated deficit		(345,105	)		(344,507	)
Total stockholders’ equity		3,837			4,257
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	16,163		$	15,518

See accompanying notes to the unaudited condensed consolidated financial statements.

1

Onvia, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
	(Unaudited)					(Unaudited)
	(In thousands, except per share data)					(In thousands, except per share data)
Revenue
Subscription	$	5,762		$	5,417	$	16,977		$	16,048
Content license		328			403		1,050			1,295
Management information reports		43			20		96			109
Other		40			47		132			174
Total revenue		6,173			5,887		18,255			17,626
Cost of revenue (exclusive of depreciation and amortization included below)		689			783		2,195			2,414
Gross margin		5,484			5,104		16,060			15,212
Operating expenses:
Sales and marketing		3,207			2,735		9,058			8,252
Technology and development		1,732			1,578		4,636			4,363
General and administrative		1,050			788		2,992			3,015
Total operating expenses		5,989			5,101		16,686			15,630
Income/(loss) from operations		(505	)		3		(626	)		(418	)
Interest and other income, net		13			6		28			30
Net income/( loss)	$	(492	)	$	9	$	(598	)	$	(388	)
Unrealized gain/( loss) on available-for-sale securities		1			1		4			1
Comprehensive income/(loss)	$	(491	)	$	10	$	(594	)	$	(387	)
Basic net income/(loss) per common share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)
Diluted net income/(loss) per common share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)
Basic weighted average shares outstanding		7,131			7,449		7,129			7,421
Diluted weighted average shares outstanding		7,131			7,561		7,129			7,421

See accompanying notes to the unaudited condensed consolidated financial statements.

2

Onvia, Inc.

Condensed Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
	2016			2015
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(598	)	$	(388	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,754			1,766
Stock-based compensation		153			78
Gain/Loss on sale of property and equipment		(4	)		2
Change in operating assets and liabilities:
Accounts receivable		5			435
Prepaid expenses and other assets		420			(84	)
Accounts payable		128			(124	)
Accrued expenses		269			(244	)
Unearned revenue		377			176
Deferred rent		6			20
Net cash provided by operating activities		2,510			1,637
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(138	)		(296	)
Additions to internal use software		(1,510	)		(1,403	)
Purchases of investments		(5,756	)		(6,803	)
Sales of investments		252			340
Maturities of investments		5,217			6,511
Proceeds from sale of equipment		4			8
Net cash used in investing activities		(1,931	)		(1,643	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		20			223
Net cash provided by financing activities		20			223
Net increase in cash and cash equivalents		599			217
Cash and cash equivalents, beginning of period		1,483			1,577
Cash and cash equivalents, end of period	$	2,082		$	1,794
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment additions in accounts payable		(114	)		(38	)
Internal use software additions in accounts payable		(251	)		(122	)

See accompanying notes to the unaudited condensed consolidated financial statements.

3

Onvia, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Accounting Policies

Basis of Presentation

The unaudited interim Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, (“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 unaudited interim 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, 2015 (“2015 Annual Report”).

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.

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

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Sales and marketing operating expenses of $511,000 and $1.2 million for the three and nine month periods ended September 30, 2015, respectively, have been reclassified as technology and development operating expenses to conform to current period presentation. The reclassification has no impact on net income/(loss) as presented on the unaudited Condensed Consolidated Statements of Operations.

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.

During the third quarter of 2016, the Company determined it was appropriate to reduce the remaining estimated useful lives of certain internally developed software costs. See Note 7 below for further discussion of this reduction in remaining estimated useful lives and the corresponding impact to the results of operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance for revenue from contracts with customers, which provides a single comprehensive revenue recognition model to apply in determining how and when to recognize revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When applying the new revenue model to contracts with customers the guidance requires five steps to be applied, which include: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires both quantitative and qualitative disclosures, which are more comprehensive than existing revenue standards. The disclosures are intended to enable financial statement users to understand the nature, timing and uncertainty of revenue and the related cash flow. This guidance will be effective for Onvia in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. The Company is currently assessing the impact the guidance will have upon adoption.

4

In November 2015, the FASB issued authoritative guidance amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the balance sheet. The objective of the guidance is to simplify the presentation as current GAAP requires the Company to separate the deferred tax assets into current and noncurrent amounts. The FASB concluded that the current presentation does not benefit financial statement users because the classification does not align with the time period in which the deferred tax amounts are expected to be recovered. The guidance will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The guidance may be adopted either prospectively or retrospectively. The Company does not expect it to have a material impact on its consolidated financial statements upon adoption.

In February 2016, the FASB issued authoritative guidance which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new guidance will require both types of leases to be recognized on the balance sheet. The guidance will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This guidance shall be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes a number of practical expedients that an entity may elect to apply. Early application of the guidance is permitted. The Company is evaluating the adoption of this guidance and the potential effects on its consolidated financial statements.

In March 2016, the FASB issued authoritative guidance on accounting for share-based payment transactions. The guidance makes several modifications related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies and clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company is currently assessing how the adoption of this standard may impact its consolidated financial statements.

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):

5

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016		2015			2016		2015
Sales and marketing	$	20	$	(5	)	$	52	$	1
Technology and development		9		14			35		13
General and administrative		21		25			66		64
Total stock-based compensation	$	50	$	34		$	153	$	78

3. Earnings per Share

Basic net income/(loss) per share is calculated by dividing the net income/(loss) for the period by the weighted average shares of common stock outstanding for the period. Diluted net 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 net loss 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 nine months ended September 30, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Net income/(loss)	$	(492	)	$	9	$	(598	)	$	(388	)
Shares used to compute basic net income/(loss) per share		7,131			7,449		7,129			7,421
Dilutive potential common shares:
Stock options					112
Shares used to compute diluted net income/(loss) per share		7,131			7,561		7,129			7,421
Basic net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)
Diluted net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)

For the three and nine months ended September 30, 2016, the weighted average effect of stock options to purchase approximately 885,000 and 864,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because the exercise price is greater than the average market price of common stock for the respective period.

For the three and nine months ended September 30, 2015, the weighted average effect of stock options to purchase approximately 314,000 and 853,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because the exercise price is greater than the average market price of common stock for the respective period.

