DRS

SUBMITTED CONFIDENTIALLY TO THE DIVISION OF CORPORATION FINANCE ON NOVEMBER 12, 2015

As filed with the U.S. Securities and Exchange Commission on _____, 2015

Registration No. 333-         

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

Confidential Draft Submission No. 1

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

AEGIS IDENTITY SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware	7372	45-2943801
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

(303) 222-1060

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

______________

Robert Lamvik

President and Chief Executive Officer

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

(303) 222-1060

(Name, address, including zip code, and telephone number, including area code, of agent for service)

______________

Copies of all communications to:

Spencer G. Feldman, Esq. Olshan Frome Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 Telephone: (212) 451-2300 Fax: (212) 451-2222 Email: sfeldman@olshanlaw.com Jack I. Kantrowitz, Esq. DLA Piper LLP (US) 1251 Avenue of the Americas New York, New York 10020 Telephone: (212) 335-4500 Fax: (212) 335-4501  

______________

Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities To Be Registered	Amount To Be Registered (1)		Proposed Maximum Offering Price Per Unit (1)		Proposed Maximum Aggregate Offering Price (1)		Amount of Registration Fee (1)
Common Stock, par value $0.001 per share		2,000,000	$	5.00	$	10,000,000	$	1,007

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.  This registration statement shall also cover, pursuant to Rule 416 under the Securities Act, any additional shares of common stock that shall become issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

____________________

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall hereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. 

Subject to Completion, dated _____, 2015

PRELIMINARY PROSPECTUS

2,000,000 Shares

Common Stock

This is an initial public offering of 2,000,000 shares of common stock of Aegis Identity Software, Inc.  Prior to this offering, there has been no public market for our common stock.

We expect that the initial public offering price will be $5.00 per share.

We have reserved the symbol “AIDM” for purposes of listing our common stock on the Nasdaq Capital Market and have applied to list our common stock on that exchange.  If the application is approved, trading of our common stock on the Nasdaq Capital Market is expected to begin within five days after the date of initial issuance of the common stock.  We will not close this offering without a listing approval letter from the Nasdaq Capital Market.

Investing in our common stock may be considered speculative and involves a high degree of risk, including the risk of losing your entire investment.  See “Risk Factors” beginning on page 9 to read about the risks you should consider before buying shares of our common stock.

We are an “emerging growth company” under applicable law and will be subject to reduced public company reporting requirements.  Please read the disclosures on page 4 of this prospectus for more information.

	Public Offering Price	Underwriting Commissions(1)	Proceeds to Us, Before Expenses(2)
Per share	$	$	$
Total minimum offering	$	$	$
Total maximum offering	$	$	$

_______________

(1) For the purpose of estimating the underwriting commissions, we have assumed that the underwriters will receive their maximum commission on all sales made in this offering, plus an advisory fee not to exceed $100,000.  The underwriters will also be entitled to reimbursement of out-of-pocket expenses incurred in connection with this offering, including fees and expenses of their counsel, in an aggregate amount not to exceed $100,000.

(2) We estimate the total expenses of this offering, excluding the underwriting commissions, will be approximately $562,000 if the minimum number of shares is sold and approximately $592,000 if the maximum number of shares is sold in this offering.  Because this is a best efforts offering, the actual public offering amount, underwriting commissions and proceeds to us are not presently determinable and may be substantially less than the total maximum offering set forth above.  See “Underwriting” beginning on page 62 of this prospectus for more information on this offering and our arrangements with the underwriters.

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Burnham Securities Inc. and Bonwick Capital Partners are acting as the underwriters for this offering.  The underwriters are selling shares of our common stock in this offering on a best efforts basis.  We do not intend to close this offering unless we sell at least a minimum number of 1,100,000 shares of common stock, at the price per share set forth in the table above, and otherwise satisfy the listing conditions to trade our common stock on the Nasdaq Capital Market.  This offering will terminate on _____, 2016 (60 days after the date of this prospectus), unless we sell the minimum number of shares of common stock set forth above before that date or we decide to terminate this offering prior to that date.  The gross proceeds of this offering will be deposited at Signature Bank, New York, New York in an escrow account established by us, until we have sold a minimum of 1,100,000 shares of common stock and otherwise satisfy the listing conditions to trade our common stock on the Nasdaq Capital Market.  Once we satisfy the minimum stock sale and Nasdaq listing conditions, the funds will be released to us.  In the event we do not sell a minimum of 1,100,000 shares of common stock and raise minimum gross proceeds of $5,500,000 by _____, 2016, all funds received will be promptly returned to investors without interest or offset.  See “Prospectus Summary — The Offering” on page 6.

Delivery of the shares of our common stock is expected to be made on or about _____, 2016.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 Lead Underwriter  Co-Manager

   

The date of this prospectus is _____, 2016

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[COMPANY GRAPHICS/ARTWORK TO BE ADDED BY AMENDMENT]

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TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	9
Risks Relating to Forward-Looking Statements	21
Use of Proceeds	25
Dividend Policy	26
Capitalization	26
Dilution	27
Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Business	36
Management	46
Executive Compensation	51
Principal Stockholders	54
Certain Relationships and Related Party Transactions	56
Market for Common Equity and Related Stockholder Matters	58
Description of Capital Stock	59
Underwriting	62
Shares Eligible for Future Sale	65
Indemnification for Securities Act Liabilities	66
Legal Matters	66
Experts	66
Where You Can Find More Information	66
Index to Consolidated Financial Statements	F-1

________________

About this Prospectus

You should rely only on the information in this prospectus.  Neither we nor the underwriters has authorized anyone to provide you with different information.  The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery or of any sale of our common stock.  Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus.

We are making offers to sell and seeking offers to buy shares of our common stock only in jurisdictions where offers and sales are permitted.  You should not consider this prospectus to be an offer to sell, or a solicitation of an offer to buy, shares of our common stock if the person making the offer or solicitation is not qualified to do so or if it is unlawful for you to receive the offer or solicitation.

This prospectus contains summaries of certain other documents, which summaries contain all material terms of the relevant documents and are believed to be accurate, but reference is hereby made to the full text of the actual documents for complete information concerning the rights and obligations of the parties thereto.

The industry and market data used throughout this prospectus have been obtained from our own research, surveys or studies conducted by third parties and industry or general publications.  Industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information.  We believe that each of these studies and publications is reliable.

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PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. It is not complete and may not contain all of the information that you may want to consider.  To understand this offering fully, you should carefully read the entire prospectus, including the section entitled “Risk Factors,” before making a decision to invest in our common stock.  Unless otherwise noted or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “Aegis Identity” refer to Aegis Identity Software, Inc.

Overview of Our Business

Aegis Identity Software provides identity and access management (IAM) products and services for education IT environments, including software applications, platforms and infrastructure, which are available to our customers via cloud computing or on-premise deployment models.

Our current IAM solutions – TridentHE, TridentK12, TridentCloud and EduZone – have been developed, tested and enhanced over the last four years and are being used by more than 60 major universities, private colleges, community college systems and school districts across the United States.  Our IAM solutions are designed to deter and prevent fraudulent activities and thwart the misuse of protected data by establishing digital “identities” of computer system users and validating such users’ access rights to digital information.  TridentHE and TridentK12 products include features such as authentication through the identification of users, roles and resources to be accessed and the creation of user accounts, authorization through password creation and management, reconciliation that minimizes security risks and ensures appropriate user access, and auditing where users can create IAM reports and have centralized access to their IAM records.  We also provide TridentCloud that provides software support and applications that we host on our servers via the internet to licensees of our products, making it unnecessary for customers to install and maintain software on their own IT infrastructure.

Our EduZone product is a SaaS (software as a service) technology platform designed to be fully integrated with the educational institution’s identity and information ecosystem. EduZone is one of the first education community platforms to allow school districts to protect and utilize student data while they rapidly adopt, standardize and share learning applications with students, parents and educators.

Our present and potential customers are major universities and school systems.  There are more than 4,700 universities and colleges and over 13,500 K-12 school districts in the United States.  Our selling efforts are conducted by our internal sales team, which is being expanded to include a reseller channel that will buy and distribute our IAM software products and provide implementation and maintenance services.  In 2014, our six largest educational institution customers (by revenue) were IlliniCloud (a voluntary organization with a potential user base of the 385 K-12 school districts in Illinois, representing approximately 2.3 million students), Chicago State University, Radford University, Colorado School of Mines, West Virginia University and City College of San Francisco.  In 2013, this list included University of Oregon, Radford University, Wake Forest University, IlliniCloud (Illinois K-12), St. Edward University and a key California State University, all of which continue to license our software.

Our revenue model is based on traditional software licensing.  When a customer downloads our IAM software, we receive an upfront software license fee, with annual revenue and maintenance fees of approximately 20% of the original license fee. Customer pricing is predicated on university size determined by the Carnegie Classification of Institutions of Higher Education.  Additionally, we charge our customers a premium for professional services, including custom engineering and development work.  We estimate that our average new licensing contract generates an initial fee of approximately $75,000, and that new maintenance/service contracts range from approximately $50,000 to $200,000.  We recorded total revenue of $1,186,150 for the six-month period ended June 30, 2015 and total revenue of $1,794,634 and $846,679 for the years ended December 31, 2014 and 2013, respectively.

