10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 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 000-27083

MAM Software Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	84-1108035
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Maple Park, Maple Court, Tankersley, Barnsley, U.K. S75 3DP

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: 011-44-122-635-2900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of each exchange on which registered:
Common Stock, $0.0001 par value	NASDAQ Capital Market

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Act).

Yes ☐   No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐   No  ☑

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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

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).   Yes  ☑   No    ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III or this Form 10-K or any amendment to this Form 10-K.   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if smaller reporting company)	Smaller reporting company ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes☐   No  ☑

As of December 31, 2015, 12,434,887 shares of common stock were outstanding. The aggregate market value of the common stock held by non-affiliates of the registrant, as of December 31, 2015, the last business day of the second fiscal quarter, was approximately $25,394,000 based on the average high and low price of $7.05 for the registrant’s common stock as quoted on NASDAQ Capital Market on that date. Shares of common stock held by each director, each officer and each person who owns 10% or more of the outstanding common stock have been excluded from this calculation in that such persons may be deemed to be affiliates. The determination of affiliate status is not necessarily conclusive.

The registrant had 12,400,758 shares of its common stock outstanding as of September 16, 2016.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant's 2017 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page
PART I		1
Item 1.	Business	1
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
PART II		15
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 8.	Financial Statements and Supplementary Data	24
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9A.	Controls and Procedures	24
Item 9B.	Other Information	25
PART III		26
Item 10.	Directors, Executive Officers and Corporate Governance	26
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accounting Fees and Services	26
PART IV		44
Item 15.	Exhibits, Financial Statement Schedules	27
SIGNATURES		29
INDEX TO EXHIBITS		30

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public.  Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors.  Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A — Risk Factors” below.

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PART I

Item 1. Business

Overview

MAM Software Group, Inc. (“MAM,” "the Company," “we,” “our,” or “us”) is a leading provider of cloud-based business and on premise management solutions for the auto parts, tires and vertical distribution industries. We have a broad line of software solutions and services to address the information technology ("IT") needs of virtually every significant sector of the automotive aftermarket in the United Kingdom ("UK") and Ireland (collectively referred to as the “UK Market”) and North America (“NA”), which includes the United States ("US") and Canada, and are seeking to leverage this position into new industry verticals.

Our Markets

MAM provides software, information and related services to businesses engaged in the automotive aftermarket in the US, Canada, UK and Ireland. The automotive aftermarket consists of businesses associated with the life cycle of a motor vehicle from when the original manufacturer’s warranty expires to when the vehicle is scrapped. Products sold by businesses engaged in this market include the parts, tires and auto services required to maintain and improve the performance or appeal of a vehicle throughout its useful life. We aim to meet the business needs of customers who are involved in the maintenance and repair of automobiles and light trucks in three key segments of the automotive aftermarket, namely parts, tires and auto service.  

Our customer base consists of wholesale parts and tire distributors, retailers, franchisees, cooperatives, auto service chains and single location auto service businesses with high customer service expectations and complex commercial relationships.

In the UK Market, we also provide management solutions to businesses involved in the wholesale of construction materials. These vertical markets include plumbing, building, lumber, and electrical wholesale distribution companies.  We currently do not provide management solutions for vertical markets in North America.

Industry Overview

MAM serves the business needs of customers involved in the supply of parts, maintenance and repair of automobiles and light trucks in three key segments of the automotive aftermarket, namely parts, tires and auto service.

The industry is presently experiencing a level of consolidation in the lines that are being sold. The previous distinction of having parts and tires provided by two distinct suppliers is coming to an end, as our customers’ businesses need to offer their clients the widest range of products and services under one roof. As a result, what were previously parts-only stores, jobbers and warehouse, are now taking in tire inventory as well in order to satisfy their clients’ demands, and vice-versa. This in turn is causing owners of these businesses to evaluate their business systems to ensure they can compete over the short, medium and long term. An increase in the “do-it-yourself” market due to the “credit crunch” is requiring these systems, but at the same time a need to compete strongly with other parts stores is cutting margins as businesses attempt to attract new and return business. Longer warranties are still deferring the length of time until newer vehicles are entering the aftermarket, except for running spares and service parts, accident damage, and optional add-ons such as security, entertainment, performance and customization.

Continuing market conditions related to the overall downturn in the consumer market are also directly affecting the confidence and ability of businesses to invest in new systems. The industry’s response to this has been to introduce incentive and discount programs, but to date it is uncertain whether this approach will be successful long term.

Nonetheless, we believe that the automotive aftermarket will continue to grow, driven by the following factors:

• gradual growth in the aggregate number of vehicles in use;

• an increase in the average age of vehicles in operation, now estimated to be 11.5 years;

• growth in the total number of miles driven per vehicle per year; and

• increased vehicle complexity.

Operations

MAM is a technology holding company that operates through three wholly owned subsidiaries; one based in the United States of America ("US"), MAM Software, Inc. (“MAM NA”) which is located in Blue Bell, Pennsylvania, and two based in the UK, MAM Software Limited (“MAM Ltd.”) which is located in Tankersley, Barnsley, UK and Origin Software Solutions Ltd. ("Origin") which is located in Bristol, UK (MAM Ltd. and Origin are collectively referred to as “MAM UK”).  The subsidiaries operate independently from one another.

MAM UK

MAM UK is a provider of software to the automotive aftermarket in the UK and Ireland. MAM UK's two primary software solutions are Autopart and Autowork.  Autopart is designed for and targeted at parts store chains that seek to manage multiple locations and inventories on a single system for a regional area.  It is also suited for managing single location franchisees or buying group members.  Autowork is designed for and targeted at small single location automotive installers.

MAM UK also provides customers in the UK Market and North America with a range of business to business ("B2B") and business to consumer ("B2C") e-commerce solutions for the automotive aftermarket.

MAM NA

MAM NA sells two primary software solutions, VAST and Autopart. VAST specifically focuses on selling systems to the service and tire segment of the market, while Autopart focuses on the warehouse and jobber segment of the market.

Our Technologies

All MAM programs are based on the Microsoft Windows family of operating systems.  Each MAM program is fully compatible with the other MAM applications in its range, enabling them to be combined to create a fully integrated package.

Our solutions are available as both 'on premise' applications (sold via the traditional perpetual licensing model) and ‘cloud’ solutions that are delivered as a service over the Internet on a subscription basis.

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Many of our business management applications are now available as software as a service ("SaaS") solutions, where software and associated data is centrally hosted on the cloud. Depending on the complexity of the application, MAM SaaS solutions are deployed using 'cloud hosting' or 'web application' technology:

• SaaS cloud hosting - single tenants accessing fully-managed virtual servers via thin client (terminal services) connections (e.g. Autopart Online).

• SaaS web application - multiple tenants accessing a dedicated website using a standard web browser (e.g. Autowork Online).

Our catalog information is also available in the cloud as data as a service ("DaaS"). We centrally host and maintain the data, which is accessed by users via a desktop application, web application or integrated into their business-to-consumer (B2C) website.

Market acceptance of cloud computing for mission critical enterprise applications has become increasingly common in recent years.  Now, software can be delivered cost-effectively, reliably, and securely to businesses over the Internet without the need for these businesses to either purchase supporting software and hardware for an on premise system or the need to keep IT people on staff to monitor and upgrade such a system.

We introduced our first subscription-based service solution over the Internet in 2005 to customers in the UK Market, and we began marketing our first cloud system to customers in North America in 2013. Since that time, we have significantly expanded our cloud-based offerings and are offering customers that maintain in-house installations significant incentives to move to our cloud-computing model. While transitioning our customers to a cloud computing model results in a decrease in our up-front revenue recognition, we believe that this is a necessary transition and is in the best interests of our customers and our own long-term business prospects as an increasing number of our customers are looking for solutions that are highly functional, easy to use, configurable, and fast.

Our cloud model is based on Microsoft .Net, HTML5 and SQL technologies that are both open and secure, with support for user experiences on both desktop and mobile devices. Our customers that have moved away from traditional on premise software to our cloud-based service applications benefit by substantially reducing the complexity typical of on premise software implementations, customizations, and upgrades. Through cloud computing, we supply and manage the hardware, infrastructure, ongoing maintenance, and backup services for our customers. We install the latest version of our software for our customers, thereby reducing their need to buy and maintain their own IT resources. As a part of our cloud model, we also provide activation and training services to our customers as well as support services.

Products and Services

Meeting the needs of the automotive aftermarket requires a combination of business management systems, information products and online services that combine to deliver benefits for all parties involved in the timely repair of a vehicle. MAM provides systems and services that meet these needs and help its customers to meet their customers’ expectations. These products and services include:

1. Business Management Systems comprised of our proprietary software applications, implementation and training and third-party hardware and peripherals;

2. Information Products such as an accessible catalog database related to parts, tires, labor estimates, scheduled maintenance, repair information, technical service bulletins, pricing and product features and benefits that are used by the different participants in the automotive aftermarket;

3. Online Services and products that provide online connectivity between manufacturers, warehouse distributors, retailers and automotive service providers. These products enable electronic data interchange throughout the automotive aftermarket supply chain between the different trading partners. They also enable procurement and business services to be projected over the Internet to an expanded business audience; and

4. Customer Support, Consulting and Training that provide phone and online support, implementation and training.

Business Management Systems

MAM’s business management systems meet the needs of warehouse distributors, part stores and automotive service providers as follows:

Warehouse Distributors

Autopart. This is a UK-developed product that is sold and promoted both in North America and in the UK Market. This product is designed for and targeted at warehouse distributors that seek to manage multiple locations and inventories on a single system for a regional area and are also suited to managing single location franchisees or buying group members. The product provides point of sale, inventory management, electronic purchasing capabilities, a fully integrated accounting module, a warehouse management module, and a business intelligence reporting module. It also allows the distributor to connect with their customers through our OpenWebs™ ecommerce solutions.

Autopart can be delivered as an on premise solution and sold via the traditional perpetual licensing model. Autopart Online is a hosted or ‘cloud’ based version of our Autopart solution and is delivered as a service over the Internet, in a SaaS-based offering.

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Parts Stores

Autopart. This is a UK-developed product that is sold in both North America and UK Market.  This product is designed for and targeted at parts store chains that seek to manage multiple locations and inventories on a single system for a regional area. It is also suited to managing single location franchisees or buying group members. The product provides point of sale, inventory management, electronic purchasing capabilities a fully integrated accounting module and a business intelligence reporting module. It also allows parts stores to connect with their automotive service customers through VAST, Autowork Online or, OpenWebs™ ecommerce solutions.

Autopart can be delivered as an on premise solution and sold via the traditional perpetual licensing model. Autopart Online is a hosted or ‘cloud’ based version of our Autopart solution and is delivered as a service over the Internet, in a SaaS-based model.

Automotive Service Providers

VAST. This product is designed for and targeted to large-to-medium sized automotive service and tire chains that seek to manage multiple locations and inventories for a regional area it is also suited to managing single location stores that are part of a franchise or a buying group. VAST provides point-of-sale, inventory management, electronic purchasing and customer relationship management capabilities. It also allows the service provider to connect with parts and tires warehouse distributors and parts stores through either VAST’s online services and products or other industry connectivity solutions.

Autowork Online. This is a UK-developed product that is sold both in North America and the UK Market.  This product is designed for and targeted at small single location automotive installers. The Autowork Online product provides estimate, job card, parts procurement and invoice capabilities. It also allows the automotive installer to connect with parts distributors to purchase components. Autowork Online is delivered as a service over the Internet, commonly known as SaaS, allowing customers to purchase the solution on a monthly basis without the need to manage the system.

Vertical Markets

Trader. This is a UK-developed product that is sold in the UK Market. This product is designed for and targeted at generic wholesalers and distributors. Based on the Autopart codebase, the product provides point of sale, inventory management, electronic purchasing capabilities and a fully integrated accounting module.

Information Products

MAM provides product catalog and vehicle repair information required to enable point-of-sale transactions. These proprietary database products and services generate recurring revenues through monthly or annual subscription fees.

MAM Ltd. develops and maintains proprietary information products that differentiate its products from those of the majority of its competitors in the UK Market. In North America, MAM NA also develops and maintains proprietary information products, and also maintains a proprietary workflow capability that integrates information products sourced from its suppliers for its automotive parts and tire customers, including warehouse distributors, parts stores and automotive service providers.

The principal information service for both MAM NA and MAM Ltd. is Autocat+, an auto parts catalog that uses the DaaS distribution model. Autocat+ provides access to a database of automobile vehicle applications for the NA and UK markets   that enables users to access information about parts quickly and accurately. The Autocat+ service is centrally hosted and data is accessed by users via MAM's business management software, a standalone desktop application, or web application. Data can also be 'consumed' via a Web Service for integration into B2C websites. Information in Autocat+ is maintained through an automatic verification and standardization process, with updates published daily.

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In addition, information products developed or resold by MAM NA include Interchange Catalog, a database that provides cross references of original equipment manufacturer part numbers to aftermarket manufacturer part numbers; Price Updating, a service that provides electronic price updates following a price change by the part manufacturer; Labor Guide, a database used by automotive service providers to estimate labor hours for purposes of providing written estimates of repair costs to customers; Scheduled Service Intervals, a database of maintenance intervals; and Tire Sizing, a database that cross-references various tire products and applications.

Online Services

MAM offers online e-commerce services in the form of business to business and business to consumer implementations in North America and the UK Market. These online services connect the automotive aftermarket from manufacturers through warehouse distributors and parts stores to automotive service providers for the purpose of purchasing parts and tires, fleet and national account transaction processing and online product price information.

OpenWebs™ e-Commerce Gateway Services

In the NA market, VAST’s e-commerce gateway services use automotive industry standard messaging specifications to deliver online services that connect the automotive aftermarket supply chain for the purpose of purchasing parts and tires, fleet and national account transaction processing, online product and price updating for parts and tires.

OpenWebs™ e-Commerce Browser Services

In North America, VAST’s e-commerce browser services enable warehouse distributors and parts stores to provide an online service to automotive service providers for the purpose of purchasing parts and tires, accessing account information and other browser-based channel management services.

Autonet

In the UK Market, Autonet online services connect manufacturers, warehouse distributors, parts stores and automotive service providers for the purpose of purchasing parts and tires, fleet and national account transaction processing and product information and price distribution.

Customer Support and Consulting and Training

We provide support, consulting and training to its customers to ensure the successful use of its products and services. We believe this extra level of commitment and service builds customer relationships, enhances customer satisfaction and maximizes customer retention. These services consist of the following:

• Phone and online support. Customers can call dedicated support lines to speak with knowledgeable personnel who provide support and perform on-line problem solving as required.

• Implementation, education and training consulting. Our consulting and training teams work together to minimize the disruption to a customer’s business during the implementation process of a new system, and to maximize the customer’s benefit from the use of the system through training.

We also provide a customer-only support portal that allows customers direct access to tutorials, on-line documentation and information related to products and services. New customers enter into support service agreements, and most retain such agreements for as long as they own the system. Monthly fees vary with the number of locations and the software modules, information products and online services subscribed to. The agreements are generally month-to-month agreements. We offer training at facilities in both the UK and US, as well as the customers’ facilities and online, for product updates or to introduce specific new capabilities.

MAM's catalog information products are delivered by its Autocat+ product teams in NA and UK. The Autocat+ product teams source, standardize and format data collected in an electronic format from over 300 automotive parts manufacturers in both regions and the data is provided to its customers via the Internet.

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Distribution

There are two primary vertical distribution channels for aftermarket parts and tire distribution: the traditional wholesale channel and the retail channel.

Automotive Aftermarket Distribution Channels

•  Traditional Wholesale Channel. The wholesale channel is the predominant distribution channel in the automotive aftermarket. It is characterized by the distribution of parts from the manufacturer to a warehouse distributor, to parts stores and then to automotive service providers. Warehouse distributors sell to automotive service providers through parts stores, which are positioned geographically near the automotive service providers they serve. This distribution method provides for the rapid distribution of parts. We have products and services that meet the needs of the warehouse distributors, parts stores and the automotive service providers.

• Retail Channel. The retail channel is comprised of large specialty retailers, small independent parts stores and regional chains that sell to “do-it-yourself” customers. Larger specialty retailers, such as Advance Auto Parts, AutoZone, Inc., and O’Reilly Automotive, Inc. carry a greater number of parts and accessories at more attractive prices than smaller retail outlets and are gaining market share. The business management systems used in this channel are either custom developed by the large specialty retailers or purchased from business systems providers by small to medium-sized businesses. We have products and services that support the retail channel.

In addition to these two primary channels, some aftermarket parts and tires are being distributed to new car dealers. The business management systems used in this channel have unique functionality specific to new car dealerships. We sell a small number of products into the auto service provider side of car dealerships. Also, aftermarket wholesalers of parts and tires provide online purchasing capabilities to some new car dealerships.

Product Development

Our product development strategy, designed to add value to our customers' businesses through products and services designed to optimize efficiency, consists of the following three key components:

• Integrating all of our products so that our various software solutions work together seamlessly, thereby eliminating the need to switch between applications;

• Enhancing our current products and services to support our customers’ changing needs; and

• Providing a migration path to our business management systems, reducing a fear that many customers have that changing systems will disrupt business.

Sales and Marketing

MAM's sales and marketing strategy is to acquire customers and retain them by cross-selling and up-selling a range of commercially compelling business management systems, information products and online services.

Within the parts, tire and auto service provider segments, each division sells and markets through a combination of field sales, inside sales, and independent representatives. We seek to partner with large customers or buying groups and leverage their relationships with their customers or members. Incentive pay is a significant portion of the total compensation package for all sales representatives and sales managers. Outside sales representatives focus primarily on identifying and selling to new customers complemented by an inside sales focus on selling upgrades and new software applications to its installed customer base.

Our marketing approach aims to maximize customer retention, and secure recurring revenues, by leveraging our reputation for satisfying customers and for delivering systems, information and services that improve a customer’s commercial results. We likewise continually aim to enhance the productivity of the field sales team, and to create the cross-selling and up-selling opportunities for our systems, information products and online services.

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Research and Development

MAM spent $3.8 million for the year ended June 30, 2016 on research and development, as compared to $3.9 million for the year ended June 30, 2015.

Patent and Trademark

We rely on a combination of intellectual property laws, as well as confidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have not sought patent protection for any of our products. We have registered our business name, “MAM Software,” with the US Patent and Trademark office. In addition, we have registered our tagline, “Driving Business Performance,” with the US Patent and Trademark office.

Customers

During the years ended June 30, 2016 and 2015, no customer accounted for more than 10% of our total net revenues.  Our top ten customers collectively accounted for 15% and 16% of our total net revenues during the years ended June 30, 2016 and 2015, respectively.

Competition

In MAM NA, Autopart competes primarily with Epicor Inc. (formerly Activant, Inc.), WHI and several smaller software companies, including Autologue, DST and Fuse 5. VAST competes primarily with Maddenco, ASA, Tasco and RO Writer, each of which provides similar products and services as VAST, to the US automotive aftermarket. We are subject to the ongoing threat of in-house developed custom systems, information products and online services.  For example, AutoZone, Inc. and Genuine Parts Company’s NAPA Parts Group, each have developed their own business management systems and electronic automotive parts catalogs for their stores and members, although we currently have a partnership agreement with each of these companies to supply their information products through our solutions.

In North America, we expect to compete successfully against our competitors using two separate and complimentary strategies. First, we will continue to focus on promoting and selling our complete supply chain solutions that provide businesses with easy integration of our business management information systems into their existing supply chain structures. Second, we will continue our strategy of working with those businesses that already manage their own supply chains and information products (catalogs), such as AutoZone, helping to improve and compliment their systems with our products.

In North America, VAST competes with multiple products across different market segments, so its competitors vary by segment.

Within the warehouse distribution segment, we will continue to promote our Autopart product which enables large warehouses with hundreds of thousands of parts to locate, manage, pack and deliver the parts with ease and efficiency. Our prospective customers are moving towards modern solutions which integrate seamlessly with third-party e-commerce solutions. We have been selling Autopart successfully in the UK Market since 2000, which we believe will help to establish this product in North America.

The tire segment is comprised of three distinct elements: retail, wholesale and commercial. Within the tire segment and the auto service segment, we focus on clients and market requirements, which we believe will enable us to offer our clients the best solution, regardless of the size of a client’s business. By continually integrating and extending the functionality of our solutions across the entire supply chain, we believe that we will be able to offer existing and potential clients products that suit their present and future needs. Our management believes that our products will present existing and potential clients the opportunity to move away from their older existing systems, which may restrict their market opportunities, and will permit integration into additional sales channels and reduce the costly maintenance of older systems.

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The auto parts segment within the auto service space has many competitors who have developed applications for single location auto service shops. Many of these have been developed by parts distributors like NAPA and Advance Auto Parts. While these applications do well in a small single location store, they are not widely distributed in the multi-store location segment of the auto parts business. We believe that our Autowork Online product is highly suited to single store locations. The strategy for generating revenue in this sector of the market will be to establish reseller agreements with distributor partners. In addition, we will focus on multi-store locations for which our product VAST is highly suited. We believe that this multi-store ability offers strong opportunities to beat the competition in this area and increase our customer base.

The last area that we plan to compete in is the e-commerce space, providing new tools and solutions for this expanding Internet marketplace.  Our goal for the OpenWebs™ product is to connect both parts and tire partners together in a real-time environment so they can perform electronic ordering, gauge inventory levels as well as disseminate information. Within the tire segment, we feel that we have a competitive advantage. Our marketplace knowledge has led us to believe that most tire distributors either do not have a business-to-business solution or have developed solutions from independent sources. While the parts segment of this market is largely tied to Epicor, Inc. (formerly Activant, Inc.) at this time, we believe that customers are looking for solutions that simply integrate their supply chain, completely and without further restrictions. Our OpenWebs™ solution will allow our customers to achieve these goals.

In the UK Market, we compete primarily with Epicor, Inc., (formerly Activant, Inc.) in the parts sector of automotive aftermarket. In the tire sector of the UK Market, we compete primarily with CAM Systems, Tyreman and Team Systems. In the vertical sector of the UK Market, we compete with Kerridge, Chatsworth, EDP, Blue Rock, OGL and Ramtac. We feel that we provide a range of solutions that combine proven concepts with cutting-edge technology that are functional, effective and reliable, and offer solutions that enable business to identify and implement new efficiencies and increase existing efficiencies, to our competitive advantage. These efforts, together with strong post-sales support and ongoing in depth product and market support, will assist us in generating and maintaining its position within the market.

Several large enterprise resource planning and software companies, including Microsoft Corporation, Oracle Corporation and SAP AG, continue to supply Enterprise Resource Planning (“ERP”) and Supply Chain Management (“SCM”) products to medium sized original equipment manufacturers and suppliers within the automotive market, but to date have not focused strongly on the aftermarket. These companies appear focused on the efficient management of the supply chain and to date do not appear to be looking to supply systems and solutions into the jobber and service segments of the aftermarket. However, there can be no assurance that those companies will not develop or acquire a competitive product or service in the future.

Company Information

MAM was formed in December of 2005 following a spin-off from another publicly traded company.

Our principal executive office is located at Maple Park, Maple Court, Tankersley, Barnsley, UK S75 3DP and our phone number is 011-44-122-635-2900. Our website address is www.mamsoftware.com. Information contained in our website does not form part of this report and is intended for informational purposes only.

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Employees

As of June 30, 2016, we had 230 full-time employees and 8 part-time employees.

Item 1A. Risk Factors

Our business, financial condition and results of operations are subject to a number of risk factors, both those that are known to us and identified below and others that may arise from time to time. These risk factors could cause our actual results to differ materially from those suggested by forward-looking statements in this Report and elsewhere, and may adversely affect our business, financial condition or results of operations. If any of these risk factors should occur, moreover, the trading price of our securities could decline, and investors in our securities could lose all or part of their investment in our securities. These risk factors should be carefully considered in evaluating our business.

Risks Related to MAM and Our Business

We may fail to address risks we face as a growing business, which could adversely affect the implementation of our business plan.

We are prone to all of the risks inherent in growing a business.  You should consider the likelihood of our future success to be highly speculative in light of the limited resources, problems, expenses, risks and complications frequently encountered by entities at our current stage of development.

To address these risks, we must, among other things:

• implement and successfully execute our business and marketing strategy;

• continue to develop new products and upgrade our existing products;

• respond to industry and competitive developments;

• attract, retain, and motivate qualified personnel; and

• obtain equity and debt financing on satisfactory terms and in timely fashion in amounts adequate to implement our business plan and meet our obligations.

We may not be successful in addressing these risks and if we do not, our business prospects, financial condition and results of operations would be materially adversely affected.

Global market disruptions may adversely affect our business and results of operations.

Recent disruptions in the current global credit and financial markets have included diminished liquidity and credit availability, a decline in economic growth and uncertainty about economic stability. There can be no assurance that there will not be further deterioration in credit and financial markets and confidence in economic conditions. These economic uncertainties affect businesses such as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities. We believe that the recent global economic slowdown and the resulting slow recovery have caused certain customers to reduce or delay capital spending plans, which, if prolonged, could impact our growth expectations as potential and existing customers continue to delay decisions to purchase or upgrade their systems. We are unable to predict the likely duration and severity of the current disruptions in the credit and financial markets and adverse global economic conditions and its potential impact on our business. If the current uncertain economic conditions continue or further deteriorate, our business and results of operations could be materially and adversely affected.

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Political and economic uncertainty arising from a majority of voters approving a referendum for the United Kingdom to exit the European Union could adversely impact our financial results.

In June 2016, a majority of voters in the UK elected to withdraw from the European Union (E.U.) in a national referendum (also referred to as “Brexit”). Negotiations are expected to commence to determine the future terms of the UK’s relationship with the E.U. MAM UK represents a significant portion of our revenues and profitability. The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the US dollar against the British pound. During periods of a strengthening dollar, our reported international revenues are reduced because the British pound translates into fewer US dollars. The long term effects of Brexit will depend on any agreements the UK makes to retain access to European markets either during a transitional period or more permanently. Any of the potential effects of Brexit could have unpredictable consequences for credit markets and adversely affect our business, results of operations, and financial performance.

Financial difficulties or the bankruptcy of one or more of our major customers could adversely affect our results.

Our ability to collect our accounts receivable and future sales depends, in part, on the financial strength of our customers. We grant credit, generally without collateral, to our customers. Consequently, we are subject to credit risk related to changes in business and economic factors throughout the UK Market and North America. In the event customers experience financial difficulty, and particularly if bankruptcy results, our profitability may be adversely impacted by our failure to collect our accounts receivable in excess of our estimated allowance for uncollectible accounts. Additionally, our future revenues could be reduced by the loss of a customer due to bankruptcy. Our failure to collect accounts receivable and/or the loss of one or more major customers could have an adverse effect on our net income and financial condition.