4. Investments

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

6

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	110	$	-	$	-	$	110
Certificates of Deposit  (1)		5,453		1		-		5,454
Total Investments	$	5,563	$	1	$	-	$	5,564

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	902	$	-	$	-		$	902
Certificates of Deposit  (1)		4,375		-		(2	)		4,373
Total Investments	$	5,277	$	-	$	(2	)	$	5,275

⁽¹⁾ The Company evaluated certificates of deposits held as of September 30, 2016 and December 31, 2015 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 September 30, 2016 and at December 31, 2015, stated at fair value (in thousands):

	Fair Value Measurements as of September 30, 2016
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	110	$	-	$	110
Certificates of Deposit		-		5,454		-		5,454
Total Investments	$	-	$	5,564	$	-	$	5,564

7

	Fair Value Measurements as of December 31, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	902	$	-	$	902
Certificates of Deposit		-		4,373		-		4,373
Total Investments	$	-	$	5,275	$	-	$	5,275

There were no transfers in or out of Level 2 investments during the first nine months of 2016 and fourth quarter of 2015, 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):

	September 30,		December 31,
	2016		2015
Prepaid software licenses and maintenance	$	241	$	690
Prepaid insurance		168		108
Other prepaid expenses		99		175
Other receivables		88		94
Prepaid rent		73		-
Interest receivable		13		8
Total prepaid expenses and other current assets	$	682	$	1,075

6. Property and Equipment

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

	September 30,			December 31,
	2016			2015
Computer equipment	$	3,722		$	3,932
Software		1,805			1,856
Furniture and fixtures		120			117
Leasehold improvements		815			815
Total cost basis		6,462			6,720
Less accumulated depreciation		(5,591	)		(5,684	)
Net book value	$	871		$	1,036

Depreciation expense was $122,000 and $398,000 for the three and nine months ended September 30, 2016, respectively, compared to $156,000 and $473,000, respectively, for the same periods in

2015.

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.

8

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 for the nine months ended September 30, 2016 and 2015.

During the third quarter of 2016 the Company determined that ongoing product development would replace the functionality of certain internal use software costs and evaluated the then current estimates of remaining useful lives of the affected internal use software. The Company determined that unamortized internal software costs of approximately $892,000 are subject to a reduced estimated remaining useful life. The Company will recognize expense related to the reduced estimated useful lives of these assets over the next year. The expense related to the reduced estimated useful lives of these assets was $205,000 in the third quarter of 2016 and is reflected in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations as additional amortization expense.

The following table presents a roll-forward of capitalized internal use software for the nine months ended September 30, 2016 (in thousands):

	Balance at December 31, 2015			Additions			Balance at September 30, 2016
Capitalized internal use software	$	18,812		$	1,703		$	20,515
Accumulated amortization		(13,721	)		(1,356	)		(15,077	)
Internal use software, net	$	5,091		$	347		$	5,438

Amortization expense was $616,000 and $1.4 million for the three and nine months ended September 30, 2016, respectively, compared to $388,000 and $1.3 million, respectively, for the same periods of 2015. 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):

	September 30,		December 31,
	2016		2015
Payroll and related liabilities	$	1,134	$	855
Taxes payable and other		72		82
Total accrued expenses	$	1,206	$	937

9

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

	September 30,		December 31,
	2016		2015
Deferred rent, current portion	$	102	$	78
Obligations under capital leases, current portion		26		25
Total other current liabilities	$	128	$	103

9. Commitments and Contingencies

Operating Leases

Onvia has a lease agreement for its corporate offices located in Seattle, Washington that expires in April 2021. Onvia also has a non-cancellable operating lease for office equipment, which expires in June 2019.

The office lease contains rent escalation clauses and rent holidays. Rent expense is recorded on a straight-line basis over the lease term with the difference between the rent paid and the straight-line rent expense recorded as a deferred rent liability. Total rent expense associated with real estate operating leases was $193,000 and $578,000 for the three and nine months ended September 30, 2016, respectively, compared to $192,000 and $576,000 for the same periods in 2015. Rent expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

As of September 30, 2016, remaining future minimum lease payments required on non-cancellable operating leases are as follows for the years ending December 31 (in thousands):

	Real Estate		Office Equipment		Total
	Operating Leases		Operating Lease		Operating Leases
2016		213		4		217
2017		873		20		893
2018		896		20		916
2019		918		10		928
2020		940		-		940
2021 and thereafter		320		-		320
Total	$	4,160	$	54	$	4,214

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 2017 to October 2019. Future required payments under these non-cancellable agreements are as follows for the years ending December 31 (in thousands):

10

	Purchase
	Obligations
2016	$	490
2017		417
2018		337
Total	$	1,244

CEO Transition Agreement

On March 28, 2016, the Company and its current President and Chief Executive Officer (“Riner”) entered into a Transition and Release Agreement (the “Transition Agreement”).

Under the terms of the Transition Agreement, Riner will transition into planned retirement and a 12-month consulting relationship with the Company effective no later than June 30, 2017, or such earlier date that Onvia selects and announces a new Chief Executive Officer (“CEO”) (the “Transition Date”). Riner will continue to serve as the Company’s President and CEO on a full-time basis through the Transition Date.

In exchange for Riner’s entry into the Transition Agreement, his covenants and promises described therein, and his entry into an additional Release of Claims Agreement on his last of date of employment with the Company, the Company has agreed to pay Riner a lump sum cash payment of $362,000 on July 8, 2017.

Costs related to the Transition Agreement are being accrued over the requisite service period and the expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

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, the Company is not currently involved in any legal proceeding in which the outcome, in its judgment based on information currently available, is likely to have a material adverse effect on its business or financial position.

10. Income Taxes

As of September 30, 2016 and December 31, 2015, Onvia has recorded a full 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 September 30, 2016 and December 31, 2015, Onvia’s Federal NOL carryforwards for income tax purposes were approximately $76.8 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 2021.  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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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 in the amount of $150,000.  The letter of credit will be returned at lease termination in April 2021, or earlier, subject to certain office lease conditions. As of September 30, 2016, the stand by letter of credit is secured by a security deposit of $150,000 and included within other long-term assets on the unaudited Condensed Consolidated Balance Sheets.

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 2016 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 its customers; 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 and in our 2015 Annual Report on Form 10-K for the year ended December 31, 2015.  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.

Company Overview

Onvia is a leading source of insight and intelligence on government procurement with a primary focus on the State, Local and Education (“SLED”) market. We maintain a proprietary database of detailed procurement activity from the market of 94,000 federal and SLED government agencies across the entire United States. When available, we capture and connect the entire procurement lifecycle of a SLED procurement from the initial budget to the awarded contract. We compile and enhance more than 1.8 million procurement records representing 95% of SLED procurement spending, to provide a comprehensive view of this market by government agency, vendor, and procurement type. Onvia intelligence is used by both SLED agencies and businesses that sell (directly or indirectly) to SLED agencies. Government agencies can use our insight to make informed and defensible purchasing decisions, identify potential vendors and meet their fiduciary responsibilities to their constituents. Businesses use our procurement intelligence to qualify short-term revenue opportunities and to obtain early insight into future potential spending for their goods and services, evaluate agency procurement trends, and identify competitor activity and potential teaming partners. Onvia intelligence helps companies identify emerging markets, allocate resources and build their long term SLED strategy.

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Onvia maintains a database of proprietary public sector procurement information which includes comprehensive historical and real-time information on procurement activities unavailable elsewhere in the marketplace. These records are standardized, formatted and classified within our database each day. We deliver approximately 90% of our bid and RFP content on the same day we capture it from the original source.