In response to the explosive growth of internet technologies and the associated proliferation of digital identities, schools around the country have been seeking appropriate software and services to manage large amounts of personal data, prevent the unauthorized access of such data and maintain easily accessible and navigable IT systems for their students, faculty and employees.  We believe that schools that do not adopt appropriate IAM software and services are more likely to experience data breaches, losses of data, liability for failure to protect data and reputational damage.  Our objective is to provide the education sector with an identity infrastructure that enables the protection of digital identities created by the growth of internet technologies.

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Our IAM Software Products

Our TridentHE, TridentK12 and other software products improve the efficiency of IT systems with automated tools for on-boarding of thousands of new users and provisioning user access rights.  A description of each of our software products is set forth below.

TridentHE for Higher Education Market

TridentHE represents one of the education market’s first open-standards (software that can be easily adapted and extended for specific users) and class identity management software programs dedicated to addressing the specific needs of higher education.  As one of the only identity management applications built specifically for higher education, TridentHE provides comprehensive provisioning, password management and identity synchronization.  TridentHE’s provisioning capabilities allow for the creation of users, roles and resources, access that is role and rule based, automated workflows, delegated access administration and approvals, multiple authoritative sources of record and multiple targets.  TridentHE enables the establishment of a password policy, the synchronization of passwords to all applications, self-service password changes, profile management, access request approvals, white pages and Family Education Rights and Privacy Act (“FERPA”) compliance, and integration of our software with a help desk.  TridentHE’s reconciliation functionality allows connectors to determine if target systems have the correct credentials, automated error detection and correction, and periodic user access confirmation.  TridentHE’s audit abilities include the creation of ad hoc and custom reports.  Our TridentHE software, first released in October 2011, and its associated services and maintenance represented a majority of our total revenue for the six months ended June 30, 2015 and the years ended December 31, 2014 and 2013.  Revenue from TridentHE sales is expected to continue to be a significant percentage of our total revenue for the full 2015 year and for 2016.

TridentK12 for K-12 Education Market

TridentK12 is an identity management software designed specifically for K-12 education, providing quality provisioning, password management and identity synchronization.  TridentK12 is a cost-effective, open standards-based identity software program that provides “out-of-the-box” integration for K-12 education environments.  TridentK12’s provisioning capabilities allow for near real-time account creation with multiple authoritative sources of record and multiple access targets based on users’ information, roles and resources, as well as automated workflow control and delegated access approvals and administration.  TridentK12’s password management allows for the establishment of a customized password policy, self-service password changes, profile management, access request approvals, white pages and the school’s FERPA compliance, synchronization of passwords to all applications, and integration of our software with a help desk.  TridentK12’s functionality allows for connectors to determine if target systems have the correct credentials, automated error detection and correction, and the periodic sending of access configurations to appropriate access approvers to confirm access of a user. TridentK12’s audit abilities include the creation of ad hoc and custom reports, automated audit workflows to enforce an organization’s access policy and centralized account and access records.  Our TridentK12 software was released in late 2014.  TridentK12 generated minimal revenue in 2014 and the first half of 2015.  We expect that revenue from TridentK12 sales will increase as a percentage of our total revenue in future periods as we expand our marketing and distribution efforts in the K-12 market segment.

EduZone

EduZone is a platform of technologies that brings together an ecosystem we call Digital Citizenship in Education.  Digital “citizenship” is the online presence, via school district systems, of students, teachers, administration, technology leaders, academic leaders, parents, application providers and other partners representing the educational community today and of the future.  In EduZone, digital citizens access a single platform where they find their digital resources, secured by a unique login, that allows them to focus on a student’s performance.  The platform is designed to be fully integrated with school district identity and information systems, under the full control and discretion of the school district, enhancing student data privacy and providing control and fast adoption that the ecosystem requires.  We initially demonstrated a prototype of our EduZone platform in mid 2015 and EduZone is currently in its “pilot stage.”  We expect to roll-out EduZone to the market on a commercial basis following this offering.

TridentCloud

TridentCloud is a flexible and simple to implement software designed to provide IAM services to higher education and K-12 institutions from a cloud environment, which we refer to as identity as a service (“IDaaS”).  Once deployed within their infrastructure, an educational institution can deliver quality provisioning, password management and identity synchronization services at a lower cost due to economies of scale.  The current version of our TridentCloud is operational and is being rolled out to K-12 school districts to provide them with IDaaS services.  Subsequent versions of TridentCloud are being developed in conjunction with strategic educational partners and service providers.

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Our Industry and Target Markets

International Data Corporation (“IDC”), an independent market research firm, estimated in a November 2014 report that the worldwide IAM market is expected to account for $7.1 billion in license, maintenance and SaaS revenue by 2018.  While IDC’s report showed significant historical revenue growth and predicted strong future growth in the IAM market, it also revealed considerable market fragmentation with respect to the market share and overall number of vendors.  We believe that this fragmentation creates a significant opportunity for our company on which we plan to capitalize through an aggressive product strategy that we believe is superior to the approach to IAM software and services used by several of our competitors.  During the first half of 2015, more than $2.5 billion was invested in the education technology market segment, according to a report by InsideHigherEd, a market research publication.  We believe education technology lags behind numerous other commercial enterprises in terms of technological advancements, leading to greater demand for solutions that enhance student data privacy, a topic of increasing importance as there have been many data breaches in recent years.

Our Growth and Expansion Strategy

We intend to grow organically by expanding our reseller channel, developing our in-house channel support, extending our product line, building our industry position and accelerating our marketing and distribution efforts.  We also intend to commercially launch our EduZone technology platform, which we expect to further broaden our product line and service offerings, and provide additional growth opportunities for our company.

We plan to develop an international market by focusing initially on countries where English is a primary working language, limiting exports to countries with sufficiently robust intellectual property and software copyright laws, enhancing global partnerships, creating greater brand awareness and building customer support infrastructure.

We are also evaluating several well-positioned companies that may be potential acquisition targets.  Areas of interest to us are cyber-security companies that could provide complementary software and/or technology platforms, existing customer bases in various niche or regional markets and experienced technical employees.  As of the date of this prospectus, we have not entered into any term sheets or agreements with respect to an acquisition.  We intend to pursue only those acquisitions that we expect to be accretive and synergistic in terms of immediate revenues, business lines, customers and cross-selling opportunities.

Our Competitive Advantages

Open-Standards Products.  We offer one of the market’s first open-standards, enterprise-class identity management software in the vertical market of higher education and K-12 school districts.  We believe that our TridentHE and TridentK12 software costs less, performs better, offers open standards technology and is easier to install and support than the IAM software offered by our competitors.

Affordability.  We leverage open-standards software to provide affordable software products for the education market.  By using open standards as part of our software, our cost of development and our customers’ ongoing cost of ownership are lower.  Complementing the overall lower cost, we offer very competitive fixed license pricing based on the overall size of the institution instead of the number of users or connectors that are required.  We believe that this makes TridentHE and TridentK12 more affordable for educational institutions with budgetary constraints.  We believe the lower price point of our TridentHE software expands our market opportunity well beyond the current enterprise-focused IAM software offered by most vendors.  For example, in our experience Sun Microsystems focused on the top 1,000 universities and Oracle focuses on the top 600 universities.  We anticipate that our TridentHE software will be able to address the larger market of over 4,700 universities and colleges due in large part to being more affordable.  Additionally, we expect our TridentK12 software will be able to effectively address the unique requirements of the over 13,500 K-12 school districts in the United States.

Barriers to Entry.  While there are no absolute barriers to entering the IAM software business for the education market, we believe there are significant hurdles for prospective competitors to overcome.  These barriers include long software development time, the difficult and time-consuming process of acquiring new customers, systems testing, knowledge of the market and specific customer needs, and the cost of developing a sales distribution network.  Unlike new entrants in the industry, we have already established an internal sales force and are building a reseller network, and our software is already installed and operating at more than 60 major universities, private colleges, community college systems and school districts across the United States.

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    Management Experience.  Our executives have extensive experience managing companies, with significant, practical experience involving numerous IAM implementations utilizing legacy Sun Microsystems, Inc. software to deliver custom IAM services to higher education customers.  Additionally, our management has substantial vertical market expertise in the higher education market.

Selected Risks Relating to Our Business

    Despite our growth and expansion strategy and the competitive advantages we describe above, our business and prospects may be limited by a number of risks and uncertainties that we currently face, including:

●         We operate in an intensely competitive market for identity and access management software against a number of large, well-known providers, many of which also offer their products in the education market.

●         We do not currently offer our IAM software and services in non-education vertical markets or outside the United States and Canada, making us dependent largely upon the prevailing conditions and growth of the United States and Canadian education markets, which are frequently subject to budgetary pressures.

●         We had a net loss of $1,594,044 for the six months ended June 30, 2015 and net losses of $3,174,487 and $2,110,342 for the years ended December 31, 2014 and 2013, respectively. We expect to report a net loss for the full 2015 year. Our independent auditors, in their report dated November 12, 2015, expressed doubt about our ability to continue as a going concern. There can be no assurance we will have significant levels of total revenue or net income in future periods.

●         Historically, we have been able to fund our growth and expansion through private placements of equity securities and notes, but we have no agreements for future financing after the completion of this offering.