We may fail to successfully develop, market and sell our products.

To achieve profitable operations, we, along with our subsidiaries, must continue successfully to improve, market and sell existing products and develop, market and sell new products. Our product development efforts may not be successful. The development of new software products is highly uncertain and subject to a number of significant risks. The development cycle-from inception to installing the software for customers - can be lengthy and uncertain. The ability to market the product is unpredictable and may cause delays. Potential products may appear promising at early stages of development, and yet may not reach the market for a number of reasons.

We may encounter significant financial and operating risks if we grow our business through acquisitions.

As part of our growth strategy, we may seek to acquire or invest in complementary or competitive businesses, products or technologies. The process of integrating acquired assets into our operations may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for the ongoing development of our business. We may allocate a significant portion of our available working capital to finance all or a portion of the purchase price relating to possible acquisitions. Any future acquisition or investment opportunity may require us to obtain additional financing to complete the transaction. The anticipated benefits of any acquisitions may not be realized. In addition, future acquisitions by us could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to intangible assets, any of which could materially adversely affect our operating results and financial position. Acquisitions also involve other risks, including entering markets in which we have no or limited prior experience.

An increase in competition from other software manufacturers could have a material adverse effect on our ability to generate revenue and cash flow.

Competition in our industry is intense. Potential competitors in the UK Market and North America are numerous. Most competitors have substantially greater capital resources, marketing experience, research and development staffs and facilities than we have. Our competitors may be able to develop products before us or develop more effective products or market them more effectively which would limit our ability to generate revenue and cash flow.

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The prices we charge for our products may decrease as a result of competition and our revenues could decrease as a result.

We face potential competition from many competitors and increased competition may have a negative impact on our future revenues and financial condition. In addition, there are very large software companies, including Microsoft Corporation, Oracle Corporation and SAP AG which supply ERP and SCM products to our target market of small to medium-sized businesses servicing the automotive aftermarket. There can be no assurance that these companies will not develop or acquire a competitive product or service in the future. Our business would be dramatically affected by price pressure if these larger software companies attempted to gain market share through the use of highly discounted sales and extensive marketing campaigns.

If we fail to keep up with rapid technological change, our technologies and products could become less competitive or obsolete.

The software industry is characterized by rapid and significant technological change. We expect that the software needs associated with the automotive technology will continue to develop rapidly, and our future success will depend on our ability to develop and maintain a competitive position through technological development.

We depend on proprietary know-how to develop and protect our technologies and products, which rights may not offer us sufficient protection.

The software industry places considerable importance on obtaining intellectual property protection for new technologies, products and processes. Our success will depend on our ability to obtain and enforce protection for products that we develop, preserve the confidentiality of our trade secrets and operate without infringing the proprietary rights of third parties.

We rely upon trade secret protection for our confidential and proprietary information. Others may independently develop substantially equivalent proprietary information and techniques or gain access to our trade secrets or disclose our technology. We may not be able to meaningfully protect our trade secrets which could limit our ability to exclusively produce products.

We require our employees, consultants, and parties to collaborative agreements to execute confidentiality agreements upon the commencement of employment or consulting relationships or collaboration with us. These agreements may not provide meaningful protection of our trade secrets or adequate remedies in the event of unauthorized use or disclosure of confidential and proprietary information.

If we become subject to adverse claims alleging infringement of third-party proprietary rights, we may incur unanticipated costs and our competitive position may suffer.

We are subject to the risk that we are infringing on the proprietary rights of third parties. Although we are not aware of any infringement by our technology on the proprietary rights of others and are not currently subject to any legal proceedings involving claimed infringements, we cannot assure that we will not be subject to such third-party claims, litigation or indemnity demands and that these claims will not be successful. If a claim or indemnity demand were to be brought against us, it could result in costly litigation or product shipment delays or force us to stop selling such product or providing such services or to enter into royalty or license agreements.

Our software and information services could contain design defects or errors which could affect our reputation, result in significant costs to us and impair our ability to sell our products.

Our software and information services are highly complex and sophisticated and could, from time to time, contain design defects or errors. We cannot assure you that these defects or errors will not delay the release or shipment of our products or, if the defect or error is discovered only after customers have received the products, that these defects or errors will not result in increased costs, litigation, customer attrition, reduced market acceptance of our systems and services or damage to our reputation.

If we lose key management or other personnel our business could suffer.

We are highly dependent on the principal members of our management staff. We also rely on consultants and advisors to assist us in formulating our development strategy. Our success also depends upon retaining key management and technical personnel, as well as our ability to continue to attract and retain additional highly qualified personnel. We may not be successful in retaining our current personnel or hiring and retaining qualified personnel in the future. If we lose the services of any of our management staff or key technical personnel, or if we fail to continue to attract qualified personnel, our ability to acquire, develop or sell products would be adversely affected.

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Our management and internal systems might be inadequate to handle our potential growth.

Our success will depend in significant part on the expansion of our operations and the effective management of growth. This growth will place a significant strain on our management and information systems and resources and operational and financial systems and resources. To manage future growth, our management must continue to improve our operational and financial systems and expand, train, retain and manage our employee base. Our management may not be able to manage our growth effectively. If our systems, procedures, controls, and resources are inadequate to support our operations, our expansion would be halted and we could lose our opportunity to gain significant market share. Any inability to manage growth effectively may harm our ability to institute our business plan.

We have insurance coverage for the services we offer. However, a claim for damages may be made against us regardless of our responsibility for the failure, which could expose us to liability.

We provide business management solutions that we believe are critical to the operations of our customers’ businesses and provide benefits that may be difficult to quantify. Any failure of a customer’s system installed or of the services offered by us could result in a claim for substantial damages against us, regardless of our responsibility for the failure. Although we attempt to limit our contractual liability for damages resulting from negligent acts, errors, mistakes or omissions in rendering our services, we cannot assure you that the limitations on liability we include in our agreements will be enforceable in all cases, or that those limitations on liability will otherwise protect us from liability for damages. In the event that the terms and conditions of our contracts which limit our liability are not sufficient, we have insurance coverage. This coverage of approximately $10 million in the aggregate in the UK Market and in North America insures the business for negligent acts, error or omission, failure of the technology services to perform as intended, and breach of warranties or representations. It also insures the services that we supply including, web services, consulting, analysis, design, installation, training, support, system integration, the manufacture, sale, licensing, distribution or marketing of software, the design and development of code, software and programming and the provision of software applications as a service, rental or lease. However, there can be no assurance that our insurance coverage will be adequate or that coverage will remain available at acceptable costs. Successful claims brought against us in excess of our insurance coverage could seriously harm our business, prospects, financial condition and results of operations. Even if not successful, large claims against us could result in significant legal and other costs and may be a distraction to our senior management.

Because we have international operations, we will be subject to risks of conducting business in foreign countries.

International operations constitute a significant part of our business, and we are subject to the risks of conducting business in foreign countries, including:

• difficulty in establishing or managing distribution relationships;

• different standards for the development, use, packaging and marketing of our products and technologies;

• our ability to locate qualified local employees, partners, distributors and suppliers;

• the potential burden of complying with a variety of foreign laws and trade standards; and

• general geopolitical risks, such as political and economic instability, changes in diplomatic and trade relations, and foreign currency risks and fluctuations.

No assurance can be given that we will be able to positively manage the risks inherent in the conduct of our international operations or that such operations will not have a negative impact on our overall financial operations.

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Risks Related to our Common Stock

Our insiders and affiliated beneficially own a significant portion of our stock.

As of the date of hereof, our executive officers, directors and affiliated parties beneficially own approximately 65% of our common stock.  As a result, our executive officers and affiliated parties will have significant influence to:

• Elect or defeat the election of our directors;

• Amend or prevent amendment of our certificate of incorporation or bylaws;

• Effect or prevent a merger, sale of assets or other corporate transaction; and

• Affect the outcome of any other matter submitted to the stockholders for vote

In addition, any sale of a significant amount of our common stock held by our directors and executive officers, or the possibility of such sales, could adversely affect the market price of our common stock.  Management's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing any gains from our common stock.

Additional issuances of securities will dilute your stock ownership and could affect our stock price.

As of September 16, 2016, there were 13,190,546 shares of our common stock issued and 12,400,758 shares of our common stock outstanding. Our Certificate of Incorporation authorizes the issuance of an aggregate of 18,000,000 shares of common stock and 2,000,000 shares of Preferred Stock, on such terms and at such prices as our Board of Directors may determine. These shares are intended to provide us with the necessary flexibility to undertake and complete plans to raise funds if and when needed. In addition, we may pursue acquisitions that could include issuing equity, although we have no current arrangements to do so. Any such issuances of securities would have a dilutive effect on current ownership of MAM stock. The market price of our common stock could fall in response to the sale or issuance of a large number of shares, or the perception that sales of a large number of shares could occur.

The market for our common stock is limited and you may not be able to sell your common stock.

Our common stock is currently listed on the NASDAQ Capital Market. The market for purchases and sales of our common stock is limited and therefore the sale of a relatively small number of shares could cause the price to fall sharply. Accordingly, it may be difficult to sell shares quickly without significantly depressing the value of the common stock. Unless we are successful in developing continued investor interest in our common stock, sales of our common stock could continue to result in major fluctuations in the price of the common stock.

The price of our common stock is likely to be volatile and subject to fluctuations.

The market price of the securities of software companies has been especially volatile. Additionally, the lack of trading volume for our common stock may cause the market price of our common stock to be subject to fluctuations. If our revenues do not grow or grow more slowly than we anticipate, or, if operating or capital expenditures exceed our expectations and cannot be adjusted accordingly, or if some other event adversely affects us, the market price of our common stock could decline. If the stock market in general experiences a loss in investor confidence or otherwise fails, the market price of our common stock could fall for reasons unrelated to our business, results of operations and financial condition. The market price of our common stock also might decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.

It may be difficult for shareholders to recover against those of our directors and officers that are not residents of the US.

One of our directors, who is also an executive officer, is a resident of the UK.  In addition, our significant operating subsidiary, MAM Software Limited is located in the UK.  Were one or more shareholders to bring an action against us in the US and succeed, either through default or on the merits, and obtain a financial award against an officer or director of MAM, that shareholder may be required to enforce and collect on his or her judgment in the UK, unless the officer or director owned assets which were located in the US.  Further, shareholder efforts to bring an action in the UK against its citizens for any alleged breach of a duty in a foreign jurisdiction may be difficult, as prosecution of a claim in a foreign jurisdiction, and in particular a foreign nation, is fraught with difficulty and may be effectively, if not financially, unfeasible.

Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our common stock.

Our certificate of incorporation and our bylaws contain provisions that could delay or prevent a change in control of MAM. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include

• authorizing the board to issue, without stockholder approval, preferred stock with rights senior to those of our common stock;

• limiting the persons who may call special meetings of stockholders; and

• requiring advance notification of stockholder nominations and proposals.

In addition, the provisions of Section 203 of the Delaware General Corporation Law govern us. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors.

These and other provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and under Delaware law could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.

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If we are not able to comply with the applicable continued listing requirements or standards of the NASDAQ Capital Market, NASDAQ could delist our common stock.

Our common stock is currently listed on the NASDAQ Capital Market. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with the applicable listing standards.

In the event that our common stock is delisted from the NASDAQ Capital Market and is not eligible for quotation on another market or exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, our share price and trading volume could decline.

The trading market for our shares of common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, our share price would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

We have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common stock.

We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends on our shares of common stock in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including without limitation, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. To the extent we do not pay dividends, our shares of common stock may be less valuable because a return on investment will only occur if and to the extent our stock price appreciates, which may never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize their investment, and if the price of our common stock does not appreciate, then there will be no return on investment. Investors seeking cash dividends should not purchase our common stock.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Our corporate offices are located at Maple Park, Maple Court, Tankersley, Barnsley, UK S75 3DP.

MAM NA's headquarters are located at Two Valley Square, 512 Township Line Road, Blue Bell, PA 19422 and the telephone number is 610-351-2928.  The Blue Bell, Pennsylvania office is approximately 9,000 square feet in size and is leased for an approximate monthly cost of $14,000.

MAM NA also has an office at 1390 Ridgeview Drive, Suite 101, Allentown, PA, 18104 and the phone number at that office is 610-336-9045. The Allentown, Pennsylvania office is approximately 2,250 square feet in size and is leased for an approximate monthly cost of $4,000.

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MAM Ltd. has three offices. Its headquarters are at Maple Park, Maple Court, Tankersley, S75 3DP, UK. The Tankersley phone number is 0-11-44-122-635-2900. It also has a regional office at 15 Duncan Close, Red House Square, Moulton Park, Northampton, NN3 6WL, UK. The Northampton phone number is 44-160-449-4001. It has a second regional office at Leanne Business Centre, Sandford Lane, Wareham, Dorset, BH20 4DY, UK. The Wareham phone number is 44-192-955-0922. MAM Ltd. leases approximately 15,250 square feet at its company headquarters at a monthly cost of approximately $19,800. It leases approximately 1,200 square feet at its Northampton office at a monthly cost of approximately $1,650 and approximately 700 square feet at its Wareham office at a monthly cost of approximately $900.

Origin is located at 130 Aztec, Aztec West, Bristol, BS32 4UB, UK and the telephone number is 44-145-462-9609.  The office is approximately 260 square feet in size and is leased for an approximate monthly cost of $2,000.

Item 3. Legal Proceedings

Although there are no pending material legal proceedings against us, from time to time, we may become involved in legal proceedings, lawsuits, claims and regulations in the ordinary course of its business.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the NASDAQ Capital Market under the symbol “MAMS.”

The following table shows the range of high and low bids per share of our common stock as reported by the NASDAQ Capital Market for the fiscal year periods indicated. Such market quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions. 

	2015
	High		Low
1st Quarter ended September 30, 2014	$	6.68		5.00
2nd Quarter ended December 31, 2014	$	6.03		4.81
3rd Quarter ended March 31, 2015	$	6.25		4.76
4th Quarter ended June 30, 2015	$	5.75		5.00

	2016
	High		Low
1st Quarter ended September 30, 2015	$	6.74		5.18
2nd Quarter ended December 31, 2015	$	7.48		5.71
3rd Quarter ended March 31, 2016	$	7.23		5.15
4th Quarter ended June 30, 2016	$	6.48		5.10

Holders

As of September 16, 2016, there were 12,400,758 shares outstanding and approximately 320 holders of record of our shares.  Because shares of our common stock are held by depositories, brokers, and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.  Our transfer agent and registrar is Corporate Stock Transfer, 3200 Cherry Creek Drive South, Denver, Colorado 80209.

Dividends

We have never declared or paid dividends on our common stock, and our Board of Directors does not intend to declare or pay any dividends on the common stock in the foreseeable future. Our earnings are expected to be retained for use in expanding our business. The declaration and payment in the future of any cash or stock dividends on the common stock will be at the discretion of our Board of Directors and will depend upon a variety of factors, including our future earnings, capital requirements, financial condition and such other factors as our Board of Directors may consider to be relevant from time to time.

Securities Authorized for Issuance under Equity Compensation Plans

Reference is made to “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Securities Authorized for Issuance under Equity Compensation Plans” for the information required by this item.

Recent Sales of Unregistered Securities

As of the three months ended, June 30, 2016, we issued 16,202 shares of common stock valued at approximately $0.1 million, and as of the year ended June 30, 2016, we issued 57,126 share of common stock valued at approximately $0.3 million, to the non-management members of our Board of Directors under the MAM's 2007 Long-Term Incentive Plan.

These issuances were not registered under the Securities Act, in reliance on an exemption from registration set forth in Section 4(a)(2) of the Securities Act, as part of a transaction by MAM not involving a public offering in which the shares were granted as compensation for services and the recipients had access to adequate current public information concerning MAM.

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Item 6. Selected Financial Data

We are not required to provide the information required by this Item as we are a smaller reporting company.

Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition is for the fiscal years ended June 30, 2016, and June 30, 2015, and should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Report.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Business” sections in this Report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Unless the context indicates or requires otherwise, (i) the term “MAM” refers to MAM Software Group, Inc. and its principal operating subsidiaries; (ii) the term “MAM Ltd.” refers to MAM Software Limited; (iii) the term “MAM NA” refers to MAM Software, Inc.; (iv) the term “Origin” refers to Origin Software Solutions, Ltd.; (v) the term “MAM UK” collectively refers to MAM Ltd. And Origin; and (vi) the terms “we,” “our,” “ours,” and “us” refer collectively to MAM Software Group, Inc.

Overview

MAM Software Group, Inc. is a leading provider of cloud-based business and on premise management solutions for the auto parts, tires and vertical distribution industries. We have a broad line of software solutions and services to address the information technology ("IT") needs of virtually every significant sector of the automotive aftermarket in the United Kingdom ("UK") and Ireland (collectively referred to as the “UK Market”) and North America (“NA”), which includes the United States ("US") and Canada, and are seeking to leverage this position into new industry verticals.

MAM NA has two primary software solutions, VAST and Autopart. We have and continue to market and develop business management software solutions that manage both the business and supply chain for small- and medium-sized firms in the automotive aftermarket. The automotive aftermarket includes those businesses that supply servicing, parts, oil, tires, and performance extras to the retail market.

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Our revenues and income are derived primarily from the sale of business management software, data, ecommerce solutions and services and support. For MAM UK, we also earn a percentage of our revenue and income from the sale of hardware systems to clients.  In the year ended June 30, 2016, we generated revenues of $32.2 million and had net income of $3.6 million; 71% of these revenues came from the UK market.

We are headquartered in Tankersley, Barnsley, UK and maintain additional offices for our NA operations in Blue Bell and Allentown, Pennsylvania, and, for our UK Market operations, in Northampton and Wareham. The software that we sell is Microsoft Windows™ based technology. The four main products that we support in the US cover all of the components of the automotive aftermarket supply chain. First is “warehouse distribution.” Into this market we sell our Autopart product to new prospects.  Autopart enables large warehouses with hundreds of thousands of stock keeping units ("SKU") to locate, manage, pack and deliver the parts with ease and efficiency. Second, these parts are distributed to the next business in the chain, which is the “jobber.” Into this market segment we also sell our Autopart product, which manages a jobber’s business (i.e., financial, stock control and order management) but more importantly enables the jobber to quickly identify the parts that the jobber’s client needs, either via the Internet or telephone, so that the correct product for the vehicle on the ramp can be supplied. The third and next segment of the automotive aftermarket supply chain is the “installer,” which repairs and maintains automobiles. The installer needs systems that enable it to efficiently and simply manage his businesses, whether as a single entity or national multi-site franchise. Into this segment we sell VAST and Autowork Online. The fourth segment is the “OpenWebs™.” This technology allows these separate business solutions to connect to each other to allow, among other processes, ordering, invoicing and stock checking to take place in real- time both up and down the supply chain. The UK Market differs from that of the US in that it does not have the same number of large warehouse distribution centers. In the UK Market we sell the Autopart product to the jobber market, but sell Autowork Online to the installer market.  In the UK, we also sell our catalog solution, Autocat+, which is an Internet-based identification tool used by the warehouse distribution, jobber and installer

Current Products and Services

Meeting the needs of the automotive aftermarket requires offering a combination of business management systems, information products and online services that combine to deliver benefits for all parties involved in the timely repair of a vehicle. Our products and services include:

• Business management systems comprised of our proprietary software applications, implementation and training and third-party hardware and peripherals;

• Information products such as an accessible catalog database related to parts, tires, labor estimates, scheduled maintenance, repair information, technical service bulletins, pricing and product features and benefits, which are used by the different participants in the automotive aftermarket;

• Online services and products that connect manufacturers, warehouse distributors, retailers and automotive service providers via the Internet. These products enable electronic data interchange throughout the automotive aftermarket supply chain among the different trading partners. They also enable procurement and business services to be projected over the Internet to an expanded business audience. Some clients use our information products on their own websites and intranets and some clients use our systems and branded software to obtain relevant and up-to-date information via the Internet; and

• Customer support and consulting services that provide phone and online support, implementation and training.

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Need for Technology Solutions

A variety of factors drive the automotive market’s need for sophisticated technology solutions, including the following:

Inventory Management

Industry sources suggest that approximately 35% of parts produced are never sold and 30% of parts stocked are never sold. Approximately 25% of parts sold are eventually returned due to insufficient knowledge or capability by either the parts supplier counterman or the auto service provider installer. Clearly, there is substantial inefficiency in the automotive aftermarket supply chain. This inefficiency results in excess inventory carrying costs, logistical costs and the over-production of parts and tires at the manufacturer level. The combination of business systems software, information products, and connectivity services we offer. can assist in overcoming these inefficiencies.

Competition

In the US, the need for technology solutions has been accelerated by the expansion of large specialty parts retailers such as AutoZone, Inc. and Advance Auto Parts, Inc. and large auto service chains like Monro, Muffler and Brake, Inc. This expansion has driven smaller competitors to computerize or upgrade their existing systems with more modern business management solutions enabled for information products and online services. Many of the systems used by smaller competitors today are older, character-based or systems developed in-house that have a limited ability to integrate current information products and online services.

Volume and Complexity of Information

Businesses in the automotive aftermarket manage large volumes of information from numerous sources with complex inter-relationships. There are over 4.5 million different SKU available to parts sellers in the product catalogs used by the US automotive aftermarket. The numbers of SKU increase in the order of some 5% each year. Moreover, manufacturers update product information and product prices with increasing frequency as they improve their internal processing and try to keep pace with consumer trends. As a result, most automotive aftermarket businesses require sophisticated inventory management systems, accurate and timely information on parts, tires, and repair delivered through online services to communicate, manage and present this volume of data effectively.

Customer Service Requirements

Consumer demand for same-day repair service and the need to maintain efficient use of repair bays, forces automotive service providers to demand prompt and accurate delivery of specific parts and tires from their suppliers. Getting the required product promptly depends on all the parties having access to timely information about product price and availability. To meet these demanding customer service requirements successfully, automotive aftermarket participants need business management systems, product information and online services that enable workers to reliably and accurately transact their business between warehouse distributors, parts stores and automotive service providers.

Regional Efficiencies

The use and availability of a combination of business management systems, information products and online services has resulted in the development of regional trading networks among auto service provider chains, stores and warehouse distributors of parts and tires. This enables participants to achieve the efficiencies and customer service levels that are critical to being competitive and successful against the larger retail and service chains in the automotive aftermarket.

Plans for Growth

We expect growth in the automotive aftermarket will continue to be driven by:

• gradual growth in the aggregate number of vehicles in use;

• an increase in the average age of vehicles in operation;

• growth in the total number of miles driven per vehicle per year; and

• increased vehicle complexity.

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We see opportunities to expand the breadth of our customer base within the automotive industry and diversify into new industries with similarly complex needs. We offer tailored business management and distribution software to the wholesale distributor market of the automotive industry. We have also started to expand and diversify our client and product mix in the UK Market to serve the lumber and hardware industries, which we believe have an unmet need for the efficiency offered by our suite of business software solutions and services. Our growth plans include adapting and updating our software products to serve other vertical markets as well as through potential acquisitions. While we have identified these vertical markets for potential growth for our software, our top execution priority remains automotive projects.

To date, our management has identified five areas of focus to drive our business.  The first area is the continued growth of SaaS revenues derived from delivering our business management software via the ‘cloud’.  At present, most of our customers have our software installed in-house.  However, market acceptance of cloud computing for mission critical enterprise applications has become increasingly common in recent years since software can be delivered cost-effectively, reliably, and securely to businesses over the Internet without the need for these businesses to purchase supporting software and hardware for an on premise system or the need to keep information technology personnel on staff to monitor and upgrade such a system. 

We introduced our first subscription-based service solution over the Internet in 2005 in the UK Market, and we began marketing our first cloud system to customers in North America in 2013. Since that time, we have significantly expanded our cloud-based offerings and are offering customers that maintain in-house installations significant incentives to move to our cloud-computing model. While transitioning our MAM UK customers to a cloud computing model results in a decrease in our up-front revenue recognition, we believe that this is a necessary transition and is in the best interests of our customers and our own long-term business prospects as an increasing number of our customers are looking for solutions that are highly functional, easy to use, configurable, and fast.

To date, Autowork Online, our "installer" solution in the UK Market and Autopart Online, our parts store solution, are being delivered in this way.  Both products have been developed under the 'cloud' computing model.  This is where software solutions are made available to end-users via the Internet and does not require them to purchase the software directly, but 'rent' it over a fixed period of time.  We believe that this will be a growing area in the UK and NA markets as businesses continue to look for ways of reducing capital expenditures while maintaining levels of service.

Autowork Online was launched in 2010 and as of June 30, 2016 we had 2,865 customers subscribing to this service.  A white label version of this product, which is our product rebranded by a different company, has been successfully launched into the NA market in conjunction with ALLDATA LLC. Autopart Online was launched in August 2011 in the UK Market and in 2014 in the NA.  As of June 30, 2016 we had 3,191 end users subscribing to this service.

We have been developing VAST Online, the 'cloud' version of our VAST platform, which we expect to launch in the second half of fiscal year 2017.  We have been working with Goodyear to deliver a version of VAST Online that will be their next generation point of sale 'cloud' solution.  Following the successful rollout of VAST Online to the Goodyear network, MAM NA will promote the product to the wider NA market and also in the UK market.

The second area of focus is the sales and marketing strategy within the NA market. MAM NA business will continue to invest in sales and marketing activity to help further expand the MAM brand and build our pipeline in the NA market.

The third area of focus relates to the launch of our information service, Autocat+, an electronic auto parts catalog that uses the DaaS distribution model.  MAM centrally hosts and maintains the data, which is accessed by users via MAM's business management software, a standalone desktop application, or web application.  Data can also be 'consumed' via a web service for integration into B2C websites.  Information in Autocat+ is maintained through an automatic verification and standardization process, with updates published daily.

In the UK Market, there are approximately 10,000 end-users (warehouse distributors, parts stores and auto service providers) of our information products, to whom a monthly or annual subscription fee is charged. Our management believes that launching a version of Autocat+ in the NA market will boost sales of our related our business management software solutions.

The fourth area of focus is to sustain levels of growth in MAM UK by concentrating on vertical markets, which share common issues to that of the automotive market. We have developed a reputation of high levels of service and knowledge within the automotive market, and we are now working on replicating this reputation in these additional vertical markets. 

The fifth area of focus is the continued investment in research and development that allows us to deliver innovative new solutions and modules in the four prior areas of focus. During the year ended June 30, 2016, we introduced a number of enhancements to our existing products which created additional value for existing and prospective customers.