Onvia’s solution is used by clients for long-term strategic planning and near-term sales and marketing activities, tailored to their unique business objectives. We help our clients build specialized searches to identify relevant content and establish workflows to help the client consume the content most effectively. Over time, we expect to continue to enhance our content coverage of valuable data types to meet the business development needs of our strategic clients. Our key offerings include access to the Onvia Database, Project Center, Agency Center, Vendor Center, Spending Forecast Center, Term Contract Center, Purchase Order Analytics and Onvia Guide.

We have a diverse client base ranging from large Fortune 500 companies to small businesses that have been Onvia clients for many years. Onvia’s strategic account client has a long-term strategic interest in the SLED market and does business on a regional or national level. As companies expand geographically, their market becomes less transparent, and they have a greater need for business intelligence. We continue to serve a number of small businesses (legacy accounts) that have been clients since before we changed our target client profile.

Over the last two years we have developed Onvia 7, a set of proprietary ontologies and business rules used to automate the classification and tagging of our content across all of our business verticals. Our tagging process is designed to allow clients to more effectively search for projects using intuitive tags and receive more relevant data and less extraneous data as part of their research Onvia 7 is also designed to allow us to efficiently scale our data collection by leveraging automation instead of manual categorization. The migration of all clients to our Onvia 7 platform was completed in September 2016.

Onvia 7 also allows us to test a self-serve, ecommerce solution for the small business market, which we were unable to serve profitably in the past. We believe that our new Small Business solution can create significant value for this market at a competitive price. We officially launched this solution at the beginning of 2016.

Our product development is currently focused on user experience and client workflow solutions that will be released as Onvia 8. We expect that Onvia 8 will improve product adoption by our clients who have difficulty incorporating our solution into their existing workflows. The initial release of Onvia 8 is expected to be in early 2017 and further releases are expected to follow throughout 2017.

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. With the launch of our ecommerce sales channel, we now approach the small business market directly, and, therefore, have reduced our emphasis on content license relationships to serve that market. As a result, we anticipate Content License revenue to decline in future periods as existing contracts may not be renewed.

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.

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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 to 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 measure our Strategic and Small Business (legacy accounts) clients with the following key metrics:

Annual Contract Value (“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 and the number of clients. Most of Onvia’s revenues are generated from subscription contracts, which are typically prepaid and have a minimum term of one year, with revenues recognized ratably over the term of the subscription. Onvia also receives revenue from multi-year content distribution partnerships, stand-alone management reports, document download services, and list rental services, which are not included in the calculation of ACV. Content license contracts are excluded from ACV. ACV excludes subscribers to the self-serve Small Business solution.

Total ACV increased 3% to $22.9 million in the third quarter of 2016 from $22.2 million for the same period one year ago. The ACV for Strategic Accounts grew 6% to $18.2 million at September 30, 2016 compared to $17.1 million at September 30, 2015. 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. 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.

Number of Clients

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

As of the end of the third quarter, our total client base had decreased 6% to 2,920 clients compared to 3,100 clients as of the end of the same period one year ago. The total number of strategic clients increased 5% to 1,400 compared to 1,330 at the end of the same period one year ago. Onvia’s strategy is to continue to improve profitability by acquiring and managing fewer, but more strategic clients at higher ACVC. We believe that ACV is a better measure of sales effectiveness than the number of clients.

Annual Contract Value per Client (“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.

Total ACVC increased 10% to $7,824 in the third quarter of 2016 compared to $7,116 in the same period one year ago. The ACVC for Strategic Accounts grew 1% to $12,947 as of September 30, 2016, compared to $12,781 in the same period one year ago. 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 strategic clients account for an increasing percentage or our total client base. Companies within this target market typically have higher ACVC and renew at higher rates, which are key attributes of a profitable long-term client.

Dollar Retention

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.

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In the twelve months ended September 30, 2016, dollar retention was 88% compared to 88% in the twelve months ended September 30, 2015. Dollar retention can fluctuate from period to period due to the client mix (first year and tenured clients) expiring in each period, list price achievement and contract expansions in the corresponding periods. Dollar retention, in conjunction with ACV, provides insight in to our subscription retention rate and ability to generate future subscription revenue.

Adjusted EBITDA

Adjusted EBITDA is not a financial measure calculated and presented in accordance with 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; other income; 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						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2016			2015			2016			2015
GAAP net income/(loss)	$	(492	)	$	9		$	(598	)	$	(388	)
Reconciling items from GAAP to adjusted EBITDA
Interest and other income, net		(13	)		(6	)		(28	)		(30	)
Depreciation and amortization		737			544			1,754			1,766
Amortization of stock-based compensation		49			34			153			78
Adjusted EBITDA	$	281		$	581		$	1,281		$	1,426

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.

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Results of Operations for the Three and Nine Months Ended September 30, 2016 Compared to the Three and Nine Months Ended September 30, 2015

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 September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue	$	6,173		$	5,887		$	18,255		$	17,626
Revenue:
Subscription		93	%		92	%		93	%		91	%
Content license		5	%		7	%		6	%		7	%
Management information reports		1	%		0	%		0	%		1	%
Other		1	%		1	%		1	%		1	%
Total revenue		100	%		100	%		100	%		100	%

Subscription revenue for the three and nine months ended September 30, 2016 grew 6% in both periods to $5.8 million and $17 million, respectively, over the same periods in 2015. Subscription revenue includes revenue earned from our target market of Strategic Accounts, our Small Business channel (legacy accounts) as well as revenue generated from the recently launched ecommerce sales channel. The Small Business ecommerce solution, which launched in early 2016, is a self-serve solution for small businesses offering a limited geography Onvia service. The growth in subscription revenue is reflective of growth in ACV and an increase in Small Business revenue. ACV is a leading indicator of subscription revenue and excludes subscribers to the self-serve Small Business solution.

Content License revenue has declined in the three and nine month periods ending September 30, 2016 compared to the same periods last year. With the launch of our ecommerce sales channel, we now approach the small business market directly, and, therefore, have reduced our emphasis on content license relationships to serve that market. As a result, we anticipate Content License revenue will continue to decline in future periods as existing contracts may not be renewed.

Total revenue for the three and nine months ended September 30, 2016 was $6.2 million and $18.3 million, up by 5% and 4%, 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 nine months ended September 30, 2016 and 2015 was as follows (in thousands of dollars):

	Three Months Ended September 30,						Increase / (Decrease)						Nine Months Ended September 30,						Increase / (Decrease)
	2016			2015			Amount			Percent			2016			2015			Amount			Percent
Total	$	689		$	783		$	(94	)		(12	%)	$	2,195		$	2,414		$	(219	)		(9	%)
Percentage of revenue		11	%		13	%								12	%		14	%

Our cost of revenue primarily represents payroll-related expenses associated with the research, capture and curation 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 nine month periods was related to improvements in process automation, including the benefits of Onvia 7, which contributed to lower headcount and salary expenses within the department.