Implications of Being an “Emerging Growth Company”

     As a public reporting company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012, commonly known as the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:

●         are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

●         are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

●         are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

●         are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

●         may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A;

●         are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and

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We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.  Please see “Risk Factors,” page 19 (“We are an ‘emerging growth company’. . . .”).

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules.  For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, or such earlier time that we no longer meet the definition of an emerging growth company.  In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.  Further, under current SEC rules we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter.

Corporate Information

We were originally formed as a Colorado corporation in August 2011 and we reincorporated in Delaware in November 2015. Our executive offices are located at 750 West Hampden Avenue, Suite 500, Englewood, Colorado 80110 and our telephone number is (303) 222-1060. We maintain a corporate website at http://www.aegisidentity.com. Information on our website and any downloadable files found there are not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus.

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THE OFFERING
Common stock offered by us	1,100,000 shares (minimum) to 2,000,000 shares (maximum)
Proposed initial public offering price	$5.00 per share
Common stock outstanding prior to this offering	4,598,850 shares(1)
Best efforts offering	The underwriters are selling the shares of our common stock offered in this prospectus on a “best efforts” basis and are not required to sell any specific number or dollar amount of the shares offered by this prospectus, but will use their best efforts to sell such shares.  However, one of the conditions to our obligation to sell any of the shares through the underwriters is that, upon the closing of the offering, our common stock would qualify for listing on the Nasdaq Capital Market.  In order to list, the Nasdaq Capital Market requires that, among other criteria, at least 1,000,000 publicly-held shares of our common stock be outstanding, the shares be held in the aggregate by at least 300 round lot holders, the market value of the publicly-held shares of our common stock be at least $15.0 million, our stockholders’ equity after giving effect to the sale of our shares in this offering be at least $4.0 million, the bid price per share of our common stock be $4.00 or more, and there be at least three registered and active market makers for our common stock.  We do not intend to close this offering unless we sell a minimum of 1,100,000 shares of common stock and otherwise satisfy the listing conditions to trade our common stock on the Nasdaq Capital Market.
Common stock to be outstanding after this offering	5,698,850 shares (if minimum number of shares is sold) and 6,598,850 shares (if maximum number of shares is sold)(1)
Use of proceeds	Based on a proposed initial public offering price of $5.00 per share, which is the estimate of the purchase price at which we expect to offer our shares for sale under this prospectus, we estimate that the net proceeds to us from this offering, assuming we sell a minimum of 1,100,000 shares, will be approximately $4,553,000 and, assuming we sell all 2,000,000 shares, will be approximately $8,708,000, after payment of underwriting commissions and our estimated offering expenses.  However, this is a best efforts offering, and there is no assurance that we will sell any shares or receive any proceeds. We intend to use the net proceeds from this offering to expand marketing and distribution of our IAM software products in the education market, to enhance our ongoing product development and engineering programs, to fund potential acquisitions of complementary businesses, products and technologies as part of our growth strategy, and for working  capital and general corporate purposes.  See “Use of Proceeds” for more information.

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Escrow	The gross proceeds of this offering will be deposited at Signature Bank, New York, New York, in an escrow account established by us.  The funds will be held in escrow until we receive a minimum of $5,500,000 and otherwise satisfy the listing conditions to trade our common stock on the Nasdaq Capital Market, at which time the funds will be released to us.  Any funds received in excess of $5,500,000 and following the satisfaction of the Nasdaq listing requirements will immediately be available to us.  If we do not receive the minimum amount of $5,500,000 by _____, 2016 (60 days after the date of this prospectus), all funds will be returned to purchasers in this offering on the next business day after the offering’s termination, without charge, deduction or interest.  Prior to _____, 2016, in no event will funds be returned to you.  You will only be entitled to receive a refund of your subscription if we do not raise a minimum of $5,500,000 and satisfy the Nasdaq listing conditions by _____, 2016.
Risk factors	Investing in our common stock involves a high degree of risk.  You should read the “Risk Factors” section of this prospectus beginning on page 9 for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Proposed Nasdaq Capital Market symbol	AIDM(2)
______________

(1)

Does not include (i) 3,201,119 shares of our common stock reserved for issuance upon the exercise of outstanding stock options, (ii) 2,641,866 shares of our common stock reserved for issuance upon the exercise of outstanding warrants, and (iii) 77,000 shares (minimum) to 140,000 shares (maximum) of our common stock reserved for issuance upon the exercise of warrants we expect to grant to the underwriters in this offering.

(2)

We have reserved the trading symbol “AIDM” in connection with our application to have our common stock listed for trading on the Nasdaq Capital Market.

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SUMMARY FINANCIAL DATA
The following tables set forth summary historical statement of operations and balance sheet data. The summary statement of operations data for the years ended December 31, 2014 and 2013 are derived from our audited financial statements contained elsewhere in this prospectus. The statement of operations data for the six months ended June 30, 2015 and 2014 and the balance sheet data as of June 30, 2015 are derived from our unaudited condensed financial statements included elsewhere in this prospectus. We have prepared the unaudited condensed financial statements on the same basis as the audited financial statements and have included, in our opinion, all adjustments consisting only of normal recurring adjustments that we consider necessary for a fair statement of the financial information set forth in those statements.  The results for the six-month periods June 30, 2015 and 2014 are not necessarily indicative of the results to be expected for the full year. The summary historical financial data set forth below should be read together with the financial statements and the related notes, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in this prospectus.
	Years Ended December 31,						Six Months Ended June 30, (unaudited)
Statement of Operations Data:	2014			2013			2015			2014
Software licenses	$	611,225			356,100		$	182,900		$	312,125
Professional services		966,947			395,350			854,163			397,592
Maintenance fees		216,462			95,229			149,087			78,026
Total revenue		1,794,634			846,679			1,186,150			787,743
Total operating expenses		4,274,007			2,610,843			2,512,684			1,995,261
Loss from operations		(2,479,373	)		(1,764,164	)		(1,326,534	)		(1,207,518	)
Total interest expense		(695,114	)		(346,178	)		(267,510	)		(179,601	)
Net loss	$	(3,174,487	)	$	(2,110,342	)	$	(1,594,044	)	$	(1,387,119	)
Loss per share, basic and diluted	$	(0.85	)	$	(0.70	)	$	(0.41	)	$	(0.39	)
Common shares outstanding, basic and diluted		3,717,464			3,023,507			3,889,508			3,559,974
The following table summarizes our balance sheet data as of June 30, 2015 on an actual and a pro forma, as adjusted basis. The pro forma, as adjusted information gives effect to (i) our 2015 private placement of 281,500 shares of our common stock for aggregate gross proceeds of $703,750, (ii) the conversion into 289,016 shares of common stock of notes payable by us in the aggregate amount of $708,664 from July to November 2015, (iii) the application of $55,055 in debt to exercise an option for 80,964 shares of common stock, (iv) the issuance of 1,334 shares of common stock in consideration for business counsulting services, and (v) the sale by us of a minimum of 1,100,000 shares and a maximum of 2,000,000 shares of common stock in this offering at a proposed initial public offering price of $5.00 per share.
				As of June 30, 2015 (unaudited)
Balance Sheet Data:					Actual			Pro Forma, as Adjusted - Minimum			Pro Forma, as Adjusted - Maximum
Cash and cash equivalents				$	7,245		$	5,263,995		$	9,418,995
Working capital (deficit)					(3,584,941	)		2,435,528			6,590,528
Total assets					822,799			6,079,549			10,234,549
Total liabilities					4,880,260			4,116,541			4,116,541
Total stockholders’ equity (deficit)					(4,057,461	)		1,963,008			6,118,008

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RISK FACTORS

An investment in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus and the documents incorporated by reference herein, and in any free writing prospectus that we have authorized for use in connection with this offering.  If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be harmed.  This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.  The risks described below and in the documents referenced above are not the only ones that we face.  Additional risks not presently known to us or that we currently deem immaterial may also affect our business.

Risks Related to Our Company and Our Industry

We have a limited operating history and therefore we cannot ensure the long-term successful operation of our business, and the likelihood of our success must be considered in light of the risks, expenses and difficulties frequently encountered by a smaller publicly-traded technology company.  

We were initially formed as a corporation in Colorado in August 2011 and we reincorporated in Delaware in November 2015.  For the year ended December 31, 2014, we had total revenue of $1,794,634 and a net loss of $3,174,487.  As of December 31, 2014, we had a total stockholders’ deficit of $3,238,609, an increase in the deficit of $1,690,397 from December 31, 2013.  Our total stockholders’ deficit increased further to $4,057,461 as of June 30, 2015.  For the six-month period ended June 30, 2015, we had unaudited total revenue of $1,186,150 compared to total revenue of $787,743 for the same period in 2014.  We had a net loss of $1,594,044 for the six months ended June 30, 2015, compared to a net loss of $1,387,119 for the same 2014 period.  No assurance can be given that we will have significant levels of total revenue or net income in future periods.  Accordingly, our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing technology companies in new and rapidly evolving markets, such as the identity and access management software and services market in which we operate.  We must meet many challenges including:

· establishing and maintaining broad market acceptance of our products and services and converting that acceptance into direct and indirect sources of revenue,

· establishing and maintaining adoption of our technology on a wide variety of platforms and devices,

· timely and successfully developing new products, product features and services and increasing the functionality and features of existing products and services,

· developing services and products that result in high degrees of client satisfaction and high levels of end-customer usage,

· successfully responding to competition, including competition from emerging technologies and software and services,

· developing and maintaining strategic relationships to enhance the distribution, features, content and utility of our products and services, and

· identifying, attracting and retaining high quality sales and technical personnel at reasonable market compensation rates.