Additional Vertical Markets: Plumbing Merchants, Electrical Wholesalers, Builders Merchants and Lumber Merchants

We believe that construction-related businesses would benefit from the business management and distribution systems developed by MAM for its customers in the automotive aftermarket. We already have over 80 clients in the UK Market operating in the plumbing, building, lumber, and electrical wholesale distribution markets that are using a derivative of MAM's Autopart product, known as “Trader.” We originally moved the Autopart product into these additional vertical markets a number of years ago after being approached by companies operating within these vertical markets that could not find a suitable management solution. To date, these additional vertical markets have made only a limited contribution to the revenues of MAM Ltd.

We have been promoting the “Trader” product to these markets, specifically targeting small and medium sized businesses with revenues of between $500,000 and $10 million. We are, and intend to continue, promoting Trader through a number of channels, direct marketing, advertorials and trade shows. We are also looking to raise awareness of the Trader product by placing advertisements in trade journals and will continue to look to have articles and editorial reviews written about the product and its advantages for those operating within these markets. We have also been targeting small and medium sized businesses within these vertical markets with direct mail pieces such as product fliers, and case studies from the small client base we have in this market. These have then been followed up by MAM’s existing internal sales team to generate qualified leads for the external sales representatives.

Given the current opportunities in the automotive market, and the resources required to ensure the successful development and launch of several major projects, exploring additional vertical markets has been a lower strategic priority during the year ended June 30, 2016.  We will continue to monitor the market and generate a reasonable amount of new interest in this area.  During the year ended June 30, 2017, we expect this area of our business to be a greater part of our strategic discussions; however, at this time, we remain focused on executing on our present and near-term project commitments.

Strategic Goals

We are looking to increase our share of the NA market by (i) increasing the sales and marketing presence of our Autopart product, (ii) focusing on the tire and service and repair sector of the market (iii) and establishing Autocat and OpenWebs™ as the e-commerce standard within the Automotive market. In the UK Market we expect to continue to grow our market share through (i) moving our business management software into new vertical markets and (ii) increasing our footprint within the automotive aftermarket.

We believe that our successful experience within the automotive market will translate well into other vertical markets that have similarly complex supply chains. By developing specific sales teams with relevant market experience and supporting with them suitable marketing collateral, we believe that over time “Trader” can become an established product offering in these vertical markets. We plan, at this stage, to focus only on the UK Market for these additional vertical market opportunities.

Impact of Currency Exchange Rate

Our net revenue derived from sales in currencies other than the US dollar was 71% and 74% for the years ended June 30, 2016 and 2015, respectively.   As the US dollar strengthens in relation to the Great Britain Pound (“GBP”), our revenue and income, which is reported in US dollars, is negatively impacted.  Changes in the currency values occur regularly and in some instances may have a significant effect on our results of operations.

Income and expenses of MAM UK are translated at the average exchange rate.  The exchange rate for MAM UK’s operating results was US $1.48357 per GBP for the year ended June 30, 2016, as compared to US $1.5755 per GBP for the year ended June 30, 2015.

Assets and liabilities of MAM UK are translated into US dollars at the period-end exchange rates.  The exchange rate used for translating assets and liabilities of MAM UK was US $1.33898 per GBP at June 30, 2016, as compared to US $1.5717 per GBP at June 30, 2015.

Currency translation income (loss) adjustments are accumulated as a separate component of stockholders’ equity, which totaled ($3.0) million and ($1.2) million as of June 30, 2016 and 2015, respectively.

Deferred Revenue

Quarterly and annual revenues are impacted by the deferral of revenue related to implementation and installation charges for SaaS contracts.  The expectation is that there will be a continued shift to the cloud-based version of our products from our perpetual license products and that the associated revenue will shift from being recognized at the time of the transaction to being recognized over the customer life.  However, as we will continue to offer perpetual license products, we cannot fully anticipate how revenue will be impacted.  As of June 30, 2016, deferred revenue was $1.2 million. 

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Results of Operations

Net Revenues. Our net revenues for the fiscal year ended June 30, 2016 compared with the year ended June 30, 2015 were as follows:

	For the Year Ended June 30,
Net Revenues	2016		2015		$ Variance			% Variance
MAM UK:
Recurring	$	18,589,000	$	17,681,000	$	908,000			5		%
Non-recurring		4,239,000		5,806,000		(1,567,000	)		(27	)	%
Total MAM UK Revenues	$	22,828,000	$	23,487,000	$	(659,000	)		(3	)	%
MAM NA:
Recurring	$	7,009,000	$	5,969,000	$	1,040,000			17		%
Non-recurring		2,375,000		2,182,000		193,000			9		%
Total MAM NA Revenues	$	9,384,000	$	8,151,000	$	1,233,000			15		%
Total Net Revenues	$	32,212,000	$	31,638,000	$	574,000			2		%

Total net revenues increased $2.0 million, partially offset by unfavorable foreign currency exchange rates movements of $1.4 million.

Net revenues from our MAM UK operations decreased primarily as a result of unfavorable foreign currency exchange rate movements of $1.4 million.  This was offset by increases in recurring revenues of $1.9 million and decreases in systems sales of $1.2 million.  The increase in recurring revenue and decrease in system sales are attributed to customers moving to our SaaS platform.

Net revenues from our MAM NA operations increased for recurring and system sales as a result of overall growth in the market for SaaS and perpetual license sales and professional services.

Cost of Revenues.Our cost of revenues for the fiscal year ended June 30, 2016, compared with the year ended June 30, 2015 were as follows:

	For the Year Ended June 30,
	2016		2015		$ Variance		% Variance
Cost of Revenues:
MAM UK	$	10,013,000	$	9,623,000	$	390,000		4	%
MAM NA		4,585,000		4,154,000		431,000		10	%
Total Cost of Revenues	$	14,598,000	$	13,777,000	$	821,000		6	%

Cost of revenues increased $1.4 million due to increases in professional services headcount to support growth as well as increases in license costs.  This increase was offset by favorable foreign currency rate movements of $0.6 million.

Operating Expenses. Our operating expenses for the fiscal year ended June 30, 2016, compared with the year ended June 30, 2015: 

	For the Year Ended June 30,
	2016		2015		$ Variance			% Variance
Operating Expenses:
Research and development	$	3,777,000	$	3,860,000	$	(83,000	)		(2	)	%
Sales and marketing		4,009,000		4,319,000		(310,000	)		(7	)	%
General and administrative		5,658,000		5,490,000		168,000			3		%
Depreciation and amortization		370,000		352,000		18,000			5		%
Total Operating Expenses	$	13,814,000	$	14,021,000	$	(207,000	)		(2	)	%

Research and Development Expenses. Research and development ("R&D") expenses decreased primarily due to favorable foreign exchange rate movements of $0.2 million, offset by increases of $0.1 million from increases in development resources in order to support new client developments. R&D expenses for the years ended June 30, 2016 and 2015 excluded $2.8 million and $1.7 million, respectively, of capitalized costs.

Sales and Marketing Expenses. Sales and marketing expenses decreased due to lower headcounts in MAM NA and lower commissions and staff incentives in MAM UK.

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General and Administrative Expenses. General and administrative expenses increased due to costs associated with changes with the accounting and finance organization, expenses from Origin, which was acquired in fiscal 2016, and from the increase in the allowance for bad debts.

Depreciation and Amortization Expenses. Depreciation and amortization expenses increased as a result of higher amortization expense from the intangibles acquired from Origin.

Other Income (Expense).Interest expense increased by $0.3 million to $0.3 million for the year ended June 30, 2016, as compared to expense of $13,000 for the year ended June 30, 2015. The increase in interest expense was due to the $10.5 million of borrowings under the new credit facility in December 2015 to fund a tender offer. Other income for the year ended June 30, 2016, included a $217,000 gain from the settlement of liabilities with certain vendors.

Income Taxes. Income taxes decreased $0.6 million to $0.2 million for the year ended June 30, 2016, as compared to $0.8 million for the year ended June 30, 2015. The effective tax rate was 5% for the year ended June 30, 2016, as compared to 21% for the year ended June 30, 2015.  The decrease in the effective tax rate was due to R&D credits from our MAM UK operations, including credits for certain prior periods which were approved for the first time in fiscal 2016.

Liquidity and Capital Resources

Our principal sources of liquidity are cash on hand, cash generated from operations and our senior credit facility. To date, most of our profits have been generated by MAM UK, but with the introduction of new products and our efforts to grow our MAM NA operations, our current plan anticipates that our MAM NA operations will increase revenue and profit over the next couple of years. We expect to invest in additional sales and marketing staff and to increase our professional services and support staff.

On December 1, 2015, we completed a cash tender offer (the “Tender Offer”) and purchased 2.0 million shares of our common stock at a purchase price of $7.50 per share for a total purchase price of $15.0 million. We canceled and retired the shares purchased pursuant to the Tender Offer.

On December 1, 2015, we entered into a new credit agreement with J.P. Morgan Chase Bank, N.A. to provide for borrowings up to $12.0 million consisting of a $9.5 million term loan and a $2.5 million revolver (“Credit Facility”).  All borrowings become due and payable on December 1, 2018. The borrowings incur interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the credit agreement, plus an applicable margin of 3.00% to 3.50%, based upon financial covenants. Under the terms of the Credit Facility, we are required to comply with certain loan covenants, which include, but are not limited to, the maintenance of certain financial ratios as well as certain financial reporting requirements and limitations. Our obligations under the Credit Facility are secured by all of our US assets and are guaranteed by our US wholly-owned subsidiary.  Additionally, we pledged 65% of the stock of MAM Software Limited, our UK subsidiary. 

On December 1, 2015, we borrowed $10.5 million under the Credit Facility to fund a portion of the Tender Offer.

We believe our existing cash and cash equivalents balance, the cash expected to be generated from operations, and the borrowings available under our revolving credit facility will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our level of net sales, the timing and extent of expenditures to support our development activities and the continued market acceptance of our products.

Working Capital

Working capital at June 30, 2016 was ($0.9) million compared to $5.7 million at June 30, 2015. The working capital decrease resulted primarily from the $4.5 million of cash used to fund a portion of the Tender Offer in December 2015, and the current portion of long-term debt of $1.9 million that was borrowed in December 2015 to fund the remaining portion of the Tender Offer.

Capital Expenditures

Capital expenditures for the years ended June 30, 2016 and 2015 were $3.0 million and $2.1 million, respectively.  The capital expenditures included capitalized software development costs of $2.8 million and $1.7 million for the years ended June 30, 2016 and 2015, respectively.

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Off Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not have any undisclosed borrowings or debt, and we have not entered into any synthetic leases. We are, therefore, not materially exposed to any financing, liquidity

Summary

We expect to see continued revenue growth from both our MAM NA and MAM UK operations during fiscal 2017, partially offset by the impact of foreign currency exchange rates on MAM UK.  However, we expect to see a decrease in operating income as the impact of foreign currency exchange rates and our continued investment in growth initiatives, including R&D, offset the gains from the growth in revenues.

We intend to continue to work at maximizing customer retention by supplying and developing products that streamline and simplify customer operations, thereby increasing their profit margin. By supporting our customers’ recurring revenues, we expect to continue to build our own revenue stream. We believe that we can continue to grow our customer base through additional sales personnel, targeted media and marketing campaigns and products that completely fit clients’ requirements. We also intend to service existing clients at higher levels and increasingly partner with them so that together we both will achieve our goals.

Revenues from MAM UK continue to generate positive cash flows and we continue to invest in the growth opportunities in MAM NA. Our current plans still require us to hire additional additional professional services, support and sales and marketing staff to support our growth initiatives.

We believe our plan will strengthen our relationships with our existing customers and provide new income streams by targeting additional English-speaking auto industry aftermarkets for our Autopart product.  If we continue to experience negative cash flow, we will be required to borrow more debt or limit our growth plan.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the US. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of 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.

We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Fair Value of Financial Instruments

Our financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses.

Financial assets and liabilities that are re-measured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories:

• Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.

• Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.

• Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on specific identification of customer accounts and our best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. We evaluate the collectability of our receivables at least quarterly. The allowance for doubtful accounts is subject to estimates based on the historical actual costs of bad debt experienced, total accounts receivable amounts, age of accounts receivable and any knowledge of the customers’ ability or inability to pay outstanding balances. If the financial condition of our customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.

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Software Development Costs

Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product: and, the straight-line method over the remaining estimated economic life (a period of three years) of the product including the period being reported on. If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact our results of operations.

Goodwill

Goodwill that has indefinite useful lives are not amortized but rather are tested at least annually for impairment. Goodwill is subject to impairment reviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by us.

Long-Lived Assets

Our management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of the long-lived asset can be recovered through projected undiscounted future cash flows over its remaining life. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management. At June 30, 2016, management believed there was no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for our products and services will continue, which could result in impairment of long-lived assets in the future.

Revenue Recognition

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met. We account for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

In those instances in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies (which represents the majority of our arrangements), we account for the arrangements using contract accounting, as follows:

1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

2) When customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

We record amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets.

Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement.

We recognize revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

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Stock-Based Compensation

For valuing stock options awards, we have elected to use the Black-Scholes Merton option pricing valuation model (“Black-Scholes”). For the expected term, we use a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which our stock price is expected to fluctuate during the expected term of the option. For volatility we consider our own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; we currently have no plans to pay dividends.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Comprehensive Income

Comprehensive income includes all changes in equity (net assets) during the period from non-owner sources. For the years ended June 30, 2016 and June 30, 2015, the components of comprehensive income consisted of foreign currency translation gains (losses).

Recent Accounting Pronouncements

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting.  The update provides guidance on simplifying various aspects of the accounting for shared based compensation. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2017.  We are currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The update requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. We are currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes.  Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position.  To simplify the presentation of deferred income taxes, the amendments in this update required that deferred tax liabilities be classified as noncurrent in a classified statement of financial position.  The current requirement is that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update.  ASU 2015-17 will be effective for us beginning for its first quarter of fiscal 2018.  We do not expect the adoption of ASU 2015-17 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements. 

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015.  We do not expect the adoption of ASU 2015-03 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern. Currently, there is no guidance in accounting principles generally accepted in the US about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in US auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. We are currently assessing the impact the adoption of ASU 2014-15 will have on its consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are not required to provide the information required by this Item as we are a smaller reporting company.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements, notes to the consolidated financial statements and report of MAM’s independent registered accountant required to be filed in response to this Item 8 begin on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2016. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2016 based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of June 30, 2016.

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This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by MAM's registered public accounting firm as we are a smaller reporting company and not required to provide the report. 

Inherent Limitations on Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple errors. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There were no changes in MAM’s internal control over financial reporting in our fourth fiscal quarter of the fiscal year ended June 30, 2016 covered by this Annual Report on Form 10-K, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

25

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item 10 is incorporated into this Form 10-K by reference from our proxy statement to be issued in connection with our 2017 Annual Meeting of Shareholders under the headings “Information about Director Nominees,” “Corporate Governance,’ and “Section 16(a) Beneficial Ownership Reporting Compliance, which proxy statement is expected to be filed with the Securities and Exchange Commission not later than 120 days after June 30, 2016.

Item 11. Executive Compensation

The information required by this Item 11 is incorporated into this Form 10-K by reference from our proxy statement to be issued in connection with our 2017 Annual Meeting of Shareholders under the headings “Executive Compensation,” which proxy statement is expected to be filed with the Securities and Exchange Commission not later than 120 days after June 30, 2016.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is incorporated into this Form 10-K by reference from our proxy statement to be issued in connection with our 2017 Annual Meeting of Shareholders under the headings “Security Ownership of Certain Beneficial Owners and Management,” which proxy statement is expected to be filed with the Securities and Exchange Commission not later than 120 days after June 30, 2016.

Securities Authorized for Issuance Under the Equity Compensation Plans

The following summarizes information regarding the number of units that are available for issuance under all of the Company's equity compensation plans as of June 30, 2016:

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Unit Options, Warrants and Rights		Weighted Average Exercise Price of Outstanding Unit Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in column (a)
	(a)		(b)		(c)
Equity compensation plans approved by security holders		120,484		1.23		-
Equity compensation plans not approved by security holders		-		-		-
		120,484		1.23		-

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated into this Form 10-K by reference from our proxy statement to be issued in connection with our 2017 Annual Meeting of Shareholders under the headings “Corporate Governance,” and “Certain Relationships and Related Transactions,” which proxy statement is expected to be filed with the Securities and Exchange Commission not later than 120 days after June 30, 2016.

Item 14. Principal Accounting Fees and Services

The information required by this Item 14 is incorporated into this Form 10-K by reference from our proxy statement to be issued in connection with our 2017 Annual Meeting of Shareholders under the heading “Ratification of Appointment of Our Independent Registered Public Accounting Firm,” which proxy statement is expected to be filed with the Securities and Exchange Commission not later than 120 days after June 30, 2016.

26

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

(1) Financial Statements:

The audited balance sheets of MAM Software Group, Inc. as of June 30, 2016 and 2015, the related statements of comprehensive income, stockholders’ equity and cash flows for the years then ended, the footnotes thereto, and the report of KMJ Corbin & Company LLP, independent auditors, are filed herewith.

(2) Financial Schedules:

None.

Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.

(3) Exhibits:

The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.

(b) The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.

Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:

• may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;

• may apply standards of materiality that differ from those of a reasonable investor; and

• were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.

27

Exhibit No.	Description of Exhibit
3(i)	Certificate of Incorporation of MAM Software Group, Inc., as amended (incorporated by reference to Exhibit 3(i) to the Company’s Annual Report on Form 10-K filed on September 25, 2013).
3(ii)	By laws (incorporated by reference to Exhibit 3(ii) to the Company’s Registration Statement on Form SB-2 filed on February 16, 2007).
4.1	Form of Certificate of Common stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form SB-2 filed on February 16, 2007).
4.2	Certificate of Designation for Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed on September 25, 2013).
10.1	Credit Agreement, dated as of December 1, 2015 by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to our Form 8-K dated December 4, 2015)
10.2	Revolving Credit Note, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to our Form 8-K dated December 4, 2015).

10.3	Term Note, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 to our Form 8-K dated December 4, 2015).
10.4	Pledge and Security Agreement, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.4 to our Form 8-K dated December 4, 2015).
10.5	Deed of Negative Pledge Agreement, dated December 1, 2015, by and among MAM Software Group, Inc., MAM Software Limited, and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.6 to our Form 8-K dated December 4, 2015).
10.6	Guaranty of Payment Agreement, dated December 1, 2015, by and among MAM Software, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.7 to our Form 8-K dated December 4, 2015).
10.7	2007 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit D of the Company’s revised Definitive Proxy Statement filed on May 19, 2008).
10.8‡	Employment Agreement effective as of July 1, 2010 between the Company and Michael Jamieson (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 21, 2010).
10.9‡	Employment Agreement effective as of October 16, 2015 between the Company and Brian H. Callahan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2015).
10.10‡	Employment Agreement effective as of July 1, 2013 between the Company and Lee Broad (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on September 24, 2015).
10.11‡	Separation Agreement effective as of October 19, 2015 between the Company and Charles F. Trapp (incorporated by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed on February 16, 2016).
10.12‡	MAM Software Group, Inc. Employee Stock Purchase Plan, effective as of December 16, 2011 (filed herewith).
10.13	Amended Credit Agreement, dated as of September 26, 2016, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (filed herewith)
14.1	Code of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual report on Form 10-K/A for the fiscal year ended June 30, 2007 filed October 15, 2007).
21.1	List of Subsidiaries (filed herewith).
31.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

‡ Management contract or compensatory plan or arrangement.

28

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	MAM Software Group, Inc.
Date: September 26, 2016	By:	/s/ Michael G. Jamieson
		Michael G. Jamieson
		Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: September 26, 2016	By:	/s/ Michael G. Jamieson
		Michael G. Jamieson
		Chief Executive Officer and Director (Principal Executive Officer)
Date: September 26, 2016	By:	/s/ Brian H. Callahan
		Brian H. Callahan
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: September 26, 2016	By:	/s/ Frederick Wasserman
		Frederick Wasserman
		Chairman of the Board of Directors
Date: September 26, 2016	By:	/s/ Gerald M. Czarnecki
		Gerald M. Czarnecki
		Director
Date: September 26, 2016	By:	/s/ Dwight Mamanteo
		Dwight Mamanteo
		Director
Date: September 26, 2016	By:	/s/ W. Austin Lewis IV
		W. Austin Lewis IV
		Director
Date: September 26, 2016	By:	/ S / Peter H. Kamin
		Peter H. Kamin
		Director

29

FINANCIAL STATEMENTS

MAM SOFTWARE GROUP, INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F–2
Consolidated Balance Sheets as of June 30, 2016 and 2015	F–3
Consolidated Statements of Comprehensive Income for the years ended June 30, 2016 and 2015	F–4
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2016 and 2015	F–5
Consolidated Statements of Cash Flows for the years ended June 30, 2016 and 2015	F–6
Notes to Consolidated Financial Statements	F–8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

MAM Software Group, Inc.

We have audited the accompanying consolidated balance sheets of MAM Software Group, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2016 and 2015, and the related consolidated statements of comprehensive income, stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of MAM Software Group, Inc. and subsidiaries as of June 30, 2016 and 2015, and the results of their operations and their cash flows for years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ KMJ Corbin & Company LLP

Costa Mesa, California

September 26, 2016

F-2

MAM SOFTWARE GROUP, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)

	June 30,			June 30,
	2016			2015
ASSETS
Current Assets
Cash and cash equivalents	$	491		$	6,793
Accounts receivable, net of allowance of $359 and $221, respectively		4,627			4,243
Inventories		221			185
Prepaid expenses and other current assets		1,495			1,722
Income tax receivable		535			-
Total Current Assets		7,369			12,943
Property and Equipment, Net		581			732
Other Assets
Goodwill		8,363			9,202
Intangible assets, net		739			-
Software development costs, net		5,234			3,010
Other long-term assets		159			34
TOTAL ASSETS	$	22,445		$	25,921
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	1,618		$	1,978
Accrued expenses and other liabilities		1,811			2,624
Payroll and other taxes		1,188			747
Current portion of long-term debt		1,925			-
Current portion of deferred revenue		939			719
Sales tax payable		750			850
Income tax payable		1			356
Total Current Liabilities		8,232			7,274
Long-Term Liabilities
Deferred revenue, net of current portion		273			52
Deferred income taxes		535			58
Long-term debt, net of current portion		7,853			-
Other long-term liabilities		533			140
Total Liabilities		17,426			7,524
Commitments and Contingencies
Stockholders' Equity
Preferred stock: Par value $0.0001 per share; 2,000,000 shares authorized, none issued and outstanding		-			-
Common stock: Par value $0.0001 per share; 18,000,000 shares authorized, 13,199,365 shares issued and 12,409,577 shares outstanding at June 30, 2016 and 15,027,057 shares issued and 14,266,964 shares outstanding at June 30, 2015		1			2
Additional paid-in capital		16,162			31,186
Accumulated other comprehensive loss		(2,985	)		(1,241	)
Accumulated deficit		(5,785	)		(9,337	)
Treasury stock at cost, 789,788 shares at June 30, 2016 and 760,093 shares at June 30, 2015		(2,374	)		(2,213	)
Total Stockholders' Equity		5,019			18,397
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	22,445		$	25,921

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements.

F-3

MAM SOFTWARE GROUP, INC.

Consolidated Statements of Comprehensive Income

(In thousands, except share and per share data)

	For the Years Ended
	June 30,
	2016			2015
Net revenues	$	32,212		$	31,638
Cost of revenues		14,598			13,777
Gross Profit		17,614			17,861
Operating Expenses
Research and development		3,777			3,860
Sales and marketing		4,009			4,319
General and administrative		5,658			5,490
Depreciation and amortization		370			352
Total Operating Expenses		13,814			14,021
Operating Income		3,800			3,840
Other Income (Expense)
Interest expense, net		(276	)		(13	)
Gain on settlement of liabilities		217			-
Total other expense, net		(59	)		(13	)
Income before provision for income taxes		3,741			3,827
Provision for income taxes		189			822
Net Income	$	3,552		$	3,005
Earnings per share attributed to common stockholders - basic	$	0.29		$	0.22
Earnings per share attributed to common stockholders - diluted	$	0.28		$	0.22
Weighted average common shares outstanding – basic		12,314,071			13,403,877
Weighted average common shares outstanding – diluted		12,489,934			13,498,182
Net Income	$	3,552		$	3,005
Foreign currency translation loss		(1,744	)		(1,176	)
Total Comprehensive Income	$	1,808		$	1,829

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements.

F-4

MAM SOFTWARE GROUP, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

	Preferred Stock				Common Stock						Additional Paid-in			Treasury Stock						Accumulated Other Comprehensive			Accumulated
	Shares		Amount		Shares			Amount			Capital			Shares			Amount			Loss			Deficit			Total
Balance July 1, 2014		-	$	-		15,077,830		$	2		$	31,426			(673,681	)	$	(1,746	)	$	(65	)	$	(12,342	)	$	17,275
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8)		-		-		86,589			-			562			-			-			-			-			562
Repurchase of common stock for treasury		-		-		-			-			-			(223,774	)		(1,269	)		-			-			(1,269	)
Retirement of treasury stock		-		-		(137,362	)		-			(802	)		137,362			802			-			-			-
Foreign currency translation		-		-		-			-			-			-			-			(1,176	)		-			(1,176	)
Net income		-		-		-			-			-			-			-			-			3,005			3,005
Balance June 30, 2015		-	$	-		15,027,057		$	2		$	31,186			(760,093	)	$	(2,213	)	$	(1,241	)	$	(9,337	)	$	18,397
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8)		-		-		232,920			-			434			-			-			-			-			434
Shares surrendered for taxes				-		(60,612	)		-			(341	)		-			-			-			-			(341	)
Repurchase of common stock for treasury		-		-		-			-			-			(29,695	)		(161	)		-			-			(161	)
Repurchase of common stock in tender offer		-		-		(2,000,000	)		(1	)		(15,117	)		-			-			-			-			(15,118	)
Foreign currency translation		-		-		-			-			-			-			-			(1,744	)		-			(1,744	)
Net income		-		-		-			-			-			-			-			-			3,552			3,552
Balance June 30, 2016		-	$	-		13,199,365		$	1		$	16,162			(789,788	)	$	(2,374	)	$	(2,985	)	$	(5,785	)	$	5,019

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements.

F-5

MAM SOFTWARE GROUP, INC.