Sales and Marketing

Sales and marketing expenses for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands of dollars):

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	Three Months Ended September 30,						Increase / (Decrease)					Nine Months Ended September 30,						Increase / (Decrease)
	2016			2015			Amount		Percent			2016			2015			Amount			Percent
Current period expenses	$	2,835		$	2,478		$	357		14	%	$	8,170		$	7,393		$	777			11	%
Depreciation and amortization		352			262			90		34	%		836			858			(22	)		(3	%)
Stock based compensation		20			(5	)		25		(500	%)		52			1			51			5100	%
Total	$	3,207		$	2,735		$	472		17	%	$	9,058		$	8,252		$	806			10	%
Percentage of Revenue		52	%		46	%							50	%		47	%

The increase in expenses for the comparable three and nine month periods is primarily due to the addition of sales and marketing leadership necessary to support our growth initiatives, an increase in contract labor to migrate clients to our new Onvia 7 platform and accelerated amortization of $98,000 related to the reduced estimated useful lives of certain internal software costs, partially offset by recruiting fees incurred in the third quarter of 2015 for sales leadership that did not recur 2016.

Technology and Development

Technology and development expenses for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands of dollars):

	Three Months Ended September 30,						Increase / (Decrease)						Nine Months Ended September 30,						Increase / (Decrease)
	2016			2015			Amount			Percent			2016			2015			Amount			Percent
Current period expenses	$	1,407		$	1,333		$	74			6	%	$	3,855		$	3,604		$	251			7	%
Depreciation and amortization		316			231		$	85			37	%		746			746			(0	)		(0	%)
Stock based compensation		9			14			(5	)		(36	%)		35			13			22			169	%
Total	$	1,732		$	1,578		$	154			10	%	$	4,636		$	4,363		$	273			6	%
Percentage of Revenue		28	%		27	%								25	%		25	%

The increase in expenses for the comparable three and nine month periods is primarily due to an increase in compensation costs from investing in new technology leadership necessary to support our product development plans and $88,000 in accelerated amortization expense related to the reduced estimated useful lives of certain internal software costs, partially offset by consulting fees in 2015 that were not re-incurred in 2016.

General and Administrative

General and administrative expenses for the three and nine months ended September 30, 2016 and 2015 were as follows (in thousands of dollars):

	Three Months Ended September 30,						Increase / (Decrease)						Nine Months Ended September 30,						Increase / (Decrease)
	2016			2015			Amount			Percent			2016			2015			Amount			Percent
Current period expenses	$	960		$	713		$	247			35	%	$	2,754		$	2,790		$	(36	)		(1	%)
Depreciation and amortization		69			50			19			38	%		172			161			11			7	%
Stock based compensation		21			25			(4	)		(16	%)		66			64			2			3	%
Total	$	1,050		$	788		$	262			33	%	$	2,992		$	3,015		$	(23	)		(1	%)
Percentage of Revenue		17	%		13	%								16	%		17	%

The increase in expenses for the comparable three month periods was primarily due to $155,000 of CEO transition costs in 2016 along with an accrual of executive bonus pay at expected achievement.

The decrease in expenses for the comparable nine month period is primarily due to $435,000 of special project legal and consulting fees authorized by our Board of Directors in the first quarter of 2015 which were not incurred in 2016, partially offset by approximately $284,000 of CEO transition costs and an accrual for executive bonus pay at projected achievement.

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Interest and Other Income, Net

Net interest and other income was $13,000 and $28,000 for the three and nine month periods ended September 30, 2016, compared to $6,000 and $30,000 for the same periods one year ago.

Net Income/(Loss) and Net Income/(Loss) per Share

We reported net losses of $492,000 and $598,000 for the three and nine month periods ended September 30, 2016, compared to net income of $9,000 and net loss of $388,000 for the same periods one year ago. On a diluted per share basis, net losses were $0.07 and $0.08 for the three and nine month periods ended September 30, 2016, compared to $0.00 and a net loss of $0.05 for the comparable periods ended September 30, 2015, respectively.

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 GAAP. 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, 2015 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.

With the exception to our update on certain estimated useful lives of internal use software costs discussed below, there have been no material changes in the application of our critical accounting policies and estimates subsequent to that report.

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, 2015.

See Note 1 to the accompanying unaudited Consolidated Financial Statements for the issuance of recent accounting pronouncements.

Internal Use Software

We capitalize qualifying computer software costs incurred during the “application development stage.” Amortization of these costs begins once the product is ready for its intended use. These capitalized software 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.

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We periodically evaluate the remaining useful lives of internal use software and will record an abandonment if management determines that all or a portion of the asset will no longer be used, or will adjust the remaining useful life to reflect revised estimates. As development work is completed on updated client workflows and user experience in the Onvia platform, the estimated useful life of certain previously capitalized costs may be shortened due to the planned release of replacement features and functions. We have evaluated the costs of certain internal use software potentially impacted, the impact to the corresponding estimated useful lives and the amount of related periodic amortization. We determined that unamortized internal software costs of $892,000 should be subject to reduced estimated useful lives. This reduction in estimated useful lives is a result of the ongoing product development work discussed above which will, upon release, replace the current features of the affected software assets. During the third quarter of 2016 we recorded a $205,000 expense related to the reduced useful lives of these certain assets which is reflected in operating expenses as amortization expense. The impact of these reduced estimated useful lives may be recognized over the next year with the release of these replacement features and functions, and may result in additional accelerated amortization of certain internal software cost in our financials.

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 assets were impaired during the year ended December 31, 2015.

Liquidity and Capital Resources

Our principal sources of liquidity are cash, cash equivalents and available for sale investments. Our combined cash, cash equivalents and available for sale investments were $7.6 million at September 30, 2016. At September 30, 2016, we held $5.6 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, 2015 to September 30, 2016, cash, cash equivalents and available for sale investments increased by $888,000 for the reasons described below.

Operating Activities

Net cash provided by operating activities was $2.5 million for the nine months ended September 30, 2016 compared to $1.6 million in the same period in 2015. The increase of $900,000 in net cash provided by operating activities is attributable to a decrease in vendor disbursements partially offset by an increase of customer receipts and a greater net loss.

Investing Activities

Net cash used in investing activities was $1.9 million in the nine months ended September 30, 2016, compared to $1.6 million in the same period in 2015. The increase of $300,000 in cash used in investing activities is attributable to a $1.3 million decrease in sales and maturities of investments, partially offset by a $1.0 million decrease in purchases of investments.

Financing Activities

Net cash provided by financing activities was $20,000 for the nine months ended September 30, 2016, compared to $223,000 in the same period in the prior year. The decrease in cash provided by financing activities is due to a $203,000 decrease in proceeds from stock option exercises.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

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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 September 30, 2016.  Based on the evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of September 30, 2016.

We made no change in our internal control over financial reporting during the fiscal quarter ended September 30, 2016 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, 2015.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None.