Our business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all. We cannot assure you that our business will be profitable or that we will ever generate sufficient revenue to meet our operating expenses and support our anticipated business activities.

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Our independent auditors have expressed doubt about our ability to continue as a going concern.

Our independent auditors, in their report dated November 12, 2015, expressed doubt about our ability to continue as a going concern.  At June 30, 2015 and December 31, 2014, our total stockholders’ deficit was $4,057,461 and $3,238,609, respectively.  Our net loss was $1,594,044 and $1,387,119 for the six months ended June 30, 2015 and 2014, respectively, and we used cash in our operations of $467,745 and $945,670 in the six months ended June 30, 2015 and 2014, respectively.  Net cash used in operations has resulted principally from costs incurred in the continued development of our software and marketing efforts.  We have funded our operations since inception through the use of cash obtained principally from the sale of equity securities and the placement of notes, some of which are convertible into shares of our common stock.  To continue development, we will need to raise additional capital through debt and/or equity financing.  However, additional capital may not be available on terms favorable to us and there can be no assurance that we will be successful in obtaining adequate additional financing.  We are in the process of reducing our costs associated with the delivery of services and are taking steps to grow revenues through enhanced sales effectiveness, additional sales coverage and new product offerings.  Our actual results indicate the existence of a material uncertainty that may cast significant doubt about our ability to continue as a going concern.

If we are unable to convince a meaningful number of educational institutions to use our IAM software and services, our revenue growth and operating margins will suffer.

We provide IAM software and direct our product development and marketing toward products and services that enable educational institutions to utilize identity and access management software and services as the foundation for safeguarding and managing confidential information.  Our success depends on a significant number of educational institutions perceiving technological and operational benefits and cost savings associated with the increasing adoption of our IAM software and services to protect the information of their organizations.  To the extent that our IAM software and services are not widely adopted or are accepted more slowly or less comprehensively than we expect, the growth of our business and our ability to generate significant revenues will be materially and adversely affected.

Substantially all of our revenue has come from our TridentHE and TridentK12 IAM products.  A lack of demand for our identity and access management software and products could adversely affect our results of operations and financial condition.

We currently derive and expect to continue to derive substantially all of our revenue from our TridentHE and TridentK12 software products.  As such, the growth in market demand of these software products is critical to our success.  Demand for the TridentHE and TridentK12 software is affected by a number of factors, including market acceptance of these IAM products, the timing of development and release of new products by competitors, price changes by us or our competitors, technological change, and general economic conditions and trends.  If we are unable to meet customer demands and to achieve more widespread market acceptance of our software, our business, results of operations, financial condition and growth prospects will be materially and adversely affected.  Although we expect that our IAM products and related enhancements and upgrades will achieve market acceptance, our ability to create demand for our software and services among educational institutions could be materially and adversely affected by a number of factors, including:

· improved products or product versions being offered by competitors in our markets;

· competitive pricing pressures;

· failure to release new or enhanced versions of our IAM products on a timely basis, or at all;

· technological change that we are unable to address with our IAM products or that changes the way educational institutions utilize our products; and

· general economic conditions.

Because we have one operating and reportable business segment, our business, financial condition, results of operations and cash flows would be adversely affected by a decline in demand for our IAM products and our business and business prospects would be materially and adversely affected if the market for these products does not expand as we expect.

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We currently face and continue to expect to face substantial and increasing competition in our market.

We face significant competition from many companies such as Oracle, Microsoft, Fischer International, Hitachi, IBM and NetIQ, all of which are substantially larger, have significantly greater technical and financial resources than we do and are better positioned to continue investment in competitive technologies.  These and many of our other current or potential competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than we do.

We believe the key competitive factors in the IAM market include:

· the level of reliability, security and new functionality of product offerings;

· the ability to provide comprehensive software and services, including management and security capabilities;

· the ability to offer products that support multiple hardware platforms, operating systems, applications and application development frameworks;

· the ability to deliver an intuitive end-user experience for accessing data, applications and services from a wide variety of end-user applications;

· pricing of products;

· the ability to attract and preserve a large installed base of customers;

· the ability to create and maintain partnering opportunities with hardware vendors, infrastructure software vendors and cloud service providers;

· the ability to develop robust indirect sales channels; and

· the ability to attract and retain identity and access management engineers as key employees.

Existing and future competitors may introduce products in the same markets we serve or intend to serve, and competing products may have better performance, lower prices, better functionality and broader acceptance than our products.  Our competitors may also add features to their IAM products similar to features that presently differentiate our product offerings from theirs.  This competition could result in increased pricing pressure and sales and marketing expenses, thereby materially reducing our operating margins, and could harm our ability to increase, or cause us to lose, market share.  Increased competition also may prevent us from entering into or renewing service contracts on terms similar to those that we currently offer and may cause the length of our sales cycle to increase. Some of our competitors and potential competitors supply a wide variety of products to, and have well-established relationships with, our current and prospective customers.  For example, educational institutions that are evaluating the adoption of IAM technologies and services may be inclined to consider Microsoft software and services because of their existing use of Windows and Office products.  Some of these competitors may take advantage of their existing relationships to engage in business practices that make our products less attractive to our customers.

We have substantial debt which could adversely affect our ability to raise additional capital to fund operations and prevent us from meeting our obligations under existing indebtedness.

As of November 10, 2015, our total indebtedness was approximately $2.8 million after giving effect to the conversion into common stock of notes payable by us in the aggregate amount of $708,664 from July to November 2015 and the application of $55,055 in debt to exercise an option.  We will continue to have a significant amount of indebtedness following this offering.  This substantial debt could have important consequences, including the following: (i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures; (ii) our ability to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited; (iii) we may face a competitive disadvantage to lesser leveraged competitors; (iv) our debt service requirements could make it more difficult to satisfy other financial obligations; and (v) we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth.

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Our ability to make scheduled payments of the principal of, or to pay interest on, or to refinance indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond management’s control.  If we are unable to generate sufficient cash flow to service our debt or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could impair our liquidity.  Any refinancing of indebtedness, if available at all, could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

Despite our significant amount of indebtedness, we may be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial debt.

Our ability to raise capital in the future may be limited, and a failure to raise capital when needed could harm us.

Our business and operations may consume resources faster than we anticipate.  In the future, we may need to raise additional funds to invest in future growth opportunities.  Additional financing may not be available on favorable terms, if at all.  If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could seriously harm our business and operating results.  If we incur debt, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations.

Our sales are difficult to predict and may vary substantially from quarter to quarter, which may cause our operating results to fluctuate significantly.

Given the critical nature of our software and services to the business processes of potential customers, a new client deciding whether to transition to TridentHE software may require several months to make their decision to purchase our software and services.  As a result, the complete sales cycle can take from sixty days to over nine months and require a substantial amount of time and resources.  In addition, we may experience a significant delay between the time we incurs sales-related expenses and the time we generates revenues, if any, from such expenditures and the failure to generate revenues from such expenditures could have a material adverse effect on our results of operations.

While we anticipate licensees of our products to renew support and maintenance services on at least an annual basis, the timing of new licenses and maintenance subscriptions are not subject to a typical sales cycle.  Accordingly, our revenues are difficult to predict.  We expect our future sales and marketing efforts will involve educating our customers about the use and benefit of our products, including their technical capabilities, potential cost savings to an educational institution and advantages compared to higher-cost products offered by our competitors. In addition, product purchases are frequently subject to budget constraints, multiple approvals, and unplanned administrative, processing and other delays.  Moreover, the greater number of competitive alternatives, as well as announcements by our competitors that they intend to introduce competitive alternatives at some point in the future, can lengthen customer procurement cycles, cause us to spend additional time and resources to educate customers on the advantages of our product offerings and delay product sales.  Economic downturns and uncertainty can also cause customers to add layers to their internal purchase approval processes, adding further time to a sales cycle.  These factors can have an impact on the timing and length of our sales cycles.

We may not be able to attract and retain the highly skilled employees we need to support our planned growth, and our compensation expenses may increase.

To execute on our strategy, we must continue to attract and retain highly qualified personnel.  Competition for these personnel is intense, especially for senior sales executives and engineers with high levels of experience in designing and developing software.  We may not be successful in attracting and retaining qualified personnel.  We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications.  Many of the companies with which we compete for experienced personnel have greater resources than we do.  Technical personnel are also aggressively recruited by other startup and emerging growth companies, which are especially active in many of the technical areas and geographic regions in which we conduct product development.  Employees trained by us also may leave to work at companies that compete with us.  In addition, in making employment decisions, particularly in the technology industry, job candidates often consider the value of the stock-based compensation they are to receive in connection with their employment.  Declines in the value of our common stock could adversely affect our ability to attract or retain key employees and result in increased employee compensation expenses.

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Protection of our intellectual property will be limited, and any misuse of our intellectual property by others could harm our business, reputation and competitive position.

We rely on a combination of trademark and trade secret laws in the United States and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our proprietary information, technology and brand.