Consolidated Statements of Cash Flows

(in thousands)

	For the Years Ended
	June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,552		$	3,005
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense		257			99
Depreciation and amortization		648			599
Amortization of debt discount and debt issuance costs		32			-
Deferred income taxes		359			5
Stock-based compensation expense		383			562
Changes in assets and liabilities:
Accounts receivable		(881	)		(715	)
Inventories		(70	)		9
Prepaid expenses and other assets		42			(266	)
Income tax receivable		(535	)		-
Accounts payable		(215	)		599
Accrued expenses and other liabilities		(988	)		(265	)
Payroll and other taxes		183			(413	)
Deferred revenue		478			(251	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		3,245			2,968
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(207	)		(354	)
Capitalized software development costs		(2,759	)		(1,740	)
Business acquisition, net of cash acquired		(453	)		-
NET CASH USED IN INVESTING ACTIVITIES		(3,419	)		(2,094	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock for treasury		(161	)		(476	)
Repurchase of common stock		(15,000	)		-
Payment for debt issuance costs		(123	)		-
Payment of fees for repurchase of common stock		(118	)		-
Proceeds from long-term debt		10,729			-
Repayment of long-term debt		(950	)		-
NET CASH USED IN FINANCING ACTIVITIES		(5,623	)		(476	)
Effect of exchange rate changes		(505	)		(613	)
Net change in cash and cash equivalents		(6,302	)		(215	)
Cash and cash equivalents at beginning of year		6,793			7,008
Cash and cash equivalents at end of year	$	491		$	6,793

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements.

F-6

MAM SOFTWARE GROUP, INC.

Consolidated Statements of Cash Flows (Continued)

(in thousands)

	For the Years Ended
	June 30,
	2016		2015
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest	$	221	$	13
Income taxes	$	665	$	767
Supplemental disclosures of non-cash investing and financing activities:
Issuance of common stock in settlement of accrued liabilities	$	93	$	-
Common stock surrendered for payment of taxes		341		-
Treasury stock retired	$	-	$	802

 The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements.

F-7

MAM SOFTWARE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016 and 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

MAM Software Group, Inc. ("MAM" or the "Company") is a leading provider of integrated information management solutions and services and a leading provider of cloud-based software solutions for the automotive aftermarket sector. The Company conducts its businesses through wholly owned subsidiaries with operations in Europe and North America. MAM Software Ltd. (“MAM Ltd.”) is based in Tankersley, Barnsley, United Kingdom (“UK”), Origin Software Solutions, Ltd. (“Origin”) is based in the UK (MAM Ltd. and Origin are collectively referred to as “MAM UK”), and MAM Software, Inc. (“MAM NA”) is based in the United States of America ("US") in Blue Bell, Pennsylvania.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Concentrations of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

In the US, the Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000.  At times deposits held with financial institutions in the US may exceed the $250,000 limit.

In the UK, the Company maintains cash balances at financial institutions that are insured by the Financial Services Compensation Scheme up to 85,000GBP.  At times deposits held with financial institutions in the UK may exceed the 85,000GBP limit.

The Company maintains its cash accounts at financial institutions which it believes to be credit worthy. The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Customers

The Company performs periodic evaluations of its customers and maintains allowances for potential credit losses as deemed necessary. The Company generally does not require collateral to secure its accounts receivable. Credit risk is managed by discontinuing sales to customers who are delinquent. The Company estimates credit losses and returns based on management’s evaluation of historical experience and current industry trends. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.

No customers accounted for more than 10% of the Company’s revenues for each of the years ended June 30, 2016 and 2015. No customers accounted for more than 10% of the Company’s accounts receivable at June 30, 2016 and 2015.

Segment Reporting

The Company operates in one reportable segment.  Though the Company has two operational segments (MAM UK and MAM NA), the Company evaluated in accordance with ASC 280-10-50, Segment Reporting, and determined that the segments have the same economic characteristics, are similar in the following areas and can therefore be aggregated into one reportable segment:

1.	The products and services are software and professional services
2.	The products are produced through professional services
3.	The customers for these products are primarily for the automotive aftermarket
4.	The method to distribute these products are via software that the customer can host locally or the Company will host
5.	They both operate in a non-regulatory environment

F-8

Geographic Concentrations

The Company conducts business in the US, Canada, the UK and Ireland (UK and Ireland are collectively referred to as the “UK Market”). For customers headquartered in their respective countries, the Company derived approximately 70% of its revenues from the UK, 28% from the US, 1% from Ireland, and 1% from Canada during the year ended June 30, 2016, compared to 74% of its revenues from the UK, 25% from the US and 1% from Canada during the year ended June 30, 2015.

At June 30, 2016, the Company maintained 79% of its net property and equipment in the UK and the remaining 21% in the US.  At June 30, 2015, the Company maintained 83% of its net property and equipment in the UK and the remaining 17% in the US. 

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to, the collectability of accounts receivable, the realizability of inventories, the determination of the fair value of acquired intangible assets, the recoverability of goodwill and other long-lived assets, valuation of deferred tax assets and liabilities and the estimated fair value of stock options, warrants and shares issued for non-cash consideration. Actual results could materially differ from those estimates. 

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities, and long-term debt. Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories:

• Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.

• Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.

• Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Determining which category an asset or liability falls within the hierarchy may require significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company believes that the carrying values of all financial instruments, except long-term debt, approximate their values due to their nature and respective durations.  The carrying value of long-term debt approximates fair value based on borrowing rates currently available to the Company.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on specific identification of customer accounts and its best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. The Company evaluates the collectability of its receivables at least quarterly. The allowance for doubtful accounts is subject to estimates based on the historical actual costs of bad debt experienced, total accounts receivable amounts, age of accounts receivable and any knowledge of the customers’ ability or inability to pay outstanding balances. If the financial condition of the Company's customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.

Inventories

Inventories are stated at the lower of cost or current estimated market value. Cost is determined using the first-in, first-out method. Inventories consist primarily of hardware that will be sold to customers. The Company periodically reviews its inventories and records a provision for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand. Once established, write-downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories.

Property and Equipment

Property and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Equipment under capital lease obligations is depreciated over the shorter of the estimated useful lives of the related assets or the term of the lease. Maintenance and routine repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of comprehensive income.

F-9

Software Development Costs

Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of:  the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product; and, the straight-line method over the remaining estimated economic life (a period of three to ten years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the consolidated statements of comprehensive income.  If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations.

Amortizable Intangible Assets

Amortizable intangible assets consist of completed software technology, customer contracts/relationships, automotive data services and acquired intellectual property and are recorded at cost. Completed software technology and customer contracts/relationships are amortized using the straight-line method over their estimated useful lives of 9 to 10 years, automotive data services are amortized using the straight-line method over their estimated useful lives of 20 years and acquired intellectual property is amortized over the estimated useful life of 10 years.

Goodwill

Goodwill is not amortized, but rather is tested at least annually for impairment.

Goodwill is subject to impairment reviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by the Company. As of June 30, 2016, the Company does not believe there is an impairment of its goodwill. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of goodwill in the future.

Goodwill activity for the years ended June 30, 2016 and 2015 was as follows:

Balance, July 1, 2014	$	9,767,000
Effect of exchange rate changes		(565,000	)
Balance, June 30, 2015	$	9,202,000
Acquisition of Origin (see Note 2)		202,000
Effect of exchange rate changes		(1,041,000	)
Balance, June 30, 2016	$	8,363,000

Long-Lived Assets

The Company’s management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows over their remaining useful lives. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management. At June 30, 2016, management believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of long-lived assets in the future.

Debt Issuance Costs

Debt issuance costs represent costs incurred in connection with the issuance of long-term debt.  Debt issuance costs are amortized over the term of the financing instrument using the effective interest method.  Debt issuance costs are included in other long-term assets.

Issuance of Equity Instruments to Non-Employees

All issuances of the Company’s equity instruments to non-employees are measured at fair value based upon either the fair value of the equity instruments issued or the fair value of consideration received, whichever is more readily determinable. The majority of stock issuances for non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair value of the equity instruments on the dates issued.

F-10

The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Assets acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments are not presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.  

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires the recognition of the fair value of the stock-based compensation in net income. Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant. For valuing stock options awards, the Company has elected to use the Black-Scholes model. For the expected term, the Company uses a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate during the expected term of the option. For volatility the Company considers its own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; the Company currently has no plans to pay dividends.  The fair value of stock-based awards is amortized over the vesting period of the award or expected vesting date of the market-based restricted shares and the Company elected to use the straight-line method for awards granted.

Revenue Recognition

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met.

The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

In those instances, in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies (which represents the majority of the Company’s arrangements), the Company accounts for the arrangements using contract accounting, as follows:

1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

2) When customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets. Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement.

The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

Advertising Expense

The Company expenses advertising costs as incurred. For the years ended June 30, 2016 and 2015, advertising expense totaled $0.4 million and $0.4 million, respectively.

F-11

Foreign Currency

Management has determined that the functional currency of its subsidiaries is the local currency. Assets and liabilities of the UK subsidiaries are translated into US dollars at the year-end exchange rates. Income and expenses are translated at an average exchange rate for the year and the resulting translation gain (loss) adjustments are accumulated as a separate component of stockholders’ equity. The translation (loss) gain adjustment totaled $(1.7) million and $(1.2) million for the years ended June 30, 2016 and 2015, respectively.

Foreign currency gains and losses from transactions denominated in other than respective local currencies are included in income. The Company had no foreign currency transaction gain (loss) for all periods presented.

Comprehensive Income

Comprehensive income includes all changes in equity (net assets) during a period from non-owner sources. For the years ended June 30, 2016 and 2015, the components of comprehensive income consist of foreign currency translation gain (loss).

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s consolidated balance sheets at June 30, 2016 and 2015, and has not recognized interest and/or penalties in the consolidated statements of comprehensive income for the years ended June 30, 2016 and 2015.

Basic and Diluted Earnings Per Share

Basic earnings per share (“BEPS”) is computed by dividing the net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share (“DEPS”) is computed giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon the exercise of stock options and warrants using the “treasury stock” method. The computation of DEPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. For the year ended June 30, 2016 there were 175,863 common share equivalents included in the computation of the DEPS. For the year ended June 30, 2016, 691,505 shares of common stock vest based on the market price of the Company’s common stock and were excluded from the computation of DEPS because the shares have not vested, but no stock options were excluded from the computation of DEPS. For the year ended June 30, 2015, there were 94,305 common share equivalents included in the computation of the DEPS.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computation for the years ended June 30:

	2016		2015
Numerator:
Net income	$	3,552,000	$	3,005,000
Denominator:
Basic weighted-average shares outstanding		12,314,071		13,403,877
Effect of dilutive securities		175,863		94,305
Diluted weighted-average diluted shares		12,489,934		13,498,182
Basic earnings per common share	$	0.29	$	0.22
Diluted earnings per common share	$	0.28	$	0.22

Reclassification

Certain expenses were reclassified from depreciation and amortization to cost of revenues in the accompanying consolidated statement of comprehensive income for the year ended June 30, 2015 in order to conform to the current period presentation.

F-12

Recent Accounting Pronouncements

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting.  The update provides guidance on simplifying various aspects of the accounting for shared-based compensation. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2017.  The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The update requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes.  Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position.  To simplify the presentation of deferred income taxes, the amendments in this update required that deferred tax liabilities be classified as noncurrent in a classified statement of financial position.  The current requirement is that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update.  ASU 2015-17 will be effective for the Company beginning for its first quarter of fiscal 2018.  The Company does not expect the adoption of ASU 2015-17 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements. 

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015.  The Company does not expect the adoption of ASU 2015-03 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern. Currently, there is no guidance in accounting principles generally accepted in the US about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in US auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. The Company is currently assessing the impact the adoption of ASU 2014-15 will have on its consolidated financial statements.

NOTE 2. BUSINESS ACQUISITION

On July 1, 2015, MAM Ltd. acquired 100% of the stock of Origin, a UK-based provider of e-commerce solutions for the automotive aftermarket.  With the acquisition of Origin, MAM is able to strengthen its e-commerce strategy by being able to provide customers with a range of e-commerce solutions for the automotive aftermarket.  The Company paid $503,000 at closing of the acquisition. The Company will also make future cash payments of $416,000 and issue stock consideration of $283,000 in the future if Origin reaches established earnings targets. The Company recorded the estimated fair value of the contingent consideration of $270,000 in other long-term liabilities on its consolidated balance sheet as of June 30, 2016.  In connection with the acquisition, the Company incurred acquisition-related costs of $53,000, which were expensed and included in general and administrative expenses in the accompanying consolidated statement of comprehensive income for the year ended June 30, 2016.

The Company allocated the purchase consideration to acquire Origin to (1) net assets acquired of $177,000, (2) finite-lived intangible assets of $1.0 million for acquired intellectual property (with an estimated useful life of 10 years), (3) a deferred tax liability of $202,000, and (4) goodwill of $202,000. The goodwill from this acquisition is non-deductible for tax purposes. The results of operations of Origin have been included in the Company's consolidated statements of comprehensive income from the date of acquisition, however the results from Origin were not significant to the Company’s consolidated results of operations and thus proforma information is not presented.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30,			June 30,
	2016			2015
Leasehold improvements	$	396,000		$	884,000
Computer and office equipment		869,000			880,000
Equipment under capital leases		10,000			10,000
Furniture and equipment		477,000			432,000
Total property, plant and equipment		1,752,000			2,206,000
Less: accumulated depreciation and amortization		(1,171,000	)		(1,474,000	)
Total property, plant and equipment, net	$	581,000		$	732,000

Depreciation expense on property and equipment for the years ended June 30, 2016 and 2015 was $0.3 million and $0.2 million, respectively.

NOTE 4. INTANGIBLE ASSETS

Intangible assets consist of the following at June 30, 2016:

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	1,093,000	$	(1,093,000	)	$	-
Customer contracts / relationships		10			543,000		(543,000	)		-
Automotive data services		20			262,000		(262,000	)		-
Acquired intellectual property		10			822,000		(83,000	)		739,000
Software development costs	3	to	10		7,887,000		(2,653,000	)		5,234,000
Total				$	10,607,000	$	(4,634,000	)	$	5,973,000

Intangible assets consist of the following at June 30, 2015:

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	3,043,000	$	(3,043,000	)	$	-
Customer contracts / relationships		10			3,737,000		(3,737,000	)		-
Automotive data services		20			308,000		(308,000	)		-
Software development costs	3	to	10		5,730,000		(2,720,000	)		3,010,000
Total				$	12,818,000	$	(9,808,000	)	$	3,010,000

F-13

For the years ended June 30, 2016 and 2015, the Company recognized amortization expense on its software development costs and other amortizable intangible assets of $0.4 million and $0.4 million, respectively.

Estimated future amortization of software development costs and intangibles is as follows:

Years Ending June 30,
2017	$	500,000
2018		694,000
2019		651,000
2020		581,000
2021		556,000

NOTE 5. LONG-TERM DEBT

	As of
($ in thousands)	June 30, 2016			June 30, 2015
Debt obligations:
Revolving loan facility	$	1,150		$	-
Term loan		8,550			-
Equipment financing		78			-
Total		9,778			-
Less current portion		(1,925	)		-
Long-term debt	$	7,853		$	-

On December 1, 2015, the Company entered into a new credit agreement with J.P. Morgan Chase Bank, N.A. to provide for borrowings up to $12.0 million consisting of a $9.5 million term loan and a $2.5 million revolver (“Credit Facility”).  All borrowings become due and payable on December 1, 2018. The borrowings bear interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the Credit Facility, plus an applicable margin of 3.00% to 3.50%, based upon financial covenants. As of June 30, 2016, the interest rate was 4.0%. The term loan required monthly principal payments of $158,000.  Under the terms of the Credit Facility, the Company is required to comply with certain loan covenants, which include, but are not limited to, the maintenance of certain financial ratios as well as certain financial reporting requirements and limitations. The Company’s obligations under the Credit Facility are secured by all of the Company’s US assets and are guaranteed by the Company’s US wholly-owned subsidiary.  Additionally, the Company pledged 65% of the stock of MAM Software Limited, its UK subsidiary.  As of June 30, 2016, the Company was in compliance with its loan covenants. 

On December 1, 2015, the Company borrowed $10.5 million under the Credit Facility to fund a portion of the Tender Offer (see Note 8).

The Company entered into an equipment financing agreement of $78,000 during the year ended June 30, 2016.  The interest rate is 3.98% and the maturity date of the agreement is June 15, 2019.  The equipment financing is secured by the related equipment.

Future minimum payments under long-term debt outstanding at June 30, 2016 are as follows:

For the years ending June 30,
2017	$	1,925
2018		1,926
2019		5,927
Total debt payments	$	9,778

NOTE 6. INCOME TAXES

The Company is subject to taxation in the US, UK and various US state jurisdictions. The Company’s tax years for 1999 and forward are subject to examination by the US and state tax authorities due to losses incurred since inception. The Company is currently not under examination by any taxing authorities.

The Company follows the provisions of ASC 740-10, Income Taxes, that defines a recognition threshold and measurement attributes for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. A SC 740-10 also provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likely of being sustained.

F-14

Due to the recognition of a full valuation allowance against the Company's net operating losses (“NOLs”), future changes in the Company’s unrecognized tax benefits will not impact the Company’s tax provision.

The Company’s practice is to recognize interest and/or penalties related to income matters in income tax expense. During the years ended June 30, 2016 and 2015, the Company did not recognize any interest or penalties.

The provision (benefit) for income taxes consists of the following for the years ended June 30, 2016 and 2015:

	US Federal		US State		UK Corporate			Total
2016
Current	$	-	$	31,000	$	(162,000	)	$	(131,000	)
Deferred		-		-		320,000			320,000
Total	$	-	$	31,000	$	158,000		$	189,000
2015
Current	$	-	$	5,000	$	811,000		$	816,000
Deferred		-		-		6,000			6,000
Total	$	-	$	5,000	$	817,000		$	822,000

At June 30, 2016, the Company had net US deferred tax assets of approximately $5 million. Due to uncertainties surrounding the Company’s ability to generate future US taxable income to realize these assets, a full valuation allowance has been established to offset carry-forwards of not only NOLs, but also its capital losses due to investments previously written off. Additionally, the future utilization of the Company’s federal and state NOLs to offset future taxable income have been determined to be subject to an annual limitation pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383 as a result of ownership changes that have previously occurred.

Through its Section 382 study, the Company has analyzed any NOLs from its acquired subsidiaries to determine the maximum potential future tax benefit that might be available, and the corresponding limitation imposed based on IRC Section 382. As a result, by the year ended June 30, 2011, the Company adjusted the aforementioned net operating losses previously estimated. The outcome resulted in a determination that it could utilize, annually, approximately $0.6 million of previously incurred NOLs; presuming, however, there is taxable income in future periods affording utilization prior to expiration.

At June 30, 2016, the Company had combined federal and state NOLs of approximately $9.6 million and $5.2 million, respectively. The federal and state tax loss carry-forwards will begin to expire in 2019 and 2017, respectively, unless previously utilized.

Significant components of the Company’s net deferred tax assets at June 30, 2016 and 2015 are shown below. A valuation allowance of $4.9 million and $5.0 million has been established to offset the net deferred tax assets as of June 30, 2016 and 2015, respectively, due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets. The change in the valuation allowance is primarily attributable to the change in deferred tax assets and NOLs, as capital loss carry-forwards have not changed year to year.

The tax effects of temporary differences and carry-forwards that give rise to significant portions of deferred tax assets (liabilities) consist of the following at June 30, 2016 and 2015:

	June 30,			June 30,
	2016			2015
Deferred tax assets:
State taxes	$	1,000		$	2,000
Net operating loss carry-forwards		2,759,000			2,768,000
Write-down of investments		1,745,000			1,736,000
Equity-based compensation		67,000			41,000
Reserves and accruals		274,000			284,000
Deferred rent		3,000			55,000
Domestic intangibles and other long-lived assets		101,000			133,000
Total deferred tax assets		4,950,000			5,019,000
Deferred tax liabilities:
Intangible and other long-lived		(546,000	)		(58,000	)
Valuation allowance		(4,939,000	)		(5,019,000	)
Net deferred tax liabilities	$	(535,000	)	$	(58,000	)

F-15

We recognize windfall tax benefits associated with the exercise of share-based compensation directly to stockholders' equity only when realized.  Accordingly, deferred tax assets are not recognized for the net operating loss carryforwards resulting from windfall tax benefits.  At June 30, 2016, deferred tax assets do not include $0.7 million of excess tax benefits from stock-based compensation.

The provision for income taxes for the years ended June 30, 2016 and 2015 differs from the amount computed by applying the US federal income tax rates to net income from continuing operations before taxes as a result of the following:

	June 30,
	2016			2015
Taxes at federal statutory rates	$	1,272,000		$	1,301,000
State taxes, net of federal benefit		8,000			(12,000	)
Rate changes		(19,000	)		56,000
Permanent items and other		100,000			130,000
Research and development		(577,000	)		-
NOL expiration		-			4,000
Differential in UK corporate tax rate		(515,000	)		(519,000	)
Change in valuation allowance		(80,000	)		(138,000	)
Provision for income taxes	$	189,000		$	822,000

During the year ended June 30, 2016, the Company completed a formal research and development expense study in the UK and identified qualifying expenses related to the prior years which resulted in a reduction in the tax provision of $0.2 million, which is included in the rate reconciliation above.

A provision has not been made at June 30, 2016 and 2015, for US or additional foreign withholding taxes on undistributed earnings of its UK subsidiaries because it is the present intention of management to reinvest the undistributed earnings indefinitely in foreign operations. Generally, such earnings become subject to US tax upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company is subject to various legal claims and proceedings arising in the ordinary course of business. The ultimate disposition of such a proceeding if initiated could have material adverse effects on the consolidated financial position or results of operations of the Company. There are currently no pending material legal proceedings.

Indemnities and Guarantees

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its Credit Facility (see Note 5), the Company indemnified the lender for certain losses, claims, and other liabilities that are standard for this type of agreement. In connection with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. In connection with its customers’ contracts the Company indemnifies the customer that the software provided does not violate any US patent. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

F-16

Operating Leases

The Company leases its facilities and certain equipment pursuant to month-to-month and non-cancelable operating lease agreements that expire on various dates through March 2028. Terms of the leases provide for monthly payments ranging from $900 to $19,800.  The Company incurred rent expense totaling approximately $0.4 million for both the years ended June 30, 2016 and 2015. Future annual minimum payments under non-cancelable operating leases are as follows:

For the years ended June 30,
2017	$	568,000
2018		521,000
2019		437,000
2020		429,000
2021		421,000
Thereafter		1,770,000
Total operating lease obligations	$	4,146,000

NOTE 8. STOCKHOLDERS’ EQUITY

Common Stock

The Company issues shares of common stock to the non-management members of the Board of Directors under the Company’s 2007 LTIP for quarterly compensation. The shares vest over a three-year period and are issued quarterly. The Company also gives the non-management members of the Board of Directors the option to receive shares of common stock in lieu of cash compensation.

During the years ended June 30, 2016 and 2015, the Company issued 57,126 and 61,207 shares of common stock, respectively, valued at $0.3 million and $0.2 million, respectively for the vesting of shares granted to the non-management members of the Board of Directors under the Company’s 2007 LTIP and in lieu of cash compensation. There are no remaining shares available under the plan as of June 30, 2016.

Tender Offer

On December 1, 2015, the Company completed a cash tender offer (the “Tender Offer”) and purchased 2.0 million shares of its common stock at a purchase price of $7.50 per share for a total purchase price of $15.0 million. The Company canceled and retired the shares purchased pursuant to the Tender Offer.  In connection with the Tender Offer, the Company incurred costs of $0.1 million directly related to the Tender Offer, which were recorded in additional paid-in capital.

Treasury Stock

During the years ended June 30, 2016 and 2015, the Company repurchased, under its stock repurchase program, 29,695 and 89,388 shares of common stock at a cost of $0.2 million and $0.5 million, respectively. As of June 30, 2016, the Company has repurchased a total of 1,982,235 shares at a cost of $4.7 million, pursuant to a stock repurchase program approved by the Company’s Board of Directors. The stock repurchase program was cancelled on October 30, 2015 in connection with the Tender Offer. 

During the year ended June 30, 2015, the Company retired 137,362 shares, at a value of $0.8 million.

Stock-Based Compensation

Stock-based compensation expense for restricted stock and stock issuances of $0.4 million and $0.6 million was recorded in the years ended June 30, 2016 and 2015, respectively, and was recorded in general and administrative expenses in the statements of comprehensive income.  As of June 30, 2016, $0.3 million of total unrecognized stock-based compensation expense related to restricted stock is expected to be recognized over approximately 3.1 years.

A summary of the Company's common stock option activity is presented below (shares in thousands):

	Options Outstanding
	Number of Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding - July 1, 2015		121	$	1.23
Options granted		-		-
Options exercised		-		-
Options cancelled		-		-
Options outstanding - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable and vested - June 30, 2016		121	$	1.23		5.0	$	596

During the year ended June 30, 2016, no stock options were exercised.

The aggregate intrinsic value represents the total pre-tax amount of proceeds, net of the exercise price, which would have been received by the option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price of the Company's common stock on June 30, 2016.

F-17

A summary of the Company's restricted common stock activity is presented below (shares in thousands):

	Number of			Weighted Average
	Shares			Initial Value Price
	(in thousands)			Per Share
Restricted stock outstanding - July 1, 2015		866		$	0.48
Issuance of restricted stock		160			1.79
Vesting		(250	)		0.52
Forfeitures		-			-
Restricted stock outstanding - June 30, 2016		776		$	0.87

A summary of the vesting levels of the Company's restricted common stock is presented below:

			Weighted Average
	Number of		Initial Value Price
	Shares		Per Share
30 day VWAP per share vesting level (1):
$7.00 per share		84,676	$	0.39
$8.00 per share		481,327	$	0.43
$9.00 per share		82,178	$	1.25
$10.00 per share		48,000	$	1.79
$11.00 per share		48,000	$	1.79
$12.00 per share		32,000	$	1.79

(1) The outstanding restricted stock becomes vested when the Company’s 30-day volume weighted average price (“VWAP”) per share is at or above these levels.

During the years ended June 30, 2016 and 2015, the Company withheld 60,612 and 134,386 shares of common stock at a cost of $0.3 million and $0.8 million, respectively, for the payment of taxes on shares that vested during the year.

Employee Stock Purchase Plan

On September 21, 2011, the Company approved the MAM Software Group, Inc. Employee Stock Purchase Plan (“ESPP” or the “Plan”). On December 16, 2011, the stockholders approved the ESPP. Under the ESPP, the Company will grant eligible employees the right to purchase common stock through payroll deductions at a price equal to the lesser of 85% of the fair market value of a share of common stock on the exercise date of the current offering period or 85% of the fair market value of our common stock on the grant date of the offering period. No employee will be granted an option to purchase more than $2,400 of fair market value common stock in a calendar year. The Plan is intended to be an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code. The Plan covers a maximum of 100,000 shares of common stock which will be offered to employees until January 2, 2022 or until the Plan is terminated by the Board of Directors.

During the year ended June 30, 2016, the Company issued 15,794 shares of common stock to employees including an executive officer, under the ESPP in lieu of compensation, which shares of common stock were valued at approximately $0.1 million based on the closing market price of the Company’s common stock on January 2, 2015 and December 31, 2015.