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Item 6. Exhibits

Number	Description
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

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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: November 8, 2016

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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 September 30, 2016 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

November 8, 2016

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 September 30, 2016 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

November 8, 2016

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 September 30, 2016 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

November 8, 2016

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 September 30, 2016 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

November 8, 2016

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.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document Information [Line Items]
Entity Registrant Name	ONVIA INC
Entity Central Index Key	0001100917
Trading Symbol	onvi
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)		7,131,956
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 2,082,000	$ 1,483,000
Short-term investments, available-for-sale	5,564,000	5,275,000
Accounts receivable, net of allowance for doubtful accounts of $36 and $32	1,293,000	1,298,000
Prepaid expenses and other current assets	682,000	1,075,000
Total current assets	9,621,000	9,131,000
LONG TERM ASSETS:
Property and equipment, net of accumulated depreciation	871,000	1,036,000
Internal use software, net of accumulated amortization	5,438,000	5,091,000
Other long-term assets	233,000	260,000
Total long term assets	6,542,000	6,387,000
TOTAL ASSETS	16,163,000	15,518,000
CURRENT LIABILITIES:
Accounts payable	933,000	499,000
Accrued expenses	1,206,000	937,000
Unearned revenue, current portion	9,432,000	9,040,000
Other current liabilities	128,000	103,000
Total current liabilities	11,699,000	10,579,000
LONG TERM LIABILITIES:
Unearned revenue, net of current portion	48,000	64,000
Deferred rent, net of current portion	556,000	575,000
Other long-term liabilities	23,000	43,000
Total long term liabilities	627,000	682,000
TOTAL LIABILITIES	12,326,000	11,261,000
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; 8,724,260 and 8,717,788 shares issued; and 7,131,956 and 7,125,484 shares outstanding	1,000	1,000
Treasury stock, at cost: 1,592,304 and 1,592,304 shares	(5,446,000)	(5,446,000)
Additional paid in capital	354,386,000	354,212,000
Accumulated other comprehensive gain/(loss)	1,000	(3,000)
Accumulated deficit	(345,105,000)	(344,507,000)
Total stockholders’ equity	3,837,000	4,257,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 16,163,000	$ 15,518,000

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Allowance for doubtful accounts	$ 36	$ 32
Preferred stock par value (in dollars per share)	$ 0.0001	$ 0.0001
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)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	11,000,000	11,000,000
Common stock, shares issued (in shares)	8,724,260	8,717,788
Common stock, shares outstanding (in shares)	7,131,956	7,125,484
Treasury stock, shares (in shares)	1,592,304	1,592,304

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Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Subscription	$ 5,762	$ 5,417	$ 16,977	$ 16,048
Content license	328	403	1,050	1,295
Management information reports	43	20	96	109
Other	40	47	132	174
Total revenue	6,173	5,887	18,255	17,626
Cost of revenue (exclusive of depreciation and amortization included below)	689	783	2,195	2,414
Gross margin	5,484	5,104	16,060	15,212
Operating expenses:
Sales and marketing	3,207	2,735	9,058	8,252
Technology and development	1,732	1,578	4,636	4,363
General and administrative	1,050	788	2,992	3,015
Total operating expenses	5,989	5,101	16,686	15,630
Income/(loss) from operations	(505)	3	(626)	(418)
Interest and other income, net	13	6	28	30
Net income/( loss)	(492)	9	(598)	(388)
Unrealized gain/( loss) on available-for-sale securities	(1)	(1)	(4)	(1)
Comprehensive income/(loss)	$ (491)	$ 10	$ (594)	$ (387)
Basic net income/(loss) per share (in dollars per share)	$ (0.07)	$ 0	$ (0.08)	$ (0.05)
Diluted net income/(loss) per share (in dollars per share)	$ (0.07)	$ 0	$ (0.08)	$ (0.05)
Shares used to compute basic net income/(loss) per share (in shares)	7,131	7,449	7,129	7,421
Diluted weighted average shares outstanding (in shares)	7,131	7,561	7,129	7,421

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (598,000)	$ (388,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,754,000	1,766,000
Stock-based compensation	153,000	78,000
Gain/Loss on sale of property and equipment	(4,000)	2,000
Change in operating assets and liabilities:
Accounts receivable	5,000	435,000
Prepaid expenses and other assets	420,000	(84,000)
Accounts payable	128,000	(124,000)
Accrued expenses	269,000	(244,000)
Unearned revenue	377,000	176,000
Deferred rent	6,000	20,000
Net cash provided by operating activities	2,510,000	1,637,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(138,000)	(296,000)
Additions to internal use software	(1,510,000)	(1,403,000)
Purchases of investments	(5,756,000)	(6,803,000)
Sales of investments	252,000	340,000
Maturities of investments	5,217,000	6,511,000
Proceeds from sale of equipment	4,000	8,000
Net cash used in investing activities	(1,931,000)	(1,643,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	20,000	223,000
Net cash provided by financing activities	20,000	223,000
Net increase in cash and cash equivalents	599,000	217,000
Cash and cash equivalents, beginning of period	1,483,000	1,577,000
Cash and cash equivalents, end of period	2,082,000	1,794,000
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment additions in accounts payable	(114,000)	(38,000)
Internal use software additions in accounts payable	$ (251,000)	$ (122,000)

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Note 1 - Accounting Policies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Accounting Policies

Basis of Presentation

The unaudited interim Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, (“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 unaudited interim 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, 2015 (“2015 Annual Report”).

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.

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

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Sales and marketing operating expenses of $511,000 and $1.2 million for the three and nine month periods ended September 30, 2015, respectively, have been reclassified as technology and development operating expenses to conform to current period presentation. The reclassification has no impact on net income/(loss) as presented on the unaudited Condensed Consolidated Statements of Operations.

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.

During the third quarter of 2016, the Company determined it was appropriate to reduce the remaining estimated useful lives of certain internally developed software costs. See Note 7 below for further discussion of this reduction in remaining estimated useful lives and the corresponding impact to the results of operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance for revenue from contracts with customers, which provides a single comprehensive revenue recognition model to apply in determining how and when to recognize revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When applying the new revenue model to contracts with customers the guidance requires five steps to be applied, which include: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires both quantitative and qualitative disclosures, which are more comprehensive than existing revenue standards. The disclosures are intended to enable financial statement users to understand the nature, timing and uncertainty of revenue and the related cash flow. This guidance will be effective for Onvia in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. The Company is currently assessing the impact the guidance will have upon adoption.

In November 2015, the FASB issued authoritative guidance amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the balance sheet. The objective of the guidance is to simplify the presentation as current GAAP requires the Company to separate the deferred tax assets into current and noncurrent amounts. The FASB concluded that the current presentation does not benefit financial statement users because the classification does not align with the time period in which the deferred tax amounts are expected to be recovered. The guidance will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The guidance may be adopted either prospectively or retrospectively. The Company does not expect it to have a material impact on its consolidated financial statements upon adoption.