We protect our proprietary information and technology, in part, by requiring our employees to enter into agreements providing for the maintenance of confidentiality and the assignment of rights to inventions made by them while employed by us.  We also may enter into non-disclosure and invention assignment agreements with certain of our technical consultants to protect our confidential and proprietary information and technology.  We cannot assure you that our confidentiality agreements with our employees and consultants will not be breached, that we will be able to effectively enforce these agreements, that we will have adequate remedies for any breach of these agreements, or that the our trade secrets and other proprietary information and technology will not be disclosed or will otherwise be protected.

We also rely on contractual and license agreements with third parties in connection with their use of our technology and services.  There is no guarantee that such parties will abide by the terms of such agreements or that we will be able to adequately enforce our rights.  Protection of confidential information, trade secrets and other intellectual property rights in the markets in which we operate and compete is highly uncertain and may involve complex legal questions.  We cannot completely prevent the unauthorized use or infringement of our confidential information or intellectual property rights as such prevention is inherently difficult.  Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential information and intellectual property protection.  If we are unable to protect our proprietary rights or if third parties independently develop or gain access to our or similar technologies, our business, revenue, reputation and competitive position could be materially adversely affected.  Further, many of our current and potential competitors have the ability to dedicate substantially greater resources to protecting their technology or intellectual property rights than we do.  Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property, which could result in a substantial loss of our market share.

We may be exposed to liability for infringing upon the intellectual property rights of other companies.

We utilized the source code of OpenIAM, LLC (“OpenIAM”), an unaffiliated company, as a framework for our software and employees and contractors internally develop our proprietary software.  Although we are not aware of any patents or trademarks which our software or its use might infringe, we cannot be certain that infringement will not occur.  In addition, we may become the target of aggressive patent infringement litigation tactics by an entity whose sole purpose is to pursue such litigation.  We could incur substantial costs, in addition to the great amount of time lost, in defending any patent or trademark infringement suits or in asserting any patent or trademark rights, in a suit with another party.

We may experience software development delays, software defects or installation difficulties, which could harm our business and reputation and may expose us to potential liability.

We are in the process of continuing the development of our software products.  Accordingly, there is no assurance we will successfully continue to develop the software in a timely manner, or at all.

Our products include complex software utilized on sophisticated computing systems and related services, and we may encounter delays when developing the software as well as any new applications, features and services.  We may encounter undetected errors or defects in the initial installed versions of the software or when new versions of the software are released.  In addition, we may experience difficulties in installing or integrating our technologies on platforms used by our customers.  Defects in the software, errors or delays in the processing of transactions or other difficulties could result in interruption of business operations, delay in market acceptance, additional development and remediation costs, diversion of technical and other resources, loss of clients, negative publicity or exposure to liability claims.  Although we attempt to limit our potential liability through disclaimers and limitation of liability provisions in our software license and customer agreements, we cannot be certain that these measures will successfully limit our liability.

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We may not be able to scale our business quickly enough to meet the growing needs of our customers and, if we are not able to grow efficiently, our operating results could be harmed.

As usage of our software grows and as customers use our services, we will need to devote additional resources to improving our software and services, integrating with third-party systems and maintaining infrastructure performance.  In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base, particularly as our customer demographics expand over time.  Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction.  These issues could reduce the attractiveness of our marketing software to customers, resulting in decreased sales to new customers or lower maintenance renewal rates by existing customers, which could adversely affect our revenue growth and harm our reputation.  Even if we are able to upgrade our systems and expand our staff, any such expansion will be expensive and complex, requiring management time and attention.  We could also face inefficiencies or operational failures as a result of our efforts to scale our infrastructure.  Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems.  We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely affect our financial results.

Because we recognize some revenue over the term of our license agreements, downturns or upturns in sales are not immediately reflected in full in our operating results.

As a license-based business, we recognize revenue over the term of each of our licenses.  As a result, much of the revenue we report each quarter results from maintenance and services for licenses entered into during previous quarters.  Consequently, a shortfall in demand for our software and professional services or a decline in the renewal of maintenance services for existing licenses in any one quarter may not significantly reduce our revenue for that quarter but could negatively affect our revenue in the future.  Accordingly, the effect of significant downturns in new sales of our IAM software will not be reflected in full in our operating results until future periods.  Our revenue recognition model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable term of the licenses.

If we fail to establish our Trident software brand as an industry leader, our ability to expand our customer base will be impaired and our results of operations and financial condition may suffer.

We believe development of our Trident software brand is critical to achieving widespread awareness of our existing and future identity and access management products and, as a result, is important to attracting new customers and maintaining existing customers.  We also believe that the importance of brand recognition will increase as competition in our market increases.  Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to provide reliable and useful IAM software at competitive prices.  Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incurred in building our brand.  In addition, to sell to and service our customers, we utilize a combination of internal personnel and third-party service providers, as well as reseller partners.  These third-party service providers, who are not in our control, may harm our reputation and damage our brand perception in the marketplace. If we fail to successfully promote and maintain our brand, our business could suffer.

If we do not offer high-quality technical and customer support, our business and reputation may be harmed.

High-quality technical and customer support is important for the successful marketing and sale of our products and for the renewal of maintenance services by existing customers.  Providing this education and support requires that our customer support personnel have specific knowledge and expertise regarding our IAM software, making it more difficult for us to hire qualified personnel and to scale up our support operations due to the extensive training required.  The importance of high-quality customer support will increase as we expand our business and pursue new customers.  If we do not help our customers quickly resolve post-implementation issues and provide effective ongoing support, our ability to sell additional functionality and services to existing customers may suffer and our reputation with existing or potential customers may be harmed.

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If we incorrectly forecast our revenue due to lengthy sales cycles, or if we fail to match our expenditures with corresponding revenue, our operating results could be adversely affected.

We have a very limited history upon which to base forecasts of future revenue.  In addition, for our customers in the education market, the lengthy sales cycle for the evaluation and implementation of our software and services, which typically extends for several months, may also cause us to experience a delay between increasing operating expenses for such sales efforts, and, upon successful sales, the generation of corresponding revenue.  Accordingly, we may be unable to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of delays arising from these factors.  As a result, our operating results in future reporting periods may be significantly below the expectations of the public market, equity research analysts or investors, which could harm the price of our common stock.

Our success depends upon our ability to develop new products and services, integrate acquired products and services, enhance our existing products and services and develop appropriate business and pricing models.

If we are unable to develop new IAM products and services, integrate acquired products and services or enhance and improve our products and support services, in a timely manner, or position or price our products and services to meet market demand, customers may not buy new software licenses from us, update to new versions of our software or renew product support.   We cannot provide any assurance that the standards on which we choose to develop new products will allow us to compete effectively for business opportunities in emerging areas such as cloud-based services.

New product development and introduction involves a significant commitment of time and resources and is subject to a number of risks and challenges including:

· managing the length of the development cycle for new products and product enhancements;

· managing customers’ transitions to new IAM software, which can result in delays in their purchasing decisions;

· adapting to emerging and evolving industry standards and to technological developments by our competitors and customers;

· entering into new or unproven markets with which we have limited experience;

· tailoring our business and pricing models appropriately as we enter new markets and respond to competitive pressures and technological changes;

· incorporating and integrating acquired products and technologies; and

· developing or expanding efficient sales channels.

In addition, if we cannot adapt our business models to keep pace with industry trends, our revenues could be negatively impacted.  For example, if we increase our adoption of subscription-based pricing models for our products, we may fail to set pricing at levels appropriate to maintain our revenue streams or our customers may choose to deploy products from our competitors that they believe are priced more favorably.  Additionally, we may fail to accurately predict subscription renewal rates or their impact on results, and because revenue from subscriptions is recognized for our services over the term of the subscription, downturns or upturns in sales may not be immediately reflected in our results.  

We rely on third-party software that is required for the development and deployment of our software, which may be difficult to obtain or which could cause errors or failures of our software.

We rely on software licensed from or hosted by third parties, including OpenIAM, to offer our software. We may also need to obtain licenses from third parties to use intellectual property associated with the development of our software, which might not be available to us on acceptable terms, or at all. Any loss of the right to use any software or intellectual property, including the software and intellectual property we currently license from OpenIAM, which is required for the development, maintenance and delivery of our software, could result in delays in the provision of our software until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party software could result in errors or a failure of our software, which could harm our business.

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Breaches of cyber-security systems could degrade our ability to conduct our business operations and deliver products and services to our customers, delay our ability to recognize revenue, compromise the integrity of our software products, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the security of our networks and data.

We increasingly depend upon our IT systems to conduct virtually all of our business operations, ranging from our internal operations and product development activities to our marketing and sales efforts and communications with our customers and business partners.  Cyber-attacks on our IT systems or the IT systems of third-party contractors could threaten to misappropriate our proprietary information and cause interruptions of our IT services.  Because the techniques used to access or sabotage networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques. In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system.  We have also outsourced certain business functions to third-party contractors, and our business operations also depend, in part, on the success of our contractors’ own cyber-security measures.  Similarly, we rely upon distributors, resellers, system vendors and systems integrators to sell our products and our sales operations depend, in part, on the reliability of their cyber-security measures. Additionally, we depend upon our employees to appropriately handle confidential data and deploy our IT resources in safe and secure fashion that does not expose our network systems to security breaches and the loss of data.  Accordingly, if our cyber-security systems and those of our contractors fail to protect against unauthorized access, sophisticated cyber-attacks and the mishandling of data by our employees and contractors, our ability to conduct our business effectively could be damaged in a number of ways, including:

· sensitive data regarding our business, including intellectual property and other proprietary data, could be stolen;

· our electronic communications systems, including email and other methods, could be disrupted, and our ability to conduct our business operations could be seriously damaged until such systems can be restored and secured;

· our ability to process customer orders and electronically deliver products and services could be degraded, and our distribution channels could be disrupted, resulting in delays in revenue recognition;

· defects and security vulnerabilities could be exploited or introduced into our software products, thereby damaging the reputation and perceived reliability and security of our products and potentially making the data systems of our customers vulnerable to further data loss and cyber incidents; and

· personally identifiable data of our customers, employees and business partners could be stolen or lost.