During the year ended June 30, 2015, the Company issued 15,957 shares of common stock to employees including an officer, under the ESPP in lieu of cash compensation, which were valued at approximately $0.1 million based on the closing market price of the Company’s common stock on July 1, 2014 and January 2, 2014.

Warrants

The following is a summary of warrant activity for the year ended June 30, 2015:

Balance as of July 1, 2014	4,630
Warrants expired	(4,630	)
Warrants issued and outstanding at June 30, 2015	-

During the year ended June 30, 2015, 4,630 warrants with an exercise price of $0.80 expired.  There are no warrants outstanding as of June 30, 2016.

NOTE 9. EMPLOYEE BENEFIT PLANS

The Company has a retirement plan that complies with Section 401(k) of the Internal Revenue Code. All US employees are eligible to participate in the plan. The Company’s contribution to the 401(k) Plan is at the discretion of the Board of Directors. The Company matches 100% of elective deferrals subject to a maximum of 3% of the participant’s eligible earnings. The Company’s matching contributions to the 401(k) for the years ended June 30, 2016 and 2015 were $0.1 million and $0.1 million, respectively.

The Company has a defined contribution retirement plan ("UK Plan") that all UK employees are eligible to participate in.  The Company’s contribution to the UK Plan is at the discretion of the Board of Directors. The Company matches 100% of elective deferrals subject to a maximum of 3% of the participant’s eligible earnings. The Company’s matching contributions to the UK Plan for the years ended June 30, 2016 and 2015 were $0.2 million and $0.2 million, respectively.

NOTE 10. SUBSEQUENT EVENTS

The Company has performed an evaluation of events occurring subsequent to June 30, 2016, through the filing date of this Annual Report on Form 10-K.  Based on its evaluation, there are no events, except for the matter discussed below, that are required to be disclosed herein.

On September 26, 2016, the Company entered into an amendment to its Credit Facility ("Amendment" and as amended, the "Amended Credit Facility"), which amended that certain credit agreement, dated as of December 1, 2015, by and among the Company and JPMorgan Chase Bank, N.A. (the "Credit Agreement" and as amended, the "Amended Credit Agreement").  The Amendment changed certain loan covenants, including the financial ratios and liquidity requirements.  The borrowings under the Amended Credit Facility bear interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the Amended Credit Agreement, plus an applicable margin of 3.50% to 4.00%, based upon financial covenants.  The maturity date under the Amended Credit Agreement remains unchanged at December 1, 2018.

F-18

INDEX TO EXHIBITS

Exhibit No.	Description of Exhibit
3(i)	Certificate of Incorporation of MAM Software Group, Inc., as amended (incorporated by reference to Exhibit 3(i) to the Company’s Annual Report on Form 10-K filed on September 25, 2013).
3(ii)	By laws (incorporated by reference to Exhibit 3(ii) to the Company’s Registration Statement on Form SB-2 filed on February 16, 2007).
4.1	Form of Certificate of Common stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form SB-2 filed on February 16, 2007).
4.2	Certificate of Designation for Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed on September 25, 2013).
10.1	Credit Agreement, dated as of December 1, 2015 by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to our Form 8-K dated December 4, 2015)
10.2	Revolving Credit Note, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to our Form 8-K dated December 4, 2015).

10.3	Term Note, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 to our Form 8-K dated December 4, 2015).
10.4	Pledge and Security Agreement, dated December 1, 2015, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.4 to our Form 8-K dated December 4, 2015).
10.5	Deed of Negative Pledge Agreement, dated December 1, 2015, by and among MAM Software Group, Inc., MAM Software Limited, and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.6 to our Form 8-K dated December 4, 2015).
10.6	Guaranty of Payment Agreement, dated December 1, 2015, by and among MAM Software, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.7 to our Form 8-K dated December 4, 2015).
10.7	2007 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit D of the Company’s revised Definitive Proxy Statement filed on May 19, 2008).
10.8‡	Employment Agreement effective as of July 1, 2010 between the Company and Michael Jamieson (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 21, 2010).
10.9‡	Employment Agreement effective as of October 16, 2015 between the Company and Brian H. Callahan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2015).
10.10‡	Employment Agreement effective as of July 1, 2013 between the Company and Lee Broad (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on September 24, 2015).
10.11‡	Separation Agreement effective as of October 19, 2015 between the Company and Charles F. Trapp (incorporated by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed on February 16, 2016).
10.12‡	MAM Software Group, Inc. Employee Stock Purchase Plan, effective as of December 16, 2011 (filed herewith).
10.13	Amended Credit Agreement, dated as of September 26, 2016, by and among MAM Software Group, Inc. and JPMorgan Chase Bank, N.A. (filed herewith).
14.1	Code of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual report on Form 10-K/A for the fiscal year ended June 30, 2007 filed October 15, 2007.)
21.1	List of Subsidiaries (filed herewith).
31.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

‡ Management contract or compensatory plan or arrangement.

30

EX-10.12

Exhibit 10.12

MAM SOFTWARE GROUP, INC.

2011 EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

		Page Page
Section 1.	Purpose	A-3
Section 2.	Definitions	A-3
Section 3.	Eligibility	A-5
Section 4.	Offering Periods	A-5
Section 5.	Participation	A-5
Section 6.	Payroll Deductions	A-5
Section 7.	Grant of Option	A-6
Section 8.	Exercise of Option	A-6
Section 9.	Delivery	A-7
Section 10.	Withdrawal	A-7
Section 11.	Termination of Employment	A-7
Section 12.	Interest	A-7
Section 13.	Stock	A-7
Section 14.	Administration	A-8
Section 15.	Designation of Beneficiary	A-8
Section 16.	Transferability	A-8
Section 17.	Use of Funds	A-8
Section 18.	Reports	A-8
Section 19.	Adjustment Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale	A-8
Section 20.	Amendment or Termination	A-9
Section 21.	Conditions Upon Issuance of Shares	A-10
Section 22.	Term of Plan	A-10
Section 23.	Notices	A-10

MAM SOFTWARE GROUP, INC. 2011 EMPLOYEE STOCK PURCHASE PLAN

Section 1. Purpose.

The purpose of the MAM SOFTWARE GROUP, INC. 2011 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”) is to promote the interest of MAM Software Group, Inc., a Delaware corporation (“MAM Software”) and its stockholders by providing employees of MAM Software and its Designated Subsidiaries with an opportunity to purchase Common Stock of MAM Software through accumulated payroll deductions. By encouraging stock ownership, MAM Software seeks to attract, retain and motivate employees and to encourage them to devote their best efforts to the business and financial success of MAM Software. It is the intention of MAM Software to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The provisions of the Plan, accordingly, shall be construed in a manner consistent with the requirements of that section of the Code.

Section 2. Definitions.

For purposes of the Plan, the following capitalized terms shall have the following meanings:

2.1 “Board of Directors” or “Board” means the Board of Directors of MAM Software.

2.2 “Code” means the Internal Revenue Code of 1986, as amended.

2.3 “Committee” means the compensation committee of the Board, and shall consist solely of three or more Board members who are not employees of MAM Software or any Subsidiary unless otherwise determined by the Board. If no compensation committee exists, or for any other reason as may be determined by the Board it decides to serve as the Committee, the Board shall be considered the Committee and may take any action under the Plan that would otherwise be the responsibility of the Committee.

2.4 “Common Stock” means the common stock, $0.0001 par value, of MAM Software.

2.5 “Compensation” means all base straight time gross earnings and commissions, but exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses and other compensation.

2.6 “Designated Subsidiary” means any Subsidiary that has been designated by the Committee from time to time in its sole discretion as eligible to participate in the Plan.

2.7 “Employee” means any individual who is an employee of MAM Software or a Designated Subsidiary as the term is used in Treasury Regulation Section 1.423-2(e) and described in Treasury Regulation Section 1.421-1(h); PROVIDED, HOWEVER, EMPLOYEES WHO HAVE BEEN EMPLOYED LESS THAN THIRTY (30) DAYS PRIOR TO THE APPLICABLE OFFERING PERIOD, EMPLOYEES WHOSE CUSTOMARY EMPLOYMENT WITH MAM SOFTWARE IS TWENTY (20) HOURS OR LESS PER WEEK, EMPLOYEES WHOSE CUSTOMARY EMPLOYMENT WITH MAM SOFTWARE IS FOR NOT MORE THAN FIVE (5) MONTHS IN ANY CALENDAR YEAR, AND EMPLOYEES WHO ARE RESIDENTS OF OR EMPLOYED IN ANY JURISDICTION IN WHICH SUCH A PLAN IS PROHIBITED UNDER APPLICABLE LAW SHALL NOT BE DEEMED EMPLOYEES FOR THE PURPOSES OF THIS PLAN. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by MAM Software. Where the period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.

2.8 “Enrollment Date” means the first Trading Day of each Offering Period.

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2.9 “Exercise Date” means the last Trading Day of each Offering Period.

2.10 “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

2.10.1 If there should be a public market for the Common Stock on such date, the closing price of the Common Stock as reported on such date on the composite tape of the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if no composite tape exists for such national securities exchange on such date, then the closing price on the principal national securities exchange on which the Common Stock is listed or admitted to trading.

2.10.2 If the Common Stock is not listed or admitted on a national securities exchange, the arithmetic mean of the closing bid price and closing asked price for the Common Stock on such date as quoted on the National Association of Securities Dealers Automated Quotation System (or such market in which such prices are regularly quoted).

2.10.3 If the day is not a Trading Day, and as a result, paragraphs 2.10.1 and 2.10.2 above are inapplicable, the “Fair Market Value” of the Stock shall be determined as of the next earlier Trading Day. If paragraphs 2.10.1 and 2.10.2 above are otherwise inapplicable, then the “Fair Market Value” of the Common Stock shall be as determined in good faith by the Committee.

2.11 “Highly Compensated Employee” has the same meaning as the term is used in Section 414(q) of the Code.

2.12 “Offering Periods” means the period of approximately six (6) months during which an option shall be granted and may be exercised pursuant to the Plan, commencing on the first Trading Day on or after July 1^st and January 1^st of each year following the approval of the Plan by MAM Software’s stockholders and the Board of Directors, and terminating on the last Trading Day in the periods ending six

(6) months later from each beginning date. Nothwithstanding the foregoing, the first Offering Period shall commence on October 1, 2011 and shall terminate on the last trading day on or before December 31, 2011. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.

2.13 “Plan” means this MAM Software Group, Inc. 2011 Employee Stock Purchase Plan.

2.14 “Purchase Price” means the lesser of 85% of the Fair Market Value of a share of Common Stock on the Exercise Date of the current Offering Period or 85% of the Fair Market Value of a share of Common Stock on the Grant Date of the current Offering Period; provided however, that the Purchase Price may be adjusted by the Board or the Committee pursuant to Section 20.

2.15 “Reserves” means the number of shares of Common Stock covered by each option under the Plan that have not yet been exercised and the number of shares of Common Stock that have been authorized for issuance under the Plan but not yet placed under option.

2.16 “Subsidiary” has the meaning set forth for “subsidiary corporation” in Section 424(f) of the Code, whereby a Subsidiary means any corporation (other than the employer corporation) in an unbroken chain of corporations beginning with the employer corporation if, at the time of the granting of the option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

2.17 “MAM Software” means MAM Software Group, Inc., a Delaware corporation.

2.18 “Trading Day” means a day on which the Over the Counter Bulletin Board (“OTCBB”) quotation medium is open for trading; provided, however, if MAM Software is no longer traded on the OTCBB then Trading Day shall mean a day on which the quotation medium, market, or exchange on which MAM Software is then-traded is open for trading. Section 3. Eligibility.

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Section 3. Eligibility

3.1 Any individual who is an Employee of MAM Software or a Designated Subsidiary on a given Enrollment Date shall be eligible to participate in the Plan.

3.2 Notwithstanding any provision of the Plan to the contrary, no Employee shall be granted an option under the Plan: (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to section 424(d) of the Code) would own stock of MAM Software and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the stock of MAM Software or of any Subsidiary thereof; or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of MAM Software and its Subsidiaries would accrue at a rate which exceeds Two-Thousand, Four-hundred Dollars ($2,400) of fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time.

Section 4. Offering Periods.

The Plan shall be implemented by consecutive Offering Periods with a new Offering Period commencing and ending as set forth in Section 2.12, or on such other date as the Committee shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof; provided, however, that the first Offering Period under the Plan shall commence pursuant to Section 2.12. Subject to compliance with the requirements of Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected thereafter.

Section 5. Participation.

5.1 An eligible Employee may become a participant in the Plan by completing a Subscription Agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with MAM Software’s payroll office prior to the applicable Enrollment Date.

5.2 Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date after MAM Software receives the participant’s Subscription Agreement and shall end on the last payroll in the Offering Period to which such Subscription Agreement is applicable, unless sooner terminated by the participant as provided in Section 10 hereof. Section 6. Payroll Deductions.

Section 6. Payroll Deductions

6.1 At the time a participant files his or her Subscription Agreement, he or she shall elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding twenty-five percent (25%) of the Compensation that he or she receives on each payday during the Offering Period.

6.2 All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into such account.

6.3 A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll deductions during the Offering Period by completing or filing with MAM Software a new Subscription Agreement authorizing a change in payroll deduction rate. The Committee may, in its discretion, limit the number of participation rate changes during any Offering Period. The change in rate shall be effective with the first full payroll period following five (5) business days after MAM Software’s receipt of the new Subscription Agreement unless MAM Software elects to process a given change in participation more quickly. A participant’s Subscription Agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

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6.4 Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3.2 hereof, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period. Payroll deductions shall recommence at the rate provided in such participant’s Subscription Agreement at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.

6.5 At the time the option is exercised, in whole or in part, or at the time some or all of MAM Software’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for MAM Software’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, MAM Software may, but shall not be obligated to, withhold from the participant’s Compensation the amount necessary for MAM Software to meet applicable withholding obligations, including any withholding of any tax or benefits that may be attributable to the sale or early disposition of Common Stock by the Employee.

Section 7. Grant of Option.

On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of MAM Software’s Common Stock determined by dividing such Employee’s payroll deductions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided, however, in no event will an eligible Employee be permitted to purchase more than a number of shares equal to the result of $2,400 divided by the Fair Market Value of MAM Software’s Common Stock on the first Trading Day during such Offering Period (subject to adjustment upon changes in capitalization of MAM Software as provided in Section 19 hereof ); and provided further that such purchase shall be subject to the limitations set forth in Sections 3.2 and 13 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period.

Section 8. Exercise of Option.

8.1 Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 hereof. Any other monies left over in a participant’s account after the Exercise Date shall be returned to the participant or, at the election of the participant, maintained in the Plan for use in subsequent Offering Periods. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

8.2 If the Committee determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed: (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period; or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Committee may in its sole discretion: (x) provide that MAM Software shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect; or (y) provide that MAM Software shall make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all other Offering Periods then in effect pursuant to Section 20 hereof. MAM Software may make pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by MAM Software’s shareholders subsequent to such Enrollment Date.

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Section 9. Delivery.

Certificates evidencing the shares purchased upon exercise of a participant’s option will be issued by MAM Software’s transfer agent as promptly as practicable after each Exercise Date on which a purchase of shares occurs. Notwithstanding the foregoing, shares purchased upon exercise of a participant’s option may be held electronically by an uncertificated book-entry by MAM Software’s transfer agent or by the Plan administrator.

Section 10. Withdrawal.

10.1 A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to MAM Software in the form of Exhibit B to this Plan. All of the participant’s payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant’s option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to MAM Software a new Subscription Agreement.

10.2 A participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by MAM Software or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.

Section 11. Termination of Employment.

Upon a participant’s ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant’s option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant’s customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice.

Section 12. Interest.

No interest shall accrue on the payroll deductions of a participant in the Plan.

Section 13. Stock

13.1 Subject to adjustment upon changes in capitalization of MAM Software as provided in Section 19 hereof, the maximum number of shares of MAM Software’s Common Stock which shall be made available for sale under the Plan shall be 100,000 shares.

13.2 The participant shall have no interest or voting right in shares covered by his or her option until such option has been exercised.

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13.3 Shares to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse jointly with the right of survivorship.

Section 14. Administration.

The Board or the Committee, as determined in the sole discretion of the Board, shall administer the Plan. The Board or the Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Board or the Committee shall, to the full extent permitted by law, be final and binding upon all parties.

Section 15. Designation of Beneficiary.

15.1 A participant, in its Subscription Agreement, may designate a beneficiary who is to receive any shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.

15.2 Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, MAM Software shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of MAM Software), MAM Software, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to MAM Software, then to such other person as MAM Software may designate.

Section 16. Transferability.

Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that MAM Software may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

Section 17. Use of Funds.

All payroll deductions received or held by MAM Software under the Plan may be used by MAM Software for any corporate purpose, and MAM Software shall not be obligated to segregate such payroll deductions.

Section 18. Reports.

Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

Section 19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.

19.1 Changes in Capitalization. Subject to any required action by the shareholders of MAM Software, the Reserves, the maximum number of shares each participant may purchase each Purchase Period (pursuant to Section 7), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by MAM Software; provided, however, that conversion of any convertible securities of MAM Software shall not be deemed to have been “effected without receipt of consideration”. Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by MAM Software of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

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19.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of MAM Software, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Committee. The New Exercise Date shall be before the date of MAM Software’s proposed dissolution or liquidation. The Committee shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

19.3 Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of MAM Software, or the merger of MAM Software with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation, unless the successor corporation refuses to do so. In the event that the successor corporation refuses to assume or substitute for the option, any Offering Periods then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”) upon which the Offering Period then in progress shall end. The New Exercise Date shall be before the date of MAM Software’s proposed sale or merger. The Committee shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

Section 20. Amendment or Termination.

20.1 The Board of Directors or the Committee may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19 hereof, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors or the Committee on any Exercise Date if the Board or the Committee determines that the termination of the Offering Period or the Plan is in the best interests of MAM Software and its shareholders. Except as provided in Section 19 and this Section 20 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), MAM Software shall obtain shareholder approval of any amendments to the Plan in such a manner and to such a degree as required.

20.2 Subject to compliance with the requirements of Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), but without shareholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Board or the Committee shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in MAM Software’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Board or the Committee determines in its sole discretion advisable which are consistent with the Plan.

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20.3 Subject to compliance with the requirements of Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), in the event the Board or the Committee determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board or the Committee may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

20.3.1 altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;

20.3.2 shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and

20.3.3 allocating shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants.

Section 21. Conditions Upon Issuance of Shares.

Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for MAM Software with respect to such compliance.

As a condition to the exercise of an option, MAM Software may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for MAM Software, such a representation is required by any of the aforementioned applicable provisions of law.

Section 22. Term of Plan.

The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of MAM Software. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20 hereof.

Section 23. Notices.

All notices or other communications by a participant to MAM Software under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by MAM Software at the location, or by the person, designated by MAM Software for the receipt thereof.

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EXHIBIT A MAM SOFTWARE GROUP, INC. 2011 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT

Original Application Enrollment Date:

Change in Payroll Deduction Rate

Change of Beneficiary(ies)

1. I hereby elect to participate in the MAM Software Group, Inc. 2011 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”) and subscribe to purchase shares of MAM Software’s Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan.

2. I hereby authorize payroll deductions from each paycheck in the amount of $____ or ____% of my Compensation on each payday (FROM 1% TO 25%, but in no event greater than $2,400) during the Offering Period in accordance with the Employee Stock Purchase Plan (please note that no fractional percentages are permitted).

3. I understand that these payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option.

4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement is subject to shareholder approval of the Employee Stock Purchase Plan.

5. Shares purchased for me under the Employee Stock Purchase Plan should be issued in the name(s) of (Employee or Employee and Spouse only):

6. I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the Offering Period during which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the amount I received in such disposition over the price which I paid for the shares. I hereby agree to notify MAM Software in writing within 30 days after the date of any disposition of my shares and I will make adequate provision for Federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock. MAM Software may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to MAM Software any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the 2-year and 1year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of: (l) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares; or (2) the excess of the fair market value of the shares at the time the Enrollment Date (the first day of the Offering Period during which I purchased such shares) over the purchase price which I paid for the shares. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.

7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Employee Stock Purchase Plan.

8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Stock Purchase Plan:

NAME: (Please print)

(First) (Middle) (Last)

Relationship

(Address)

Employee’s Social Security Number:

Employee’s Address:

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:

Signature of Employee

Dated: Spouse’s Signature (If beneficiary is other than spouse)

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EXHIBIT B

MAM SOFTWARE GROUP, INC.

2011 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the MAM Software Group, Inc. 2011 Employee Stock Purchase Plan which began on , 201_ (the “Enrollment Date”) hereby notifies MAM Software that he or she hereby withdraws from the Offering Period. He or she hereby directs MAM Software to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to MAM Software a new Subscription Agreement.

Name and Address of Participant:

Signature:

Date:

EX-10.13

Exhibit 10.13

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made as of September 26, 2016, by MAM SOFTWARE GROUP, INC., a Delaware corporation (the “Borrower”) and JPMORGAN CHASE BANK, N.A., a national banking association (the “Lender”).

RECITALS

A..The Borrower and the Lender are parties to a Credit Agreement dated December 1, 2015 (as amended, restated, modified, substituted, extended, and renewed from time to time, the “Credit Agreement”). The Credit Agreement provides for some of the agreements between the Borrower and the Lender with respect to the “Loans” (as defined in the Credit Agreement), including a revolving credit facility in an amount not to exceed $2,500,000.00 and a term facility in the original principal amount of $9,500,000.00.

B..The Borrower has requested that the Lender amend certain covenants in the Credit Agreement.

C..The Lender is willing to agree to the Borrower’s request on the condition, among others, that this Agreement be executed.

AGREEMENTS

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, the Borrower and the Lender agree as follows:

1..The Borrower and the Lender agree that the Recitals above are a part of this Agreement. Unless otherwise expressly defined in this Agreement, terms defined in the Credit Agreement shall have the same meaning under this Agreement.

2.     .The Borrower and the Lender agree that on the date hereof the aggregate outstanding principal balance under the Revolving Credit Note (subject to change for returned items and other adjustments made in the ordinary course of business) is $1,250,000.00 and under the Term Note is $8,075,000.03.

3..The Credit Agreement is hereby amended as follows:

(a)()Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by adding the following new definition in its correct alphabetical order:

“Minimum Liquidity” means, on the date of determination, the sum of (i) unrestricted cash, plus (ii) Availability.

(b)()The definition of “Applicable Rate” in Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by restating the chart contained therein in its entirety to read as follows:

Total Leverage Ratio	Revolving Commitment CBFR Spread	Revolving Commitment Eurodollar Spread	Term Loan CBFR Spread	Term Loan Eurodollar Spread	Commitment Fee Rate
Category 1 < 1.50 to 1.00	CB Floating Rate + 3.50%	LIBO Rate + 3.50%	CB Floating Rate + 3.50%	LIBO Rate + 3.50%	0.30%
Category 2 < 2.00 to 1.00 but  > 1.50 to 1.00	CB Floating Rate + 3.75%	LIBO Rate + 3.75%	CB Floating Rate + 3.75%	LIBO Rate + 3.75%	0.30%
Category 3 > 2.00 to 1.00	CB Floating Rate + 4.00%	LIBO Rate + 4.00%	CB Floating Rate + 4.00%	LIBO Rate + 4.00%	0.30%

(c)()Section 5.01(b) (Financial Statements and Other Information) of the Credit Agreement is here by amended and restated in its entirety to read as follows:

“(b)     for the period beginning October 1, 2016, within 30  days after the end of each month except the final month of the fiscal year of the Borrower, and for the period beginning after the Lender has, in its sole discretion, provided written notice of such change to the Borrower, within 45  days after the end of each of the first three fiscal quarters of the Borrower, its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(d)()Subsections (e), (i), (j), (k), and (l) of Section 6.01 (Indebtedness) of the Credit Agreement are hereby amended and restated in their entireties to read as follows:

“(e)     Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

“(i)     Subordinated Indebtedness in an aggregate principal amount not exceeding $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

“(j)     Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (j) together with any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $50,000 at any time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

“(k)     Existing operating lease obligations (in effect as of the Effective Date), including increases in existing operating lease obligations and new operating lease obligations; provided that the sum of such increases in existing operating lease obligations, plus new operating lease obligations do not exceed, in the aggregate, $100,000 annually, provided however, such limit may be increased to $500,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower; and”

“(l)     any other unsecured Indebtedness, provided however, the Borrower may incur other unsecured Indebtedness in an aggregate principal amount not to exceed $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower.”

(e)()Section 6.02(d) (Liens) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(d)Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 85% of the cost of acquiring, constructing or improving such fixed or capital assets at any time outstanding, provided however, such limit may be increased to 100% of the cost of acquiring, constructing or improving such fixed or capital assets at any time outstanding for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower, and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary;”

(f)()Subsections (d) and (f) of Section 6.04 (Investments, Loans, Advances, Guarantees and Acquisitions) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(d)     loans or advances (excluding non-cash allocation of costs or expenses among Subsidiaries done in the ordinary course of business) made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under Section 6.04(c) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $100,000 at any time outstanding, provided however, such limit may be increased to $250,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower (in each case determined without regard to any write-downs or write-offs);”

“(f)loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $50,000 in the aggregate at any one time outstanding, provided however, such limit may be increased to $100,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

(g)()Section 6.05(g) (Asset Sales) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(g)sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $100,000 during any fiscal year of the Borrower, provided however, such limit may be increased to $250,000 for the period beginning after the Lender has, in its sole discretion, provided written notice of such increase to the Borrower;”

(h)()Subsections (a) and (b) of Section 6.12 (Financial Covenants) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(a)Maximum Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio, on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, and of any fiscal quarter thereafter, ending during any period set forth below, to be greater than the ratio set forth below opposite such period:

Period	Maximum Total Leverage Ratio
September 30, 2016, through and including August 31, 2017	2.50 to 1.00
September 30, 2017	2.25 to 1.00
December 31, 2017, and thereafter	2.0o 1.00

(b)Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of the fiscal quarter ending December 31, 2017, and for each fiscal quarter thereafter, to be less than 1.20 to 1.00.

(i)()Section 6.12 (Financial Covenants) of the Credit Agreement is hereby amended by adding the following new subsections:

(c)Minimum LTM EBITDA. The Borrower will not permit EBITDA, for any period of twelve consecutive months ending on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, to be less than $3,750,000.00.

(d)Minimum Liquidity. The Borrower will not permit Minimum Liquidity, for any period of twelve consecutive months ending on the last day of each month for the period beginning on September 30, 2016, through and including September 30, 2017, to be less than $750,000.00.