In February 2016, the FASB issued authoritative guidance which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new guidance will require both types of leases to be recognized on the balance sheet. The guidance will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This guidance shall be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes a number of practical expedients that an entity may elect to apply. Early application of the guidance is permitted. The Company is evaluating the adoption of this guidance and the potential effects on its consolidated financial statements.

In March 2016, the FASB issued authoritative guidance on accounting for share-based payment transactions. The guidance makes several modifications related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies and clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company is currently assessing how the adoption of this standard may impact its consolidated financial statements.

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Note 2 - Stock-based Compensation

9 Months Ended

Sep. 30, 2016

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					Nine Months Ended
	September 30,					September 30,
	2016		2015			2016		2015
Sales and marketing	$	20	$	(5	)	$	52	$	1
Technology and development		9		14			35		13
General and administrative		21		25			66		64
Total stock-based compensation	$	50	$	34		$	153	$	78

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Note 3 - Earnings Per Share

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

3. Earnings per Share

Basic net income/(loss) per share is calculated by dividing the net income/(loss) for the period by the weighted average shares of common stock outstanding for the period. Diluted net 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 net loss 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 nine months ended September 30, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Net income/(loss)	$	(492	)	$	9	$	(598	)	$	(388	)
Shares used to compute basic net income/(loss) per share		7,131			7,449		7,129			7,421
Dilutive potential common shares:
Stock options					112
Shares used to compute diluted net income/(loss) per share		7,131			7,561		7,129			7,421
Basic net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)
Diluted net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)

For the three and nine months ended September 30, 2016, the weighted average effect of stock options to purchase approximately 885,000 and 864,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because the exercise price is greater than the average market price of common stock for the respective period.

For the three and nine months ended September 30, 2015, the weighted average effect of stock options to purchase approximately 314,000 and 853,000 shares of common stock, respectively, were excluded from the computation of diluted net loss per share because the exercise price is greater than the average market price of common stock for the respective period.

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Note 4 - Investments

9 Months Ended

Sep. 30, 2016

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):

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	110	$	-	$	-	$	110
Certificates of Deposit   (1)		5,453		1		-		5,454
Total Investments	$	5,563	$	1	$	-	$	5,564

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	902	$	-	$	-		$	902
Certificates of Deposit   (1)		4,375		-		(2	)		4,373
Total Investments	$	5,277	$	-	$	(2	)	$	5,275

(1)

The Company evaluated certificates of deposits held as of September 30, 2016 and December 31, 2015 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 September 30, 2016 and at December 31, 2015, stated at fair value (in thousands):

	Fair Value Measurements as of September 30, 2016
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	110	$	-	$	110
Certificates of Deposit		-		5,454		-		5,454
Total Investments	$	-	$	5,564	$	-	$	5,564

	Fair Value Measurements as of December 31, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	902	$	-	$	902
Certificates of Deposit		-		4,373		-		4,373
Total Investments	$	-	$	5,275	$	-	$	5,275

There were no transfers in or out of Level 2 investments during the first nine months of 2016 and fourth quarter of 2015, and there was no activity in Level 1 or Level 3 fair value measurements during those periods.

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Note 5 - Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2016

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):

	September 30,		December 31,
	2016		2015
Prepaid software licenses and maintenance	$	241	$	690
Prepaid insurance		168		108
Other prepaid expenses		99		175
Other receivables		88		94
Prepaid rent		73		-
Interest receivable		13		8
Total prepaid expenses and other current assets	$	682	$	1,075

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Note 6 - Property and Equipment

9 Months Ended

Sep. 30, 2016

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):

	September 30,			December 31,
	2016			2015
Computer equipment	$	3,722		$	3,932
Software		1,805			1,856
Furniture and fixtures		120			117
Leasehold improvements		815			815
Total cost basis		6,462			6,720
Less accumulated depreciation		(5,591	)		(5,684	)
Net book value	$	871		$	1,036

Depreciation expense was $122,000 and $398,000 for the three and nine months ended September 30, 2016, respectively, compared to $156,000 and $473,000, respectively, for the same periods in

2015.

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Note 7 - Internal Use Software

9 Months Ended

Sep. 30, 2016

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 for the nine months ended September 30, 2016 and 2015.

During the third quarter of 2016 the Company determined that ongoing product development would replace the functionality of certain internal use software costs and evaluated the then current estimates of remaining useful lives of the affected internal use software. The Company determined that unamortized internal software costs of approximately $892,000 are subject to a reduced estimated remaining useful life. The Company will recognize expense related to the reduced estimated useful lives of these assets over the next year. The expense related to the reduced estimated useful lives of these assets was $205,000 in the third quarter of 2016 and is reflected in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations as additional amortization expense.

The following table presents a roll-forward of capitalized internal use software for the nine months ended September 30, 2016 (in thousands):

	Balance at December 31, 2015			Additions			Balance at September 30, 2016
Capitalized internal use software	$	18,812		$	1,703		$	20,515
Accumulated amortization		(13,721	)		(1,356	)		(15,077	)
Internal use software, net	$	5,091		$	347		$	5,438

Amortization expense was $616,000 and $1.4 million for the three and nine months ended September 30, 2016, respectively, compared to $388,000 and $1.3 million, respectively, for the same periods of 2015. Amortization expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

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Note 8 - Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2016

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):

	September 30,		December 31,
	2016		2015
Payroll and related liabilities	$	1,134	$	855
Taxes payable and other		72		82
Total accrued expenses	$	1,206	$	937

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

	September 30,		December 31,
	2016		2015
Deferred rent, current portion	$	102	$	78
Obligations under capital leases, current portion		26		25
Total other current liabilities	$	128	$	103

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Note 9 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

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 in April 2021. Onvia also has a non-cancellable operating lease for office equipment, which expires in June 2019.

The office lease contains rent escalation clauses and rent holidays. Rent expense is recorded on a straight-line basis over the lease term with the difference between the rent paid and the straight-line rent expense recorded as a deferred rent liability. Total rent expense associated with real estate operating leases was $193,000 and $578,000 for the three and nine months ended September 30, 2016, respectively, compared to $192,000 and $576,000 for the same periods in 2015. Rent expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

As of September 30, 2016, remaining future minimum lease payments required on non-cancellable operating leases are as follows for the years ending December 31 (in thousands):

	Real Estate		Office Equipment		Total
	Operating Leases		Operating Lease		Operating Leases
2016		213		4		217
2017		873		20		893
2018		896		20		916
2019		918		10		928
2020		940		-		940
2021 and thereafter		320		-		320
Total	$	4,160	$	54	$	4,214

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 2017 to October 2019. Future required payments under these non-cancellable agreements are as follows for the years ending December 31 (in thousands):

	Purchase
	Obligations
2016	$	490
2017		417
2018		337
Total	$	1,244

CEO Transition Agreement

On March 28, 2016, the Company and its current President and Chief Executive Officer (“Riner”) entered into a Transition and Release Agreement (the “Transition Agreement”).