If any of the above events occur, we could be subject to significant claims for liability from our customers, regulatory actions from governmental agencies, our ability to protect our intellectual property rights could be compromised and our reputation and competitive position could be significantly harmed.  Also, the regulatory and contractual actions, litigations, investigations, fines, penalties and liabilities relating to data breaches that result in losses of personally identifiable data of users of our services can be significant in terms of fines and reputational impact and necessitate changes to our business operations that may be disruptive to us.  Additionally, we could incur significant costs in order to upgrade our cybersecurity systems and remediate damages.  Consequently, our financial performance and results of operations could be adversely affected.

Our software products are highly technical and may contain errors, defects or security vulnerabilities which could cause harm to our reputation and adversely affect our business.

Our software products are highly technical and complex and, when deployed, have contained and may contain errors, defects or security vulnerabilities.  Some errors in our products may only be discovered after a product has been installed and used by customers.  Any errors, defects or security vulnerabilities discovered in our products after commercial release could result in loss of revenues or delay in revenue recognition, loss of customers and increased service and warranty cost, any of which could adversely affect our business, financial condition and results of operations.

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Undiscovered vulnerabilities in our products could expose them to hackers or other unscrupulous third parties who develop and deploy viruses, worms, and other malicious software programs that could attack our products.  Actual or perceived security vulnerabilities in our software products could harm our reputation and could lead customers to reduce or delay future purchases or to use a competitive software product.  Any security breaches could lead to interruptions, delays and data loss and protection concerns. In addition, we could face claims for product liability, tort or breach of warranty.  Our contracts with customers contain provisions relating to warranty disclaimers and liability limitations, which may not be upheld and customers may seek indemnification from us for their losses.  Defending a lawsuit, regardless of its merit, is costly and time-consuming and may divert management’s attention and adversely affect the market’s perception of us and our software products.  In addition, if our business liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms, or at all, our business, financial condition and results of operations could be adversely impacted.

Our business is subject to a variety of United States and international laws and regulations regarding data protection.

Our business is subject to federal, state and international laws and regulations regarding privacy and protection of personal data.  We and our third-party contractors collect contact and other personal or identifying information from our customers. Additionally, in connection with some of our new product initiatives, our customers may use our services to store and process personal information and other user data.  We post, on our websites, our privacy policies and practices concerning our treatment of personal data.  We also often include privacy commitments in our contracts.  Any failure by us to comply with our posted privacy policies, other federal, state or international privacy-related or data protection laws and regulations, or the privacy commitments contained in our contracts could result in proceedings against us by governmental entities or others which could have a material adverse effect on our business, financial condition and results of operations.  In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business.

It is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our data practices.  If so, in addition to the possibility of fines and penalties, a governmental order requiring that we change our data practices could result, which, in turn, could have a material adverse effect on our business.  Compliance with such an order may involve significant costs or require changes in business practices that result in reduced revenue.  Noncompliance could result in penalties being imposed on us or we could be ordered to cease conducting the noncompliant activity.

In addition to government regulation, privacy advocacy and industry groups or other third parties may propose new and different self-regulatory standards that either legally or contractually applies to our customers or us.  Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and standards, could result in additional cost and liability to us, damage our reputation, inhibit sales and harm our business.

Our use of “open source” software in our products could negatively affect our ability to sell our products and subject us to possible litigation.

A portion of the products, technologies or services acquired, licensed, developed or offered by us may incorporate so-called “open source” software or utilize open source software to operate, and we may incorporate open source software into other products in the future.  Such open source software is generally licensed by its authors or other third parties under open source licenses, including, for example, the GNU General Public License, the GNU Lesser General Public License, “Apache-style” licenses, “BSD-style” licenses and other open source licenses.  We monitor our use of open source software in an effort to avoid subjecting our products to conditions we do not intend.  Although we believe that we have complied with our obligations under the various applicable licenses for open source software that we use, there is little or no legal precedent governing the interpretation of many of the terms of most of these licenses, and, therefore, the potential impact of these terms on our business is somewhat unknown and may result in unanticipated obligations regarding our products and technologies.

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If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations.   While we have not received any inquiries regarding open source license compliance, there can be no assurance that legal actions will not arise in the future.  If our defenses were not successful, we could be subject to significant damages, enjoined from the distribution of our products that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products.  In addition, if we combine our proprietary software with open source software in a certain manner, under some open source licenses we could be required to release the source code of our proprietary software, which could substantially help our competitors develop products that are similar to or better than ours.

In addition to risks related to license requirements, usage of open source software exposes us to risks that differ from the use of third-party commercial software because open source licensors generally do not provide warranties or assurance of title or controls on the origin of the software.  In addition, many of the risks associated with usage of open source software such as the lack of warranties or assurances of title, cannot be eliminated, and could, if not properly addressed, negatively affect our business.  We have established processes to help address these risks, including a review process for screening requests from our development organizations for the use of open source and conducting appropriate due diligence of the use of open source software in the products developed by companies we acquire, but we cannot ensure that all open source software is submitted for approval prior to use in our products or is discovered during due diligence.

Our growth strategy depends, in part, on our acquiring businesses, products and technologies and expanding their existing operations, which we may be unable to do.  

Our growth strategy is based, in part, on our ability to acquire or invest in businesses, products and technologies. The success of this acquisition strategy will depend, in part, on our ability to accomplish the following:

· identify suitable businesses or assets to buy;

· complete the purchase of those businesses on terms acceptable to us;

· complete the acquisition(s) in the time frame and within the budget we expect; and

· improve the results of operations of each of the businesses that we buy and successfully integrate its operations on an accretive basis.

There can be no assurance that we will be successful in any or all of the steps above. Our failure to successfully implement our acquisition strategy could have an adverse effect on other aspects of our business strategy and our business in general. We may not be able to find appropriate acquisition candidates, accretively acquire those candidates that we identify or integrate acquired businesses effectively and profitably.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our common stock.

In order to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we need to maintain our processes and systems and adapt them to changes as our business changes and we rearrange management responsibilities and reorganize our business accordingly.  We may seek to automate certain processes to improve efficiencies and better ensure ongoing compliance but such automation may itself disrupt existing internal controls and introduce unintended vulnerability to error or fraud.  This continuous process of maintaining and adapting our internal controls and complying with Section 404 is expensive and time-consuming, and requires significant management attention.  We cannot be certain that our internal control measures will continue to provide adequate control over our financial processes and reporting and ensure compliance with Section 404.  Further, as our business changes and as we expand through acquisitions of other companies, our internal controls may become more complex and we will require significantly more resources to ensure our internal controls overall remain effective.  Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations.  If we or our independent registered public accounting firm identify material weaknesses, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price.  In addition, if we are unable to continue to comply with Section 404, our non-compliance could subject us to a variety of administrative sanctions, including the suspension or delisting of our common stock from the Nasdaq Capital Market and the inability of registered broker-dealers to make a market in our common stock, which could reduce our stock price.

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Problems with our information systems could interfere with our business that could adversely impact our operations.

We rely on our information systems and those of third parties for processing customer orders, delivery of products, providing services and support to our customers, billing and tracking our customers, fulfilling contractual obligations and otherwise running our business.  Any disruption in our information systems and those of the third parties upon whom we rely could have a significant impact on our business.  In addition, we continuously work to enhance our information systems.  The implementation of these types of enhancements is frequently disruptive to the underlying business of an enterprise, which may especially be the case for us due to the size and complexity of our business.  Any disruptions relating to our systems enhancements, particularly any disruptions impacting our operations during the implementation period, could adversely affect our business in a number of respects.  Even if we do not encounter these adverse effects, the implementation of these enhancements may be much more costly than we anticipated.  If we are unable to successfully implement the information systems enhancements as planned, our financial condition, results of operations and cash flows could be negatively impacted.

Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our previously filed financial statements, which could cause our stock price to decline.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.  These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles and guidance.  A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.

Being a public company results in additional expenses and diverts management’s attention, and could also adversely affect our ability to attract and retain qualified directors.

We will be a public reporting company after the closing of this offering.  As a public reporting company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These requirements generate significant accounting, legal and financial compliance costs, and make some activities more difficult, time consuming or costly, and may place significant strain on our personnel and resources.  The Exchange Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.  In order to establish the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight are required.

As a result, management’s attention may be diverted from other business concerns, which could have an adverse and even material effect on our business, financial condition and results of operations.  These rules and regulations may also make it more difficult and expensive for us to obtain director and officer liability insurance.  If we are unable to obtain appropriate director and officer insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent, could be adversely impacted.