4..The agreement of the Lender under this Agreement are subject to the following terms and conditions, time being of the essence:

(a)()At the time this Agreement is executed and delivered, the Borrower shall pay the Lender an amendment fee in the amount of $25,000.00, which fee is fully earned and non-refundable.

(b)()At the time this Agreement is executed and delivered, the Guarantor (as that term is defined in the Credit Agreement) shall execute and deliver the Agreement of Guarantor below.

5..The Borrower represents and warrants to the Lender as follows:

(a)()The Borrower (i) is duly organized, existing and in good standing under the laws of the jurisdiction of its formation stated in the preamble to this Agreement and is organized in no other jurisdiction, (ii) has the entity power to own its property and to carry on its business as now being conducted, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary.

(b)()The Borrower has the entity power and authority to execute and deliver this Agreement and to incur and perform its obligations hereunder and has taken all necessary and appropriate entity action to authorize the execution, delivery and performance of this Agreement.

(c)()The Credit Agreement, as amended by this Agreement, and each of the other Loan Documents remain in full force and effect, and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

(d)()All of the Borrower’s representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date of the Borrower’s execution of this Agreement.

(e)()No Event of Default and no event which, with notice, lapse of time or both would constitute an Event of Default, has occurred and is continuing under the Credit Agreement or the other Loan Documents which has not been waived in writing by the Lender.

(f)()The execution, delivery and performance of the terms of this Agreement will not conflict with, violate or be prevented by (i) as applicable, charter or bylaws, operating agreement, articles of organization, partnership agreements, or other constituent certificates, documents and agreements governing the Borrower’s formation, governance and management, (ii) any existing mortgage, indenture, contract or agreement binding on the Borrower or affecting its property, or (iii) any Laws.

6..The Borrower hereby issues, ratifies and confirms the representations, warranties and covenants contained in the Credit Agreement, as amended hereby. The Borrower agrees that this Agreement is not intended to and shall not cause a novation with respect to any or all of the Obligations.

7..The Borrower acknowledges and warrants that the Borrower has no (and alternatively waives each and every) counterclaim, recoupment, setoff, reduction or defense with respect to the Obligations or otherwise, however arising, in contract, in tort or otherwise and whenever arising; and alternatively, releases, withdraws, waives and discharges any and all claims, rights, demands, damages, causes of action, judgments or liabilities which the Borrower has, had or may have ever had against the Lender, including but not limited to any arising in connection with the Obligations or otherwise.

8..The Borrower shall pay at the time this Agreement is executed and delivered all fees, commissions, costs, charges, taxes and other expenses incurred by the Lender and its counsel in connection with this Agreement, including, but not limited to, reasonable fees and expenses of counsel and all recording fees, taxes and charges.

9..This Agreement and the rights and obligations of the parties hereunder shall be governed by and interpreted in accordance with the Laws of New York.

10..This Agreement is one of the Loan Documents. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same agreement. Each party to this Agreement agrees that the respective signatures of the parties may be delivered by fax, PDF, or other electronic means acceptable to the Lender and that the parties may rely on a signature so delivered as an original. Any party who chooses to deliver its signature in such manner agrees to provide promptly to the other parties a copy of this Agreement with its inked signature, but the party’s failure to deliver a copy of this Agreement with its inked signature shall not affect the validity, enforceability and binding effect of this Agreement.

Signatures begin on the following page.

Signature Page to
FIRST AMENDMENT TO CREDIT AGREEMENT

IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement under seal as of the date and year first written above.

ATTEST:     MAM SOFTWARE GROUP, INC.

_____________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

WITNESS:     JPMORGAN CHASE BANK, N.A.

_____________________________     By:__________________________(SEAL)

Name:

Title:

Agreement of Guarantor begins on the following page.

FIRST AMENDMENT TO CREDIT AGREEMENT

AGREEMENT OF GUARANTOR

Reference is made to the foregoing First Amendment to Credit Agreement (the “First Amendment”) for the meaning of capitalized terms not otherwise defined in this Agreement of Guarantor. The undersigned is the “Guarantor” under a Guaranty of Payment Agreement, dated December 1, 2015 (as amended, modified, substituted, extended and renewed from time to time, the “Guaranty”), in favor of the Lender. In order to induce the Lender to enter into the First Amendment, the Guarantor (a) consents to the transactions contemplated by, and agreements made by the Borrower under, the First Amendment, (b) ratifies, confirms and reissues the terms, conditions, promises, covenants, grants, assignments, security agreements, waivers, agreements, representations, warranties and provisions contained in the Guaranty, and (c) agrees that the Guarantor has no (and alternatively waives each and every) counterclaim, recoupment, setoff, reduction or defense with respect to the Guarantor's obligations under the Guaranty, however arising, in contract, in tort or otherwise and whenever arising; and (d) alternatively, releases, withdraws, waives and discharges any and all claims, rights, demands, damages, causes of action, judgments or liabilities which the Guarantor has, had or may have ever had against the Lender, including but not limited to any arising in connection with the Guaranty or the other Loan Documents. Without limiting the foregoing, the Guarantor acknowledges and agrees that in the Guaranty the Guarantor agreed, among other things, that the parties to the Credit Agreement may from time to time modify, amend, change or terminate any provisions of any of the Loan Documents without in any way releasing, affecting or in any way impairing the obligations and liabilities of the Guarantor under the Guaranty, and notwithstanding the acceptance of this Agreement of Guarantor by the Lender, the parties may hereafter modify, amend, change or terminate any provisions of any of the Loan Documents without notice to, the further agreement of, or the consent of the Guarantor. This Agreement is one of the Loan Documents. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same agreement. Each party to this Agreement agrees that the respective signatures of the parties may be delivered by fax, PDF, or other electronic means acceptable to the Lender and that the parties may rely on a signature so delivered as an original. Any party who chooses to deliver its signature in such manner agrees to provide promptly to the other parties a copy of this Agreement with its inked signature, but the party’s failure to deliver a copy of this Agreement with its inked signature shall not affect the validity, enforceability and binding effect of this Agreement.

Signature to Agreement of Guarantor begins on the following page.

First AMENDMENT TO credit AGREEMENT

Signature page to
AGREEMENT OF GUARANTOR

WITNESS signature and seal of the Guarantor as of the date of the First Amendment.

WITNESS OR ATTEST:     MAM SOFTWARE, INC.

______________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

4836-6248-1208, v. 2

EX-21.1

Exhibit 21.1

LIST OF SUBSIDIARIES

Name of Subsidiary	State of Incorporation
MAM Software, Inc.	Delaware
MAM Software Ltd.	United Kingdom
Origin Solutions, Ltd.	United Kingdom

EX-31.1

Exhibit 31.1

CERTIFICATION

OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Michael G. Jamieson, certify that:

1. I have reviewed this annual report on Form 10-K of MAM Software Group, 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 functions):

(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.

Date: September 26, 2016	By:	/s/ Michael G. Jamieson
		Michael G. Jamieson
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Brian H. Callahan, certify that:

1. I have reviewed this annual report on Form 10-K of MAM Software Group, 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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 functions):

(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.

Date: September 26, 2016	By:	/s/ Brian H. Callahan
		Brian H. Callahan
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

OF PRINCIPAL EXECUTIVE OFFICER

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 Annual Report of MAM Software Group, Inc. (the “Company”) on Form 10-K for the year ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael G. Jamieson, Chief Executive Officer of MAM Software Group, Inc., certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(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.

Date: September 26, 2016	By:	/s/ Michael G. Jamieson
		Michael G. Jamieson
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION

OF PRINCIPAL FINANCIAL OFFICER

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 Annual Report of MAM Software Group, Inc. (the “Company”) on Form 10-K for the year ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian H. Callahan, Chief Financial Officer of MAM Software Group, Inc., certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(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.

Date: September 26, 2016	By:	/s/ Brian H. Callahan
		Brian H. Callahan
		Chief Financial Officer
		(Principal Financial Officer)

XML

Document And Entity Information - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2016	Sep. 16, 2016	Dec. 31, 2015
Document Information [Line Items]
Entity Registrant Name	MAM SOFTWARE GROUP, INC.
Entity Central Index Key	0000832488
Trading Symbol	mams
Current Fiscal Year End Date	--06-30
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)		12,400,758
Entity Public Float			$ 25,394
Document Type	10-K
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Amortizable Intangible Assets, Except Computer Software [Member]
Other Assets
Intangible assets, net	$ 739,000
Total amortizable intangible assets, net	739,000
Computer Software, Intangible Asset [Member]
Other Assets
Intangible assets, net	5,234,000	3,010,000
Total amortizable intangible assets, net	5,234,000	3,010,000
Cash and cash equivalents	491,000	6,793,000
Accounts receivable, net of allowance of $359 and $221, respectively	4,627,000	4,243,000
Inventories	221,000	185,000
Prepaid expenses and other current assets	1,495,000	1,722,000
Income tax receivable	535,000
Total Current Assets	7,369,000	12,943,000
Property and Equipment, Net	581,000	732,000
Goodwill	8,363,000	9,202,000
Intangible assets, net	5,973,000	3,010,000
Total amortizable intangible assets, net	5,973,000	3,010,000
Other long-term assets	159,000	34,000
TOTAL ASSETS	22,445,000	25,921,000
Current Liabilities
Accounts payable	1,618,000	1,978,000
Accrued expenses and other liabilities	1,811,000	2,624,000
Payroll and other taxes	1,188,000	747,000
Current portion of long-term debt	1,925,000
Current portion of deferred revenue	939,000	719,000
Sales tax payable	750,000	850,000
Income tax payable	1,000	356,000
Total Current Liabilities	8,232,000	7,274,000
Long-Term Liabilities
Deferred revenue, net of current portion	273,000	52,000
Deferred income taxes	535,000	58,000
Long-term debt, net of current portion	7,853,000
Other long-term liabilities	533,000	140,000
Total Liabilities	17,426,000	7,524,000
Stockholders' Equity
Preferred stock: Par value $0.0001 per share; 2,000,000 shares authorized, none issued and outstanding
Common stock: Par value $0.0001 per share; 18,000,000 shares authorized, 13,199,365 shares issued and 12,409,577 shares outstanding at June 30, 2016 and 15,027,057 shares issued and 14,266,964 shares outstanding at June 30, 2015	1,000	2,000
Additional paid-in capital	16,162,000	31,186,000
Accumulated other comprehensive loss	(2,985,000)	(1,241,000)
Accumulated deficit	(5,785,000)	(9,337,000)
Treasury stock at cost, 789,788 shares at June 30, 2016 and 760,093 shares at June 30, 2015	(2,374,000)	(2,213,000)
Total Stockholders' Equity	5,019,000	18,397,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 22,445,000	$ 25,921,000

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Jun. 30, 2015
Allowance of accounts receivable	$ 359	$ 221
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)	18,000,000	18,000,000
Common stock, shares issued (in shares)	13,199,365	15,027,057
Common stock, shares outstanding (in shares)	12,409,577	14,266,964
Treasury stock, shares (in shares)	789,788	760,093

XML

Consolidated Statements of Comprehensive Income - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net revenues	$ 32,212,000	$ 31,638,000
Cost of revenues	14,598,000	13,777,000
Gross Profit	17,614,000	17,861,000
Operating Expenses
Research and development	3,777,000	3,860,000
Sales and marketing	4,009,000	4,319,000
General and administrative	5,658,000	5,490,000
Depreciation and amortization	370,000	352,000
Total Operating Expenses	13,814,000	14,021,000
Operating Income	3,800,000	3,840,000
Other Income (Expense)
Interest expense, net	(276,000)	(13,000)
Gain on settlement of liabilities	217,000
Total other expense, net	(59,000)	(13,000)
Income before provision for income taxes	3,741,000	3,827,000
Provision for income taxes	189,000	822,000
Net Income	$ 3,552,000	$ 3,005,000
Earnings per share attributed to common stockholders - basic (in dollars per share)	$ 0.29	$ 0.22
Earnings per share attributed to common stockholders - diluted (in dollars per share)	$ 0.28	$ 0.22
Weighted average common shares outstanding – basic (in shares)	12,314,071	13,403,877
Weighted average common shares outstanding – diluted (in shares)	12,489,934	13,498,182
Net Income	$ 3,552,000	$ 3,005,000
Foreign currency translation loss	(1,744,000)	(1,176,000)
Total Comprehensive Income	$ 1,808,000	$ 1,829,000

XML

Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Jun. 30, 2014	15,077,830		(673,681)
Balance at Jun. 30, 2014	$ 2,000	$ 31,426,000	$ (1,746,000)	$ (65,000)	$ (12,342,000)	$ 17,275,000
Common stock issued as compensation (in shares)	86,589
Common stock issued as compensation		562,000				562,000
Repurchase of common stock for treasury (in shares)			(223,774)
Repurchase of common stock for treasury			$ (1,269,000)			$ (1,269,000)
Treasury Stock, Shares, Retired	(137,362)		137,362			137,362
Treasury Stock, Retired, Cost Method, Amount		(802,000)	$ 802,000			$ 800,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax				(1,176,000)		(1,176,000)
Net income					3,005,000	3,005,000
Balance (in shares) at Jun. 30, 2015	15,027,057		(760,093)
Balance at Jun. 30, 2015	$ 2,000	31,186,000	$ (2,213,000)	(1,241,000)	(9,337,000)	18,397,000
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8) (in shares)	86,589
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8)		562,000				562,000
Shares surrendered for taxes (in shares)			(134,386)
Shares surrendered for taxes			$ (800,000)
Repurchase of common stock for treasury (in shares)			223,774
Repurchase of common stock for treasury			$ 1,269,000			1,269,000
Common stock issued as compensation (in shares)	232,920
Common stock issued as compensation		434,000				434,000
Repurchase of common stock for treasury (in shares)			29,695
Repurchase of common stock for treasury			$ 161,000			161,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax				(1,744,000)		(1,744,000)
Net income					3,552,000	3,552,000
Balance (in shares) at Jun. 30, 2016	13,199,365		(789,788)
Balance at Jun. 30, 2016	$ 1,000	16,162,000	$ (2,374,000)	$ (2,985,000)	$ (5,785,000)	5,019,000
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8) (in shares)	232,920
Common stock issued as compensation – Includes amortization of unvested shares (See Note 8)		434,000				434,000
Shares surrendered for taxes (in shares)	(60,612)		(60,612)
Shares surrendered for taxes		(341,000)	$ (300,000)			(341,000)
Repurchase of common stock for treasury (in shares)			(29,695)
Repurchase of common stock for treasury			$ (161,000)			(161,000)
Repurchase of common stock in tender offer (in shares)	(2,000,000)
Repurchase of common stock in tender offer	$ (1,000)	$ (15,117,000)				$ (15,118,000)

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,552,000	$ 3,005,000
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense	257,000	99,000
Depreciation and amortization	648,000	599,000
Amortization of debt discount and debt issuance costs	32,000
Deferred tax expense (benefit)	359,000	6,000
Stock-based compensation expense	383,000	562,000
Changes in assets and liabilities:
Accounts receivable	(881,000)	(715,000)
Inventories	(70,000)	9,000
Prepaid expenses and other assets	42,000	(266,000)
Income tax receivable	(535,000)
Accounts payable	(215,000)	599,000
Accrued expenses and other liabilities	(988,000)	(265,000)
Payroll and other taxes	183,000	(413,000)
Deferred revenue	478,000	(251,000)
NET CASH PROVIDED BY OPERATING ACTIVITIES	3,245,000	2,968,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(207,000)	(354,000)
Capitalized software development costs	(2,759,000)	(1,740,000)
Business acquisition, net of cash acquired	(453,000)
NET CASH USED IN INVESTING ACTIVITIES	(3,419,000)	(2,094,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock for treasury	(161,000)	(476,000)
Repurchase of common stock	(15,000,000)
Payment for debt issuance costs	(123,000)
Payment of fees for repurchase of common stock	(118,000)
Proceeds from long-term debt	10,729,000
Repayment of long-term debt	(950,000)
NET CASH USED IN FINANCING ACTIVITIES	(5,623,000)	(476,000)
Effect of exchange rate changes	(505,000)	(613,000)
Net change in cash and cash equivalents	(6,302,000)	(215,000)
Cash and cash equivalents at beginning of year	6,793,000	7,008,000
Cash and cash equivalents at end of year	491,000	6,793,000
Supplemental disclosures of cash flow information
Interest	221,000	13,000
Income taxes	665,000	767,000
Supplemental disclosures of non-cash investing and financing activities:
Issuance of common stock in settlement of accrued liabilities	93,000
Common stock surrendered for payment of taxes	341,000
Treasury stock retired		$ 802,000

XML

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

MAM Software Group, Inc. ("MAM" or the "Company") is a leading provider of integrated information management solutions and services and a leading provider of cloud-based software solutions for the automotive aftermarket sector. The Company conducts its businesses through wholly owned subsidiaries with operations in Europe and North America. MAM Software Ltd. (“MAM Ltd.”) is based in Tankersley, Barnsley, United Kingdom (“UK”), Origin Software Solutions, Ltd. (“Origin”) is based in the UK (MAM Ltd. and Origin are collectively referred to as “MAM UK”), and MAM Software, Inc. (“MAM NA”) is based in the United States of America ("US") in Blue Bell, Pennsylvania.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant i

ntercompany accounts and transactions have been eliminated in the consolidated financial statements.

Concentrations of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, option

s contracts or other foreign hedging arrangements.

Cash and Cash Equivalents

In the US, the Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000.

  At times deposits held with financial institutions in the US may exceed the $250,000 limit.

In the UK, the Company maintains cash balances at financial institutions that are insured by the Financial Services Compensation Scheme up to 85,000GBP.

  At times deposits held with financial institutions in the UK may exceed the 85,000GBP limit.

The Company maintains its cash accounts at financial institutions which it believes to be credit worthy. The Company considers all highly liquid debt instruments purchased with original maturities

of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Customers

The Company performs periodic evaluations of its customers and maintains allowances for potential credit losses as deemed necessary. The Company generally does not require collateral to secure its accounts receivable. Credit risk is managed by discontinuing sales to customers who are delinquent. The Company estimates credit losses and returns based on management

’s evaluation of historical experience and current industry trends. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.

No customers accounted for more than 10% of the Company’s revenues for each of the years ended June 30, 2016 and 2015. No customers accounted for more than 10% of the Company’s accounts receivable at June 30, 2016 and 2015.

Segment Reporting

The Company o

perates in one reportable segment.  Though the Company has two operational segments (MAM UK and MAM NA)

, the Company evaluated in accordance with ASC 280-10-50, 

Segment Reporting,

and determined that the segments have the same economic characteristics, are similar in the following areas and can therefore be aggregated into one reportable segment:

1.	The products and services are software and professional services
2.	The products are produced through professional services
3.	The customers for these products are primarily for the automotive aftermarket
4.	The method to distribute these products are via software that the customer can host locally or the Company will host
5.	They both operate in a non-regulatory environment

Geographic Concentrations

The Company conducts business in the US, Canada, the UK and Ireland (UK and Ireland are collectively referred to as the “UK Market”). For customers headquartered in their respective countries, the Company derived approximately 70% of its revenues from the UK, 28% from the US, 1% from Ireland, and 1% from Canada during the year ended June 30, 2016, compared to 74% of its revenues from the UK, 25% from the US and 1% from Canada during the year ended June 30, 2015.

At June 30, 2016, the Company maintained 79% of its net property and equipment in the UK and th

e remaining 21% in the US.  At June 30, 2015, the Company maintained 83% of its net property and equipment in the UK and the remaining 17% in the US. 

Use of Estimates

The preparation of consolidated financial statements in conformity with accountin

g principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to, the collectability of accounts receivable, the realizability of inventories, the determination of the fair value of acquired intangible assets, the recoverability of goodwill and other long-lived assets, valuation of deferred tax assets and liabilities and the estimated fair value of stock options, warrants and shares issued for non-cash consideration. Actual results could materially differ from those estimates. 

Fair Value of Financial Instruments

The Company

’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities, and long-term debt. Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories:

•

Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.

•

Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Determining which category an asset or liability

falls within the hierarchy may require significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company believes that the carrying values of all financial instruments, except long-term debt, approximate their values due to their nature and respective durations.  The carrying value of long-term debt approximates fair value based on borrowing rates currently available to the Company.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for

doubtful accounts is based on specific identification of customer accounts and its best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. The Company evaluates the collectability of its receivables at least quarterly. The allowance for doubtful accounts is subject to estimates based on the historical actual costs of bad debt experienced, total accounts receivable amounts, age of accounts receivable and any knowledge of the customers’ ability or inability to pay outstanding balances. If the financial condition of the Company's customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.

Inventories

Inventories are stated at the lower of cost or current estimated market value. Cost is determined using the first-in, first-out method. Inventories consist primarily of hardware that will be sold to customers. The Company peri

odically reviews its inventories and records a provision for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand. Once established, write-downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories.

Property and Equipment

Property and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful lives of the related assets, rangi

ng from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Equipment under capital lease obligations is depreciated over the shorter of the estimated useful lives of the related assets or the term of the lease. Maintenance and routine repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of comprehensive income.

Software Development Costs

Costs incurred to

develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of:  the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product; and, the straight-line method over the remaining estimated economic life (a period of three to ten years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the consolidated statements of comprehensive income.  If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations.

Amortizable Intangible Assets

Amortizable intangible assets consist of completed software technology, custome

r contracts/relationships, automotive data services and acquired intellectual property and are recorded at cost. Completed software technology and customer contracts/relationships are amortized using the straight-line method over their estimated useful lives of 9 to 10 years, automotive data services are amortized using the straight-line method over their estimated useful lives of 20 years and acquired intellectual property is amortized over the estimated useful life of 10 years.

Goodwill

Goodwill is not amortized, but rather is tested at least annually for impairment.

Goodwill is subject to impairment r

eviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by the Company. As of June 30, 2016, the Company does not believe there is an impairment of its goodwill. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of goodwill in the future.

Goodwill activity for the years ended June 30

, 2016 and 2015 was as follows:

Balance, July 1, 2014	$	9,767,000
Effect of exchange rate changes		(565,000	)
Balance, June 30, 2015	$	9,202,000
Acquisition of Origin (see Note 2)		202,000
Effect of exchange rate changes		(1,041,000	)
Balance, June 30, 2016	$	8,363,000

Long-Lived Assets

The Company

’s management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows over their remaining useful lives. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management. At June 30, 2016, management believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of long-lived assets in the future.

Debt Issuance Costs

Debt issuance costs represent costs incurred in connection with the issuance of long-term debt.  Debt issuance costs are amortized over the term of the financing instrument using the effective interest method.  Debt issuance costs are included in other long-term assets.

Issuance of Equity Instruments to Non-Employees

All issuances of the Company

’s equity instruments to non-employees are measured at fair value based upon either the fair value of the equity instruments issued or the fair value of consideration received, whichever is more readily determinable. The majority of stock issuances for non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair value of the equity instruments on the dates issued.

The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or

vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Assets acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments are not presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.  

Stock-Based

Compensation

The Company accounts for stock-based compensation under the provisions of ASC No. 718,

Compensation - Stock Compensation

(“ASC 718”). ASC 718 requires the recognition of the fair value of the stock-based compensation in net income. Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant.

For valuing stock options awards, the Company has elected to use the Black-Scholes model

. For the expected term, the Company uses a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate during the expected term of the option. For volatility the Company considers its own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; the Company currently has no plans to pay dividends. 

The fair value of stock-based awards is amortized over the vesting period of the award or expected vesting date of the market-based restricted shares and the Company elected to use the straight-line method for awards granted.

Revenue R

ecognition

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met,

revenue recognition is deferred until such time as all of the criteria are met.

The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific o

bjective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

In those instances, in which arrangements include significant customization, contractual milestones, acceptance

criteria or other contingencies (which represents the majority of the Company’s arrangements), the Company accounts for the arrangements using contract accounting, as follows:

1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

2) When customer acceptance cannot be estimated based on historical evi dence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the acc

ompanying consolidated balance sheets. Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement.

The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

Advertising Expense

The Company expenses advertising

costs as incurred. For the years ended June 30, 2016 and 2015, advertising expense totaled $0.4 million and $0.4 million, respectively.

Foreign Currency

Management has determined that the functional currency of its subsidiaries is the local

currency. Assets and liabilities of the UK subsidiaries are translated into US dollars at the year-end exchange rates. Income and expenses are translated at an average exchange rate for the year and the resulting translation gain (loss) adjustments are accumulated as a separate component of stockholders’ equity. The translation (loss) gain adjustment totaled $(1.7) million and $(1.2) million for the years ended June 30, 2016 and 2015, respectively.

Foreign currency gains and losses from transactions denomin

ated in other than respective local currencies are included in income. The Company had no foreign currency transaction gain (loss) for all periods presented.

Comprehensive Income

Comprehensive income includes all changes in equity (net assets) during a

period from non-owner sources. For the years ended June 30, 2016 and 2015, the components of comprehensive income consist of foreign currency translation gain (loss).

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax c

onsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s consolidated balance sheets at June 30, 2016 and 2015, and has not recognized interest and/or penalties in the consolidated statements of comprehensive income for the years ended June 30, 2016 and 2015.

Basic and Diluted Earnings Per Share

Basic earnings per share (“BEPS”) is computed by dividing the net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share (“DEPS”) is computed giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon the exercise of stock options and warrants using the “treasury stock” method. The computation of DEPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. For the year ended June 30, 2016 there were 175,863 common share equivalents included in the computation of the DEPS. For the year ended June 30, 2016, 691,505 shares of common stock vest based on the market price of the Company

’s common stock and were excluded from the computation of DEPS because the shares have not vested, but no stock options were excluded from the computation of DEPS. For the year ended June 30, 2015, there were 94,305 common share equivalents included in the computation of the DEPS.

The following is a reconciliation of the numerat

ors and denominators of the basic and diluted earnings per share computation for the years ended June 30:

	2016		2015
Numerator:
Net income	$	3,552,000	$	3,005,000
Denominator:
Basic weighted-average shares outstanding		12,314,071		13,403,877
Effect of dilutive securities		175,863		94,305
Diluted weighted-average diluted shares		12,489,934		13,498,182
Basic earnings per common share	$	0.29	$	0.22
Diluted earnings per common share	$	0.28	$	0.22

Reclassification

Certain expenses were reclassified from depreciation and amortization to cost of revenues in the accompanying consolidated statement of comprehensive income for the year ended June 30, 2015

in order to conform to the current period presentation.

Recent Accounting Pronouncements

In March

 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09,

Improvements to Employee Share-Based Payment Accounting.