Under the terms of the Transition Agreement, Riner will transition into planned retirement and a 12-month consulting relationship with the Company effective no later than June 30, 2017, or such earlier date that Onvia selects and announces a new Chief Executive Officer (“CEO”) (the “Transition Date”). Riner will continue to serve as the Company’s President and CEO on a full-time basis through the Transition Date.

In exchange for Riner’s entry into the Transition Agreement, his covenants and promises described therein, and his entry into an additional Release of Claims Agreement on his last of date of employment with the Company, the Company has agreed to pay Riner a lump sum cash payment of $362,000 on July 8, 2017.

Costs related to the Transition Agreement are being accrued over the requisite service period and the expense is included in operating expenses in the interim unaudited Condensed Consolidated Statements of Operations.

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, the Company is not currently involved in any legal proceeding in which the outcome, in its judgment based on information currently available, is likely to have a material adverse effect on its business or financial position.

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Note 10 - Income Taxes

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. Income Taxes

As of September 30, 2016 and December 31, 2015, Onvia has recorded a full 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 September 30, 2016 and December 31, 2015, Onvia’s Federal NOL carryforwards for income tax purposes were approximately $76.8 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 2021.  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 11 - Security Deposits

9 Months Ended

Sep. 30, 2016

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 in the amount of $150,000.  The letter of credit will be returned at lease termination in April 2021, or earlier, subject to certain office lease conditions. As of September 30, 2016, the stand by letter of credit is secured by a security deposit of $150,000 and included within other long-term assets on the unaudited Condensed Consolidated Balance Sheets.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The unaudited interim Condensed Consolidated Financial Statements and related notes thereto have been prepared pursuant to generally accepted accounting principles in the United States of America, (“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 unaudited interim 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, 2015 (“2015 Annual Report”).

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.

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

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

Sales and marketing operating expenses of $511,000 and $1.2 million for the three and nine month periods ended September 30, 2015, respectively, have been reclassified as technology and development operating expenses to conform to current period presentation. The reclassification has no impact on net income/(loss) as presented on the unaudited Condensed Consolidated Statements of Operations.

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.

During the third quarter of 2016, the Company determined it was appropriate to reduce the remaining estimated useful lives of certain internally developed software costs. See Note 7 below for further discussion of this reduction in remaining estimated useful lives and the corresponding impact to the results of operations.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance for revenue from contracts with customers, which provides a single comprehensive revenue recognition model to apply in determining how and when to recognize revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When applying the new revenue model to contracts with customers the guidance requires five steps to be applied, which include: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract and 5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires both quantitative and qualitative disclosures, which are more comprehensive than existing revenue standards. The disclosures are intended to enable financial statement users to understand the nature, timing and uncertainty of revenue and the related cash flow. This guidance will be effective for Onvia in the first quarter of 2018 and early adoption is permitted beginning in the first quarter of 2017. The Company is currently assessing the impact the guidance will have upon adoption.

In November 2015, the FASB issued authoritative guidance amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the balance sheet. The objective of the guidance is to simplify the presentation as current GAAP requires the Company to separate the deferred tax assets into current and noncurrent amounts. The FASB concluded that the current presentation does not benefit financial statement users because the classification does not align with the time period in which the deferred tax amounts are expected to be recovered. The guidance will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The guidance may be adopted either prospectively or retrospectively. The Company does not expect it to have a material impact on its consolidated financial statements upon adoption.

In February 2016, the FASB issued authoritative guidance which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new guidance will require both types of leases to be recognized on the balance sheet. The guidance will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This guidance shall be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes a number of practical expedients that an entity may elect to apply. Early application of the guidance is permitted. The Company is evaluating the adoption of this guidance and the potential effects on its consolidated financial statements.

In March 2016, the FASB issued authoritative guidance on accounting for share-based payment transactions. The guidance makes several modifications related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies and clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company is currently assessing how the adoption of this standard may impact its consolidated financial statements.

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Note 2 - Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016		2015			2016		2015
Sales and marketing	$	20	$	(5	)	$	52	$	1
Technology and development		9		14			35		13
General and administrative		21		25			66		64
Total stock-based compensation	$	50	$	34		$	153	$	78

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Note 3 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Net income/(loss)	$	(492	)	$	9	$	(598	)	$	(388	)
Shares used to compute basic net income/(loss) per share		7,131			7,449		7,129			7,421
Dilutive potential common shares:
Stock options					112
Shares used to compute diluted net income/(loss) per share		7,131			7,561		7,129			7,421
Basic net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)
Diluted net income/(loss) per share	$	(0.07	)	$	0.00	$	(0.08	)	$	(0.05	)

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Note 4 - Investments (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government backed securities	$	110	$	-	$	-	$	110
Certificates of Deposit   (1)		5,453		1		-		5,454
Total Investments	$	5,563	$	1	$	-	$	5,564

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government backed securities	$	902	$	-	$	-		$	902
Certificates of Deposit   (1)		4,375		-		(2	)		4,373
Total Investments	$	5,277	$	-	$	(2	)	$	5,275

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

	Fair Value Measurements as of September 30, 2016
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	110	$	-	$	110
Certificates of Deposit		-		5,454		-		5,454
Total Investments	$	-	$	5,564	$	-	$	5,564

	Fair Value Measurements as of December 31, 2015
	Level 1		Level 2		Level 3		Total
U.S. Government backed securities	$	-	$	902	$	-	$	902
Certificates of Deposit		-		4,373		-		4,373
Total Investments	$	-	$	5,275	$	-	$	5,275

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

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	September 30,		December 31,
	2016		2015
Prepaid software licenses and maintenance	$	241	$	690
Prepaid insurance		168		108
Other prepaid expenses		99		175
Other receivables		88		94
Prepaid rent		73		-
Interest receivable		13		8
Total prepaid expenses and other current assets	$	682	$	1,075

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Note 6 - Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	September 30,			December 31,
	2016			2015
Computer equipment	$	3,722		$	3,932
Software		1,805			1,856
Furniture and fixtures		120			117
Leasehold improvements		815			815
Total cost basis		6,462			6,720
Less accumulated depreciation		(5,591	)		(5,684	)
Net book value	$	871		$	1,036

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Note 7 - Internal Use Software (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Capitalized Internal Use Software Roll Forward [Table Text Block]

	Balance at December 31, 2015			Additions			Balance at September 30, 2016
Capitalized internal use software	$	18,812		$	1,703		$	20,515
Accumulated amortization		(13,721	)		(1,356	)		(15,077	)
Internal use software, net	$	5,091		$	347		$	5,438

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

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	September 30,		December 31,
	2016		2015
Payroll and related liabilities	$	1,134	$	855
Taxes payable and other		72		82
Total accrued expenses	$	1,206	$	937

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

	September 30,		December 31,
	2016		2015
Deferred rent, current portion	$	102	$	78
Obligations under capital leases, current portion		26		25
Total other current liabilities	$	128	$	103

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Note 9 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