We are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to public companies may result in our financial statements not being comparable to those of some other public companies. As a result of this and other reduced disclosure requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

As a public reporting company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012, or the JOBS Act.  An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies.  In particular, as an emerging growth company we:

· are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

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· are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

· are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

· are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

· may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and

· are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.  Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules.  For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, or such earlier time that we no longer meet the definition of an emerging growth company.  In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion in principal amount of non-convertible debt over a three-year period.  Further, under current SEC rules, we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter.

We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions.  If investors were to find our common stock less attractive as a result of our election, we may have difficulty raising all of the proceeds we seek in this offering.

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Risks Related to our Shares and this Offering

The best efforts structure of this offering may yield insufficient gross proceeds to fully execute on our business plan.

The underwriters are offering shares of our common stock in this offering on a best efforts basis.  The underwriters are not required to sell any specific number or dollar amount of common stock, but will use their best efforts to sell the shares offered by us.  It is a condition to this offering that, upon the closing of the offering, our common stock would qualify for listing on the Nasdaq Capital Market.  In order to list, the Nasdaq Capital Market requires that, among other criteria, at least 1,000,000 publicly-held shares of our common stock be outstanding, the shares be held in the aggregate by at least 300 round lot holders, the market value of the publicly-held shares of our common stock be at least $15.0 million, our stockholders’ equity after giving effect to the sale of our shares in this offering be at least $4.0 million, the bid price per share of our common stock be $4.00 or more, and there be at least three registered and active market makers for our common stock.  As a “best efforts” offering, there can be no assurance that we will successfully raise this minimum amount, that the offering will satisfy the listing conditions required to trade our common stock on the Nasdaq Capital Market or that the offering contemplated by this prospectus will ultimately be completed or will result in any proceeds being made available to us.

The success of this offering will impact, in large part, our ability to cover expenses and finance operations over the next 12 to 24 months.  If no shares are sold in this offering, or if we sell only the minimum number of shares yielding insufficient gross proceeds, we may be unable to cover our expenses, sufficiently fund operations or fully execute on our business plan.  This could potentially result in a material adverse effect on our business, prospects, financial condition and results of operations.

Since our common stock has not been publicly traded before this offering, the price of our common stock may be subject to wide fluctuations.

Before this offering, there was no public market for our common stock.  Even though we have applied to list our shares for trading on the Nasdaq Capital Market, we cannot be certain that our common stock will be so listed.  Even if our common stock is listed on the Nasdaq Capital Market, an active trading market for our common stock may not develop following this offering and any such listing.  You may not be able to sell your shares quickly or at the current market price if trading in our stock is not active.  You may lose all or a part of your investment.  The initial public offering price was arbitrarily determined based on negotiations between us and the underwriters.  The market price of our common stock after the offering will likely vary from the initial offering price and is likely to be highly volatile and subject to wide fluctuations in response to a variety of factors and risks, many of which are beyond our control.  See “Underwriting.”  In addition to the risks noted elsewhere in this prospectus, some of the other factors affecting our stock price may include:

· variations in our operating results;

· the level and quality of securities analysts’ coverage for our common stock;

· announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

· announcements by third parties of significant claims or proceedings against us; and

· future sales of our common stock.

For these reasons, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on past results as an indication of future performance.  In the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has often been instituted against the public company.  Regardless of the outcome, this type of litigation could result in substantial costs to us and a likely diversion of our management’s attention.  You may not receive a positive return on your investment when you sell your shares and you may lose the entire amount of your investment.

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The concentration of our common stock ownership by our current management will limit your ability to influence corporate matters.

Upon completion of this offering, our directors and executive officers will beneficially own and will be able to vote in the aggregate approximately 35% of our outstanding common stock if the minimum number of shares is sold and approximately 30% of our outstanding common stock if the maximum number of shares is sold (without taking into account shares issuable upon exercise or conversion of outstanding stock options, warrants and convertible notes).  As such, our directors and executive officers, as stockholders, will continue to have the ability to exert significant influence over all corporate activities, including the election or removal of directors and the outcome of tender offers, mergers, proxy contests or other purchases of common stock that could give our stockholders the opportunity to realize a premium over the then-prevailing market price for their shares of common stock.  This concentrated control will limit your ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial.  In addition, such concentrated control could discourage others from initiating changes of control.  In such cases, the perception of our prospects in the market may be adversely affected and the market price of our common stock may decline.

Our Board of Directors’ ability to issue “blank check” preferred stock and any anti-takeover provisions we adopt may depress the value of our common stock.

Our certificate of incorporation authorizes 10,000,000 shares of “blank check” preferred stock.  This means that our Board of Directors has the power to issue any or all of the shares of such preferred stock, including the authority to establish one or more series and to fix the powers, preferences, rights and limitations of such class or series, without seeking stockholder approval, subject to certain limitations on this power under the listing requirements of the Nasdaq Capital Market.  The authority of our Board of Directors to issue “blank check” preferred stock, along with any future anti-takeover measures we may adopt, may, in certain circumstances, delay, deter or prevent takeover attempts and other changes in control of our company that are not approved by our Board of Directors.  As a result, our stockholders may lose opportunities to dispose of their shares at favorable prices generally available in takeover attempts or that may be available under a merger proposal and the market price of our common stock and the voting and other rights of our stockholders may also be affected.  See “Description of Capital Stock.”

You will experience immediate and substantial dilution in the value of the shares of common stock you purchase.

The initial public offering price is substantially higher than the net tangible book value of each outstanding share of our common stock.  Purchasers of common stock in this offering will experience immediate and substantial dilution on a book value basis.  The dilution per share in the net tangible book value per share of common stock will be $4.75 per share if the minimum number of shares are sold and $4.15 per share if the maximum number of shares are sold, based on a proposed $5.00 initial public offering price, which is the estimate of the purchase price at which we expect to offer our shares for sale under this prospectus.  If stock options and warrants to purchase shares of common stock are exercised, there would be further dilution.  See “Dilution.”

Even if listed, our common stock could be delisted from the Nasdaq Capital Market, which delisting could hinder your ability to obtain accurate quotations on the price of our common stock, or dispose of our common stock in the secondary market.

Although we have applied to list our common stock for trading on the Nasdaq Capital Market, we cannot guarantee that our common stock will be so listed or that an active public market for our common stock will develop following this offering and any such listing.  In order to maintain any listing on the Nasdaq Capital Market, we must register at least one bid for our common stock at a price that equals or exceeds $4.00 per share on the day our common stock is first quoted on the Nasdaq Capital Market. Thereafter, our common stock must sustain a minimum bid price of at least $1.00 per share and we must satisfy the other requirements for continued listing on the Nasdaq Capital Market.  In the event our common stock is delisted from the Nasdaq Capital Market, trading in our common stock could thereafter be conducted in the over-the-counter markets on a trading tier of the OTC Markets.  In such event, the liquidity of our common stock would likely be impaired, not only in the number of shares which could be bought and sold, but also through delays in the timing of the transactions, and there would likely be a reduction in the coverage of our company by security analysts and the news media, thereby resulting in lower prices for our common stock than might otherwise prevail.

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Because we do not intend to pay dividends on our common stock, you must rely on stock appreciation for any return on your investment.

We presently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.  As a result, you must rely on stock appreciation and a liquid trading market for any return on your investment.  If an active and liquid trading market does not develop, you may be unable to sell your shares of common stock at or above the initial public offering price or at the time you would like to sell.

The protection provided by the federal securities laws relating to forward-looking statements does not apply to us. The lack of this protection could harm us in the event of an adverse outcome in a legal proceeding relating to forward-looking statements made by us.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to certain issuers, including issuers that do not have their equity traded on a recognized national securities exchange.  Our common stock does not trade on any recognized national securities exchange.  As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.  The lack of this protection in a contested proceeding could harm our financial condition.

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RISKS RELATING TO FORWARD-LOOKING STATEMENTS

Certain matters discussed in this prospectus are forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Nevertheless, these forward-looking statements are subject to risks, uncertainties and assumptions about our operations and the investments we make, including, among other things, factors previously discussed under the heading “Risk Factors” in this prospectus and the following:

· changes in the identity and access management software products market;

· our limited operating history;

· the valuation of assets reflected on our financial statements;

· our reliance on continued access to financing;

· our reliance on information provided and obtained by third parties;

· federal and state regulatory matters;

· additional expenses, not reflected in our operating history, related to being a public reporting company;

· competition in the identity and access management software products market;

· economic outlook;

· financing requirements; and

· litigation risks.

Some of the statements in this prospectus that are not historical facts are “forward-looking” statements. Forward-looking statements can be identified by the use of words like “believes,” “could,” “possibly,” “probably,” “anticipates,” “estimates,” “projects,” “expects,” “may,” “will,” “should,” “seek,” “intend,” “plan,” “expect,” or “consider” or the negative of these expressions or other variations, or by discussions of strategy that involve risks and uncertainties.  All forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements.  We base these forward-looking statements on current expectations and projections about future events and the information currently available to us.  Although we believe that the assumptions for these forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Consequently, no representation or warranty can be given that the estimates, opinions, or assumptions made in or referenced by this prospectus will prove to be accurate. Some of the risks, uncertainties and assumptions are identified in the discussion entitled “Risk Factors” in this prospectus.  We caution you that the forward-looking statements in this prospectus are only estimates and predictions, or statements or current intent. Actual results or outcomes, or actions that we ultimately undertake, could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements.  These risks, uncertainties and assumptions include, but are not limited to, those discussed in this prospectus.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to certain issuers, including issuers that do not already have their equity traded on a recognized national exchange such as the Nasdaq Capital Market.  Our common stock does not presently trade on any recognized national exchange.  As a result, we will not have the benefit of this safe harbor protection for this offering in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.