  The update provides guidance on simplifying various aspects of the accounting for shared-based compensation. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2017.  The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02,

Leases

. The update requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17,

Balance Sheet Classification of Deferred Taxes

.  Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position.  To simplify the presentation of deferred income taxes, the amendments in this update required that deferred tax liabilities be classified as noncurrent in a classified statement of financial position.  The current requirement is that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update.  ASU 2015-17 will be effective for the Company beginning for its first quarter of fiscal 2018.  The Company does not expect the adoption of ASU 2015-17 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements. 

In April

 2015, the FASB issued ASU 2015-03,

Simplifying the Presentation of Debt Issuance Costs.

  The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015.  The Company does not expect the adoption of ASU 2015-03 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09

, Revenue from Contracts with Customers

(Topic 606), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15,

Presentation of Financial Statements-Going Concern

. Currently, there is no guidance in accounting principles generally accepted in the US about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in US auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. The Company is currently assessing the impact the adoption of ASU 2014-15 will have on its consolidated financial statements.

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Note 2 - Business Acquisition

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE 2. BUSINESS ACQUISITION

On July 1, 2015, MAM Ltd. acquired 100% of the stock of Origin, a UK-based provider of e-commerce solutions for the automotive aftermarket.  With the acquisition of Origin, MAM is able to strengthen its e-commerce strategy by being able to provide customers with a range of e-commerce solutions for the automotive aftermarket.  The Company paid $503,000 at closing of the acquisition. The Company will also make future cash payments of $416,000

and issue stock consideration of $283,000 in the future if Origin reaches established earnings targets. The Company recorded the estimated fair value of the contingent consideration of $270,000 in other long-term liabilities on its consolidated balance sheet as of June 30, 2016.  In connection with the acquisition, the Company incurred acquisition-related costs of $53,000, which were expensed and included in general and administrative expenses in the accompanying consolidated statement of comprehensive income for the year ended June 30, 2016.

The Company allocated the purchase consideration to acquire Origin to (1) net assets acquired of $177,000, (2) finite-lived intangible assets of $1.0 million for acquired intellectual property (with an estimated useful l

ife of 10 years), (3) a deferred tax liability of $202,000, and (4) goodwill of $202,000. The goodwill from this acquisition is non-deductible for tax purposes. The results of operations of Origin have been included in the Company's consolidated statements of comprehensive income from the date of acquisition, however the results from Origin were not significant to the Company’s consolidated results of operations and thus proforma information is not presented.

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Note 3 - Property and Equipment

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30,			June 30,
	2016			2015
Leasehold improvements	$	396,000		$	884,000
Computer and office equipment		869,000			880,000
Equipment under capital leases		10,000			10,000
Furniture and equipment		477,000			432,000
Total property, plant and equipment		1,752,000			2,206,000
Less: accumulated depreciation and amortization		(1,171,000	)		(1,474,000	)
Total property, plant and equipment, net	$	581,000		$	732,000

Depreciation expense on property and equipment for the years ended June 30, 2016 and 2015 was $0.3 million and $0.2 million, respectively.

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Note 4 - Intangible Assets

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 4.

INTANGIBLE ASSETS

Intangible assets consist of the following at June 30, 2016:

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	1,093,000	$	(1,093,000	)	$	-
Customer contracts / relationships		10			543,000		(543,000	)		-
Automotive data services		20			262,000		(262,000	)		-
Acquired intellectual property		10			822,000		(83,000	)		739,000
Software development costs	3	to	10		7,887,000		(2,653,000	)		5,234,000
Total				$	10,607,000	$	(4,634,000	)	$	5,973,000

Intangible assets consist of the following at June 30, 2015:

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	3,043,000	$	(3,043,000	)	$	-
Customer contracts / relationships		10			3,737,000		(3,737,000	)		-
Automotive data services		20			308,000		(308,000	)		-
Software development costs	3	to	10		5,730,000		(2,720,000	)		3,010,000
Total				$	12,818,000	$	(9,808,000	)	$	3,010,000

For the years ended June 30, 2016 and 2015, the Company recognized amortization expense on its software

development costs and other amortizable intangible assets of $0.4 million and $0.4 million, respectively.

Estimated future amortization of software development costs and intangibles is as follows:

Years Ending June 30,
2017	$	500,000
2018		694,000
2019		651,000
2020		581,000
2021		556,000

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Note 5 - Long-term Debt

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 5. LONG-TERM DEBT

	As of
($ in thousands)	June 30, 2016			June 30, 2015
Debt obligations:
Revolving loan facility	$	1,150		$	-
Term loan		8,550			-
Equipment financing		78			-
Total		9,778			-
Less current portion		(1,925	)		-
Long-term debt	$	7,853		$	-

On December 1, 2015, the Company entered into a new credit agreement with J.P. Morgan Chase Bank, N.A. to provide for borrowings up to $12.0 million consisting of a $9.5 million term loan and a $2.5 million revolver (“

Credit Facility”).  All borrowings become due and payable on December 1, 2018. The borrowings bear interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the Credit Facility, plus an applicable margin of 3.00% to 3.50%, based upon financial covenants. As of June 30, 2016, the interest rate was 4.0%. The term loan required monthly principal payments of $158,000.  Under the terms of the Credit Facility, the Company is required to comply with certain loan covenants, which include, but are not limited to, the maintenance of certain financial ratios as well as certain financial reporting requirements and limitations. The Company’s obligations under the Credit Facility are secured by all of the Company’s US assets and are guaranteed by the Company’s US wholly-owned subsidiary.  Additionally, the Company pledged 65% of the stock of MAM Software Limited, its UK subsidiary.  As of June 30, 2016, the Company was in compliance with its loan covenants. 

On December 1, 2015, the Company borrowed $10.5 million under the Credit Facility to fund a portion of the Tender Offe

r (see Note 8).

The Company entered into an equipment financing agreement of $78,000 during the year ended June 30, 2016.  The interest rate is 3.98% and the maturity date of the agreement is June 15, 2019.  The equipment financing is secured by the related equipment.

Future minimum payments under long-term debt outstanding at June 30, 2016 are as follows:

For the years ending June 30,
2017	$	1,925
2018		1,926
2019		5,927
Total debt payments	$	9,778

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Note 6 - Income Taxes

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 6. INCOME TAXES

The Company is subject to taxation in the US, UK and various 

US state jurisdictions. The Company’s tax years for 1999 and forward are subject to examination by the US and state tax authorities due to losses incurred since inception. The Company is currently not under examination by any taxing authorities.

The

Company follows the provisions of ASC 740-10,

Income Taxes

, that defines a recognition threshold and measurement attributes for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. A SC 740-10 also provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likely of being sustained.

Due

to the recognition of a full valuation allowance against the Company's net operating losses (“NOLs”), future changes in the Company’s unrecognized tax benefits will not impact the Company’s tax provision.

The Company

’s practice is to recognize interest and/or penalties related to income matters in income tax expense. During the years ended June 30, 2016 and 2015, the Company did not recognize any interest or penalties.

The provision (benefit) for income taxes consists of the following for the years en

ded June 30, 2016 and 2015:

	US Federal		US State		UK Corporate			Total
2016
Current	$	-	$	31,000	$	(162,000	)	$	(131,000	)
Deferred		-		-		320,000			320,000
To tal	$	-	$	31,000	$	158,000		$	189,000
2015
Current	$	-	$	5,000	$	811,000		$	816,000
Deferred		-		-		6,000			6,000
Total	$	-	$	5,000	$	817,000		$	822,000

At June 30, 2016, the Company had net US deferred tax assets of approximately $5 million. Due to uncertainties surrounding the Company

’s ability to generate future US taxable income to realize these assets, a full valuation allowance has been established to offset carry-forwards of not only NOLs, but also its capital losses due to investments previously written off. Additionally, the future utilization of the Company’s federal and state NOLs to offset future taxable income have been determined to be subject to an annual limitation pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383 as a result of ownership changes that have previously occurred.

Through its Section 382 study, the Company has analyzed any NOLs from its acquired subsidiaries to

determine the maximum potential future tax benefit that might be available, and the corresponding limitation imposed based on IRC Section 382. As a result, by the year ended June 30, 2011, the Company adjusted the aforementioned net operating losses previously estimated. The outcome resulted in a determination that it could utilize, annually, approximately $0.6 million of previously incurred NOLs; presuming, however, there is taxable income in future periods affording utilization prior to expiration.

At June

30, 2016, the Company had combined federal and state NOLs of approximately $9.6 million and $5.2 million, respectively. The federal and state tax loss carry-forwards will begin to expire in 2019 and 2017, respectively, unless previously utilized.

Signif

icant components of the Company’s net deferred tax assets at June 30, 2016 and 2015 are shown below. A valuation allowance of $4.9 million and $5.0 million has been established to offset the net deferred tax assets as of June 30, 2016 and 2015, respectively, due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets. The change in the valuation allowance is primarily attributable to the change in deferred tax assets and NOLs, as capital loss carry-forwards have not changed year to year.

The tax effects of temporary differences and carry-forwards that give rise to significant portions of deferred tax assets (liabilities) consist of the following at June 30, 2016 and 2015:

	June 30,			June 30,
	2016			2015
Deferred tax assets:
State taxes	$	1,000		$	2,000
Net operating loss carry-forwards		2,759,000			2,768,000
Write-down of investments		1,745,000			1,736,000
Equity-based compensation		67,000			41,000
Reserves and accruals		274,000			284,000
Deferred rent		3,000			55,000
Domestic intangibles and other long-lived assets		101,000			133,000
Total deferred tax assets		4,950,000			5,019,000
Deferred tax liabilities:
Intangible and other long-lived		(546,000	)		(58,000	)
Valuation allowance		(4,939,000	)		(5,019,000	)
Net deferred tax liabilities	$	(535,000	)	$	(58,000	)

We recognize windfall tax benefits associated with the exercise of share-based compensation directly to stockholders' equity only when realized.  Accordingly, deferred tax assets are not recognized for the net operating loss carryforwards resulting from windfall tax benefits.  At June 30, 2016, deferred tax assets do not include $0.7 million of excess tax benefits from stock-based compensation.

The provision for income taxes for the years ended June 30, 2016 and 2015 differs from the amount computed by applying the US federal income tax rates to net income from continuing operations before taxes as

a result of the following:

	June 30,
	2016			2015
Taxes at federal statutory rates	$	1,272,000		$	1,301,000
State taxes, net of federal benefit		8,000			(12,000	)
Rate changes		(19,000	)		56,000
Permanent items and other		100,000			130,000
Research and development		(577,000	)		-
NOL expiration		-			4,000
Differential in UK corporate tax rate		(515,000	)		(519,000	)
Change in valuation allowance		(80,000	)		(138,000	)
Provision for income taxes	$	189,000		$	822,000

During the year ended June 30, 2016, the Company completed a formal research and development expense study in the UK and identified qualifying expenses related to the prior years which resulted in a reduction in the tax provision of $0.2 million, which is included in the rate reconciliation above.

A provision has not been made at June 30, 2016 and 2015, for US or additional foreign withholding taxes on undistributed earnings of its UK subsidiaries because it is the present intention of management

to reinvest the undistributed earnings indefinitely in foreign operations. Generally, such earnings become subject to US tax upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.

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Note 7 - Commitments and Contingencies

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 7. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company is subject to various legal claims and proceedings arising in the ordinary course of business. The ultimate disposition of such a proceeding if initiated could have material adverse effects on the consolidated financial position or results of operations of the Company. There are currently no pending material legal proceedings.

Indemnities and Guarantees

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its Credit Facility (see Note 5), the Company indemnified the lender for certain losses, claims, and other liabilities that are standard for this type of agreement. In connection with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. In connection with its customers

’ contracts the Company indemnifies the customer that the software provided does not violate any US patent. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

Operating Leases

The Company leases its facilities and certain equipment pursuant to month-to-month and non-cancelable operating lease agreements that expire on various dates through March 2028. Terms of the leases prov

ide for monthly payments ranging from $900 to $19,800.  The Company incurred rent expense totaling approximately $

0.4 million for both the years ended June 30, 2016 and 2015

. Future annual minimum payments under non-cancelable operating leases are as follows:

For the years ended June 30,
2017	$	568,000
2018		521,000
2019		437,000
2020		429,000
2021		421,000
Thereafter		1,770,000
Total operating lease obligations	$	4,146,000

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Note 8 - Stockholders' Equity

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8. STOCKHOLDERS

’ EQUITY

Common Stock

The Company issues shares of common stock to the non-management members of the Board of Directors under the Company

’s 2007 LTIP for quarterly compensation. The shares vest over a three-year period and are issued quarterly. The Company also gives the non-management members of the Board of Directors the option to receive shares of common stock in lieu of cash compensation.

During the years ended June 30, 2016 and 2015, the Company issued 57,126 and 61,207 shares of common stock, respectively, valued at $0.3 million and $0.2 million, respectively for the vesting of shares granted to the non-management members of the Board of Directors under the Company

’s 2007 LTIP and in lieu of cash compensation. There are no remaining shares available under the plan as of June 30, 2016.

Tender Offer

On December 1, 2015, the Company completed a cash tender offer (the “

Tender Offer”) and purchased 2.0 million shares of its common stock at a purchase price of $7.50 per share for a total purchase price of $15.0 million. The Company canceled and retired the shares purchased pursuant to the Tender Offer.  In connection with the Tender Offer, the Company incurred costs of $0.1 million directly related to the Tender Offer, which were recorded in additional paid-in capital.

Treasury Stock

During the years ended June 30, 2016 and 2015, the Company repurchased, under its stock repurchase program, 29,695 and 89,388 shares of common stock at a cost of $0.2 million and $0.5 million, respectively. As of June 30, 2016, the Company has repurchased a total of 1,982,235 shares at a cost of $4.7 million, pursuant to a stock repurchase program approved by the Company

’s Board of Directors. The stock repurchase program was cancelled on October 30, 2015 in connection with the Tender Offer. 

During the year ended June 30, 2015, the Company retired 137,362 shares, at a value of $0.8 million.

Stock-Based Compensation

Stock-based compensation expense for restricted stock and stock issuances of $0.4 million and $0.6 million was recorded in the years ended June 30, 2016 and 2015, respectively, and was recorded in general and administrative expenses in the statements of comprehensive income.  As of June 30, 2016, $0.3 million of total unrecognized stock-based compensation expense related to restricted stock is expected to be recognized over approximately 3.1 years.

A summary of the Company's common stock option activity is pr

esented below (shares in thousands):

	Options Outstanding
	Number of Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding - July 1, 2015		121	$	1.23
Options granted		-		-
Options exercised		-		-
Options cancelled		-		-
Options outstanding - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable and vested - June 30, 2016		121	$	1.23		5.0	$	596

During the year ended June 30, 2016, no stock

options were exercised.

The aggregate intrinsic value represents the total pre-tax amount of proceeds, net of the exercise price, which would have been received by the option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price of the Company's common stock on June 30, 2016.

A summary of the Company's restricted common stock activity is presented below (shares in thousands):

	Number of			Weighted Average
	Shares			Initial Value Price
	(in thousands)			Per Share
Restricted stock outstanding - July 1, 2015		866		$	0.48
Issuance of restricted stock		160			1.79
Vesting		(250	)		0.52
Forfeitures		-			-
Restricted stock outstanding - June 30, 2016		776		$	0.87

A summary of the vesting levels of the Company's restricted common stock is presented below:

			Weighted Average
	Number of		Initial Value Price
	Shares		Per Share
30 day VWAP per share vesting level (1):
$7.00 per share		84,676	$	0.39
$8.00 per share		481,327	$	0.43
$9.00 per share		82,178	$	1.25
$10.00 per share		48,000	$	1.79
$11.00 per share		48,000	$	1.79
$12.00 per share		32,000	$	1.79

(1) The outstanding restricted stock becomes vested when the Company ’s 30-day volume weighted average price (“VWAP”) per share is at or above these levels.

During the years ended June 30, 2016 and 2015, the Company withheld 60,612 and 134,386 shares of common stock at a cost of $0.3 million and $0.8 million, respectively,

 for the payment of taxes on shares that vested during the year.

Employee Stock Purchase Plan

On September 21, 2011, the Company approved the MAM Software Group, Inc. Employee Stock Purchase Plan (“

ESPP” or the “Plan”). On December 16, 2011, the stockholders approved the ESPP. Under the ESPP, the Company will grant eligible employees the right to purchase common stock through payroll deductions at a price equal to the lesser of 85% of the fair market value of a share of common stock on the exercise date of the current offering period or 85% of the fair market value of our common stock on the grant date of the offering period. No employee will be granted an option to purchase more than $2,400 of fair market value common stock in a calendar year. The Plan is intended to be an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code. The Plan covers a maximum of 100,000 shares of common stock which will be offered to employees until January 2, 2022 or until the Plan is terminated by the Board of Directors.

During the year ended

June 30, 2016, the Company issued 15,794 shares of common stock to employees including an executive officer, under the ESPP in lieu of compensation, which shares of common stock were valued at approximately $0.1 million based on the closing market price of the Company’s common stock on January 2, 2015 and December 31, 2015.

During the year ended June 30, 2015, the Company issued 15,957 shares of common stock to employees including an officer, under the ESPP in lieu of cash compensation, which were valued at approximately $0.1 million based on the closing mar

ket price of the Company’s common stock on July 1, 2014 and January 2, 2014.

Warrants

The following is a summary of warrant activity for the year ended June 30, 2015:

Balance as of July 1, 201 4	4,630
Warrants expired	(4,630	)
Warrants issued and outstanding at June 30, 2015	-

During the year ended June 30, 2015, 4,630 warrants with an exercise price of $0.80 expired.  There are no warrants outstanding as of June 30, 2016.

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Note 9 - Employee Benefit Plans

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 9. EMPLOYEE BENEFIT PLANS

The Company has a

retirement plan that complies with Section 401(k) of the Internal Revenue Code. All US employees are eligible to participate in the plan. The Company’s contribution to the 401(k) Plan is at the discretion of the Board of Directors. The Company matches 100% of elective deferrals subject to a maximum of 3% of the participant’s eligible earnings. The Company’s matching contributions to the 401(k) for the years ended June 30, 2016 and 2015 were $0.1 million and $0.1 million, respectively.

The Company has a

defined contribution retirement plan ("UK Plan") that all UK employees are eligible to participate in.  The Company’s contribution to the UK Plan is at the discretion of the Board of Directors. The Company matches 100% of elective deferrals subject to a maximum of 3% of the participant’s eligible earnings. The Company’s matching contributions to the UK Plan for the years ended June 30, 2016 and 2015 were $0.2 million and $0.2 million, respectively.

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Note 10 - Subsequent Events

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 10.

SUBSEQUENT EVENTS

The Company has performed an evaluation of events occurring subsequent to June 30, 2016, through the filing date of this Annual Report on Form 10-K.  Based on its evaluation, there are no events, except for the matter discussed below, that are required to be disclosed herein.

On September 26, 2016, the Company entered into an amendment to its Credit Facility ("Amendment" and as amended, the "Amended Credit Facility"), which amended that certain credit agreement, dated as of December 1, 2015, by and among the Company and JPMorgan Chase Bank, N.A. (the "Credit Agreement" and as amended, the "Amended Credit Agreement").  The Amendment changed certain loan covenants, including the financial ratios and liquidity requirements.  The borrowings under the Amended Credit Facility bear interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the Amended Credit Agreement, plus an applicable margin of 3.50% to 4.00%, based upon financial covenants.  The maturity date under the Amended Credit Agreement remains unchanged at December 1, 2018.

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Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

MAM Software Group, Inc. ("MAM" or the "Company") is a leading provider of integrated information management solutions and services and a leading provider of cloud-based software solutions for the automotive aftermarket sector. The Company conducts its businesses through wholly owned subsidiaries with operations in Europe and North America. MAM Software Ltd. (“MAM Ltd.”) is based in Tankersley, Barnsley, United Kingdom (“UK”), Origin Software Solutions, Ltd. (“Origin”) is based in the UK (MAM Ltd. and Origin are collectively referred to as “MAM UK”), and MAM Software, Inc. (“MAM NA”) is based in the United States of America ("US") in Blue Bell, Pennsylvania.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant i

ntercompany accounts and transactions have been eliminated in the consolidated financial statements.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, option

s contracts or other foreign hedging arrangements.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

In the US, the Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000.

  At times deposits held with financial institutions in the US may exceed the $250,000 limit.

In the UK, the Company maintains cash balances at financial institutions that are insured by the Financial Services Compensation Scheme up to 85,000GBP.

  At times deposits held with financial institutions in the UK may exceed the 85,000GBP limit.

The Company maintains its cash accounts at financial institutions which it believes to be credit worthy. The Company considers all highly liquid debt instruments purchased with original maturities

of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Major Customers, Policy [Policy Text Block]

Customers

The Company performs periodic evaluations of its customers and maintains allowances for potential credit losses as deemed necessary. The Company generally does not require collateral to secure its accounts receivable. Credit risk is managed by discontinuing sales to customers who are delinquent. The Company estimates credit losses and returns based on management

’s evaluation of historical experience and current industry trends. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.

No customers accounted for more than 10% of the Company’s revenues for each of the years ended June 30, 2016 and 2015. No customers accounted for more than 10% of the Company’s accounts receivable at June 30, 2016 and 2015.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting

The Company o

perates in one reportable segment.  Though the Company has two operational segments (MAM UK and MAM NA)

, the Company evaluated in accordance with ASC 280-10-50, 

Segment Reporting,

and determined that the segments have the same economic characteristics, are similar in the following areas and can therefore be aggregated into one reportable segment:

1.	The products and services are software and professional services
2.	The products are produced through professional services
3.	The customers for these products are primarily for the automotive aftermarket
4.	The method to distribute these products are via software that the customer can host locally or the Company will host
5.	They both operate in a non-regulatory environment

Geographic Concentrations [Policy Text Block]

Geographic Concentrations

The Company conducts business in the US, Canada, the UK and Ireland (UK and Ireland are collectively referred to as the “UK Market”). For customers headquartered in their respective countries, the Company derived approximately 70% of its revenues from the UK, 28% from the US, 1% from Ireland, and 1% from Canada during the year ended June 30, 2016, compared to 74% of its revenues from the UK, 25% from the US and 1% from Canada during the year ended June 30, 2015.

At June 30, 2016, the Company maintained 79% of its net property and equipment in the UK and th

e remaining 21% in the US.  At June 30, 2015, the Company maintained 83% of its net property and equipment in the UK and the remaining 17% in the US. 

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with accountin

g principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to, the collectability of accounts receivable, the realizability of inventories, the determination of the fair value of acquired intangible assets, the recoverability of goodwill and other long-lived assets, valuation of deferred tax assets and liabilities and the estimated fair value of stock options, warrants and shares issued for non-cash consideration. Actual results could materially differ from those estimates. 

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

The Company

’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities, and long-term debt. Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories:

•

Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.

•

Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability.

Determining which category an asset or liability

falls within the hierarchy may require significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company believes that the carrying values of all financial instruments, except long-term debt, approximate their values due to their nature and respective durations.  The carrying value of long-term debt approximates fair value based on borrowing rates currently available to the Company.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for

doubtful accounts is based on specific identification of customer accounts and its best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. The Company evaluates the collectability of its receivables at least quarterly. The allowance for doubtful accounts is subject to estimates based on the historical actual costs of bad debt experienced, total accounts receivable amounts, age of accounts receivable and any knowledge of the customers’ ability or inability to pay outstanding balances. If the financial condition of the Company's customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost or current estimated market value. Cost is determined using the first-in, first-out method. Inventories consist primarily of hardware that will be sold to customers. The Company peri

odically reviews its inventories and records a provision for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand. Once established, write-downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful lives of the related assets, rangi

ng from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Equipment under capital lease obligations is depreciated over the shorter of the estimated useful lives of the related assets or the term of the lease. Maintenance and routine repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of comprehensive income.

Research, Development, and Computer Software, Policy [Policy Text Block]

Software Development Costs

Costs incurred to

develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is capitalized and recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of:  the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product; and, the straight-line method over the remaining estimated economic life (a period of three to ten years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the consolidated statements of comprehensive income.  If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Amortizable Intangible Assets

Amortizable intangible assets consist of completed software technology, custome

r contracts/relationships, automotive data services and acquired intellectual property and are recorded at cost. Completed software technology and customer contracts/relationships are amortized using the straight-line method over their estimated useful lives of 9 to 10 years, automotive data services are amortized using the straight-line method over their estimated useful lives of 20 years and acquired intellectual property is amortized over the estimated useful life of 10 years.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

Goodwill is not amortized, but rather is tested at least annually for impairment.

Goodwill is subject to impairment r

eviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by the Company. As of June 30, 2016, the Company does not believe there is an impairment of its goodwill. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of goodwill in the future.

Goodwill activity for the years ended June 30

, 2016 and 2015 was as follows:

Balance, July 1, 2014	$	9,767,000
Effect of exchange rate changes		(565,000	)
Balance, June 30, 2015	$	9,202,000
Acquisition of Origin (see Note 2)		202,000
Effect of exchange rate changes		(1,041,000	)
Balance, June 30, 2016	$	8,363,000

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets

The Company

’s management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows over their remaining useful lives. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management. At June 30, 2016, management believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of long-lived assets in the future.

Debt, Policy [Policy Text Block]

Debt Issuance Costs

Debt issuance costs represent costs incurred in connection with the issuance of long-term debt.  Debt issuance costs are amortized over the term of the financing instrument using the effective interest method.  Debt issuance costs are included in other long-term assets.

Issuance of Equity Instruments to Non-employees [Policy Text Block]

Issuance of Equity Instruments to Non-Employees

All issuances of the Company

’s equity instruments to non-employees are measured at fair value based upon either the fair value of the equity instruments issued or the fair value of consideration received, whichever is more readily determinable. The majority of stock issuances for non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair value of the equity instruments on the dates issued.

The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or

vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.  Assets acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments are not presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes.  

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based

Compensation

The Company accounts for stock-based compensation under the provisions of ASC No. 718,

Compensation - Stock Compensation

(“ASC 718”). ASC 718 requires the recognition of the fair value of the stock-based compensation in net income. Compensation expense associated with market-based restricted stock is determined using a Monte-Carlo valuation model, and compensation expense associated with time-based restricted stock is determined based on the number of shares granted and the fair value on the date of grant.

For valuing stock options awards, the Company has elected to use the Black-Scholes model

. For the expected term, the Company uses a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate during the expected term of the option. For volatility the Company considers its own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; the Company currently has no plans to pay dividends. 

The fair value of stock-based awards is amortized over the vesting period of the award or expected vesting date of the market-based restricted shares and the Company elected to use the straight-line method for awards granted.

Revenue Recognition, Policy [Policy Text Block]

Revenue R

ecognition

Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met,

revenue recognition is deferred until such time as all of the criteria are met.

The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific o

bjective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete.