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

	Real Estate		Office Equipment		Total
	Operating Leases		Operating Lease		Operating Leases
2016		213		4		217
2017		873		20		893
2018		896		20		916
2019		918		10		928
2020		940		-		940
2021 and thereafter		320		-		320
Total	$	4,160	$	54	$	4,214

Long-term Purchase Commitment [Table Text Block]

	Purchase
	Obligations
2016	$	490
2017		417
2018		337
Total	$	1,244

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Note 1 - Accounting Policies (Details Textual) - Sales and Marketing Operating Expenses Reclassified as Technology and Development Operating Expenses [Member]	9 Months Ended
	Sep. 30, 2016 USD ($)
Three Month Period Ended September 30, 2015 [Member]
Prior Period Reclassification Adjustment	$ 511,000
Nine Month Period Ended September 30, 2015 [Member]
Prior Period Reclassification Adjustment	$ 1,200,000

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Note 2 - Stock-based Compensation - Impact on Results of Operations for Recording Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Selling and Marketing Expense [Member]
Stock-based compensation	$ 20	$ (5)	$ 52	$ 1
Technology and Development [Member]
Stock-based compensation	9	14	35	13
General and Administrative Expense [Member]
Stock-based compensation	21	25	66	64
Stock-based compensation	$ 50	$ 34	$ 153	$ 78

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Note 3 - Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	885,000	314,000	864,000	853,000

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Note 3 - Earnings Per Share - Basic and Diluted Net Income (Loss) Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income/(loss)	$ (492)	$ 9	$ (598)	$ (388)
Shares used to compute basic net income/(loss) per share (in shares)	7,131	7,449	7,129	7,421
Stock options (in shares)		112
Shares used to compute diluted net income/(loss) per share (in shares)	7,131	7,561	7,129	7,421
Basic net income/(loss) per share (in dollars per share)	$ (0.07)	$ 0	$ (0.08)	$ (0.05)
Diluted net income/(loss) per share (in dollars per share)	$ (0.07)	$ 0	$ (0.08)	$ (0.05)

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Note 4 - Investments - Available-for-sale Debt Securities at Fair Value (Details) - Short-term Investments [Member] - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member]
Amortized Cost		$ 110	$ 902
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value		110	902
Certificate of Deposit [Member]
Amortized Cost	[1]	5,453	4,375
Gross Unrealized Gains	[1]	1
Gross Unrealized Losses	[1]		(2)
Fair Value	[1]	5,454	4,373
Amortized Cost		5,563	5,277
Gross Unrealized Gains		1
Gross Unrealized Losses			(2)
Fair Value		$ 5,564	$ 5,275

[1] The Company evaluated certificates of deposits held as of September 30, 2016 and December 31, 2015 and concluded that they meet the definition of securities as available for sale.

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Note 4 - Investments - Available-for-sale Debt Securities, Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	110	902
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
US Government Agencies Debt Securities [Member]
Available-for-sale securities	110	902
Certificate of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
Certificate of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	5,454	4,373
Certificate of Deposit [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Certificate of Deposit [Member]
Available-for-sale securities	5,454	4,373
Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	5,564	5,275
Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Available-for-sale securities	$ 5,564	$ 5,275

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Note 5 - Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Prepaid software licenses and maintenance	$ 241	$ 690
Prepaid insurance	168	108
Other prepaid expenses	99	175
Other receivables	88	94
Prepaid rent	73
Interest receivable	13	8
Total prepaid expenses and other current assets	$ 682	$ 1,075

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Note 6 - Property and Equipment (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Depreciation	$ 122,000	$ 156,000	$ 398,000	$ 473,000

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Note 6 - Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Computer equipment	$ 3,722	$ 3,932
Software	1,805	1,856
Furniture and fixtures	120	117
Leasehold improvements	815	815
Total cost basis	6,462	6,720
Less accumulated depreciation	(5,591)	(5,684)
Net book value	$ 871	$ 1,036

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Note 7 - Internal Use Software (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Computer Software, Intangible Asset [Member] | Operating Expense [Member]
Additional Amortization from Reduction in Estimated Remaining Useful Life	$ 205,000
Amortization of Intangible Assets	616,000	$ 388,000	$ 1,400,000	$ 1,300,000
Computer Software, Intangible Asset [Member]
Impairment of Intangible Assets, Finite-lived			$ 0	$ 0
Minimum [Member]
Capitalized Internal Use Software Usefu Life			3 years
Maximum [Member]
Capitalized Internal Use Software Usefu Life			5 years
Finite-lived Computer Software, Net, Subject to Reduced Estimated Remaining Useful Life	$ 892,000		$ 892,000

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Note 7 - Internal Use Software - Roll-forward of Capitalized Internal Use Software (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Beginning balance, Capitalized internal use software	$ 18,812
Additions, Capitalized internal use software	1,703
Ending balance, Capitalized internal use software	20,515
Beginning balance, Accumulated amortization	(13,721)
Additions, Accumulated amortization	(1,356)
Ending balance, Accumulated amortization	(15,077)
Beginning balance, Internal use software, net	5,091
Additions, Internal use software, net	347
Ending balance, Internal use software, net	$ 5,438

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Note 8 - Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Payroll and related liabilities	$ 1,134	$ 855
Taxes payable and other	72	82
Total accrued expenses	$ 1,206	$ 937

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Note 8 - Accrued Expenses and Other Current Liabilities - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Deferred rent, current portion	$ 102	$ 78
Obligations under capital leases, current portion	26	25
Total other current liabilities	$ 128	$ 103

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Note 9 - Commitments and Contingencies (Details Textual) - USD ($)		3 Months Ended		9 Months Ended
	Mar. 28, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
President and Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Consulting Term	1 year
Deferred Compensation Arrangement with Individual, Cash Award Granted, Amount	$ 362,000
Operating Leases, Rent Expense		$ 193,000	$ 192,000	$ 578,000	$ 576,000

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Note 9 - Commitments and Contingencies - Remaining Future Minimum Operating Lease Payments (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Real Estate Operating Leases [Member]
2016	$ 213
2017	873
2018	896
2019	918
2020	940
2021 and thereafter	320
Total	4,160
Office Equipment Operating Lease [Member]
2016	4
2017	20
2018	20
2019	10
2020
2021 and thereafter
Total	54
2016	217
2017	893
2018	916
2019	928
2020	940
2021 and thereafter	320
Total	$ 4,214

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Note 9 - Commitments and Contingencies - Non-cancellable Purchase Obligations for Software Development and License Agreements (Details) $ in Thousands	Sep. 30, 2016 USD ($)
2016	$ 490
2017	417
2018	337
Total	$ 1,244

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Note 10 - Income Taxes (Details Textual) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Operating Loss Carryforwards	$ 76.8	$ 76.8

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Note 11 - Security Deposits (Details Textual)	Sep. 30, 2016 USD ($)
Secured by Standby Letter of Credit [Member]
Letters of Credit Outstanding, Amount	$ 150,000
Other Noncurrent Assets [Member]
Security Deposit	$ 150,000