In those instances, in which arrangements include significant customization, contractual milestones, acceptance

criteria or other contingencies (which represents the majority of the Company’s arrangements), the Company accounts for the arrangements using contract accounting, as follows:

1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized.

2) When customer acceptance cannot be estimated based on historical evi dence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained.

The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the acc

ompanying consolidated balance sheets. Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement.

The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities.

Advertising Costs, Policy [Policy Text Block]

Advertising Expense

The Company expenses advertising

costs as incurred. For the years ended June 30, 2016 and 2015, advertising expense totaled $0.4 million and $0.4 million, respectively.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency

Management has determined that the functional currency of its subsidiaries is the local

currency. Assets and liabilities of the UK subsidiaries are translated into US dollars at the year-end exchange rates. Income and expenses are translated at an average exchange rate for the year and the resulting translation gain (loss) adjustments are accumulated as a separate component of stockholders’ equity. The translation (loss) gain adjustment totaled $(1.7) million and $(1.2) million for the years ended June 30, 2016 and 2015, respectively.

Foreign currency gains and losses from transactions denomin

ated in other than respective local currencies are included in income. The Company had no foreign currency transaction gain (loss) for all periods presented.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

Comprehensive income includes all changes in equity (net assets) during a

period from non-owner sources. For the years ended June 30, 2016 and 2015, the components of comprehensive income consist of foreign currency translation gain (loss).

Income Tax, Policy [Policy Text Block]

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax c

onsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s consolidated balance sheets at June 30, 2016 and 2015, and has not recognized interest and/or penalties in the consolidated statements of comprehensive income for the years ended June 30, 2016 and 2015.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings Per Share

Basic earnings per share (“BEPS”) is computed by dividing the net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share (“DEPS”) is computed giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon the exercise of stock options and warrants using the “treasury stock” method. The computation of DEPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. For the year ended June 30, 2016 there were 175,863 common share equivalents included in the computation of the DEPS. For the year ended June 30, 2016, 691,505 shares of common stock vest based on the market price of the Company

’s common stock and were excluded from the computation of DEPS because the shares have not vested, but no stock options were excluded from the computation of DEPS. For the year ended June 30, 2015, there were 94,305 common share equivalents included in the computation of the DEPS.

The following is a reconciliation of the numerat

ors and denominators of the basic and diluted earnings per share computation for the years ended June 30:

	2016		2015
Numerator:
Net income	$	3,552,000	$	3,005,000
Denominator:
Basic weighted-average shares outstanding		12,314,071		13,403,877
Effect of dilutive securities		175,863		94,305
Diluted weighted-average diluted shares		12,489,934		13,498,182
Basic earnings per common share	$	0.29	$	0.22
Diluted earnings per common share	$	0.28	$	0.22

Reclassification, Policy [Policy Text Block]

Reclassification

Certain expenses were reclassified from depreciation and amortization to cost of revenues in the accompanying consolidated statement of comprehensive income for the year ended June 30, 2015

in order to conform to the current period presentation.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In March

 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09,

Improvements to Employee Share-Based Payment Accounting.

  The update provides guidance on simplifying various aspects of the accounting for shared-based compensation. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2017.  The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02,

Leases

. The update requires lessees to present right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. The guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements and is effective for years beginning after December 15, 2019. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17,

Balance Sheet Classification of Deferred Taxes

.  Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position.  To simplify the presentation of deferred income taxes, the amendments in this update required that deferred tax liabilities be classified as noncurrent in a classified statement of financial position.  The current requirement is that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update.  ASU 2015-17 will be effective for the Company beginning for its first quarter of fiscal 2018.  The Company does not expect the adoption of ASU 2015-17 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements. 

In April

 2015, the FASB issued ASU 2015-03,

Simplifying the Presentation of Debt Issuance Costs.

  The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015.  The Company does not expect the adoption of ASU 2015-03 to have a significant impact on the disclosure or balance sheet presentation in its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09

, Revenue from Contracts with Customers

(Topic 606), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15,

Presentation of Financial Statements-Going Concern

. Currently, there is no guidance in accounting principles generally accepted in the US about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in US auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. The Company is currently assessing the impact the adoption of ASU 2014-15 will have on its consolidated financial statements.

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Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

Balance, July 1, 2014	$	9,767,000
Effect of exchange rate changes		(565,000	)
Balance, June 30, 2015	$	9,202,000
Acquisition of Origin (see Note 2)		202,000
Effect of exchange rate changes		(1,041,000	)
Balance, June 30, 2016	$	8,363,000

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	2016		2015
Numerator:
Net income	$	3,552,000	$	3,005,000
Denominator:
Basic weighted-average shares outstanding		12,314,071		13,403,877
Effect of dilutive securities		175,863		94,305
Diluted weighted-average diluted shares		12,489,934		13,498,182
Basic earnings per common share	$	0.29	$	0.22
Diluted earnings per common share	$	0.28	$	0.22

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Note 3 - Property and Equipment (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 30,			June 30,
	2016			2015
Leasehold improvements	$	396,000		$	884,000
Computer and office equipment		869,000			880,000
Equipment under capital leases		10,000			10,000
Furniture and equipment		477,000			432,000
Total property, plant and equipment		1,752,000			2,206,000
Less: accumulated depreciation and amortization		(1,171,000	)		(1,474,000	)
Total property, plant and equipment, net	$	581,000		$	732,000

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Note 4 - Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	1,093,000	$	(1,093,000	)	$	-
Customer contracts / relationships		10			543,000		(543,000	)		-
Automotive data services		20			262,000		(262,000	)		-
Acquired intellectual property		10			822,000		(83,000	)		739,000
Software development costs	3	to	10		7,887,000		(2,653,000	)		5,234,000
Total				$	10,607,000	$	(4,634,000	)	$	5,973,000

	Average Estimated Useful Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Completed software technology	9	to	10	$	3,043,000	$	(3,043,000	)	$	-
Customer contracts / relationships		10			3,737,000		(3,737,000	)		-
Automotive data services		20			308,000		(308,000	)		-
Software development costs	3	to	10		5,730,000		(2,720,000	)		3,010,000
Total				$	12,818,000	$	(9,808,000	)	$	3,010,000

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Years Ending June 30,
2017	$	500,000
2018		694,000
2019		651,000
2020		581,000
2021		556,000

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Note 5 - Long-term Debt (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Debt [Table Text Block]

	As of
($ in thousands)	June 30, 2016			June 30, 2015
Debt obligations:
Revolving loan facility	$	1,150		$	-
Term loan		8,550			-
Equipment financing		78			-
Total		9,778			-
Less current portion		(1,925	)		-
Long-term debt	$	7,853		$	-

Schedule of Maturities of Long-term Debt [Table Text Block]

For the years ending June 30,
2017	$	1,925
2018		1,926
2019		5,927
Total debt payments	$	9,778

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Note 6 - Income Taxes (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	US Federal		US State		UK Corporate			Total
2016
Current	$	-	$	31,000	$	(162,000	)	$	(131,000	)
Deferred		-		-		320,000			320,000
To tal	$	-	$	31,000	$	158,000		$	189,000
2015
Current	$	-	$	5,000	$	811,000		$	816,000
Deferred		-		-		6,000			6,000
Total	$	-	$	5,000	$	817,000		$	822,000

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	June 30,			June 30,
	2016			2015
Deferred tax assets:
State taxes	$	1,000		$	2,000
Net operating loss carry-forwards		2,759,000			2,768,000
Write-down of investments		1,745,000			1,736,000
Equity-based compensation		67,000			41,000
Reserves and accruals		274,000			284,000
Deferred rent		3,000			55,000
Domestic intangibles and other long-lived assets		101,000			133,000
Total deferred tax assets		4,950,000			5,019,000
Deferred tax liabilities:
Intangible and other long-lived		(546,000	)		(58,000	)
Valuation allowance		(4,939,000	)		(5,019,000	)
Net deferred tax liabilities	$	(535,000	)	$	(58,000	)

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	June 30,
	2016			2015
Taxes at federal statutory rates	$	1,272,000		$	1,301,000
State taxes, net of federal benefit		8,000			(12,000	)
Rate changes		(19,000	)		56,000
Permanent items and other		100,000			130,000
Research and development		(577,000	)		-
NOL expiration		-			4,000
Differential in UK corporate tax rate		(515,000	)		(519,000	)
Change in valuation allowance		(80,000	)		(138,000	)
Provision for income taxes	$	189,000		$	822,000

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Note 7 - Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

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

For the years ended June 30,
2017	$	568,000
2018		521,000
2019		437,000
2020		429,000
2021		421,000
Thereafter		1,770,000
Total operating lease obligations	$	4,146,000

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Note 8 - Stockholders' Equity (Tables)

12 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Options Outstanding
	Number of Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Options outstanding - July 1, 2015		121	$	1.23
Options granted		-		-
Options exercised		-		-
Options cancelled		-		-
Options outstanding - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable - June 30, 2016		121	$	1.23		5.0	$	596
Options exercisable and vested - June 30, 2016		121	$	1.23		5.0	$	596

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	Number of			Weighted Average
	Shares			Initial Value Price
	(in thousands)			Per Share
Restricted stock outstanding - July 1, 2015		866		$	0.48
Issuance of restricted stock		160			1.79
Vesting		(250	)		0.52
Forfeitures		-			-
Restricted stock outstanding - June 30, 2016		776		$	0.87

Schedule of Vesting Level of Restricted Stock [Table Text Block]

			Weighted Average
	Number of		Initial Value Price
	Shares		Per Share
30 day VWAP per share vesting level (1):
$7.00 per share		84,676	$	0.39
$8.00 per share		481,327	$	0.43
$9.00 per share		82,178	$	1.25
$10.00 per share		48,000	$	1.79
$11.00 per share		48,000	$	1.79
$12.00 per share		32,000	$	1.79

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

Balance as of July 1, 201 4	4,630
Warrants expired	(4,630	)
Warrants issued and outstanding at June 30, 2015	-

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Note 1 - Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Jun. 30, 2016 USD ($) shares	Jun. 30, 2015 USD ($) shares	Jun. 30, 2016 GBP (£)
Computer Software, Intangible Asset [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	9 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Completed Software Technology [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	9 years	9 years
Completed Software Technology [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Automotive Data Services [Member]
Finite-Lived Intangible Asset, Useful Life	20 years	20 years
Acquired Intellectual Property [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life	5 years
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Number of Major Customers	0	0
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers	0	0
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | UNITED STATES
Concentration Risk, Percentage	28.00%	25.00%
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | UNITED KINGDOM
Concentration Risk, Percentage	70.00%	74.00%
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | IRELAND
Concentration Risk, Percentage	1.00%
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | CANADA
Concentration Risk, Percentage	1.00%	1.00%
UNITED STATES | Insured by the Federal Desposit Insurance Corporation [Member]
Foreign Financial Institutions, Actual Deposits	$ 250,000
Foreign Financial Institutions, Mandated Deposits	$ 250,000
UNITED STATES
Percentage of Property, Plant and Equipment, Net	21.00%	17.00%	21.00%
UNITED KINGDOM | Insured by the Financial Services Corporation Scheme [Member]
Foreign Financial Institutions, Actual Deposits | £			£ 85,000
Foreign Financial Institutions, Mandated Deposits | £			£ 85,000
UNITED KINGDOM
Percentage of Property, Plant and Equipment, Net	79.00%	83.00%	79.00%
Number of Reportable Segments	1
Impairment of Long-Lived Assets Held-for-use		$ 0
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax	$ 0	0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	0	0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ 0	0
Number of Operating Segments	2
Advertising Expense	$ 400,000	400,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	$ (1,744,000)	$ (1,176,000)
Weighted Average Number Diluted Shares Outstanding Adjustment | shares	175,863	94,305
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares	691,505

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Note 1 - Goodwill Activity (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Goodwill, beginning balance	$ 9,202,000	$ 9,767,000
Effect of exchange rate changes	(1,041,000)	(565,000)
Goodwill, ending balance	8,363,000	$ 9,202,000
Acquisition of Origin (see Note 2)	$ 202,000

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Note 1 - Basic and Diluted Earnings Per Share (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net income	$ 3,552,000	$ 3,005,000
Denominator:
Basic weighted-average shares outstanding (in shares)	12,314,071	13,403,877
Weighted Average Number Diluted Shares Outstanding Adjustment	175,863	94,305
Diluted weighted-average diluted shares (in shares)	12,489,934	13,498,182
Basic earnings per common share (in dollars per share)	$ 0.29	$ 0.22
Diluted earnings per common share (in dollars per share)	$ 0.28	$ 0.22

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Note 2 - Business Acquisition (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2014
Origin Software Solutions Ltd [Member] | Other Noncurrent Liabilities [Member]
Business Combination, Contingent Consideration, Liability, Noncurrent	$ 270,000
Origin Software Solutions Ltd [Member] | General and Administrative Expense [Member]
Business Combination, Acquisition Related Costs	$ 53,000
Origin Software Solutions Ltd [Member]
Equity Method Investment, Ownership Percentage	100.00%
Payments to Acquire Businesses, Gross	$ 503,000
Business Combination, Contingent Consideration, Liability	416,000
Business Acquisition, Contingent Consideration, Equity Interest Issuable Value	283,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	177,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 1,000,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent	$ 202,000
Goodwill	202,000
Goodwill	$ 8,363,000	$ 9,202,000	$ 9,767,000

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Note 3 - Property and Equipment (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Depreciation	$ 0.3	$ 0.2

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Note 3 - Property and Equipment (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Leasehold Improvements [Member]
Property, plant and equipment, gross	$ 396,000	$ 884,000
Computer and Office Equipment [Member]
Property, plant and equipment, gross	869,000	880,000
Assets Held under Capital Leases [Member]
Property, plant and equipment, gross	10,000	10,000
Furniture and Fixtures [Member]
Property, plant and equipment, gross	477,000	432,000
Property, plant and equipment, gross	1,752,000	2,206,000
Less: accumulated depreciation and amortization	(1,171,000)	(1,474,000)
Total property, plant and equipment, net	$ 581,000	$ 732,000

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Note 4 - Intangible Assets (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Amortization	$ 0.4	$ 0.4

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Note 4 - Intangible Assets (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Completed Software Technology [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	9 years	9 years
Completed Software Technology [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Completed Software Technology [Member]
Finite-lived intangible asset, gross	$ 1,093,000	$ 3,043,000
Finite-lived intangible asset, accumulated amortization	$ (1,093,000)	$ (3,043,000)
Customer Relationships [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	9 years
Customer Relationships [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Finite-lived intangible asset, gross	$ 543,000	$ 3,737,000
Finite-lived intangible asset, accumulated amortization	$ (543,000)	$ (3,737,000)
Automotive Data Services [Member]
Finite-Lived Intangible Asset, Useful Life	20 years	20 years
Finite-lived intangible asset, gross	$ 262,000	$ 308,000
Finite-lived intangible asset, accumulated amortization	$ (262,000)	$ (308,000)
Computer Software, Intangible Asset [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years	10 years
Computer Software, Intangible Asset [Member]
Finite-lived intangible asset, gross	$ 7,887,000	$ 5,730,000
Finite-lived intangible asset, accumulated amortization	(2,653,000)	(2,720,000)
Total amortizable intangible assets, net	$ 5,234,000	3,010,000
Acquired Intellectual Property [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Finite-lived intangible asset, gross	$ 822,000
Finite-lived intangible asset, accumulated amortization	(83,000)
Total amortizable intangible assets, net	739,000
Finite-lived intangible asset, gross	10,607,000	12,818,000
Finite-lived intangible asset, accumulated amortization	(4,634,000)	(9,808,000)
Total amortizable intangible assets, net	$ 5,973,000	$ 3,010,000

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Note 4 - Estimated Future Amortization of Software Development Costs and Intangibles (Details) - Software Development Costs and Intangible Assets [Member]	Jun. 30, 2016 USD ($)
2017	$ 500,000
2018	694,000
2019	651,000
2020	581,000
2021	$ 556,000

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Note 5 - Long-term Debt (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
J.P. Morgan Chase Bank, N.A. [Member] | Maximum [Member] | LIBOR Rate or Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	3.50%
J.P. Morgan Chase Bank, N.A. [Member] | Minimum [Member] | LIBOR Rate or Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	3.00%
J.P. Morgan Chase Bank, N.A. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,500,000
J.P. Morgan Chase Bank, N.A. [Member]
Debt Agreement, Maximum Borrowing Capacity	12,000,000
Long-term Debt	$ 9,500,000
Debt Instrument, Interest Rate, Effective Percentage	4.00%
Debt Instrument, Periodic Payment	$ 158,000
Percentage of Pledged Stock	65.00%
Proceeds from Lines of Credit	$ 10,500,000
Capital Lease Obligations [Member]
Long-term Debt	$ 78,000
Debt Instrument, Interest Rate, Stated Percentage	3.98%
Long-term Debt	$ 9,778,000

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Note 5 - Long-term Debt (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Line of Credit [Member]
Long-term Debt	$ 1,150,000
Term Loan [Member]
Long-term Debt	8,550,000
Capital Lease Obligations [Member]
Long-term Debt	78,000
Long-term Debt	9,778,000
Less current portion	(1,925,000)
Long-term debt	$ 7,853,000

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Note 5 - Schedule of Future Minimum Payments for Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Jun. 30, 2015
For the years ending June 30,
2017	$ 1,925
2018	1,926
2019	5,927
Total debt payments	$ 9,778

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Note 6 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Domestic Tax Authority [Member]
Deferred Tax Assets, Net of Valuation Allowance	$ 5,000,000
Operating Loss Carryforwards	9,600,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards	5,200,000
Her Majesty's Revenue and Customs (HMRC) [Member]
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount	200,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	0	$ 0
Deferred Tax Liabilities, Undistributed Foreign Earnings	0	0
Annual Utilization of Previously Incurred Net Operating Loss	600,000
Deferred Tax Assets, Valuation Allowance	4,939,000	5,019,000
Excess Tax Benefits from Share-based Compensation	700,000
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount	$ 577,000

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Note 6 - Provision (Benefit) for Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Current U.S. federal tax expense (benefit)
Current U.S. state tax expense (benefit)	31,000	5,000
Current U.K. corporate tax expense (benefit)	(162,000)	811,000
Current tax expense (benefit)	(131,000)	816,000
Deferred U.S. federal tax expense (benefit)
Deferred U.S. state tax expense (benefit)
Deferred U.K. corporate tax expense (benefit)	320,000	6,000
Deferred tax expense (benefit)	359,000	6,000
Total U.S. federal tax expense (benefit)
Total U.S. state tax expense (benefit)	31,000	5,000
Total U.K. corporate tax expense (benefit)	158,000	817,000
Total tax expense (benefit)	$ 189,000	$ 822,000

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Note 6 - Deferred Tax Assets (Liabilities) (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Deferred tax assets:
State taxes	$ 1,000	$ 2,000
Net operating loss carry-forwards	2,759,000	2,768,000
Write-down of investments	1,745,000	1,736,000
Equity-based compensation	67,000	41,000
Reserves and accruals	274,000	284,000
Deferred rent	3,000	55,000
Domestic intangibles and other long-lived assets	101,000	133,000
Total deferred tax assets	4,950,000	5,019,000
Deferred tax liabilities:
Intangible and other long-lived	(546,000)	(58,000)
Valuation allowance	(4,939,000)	(5,019,000)
Net deferred tax liabilities	$ (535,000)	$ (58,000)

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Note 6 - Income before Income Tax, Domestic and Foreign (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Taxes at federal statutory rates	$ 1,272,000	$ 1,301,000
State taxes, net of federal benefit	8,000	(12,000)
Rate changes	(19,000)	56,000
Permanent items and other	100,000	130,000
Research and development	(577,000)
NOL expiration		4,000
Differential in UK corporate tax rate	(515,000)	(519,000)
Change in valuation allowance	(80,000)	(138,000)
Total tax expense (benefit)	$ 189,000	$ 822,000

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Note 7 - Commitments and Contingencies (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Minimum [Member]
Operating Leases, Monthly Rent Payments	$ 900
Maximum [Member]
Operating Leases, Monthly Rent Payments	19,800
Operating Leases, Rent Expense, Net	$ 400,000	$ 400,000

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Note 7 - Future Annual Minimum Payments under Non-cancelable Operating Leases (Details)	Jun. 30, 2016 USD ($)
2017	$ 568,000
2018	521,000
2019	437,000
2020	429,000
2021	421,000
Thereafter	1,770,000
Total operating lease obligations	$ 4,146,000

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Note 8 - Stockholders' Equity (Details Textual) - USD ($)			12 Months Ended
	Dec. 01, 2015	Sep. 21, 2011	Jun. 30, 2016	Jun. 30, 2015
LITP 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Employee Stock Purchase Plan [Member]
Maximum Fair Market Value of Common Stock to be Granted to Employees		$ 2,400
Maximum Number of Common Stock Covered		100,000
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures			15,794	15,957
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures			$ 100,000	$ 100,000
Common Stock [Member] | Issue One [Member]
Stock Issued During Period, Shares, New Issues			57,126	61,207
Stock Issued During Period, Value, New Issues			$ 300,000	$ 200,000
Common Stock [Member]
Treasury Stock, Shares, Retired				(137,362)
Shares Paid for Tax Withholding for Share Based Compensation			60,612
Treasury Stock [Member]
Stock Repurchased During Period, Shares			29,695	89,388
Stock Repurchased During Period, Value			$ 200,000	$ 500,000
Treasury Stock, Shares, Retired				137,362
Treasury Stock, Retired, Cost Method, Amount				$ 802,000
Shares Paid for Tax Withholding for Share Based Compensation			60,612	134,386
Adjustments Related to Tax Withholding for Share-based Compensation			$ 300,000	$ 800,000
Employee Stock Option [Member] | Restricted Stock [Member]
Allocated Share-based Compensation Expense			400,000	600,000
Tender Offer [Member]
Purchases of Common Stock During Period	2,000,000
Purchases of Common Stock Price Per Share	$ 7.50
Purchases of Common Stock During Period, Value	$ 15,000,000
Payment of Fees for Repurchase of Common Stock	$ 100,000
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 300,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			3 years 36 days
Payment of Fees for Repurchase of Common Stock			$ 118,000
Stock Repurchased During Period, Shares			1,982,235
Stock Repurchased During Period, Value			$ 4,700,000
Treasury Stock, Shares, Retired				137,362
Treasury Stock, Retired, Cost Method, Amount				$ 800,000
Adjustments Related to Tax Withholding for Share-based Compensation			$ 341,000
Class of Warrant or Right, Cancelled During Period				4,630
Class of Warrant or Right, Cancelled During Period, Exercise Price				$ 0.80

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Note 8 - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Number of options outstanding (in shares) | shares	121,000
Options outstanding, weighted-average exercise price (in dollars per share) | $ / shares	$ 1.23
Number of options granted (in shares) | shares	0
Options granted, weighted-average exercise price (in dollars per share) | $ / shares
Number of options exercised (in shares) | shares	0
Options exercised, weighted-average exercise price (in dollars per share) | $ / shares
Number of options cancelled (in shares) | shares	0
Options cancelled, weighted-average exercise price (in dollars per share) | $ / shares
Number of options outstanding (in shares) | shares	121,000
Options outstanding, weighted-average exercise price (in dollars per share) | $ / shares	$ 1.23
Options outstanding, weighted-average remaining contractual life	5 years
Options outstanding, aggregate intrinsic value | $	$ 596
Number of options exercisable (in shares) | shares	121,000
Options exercisable, weighted-average exercise price (in dollars per share) | $ / shares	$ 1.23
Options exercisable, weighted-average remaining contractual life	5 years
Options exercisable, aggregate intrinsic value | $	$ 596
Number of options exercisable and vested (in shares) | shares	121,000
Options exercisable and vested, weighted-average exercise price (in dollars per share) | $ / shares	$ 1.23
Options exercisable and vested, weighted-average remaining contractual life	5 years
Options exercisable and vested, aggregate intrinsic value | $	$ 596

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Note 8 - Restricted Stock Activity (Details) - Restricted Stock [Member] shares in Thousands	12 Months Ended
	Jun. 30, 2016 $ / shares shares
Number of shares, restricted stock outstanding, beginning balance (in shares) | shares	866
Weighted average initial value price per share, beginning balance (in dollars per share) | $ / shares	$ 0.48
Number of shares, issuance of restricted stock (in shares) | shares	160
Weighted average initial value price per share, issuance of restricted stock (in dollars per share) | $ / shares	$ 1.79
Number of shares, vesting (in shares) | shares	(250)
Weighted average initial value price per share, vesting (in dollars per share) | $ / shares	$ 0.52
Number of shares, forfeitures (in shares) | shares
Weighted average initial value price per share, forfeitures (in dollars per share) | $ / shares
Number of shares, restricted stock outstanding, ending balance (in shares) | shares	776
Weighted average initial value price per share, ending balance (in dollars per share) | $ / shares	$ 0.87

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Note 8 - Vesting Levels of Restricted Stock (Details) - Restricted Stock [Member] - $ / shares		Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Award, Tranche One [Member]
Number of Shares (in shares)	[1]	84,676
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 0.39
Share-based Compensation Award, Tranche Two [Member]
Number of Shares (in shares)	[1]	481,327
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 0.43
Share-based Compensation Award, Tranche Three [Member]
Number of Shares (in shares)	[1]	82,178
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 1.25
Share-based Compensation Award, Tranche Four [Member]
Number of Shares (in shares)	[1]	48,000
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 1.79
Share-based Compensation Award, Tranche Five [Member]
Number of Shares (in shares)	[1]	48,000
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 1.79
Share-based Compensation Award, Tranche Six [Member]
Number of Shares (in shares)	[1]	32,000
Weighted Average Initial Value Price Per Share (in dollars per share)	[1]	$ 1.79
Number of Shares (in shares)		776,000	866,000
Weighted Average Initial Value Price Per Share (in dollars per share)		$ 0.87	$ 0.48

[1] The restricted stock becomes vested when the Company's 30-day volume weighted average price ("VWAP") per share is at or above these levels.

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Note 8 - Warrant Activity (Details)	12 Months Ended
	Jun. 30, 2015 shares
Warrants issued and outstanding at June 30, 2014 (in shares)	4,630
Warrants expired (in shares)	(4,630)
Warrants issued and outstanding at June 30, 2015 (in shares)	0

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Note 9 - Employee Benefit Plans (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
U.S. 401(K) Plan [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	3.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 0.1	$ 0.1
UK Plan [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	3.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 0.2	$ 0.2

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Note 10 - Subsequent Events (Details Textual) - J.P. Morgan Chase Bank, N.A. [Member] - Either LIBO Rate or Prime Rate [Member] - Subsequent Event [Member]	Sep. 26, 2016
Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	3.50%
Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	4.00%