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USE OF PROCEEDS

Based on a proposed initial public offering price of $5.00 per share, the estimated price set forth on the cover page of this prospectus, we estimate that the net proceeds from this offering, after deducting underwriting commissions and expenses payable by us and other offering expenses payable by us, will be approximately $4,553,000 if we sell a minimum of 1,100,000 shares and approximately $8,708,000 if we sell all 2,000,000 shares of our common stock in this offering.  However, this is a best efforts offering and there is no assurance that we will sell any shares or receive any proceeds.

We intend to use the net proceeds approximately as follows:

Application of Net Proceeds	Minimum		Percentage of Net Proceeds			Maximum		Percentage of Net Proceeds
Expand marketing and distribution of IAM software products	$	1,821,200		40.0	%	$	3,482,000		40.0	%
Enhance ongoing product development and engineering programs		910,600		20.0	%		1,742,000		20.0	%
Fund potential acquisitions of complementary businesses		910,600		20.0	%		1,742,000		20.0	%
Additional general corporate purposes		910,600		20.0	%		1,742,000		20.0	%
Total	$	4,553,000		100.0	%	$	8,708,000		100.0	%

We intend to expand the sales, marketing and distribution of our IAM software products in the education segments for higher education and K-12 school districts.

We intend to accelerate our product development and engineering programs to complete our projects described in “Business – Our Identity and Access Management Software Products,” including the modification of both our TridentHE and TridentK12 software products to include additional functionality.

We also intend to use a portion of the net proceeds of this offering to fund potential acquisitions of complementary businesses, products and technologies as a part of our growth and expansion strategy.  We have no current agreements or commitments with respect to any such acquisitions.

Funds for general corporate purposes include amounts required to pay officers’ salaries, professional fees, ongoing public reporting costs, office-related expenses and other corporate expenses, including interest and overhead.

If more than the minimum of 1,100,000 shares but less than the maximum of 2,000,000 shares of common stock are sold in this offering, the use of the net proceeds will be substantially as set forth in the table above for the sale of the minimum amount, except that the amounts to be allocated for first, expanding marketing and distribution of IAM software products, and second, additional general corporate purposes, will be increased.

We believe the net proceeds of this offering, together with operating revenues and the remaining proceeds from our private placement of 281,500 shares of our common stock (which had aggregate gross proceeds of $703,750), will be sufficient to meet our cash, operational and liquidity requirements for at least 12 months if we sell a minimum of 1,100,000 shares and for at least 24 months if we sell all 2,000,000 shares of our common stock in this offering.  While the initial allocation of the net proceeds of this offering represents our best estimates of their use, the amounts actually expended for these purposes may vary significantly from the specific allocation of the net proceeds set forth above, depending on numerous factors, including changes in general economic and/or regulatory climate, and the progress and development of potential strategic partnership arrangements.  However, there can be no assurance these sources of funds, even assuming that this offering is successful, will satisfy all of our requirements for any particular period of time.

As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering.  Accordingly, we will have broad discretion in the application of these proceeds.  Net offering proceeds not immediately applied to the uses summarized above will be invested in short-term, interest-bearing obligations.

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DIVIDEND POLICY

To date, we have never paid or declared any cash dividends on our common stock.  We currently intend to retain any future earnings to finance the operation and development of our business and we do not expect to pay any cash dividends on our common stock in the foreseeable future.  Payment of future dividends, if any, will be at the discretion of our Board of Directors and will depend on a number of factors, including, but not limited to, our financial condition, results of operations, capital requirements, restrictions contained in future financing instruments, and other factors our Board of Directors deems relevant.

CAPITALIZATION

The following table sets forth, as of June 30, 2015, our short-term debt and capitalization on an actual basis and on a pro forma, as adjusted basis to give effect to (a) our 2015 private placement of 281,500 shares of our common stock for aggregate gross proceeds of $703,750, (b) the conversion into 289,016 shares of common stock of notes payable by us in the aggregate amount of $708,664 from July to November 2015, (c) the application of $55,055 in debt to exercise an option for 80,964 shares of common stock, (d) the issuance of 1,334 shares of common stock in consideration for business consulting services, and (e)(i) the sale of a minimum of 1,100,000 shares of our common stock in this offering at a proposed initial public offering price of $5.00 per share, the estimated price set forth on the cover page of this prospectus, and our receipt of the estimated $4,553,000 in net proceeds from this offering, after deducting underwriting commissions and estimated offering expenses payable by us, and (ii) the sale of all 2,000,000 shares of our common stock in this offering at a proposed initial public offering price of $5.00 per share and our receipt of the estimated $8,708,000 in net proceeds from this offering, after deducting underwriting commissions and estimated offering expenses payable by us.  

You should read this information in conjunction with “Prospectus Summary - Summary Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our financial statements and the related notes appearing elsewhere in this prospectus.

	Actual at June 30, 2015			Pro Forma, As Adjusted - Minimum			Pro Forma, As Adjusted - Maximum
				(unaudited)
Short-term debt	$	2,543,402		$	1,779,683		$	1,779,683
Long-term notes payable, net of current portion	$	1,000,050		$	1,000,050		$	1,000,050
Stockholders’ equity:
Common Stock, $0.001 par value; 100,000,000 shares authorized, 3,946,036 shares issued and outstanding, actual; and 5,698,850 and 6,598,850 shares issued and outstanding, pro forma, as adjusted(1)	$	3,946		$	5,698		$	6,598
Additional paid-in capital		5,460,202			11,478,919			15,633,019
Accumulated deficit		(9,521,609	)		(9,521,609	)		(9,521,609	)
Total stockholders’ equity (deficit)	$	(4,057,461	)	$	1,963,008		$	6,118,008
Total capitalization (deficit)	$	(3,057,411	)	$	2,963,058		$	7,118,058

___________

(1) Does not include (i) 3,201,119 shares of our common stock reserved for issuance upon the exercise of outstanding stock options, (ii) 2,641,866 shares of our common stock reserved for issuance upon the exercise of outstanding warrants, and (iii) 77,000 shares (minimum) to 140,000 shares (maximum) of our common stock reserved for issuance upon the exercise of warrants we expect to grant to the underwriters in this offering.

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DILUTION

As of June 30, 2015, after giving pro forma effect to (a) our 2015 private placement of 281,500 shares of our common stock for aggregate gross proceeds of $703,750, (b) the conversion into 289,016 shares of common stock of notes payable by us in the aggregate amount of $708,664 from July to November 2015, (c) the application of $55,055 in debt to exercise an option for 80,964 shares of common stock, and (d) the issuance of 1,334 shares of common stock in consideration for business consulting services, our net tangible book value was approximately $(3.1 million), or $(0.68) per share of common stock.  Net tangible book value per share represents our total tangible assets, less our total liabilities, divided by the number of outstanding shares of our common stock.  Dilution represents the difference between the amount per share paid by purchasers in this offering and the pro forma net tangible book value per share of common stock after the offering.  After giving effect to the sale of 1,100,000 shares of common stock (minimum) and 2,000,000 shares of common stock (maximum) in this offering at a proposed initial public offering price of $5.00 per share, which is the estimated price set forth on the cover page of this prospectus, and after deducting underwriting commissions and estimated offering expenses payable by us, but without adjusting for any other change in our pro forma net tangible book value subsequent to June 30, 2015, our pro forma net tangible book value would have been $0.25 (minimum) and $0.85 (maximum) per share.  This represents an immediate increase in pro forma net tangible book value of $0.93 (minimum) and $1.53 (maximum) per share to our existing stockholders and immediate dilution of $4.75 (minimum) and $4.15 (maximum) per share to new investors purchasing shares at the proposed public offering price. The following table illustrates the dilution in pro forma net tangible book value per share to new investors as of June 30, 2015:

	Minimum			Maximum
Proposed initial public offering price	$	5.00		$	5.00
Pro forma net tangible book value (deficit) before offering		(0.68	)		(0.68	)
Increase in pro forma net tangible book value attributable to new investors		0.93			1.53
Pro forma, as adjusted net tangible book value after offering	$	0.25		$	0.85
Dilution in pro forma net tangible book value to new investors	$	4.75		$	4.15

The following tables set forth on a pro forma basis, as of June 30, 2015, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by the existing holders of our common stock and the price to be paid by new investors at a proposed initial public offering price of $5.00 per share.

Assuming the sale of 1,100,000 shares:

	Shares Purchased					Total Consideration					Average Price Per Share
	Number		Percent			Amount		Percent
Existing stockholders		4,598,850		80.7	%	$	6,931,617		55.8	%	$	1.51
New investors		1,100,000		19.3	%	$	5,500,000		44.2	%	$	5.00
Total		5,698,850		100.0	%	$	12,431,617		100.0	%

Assuming the sale of 2,000,000 shares:

	Shares Purchased					Total Consideration					Average Price Per Share
	Number		Percent			Amount		Percent
Existing stockholders		4,598,850		69.7	%	$	6,931,617		40.9	%	$	1.51
New investors		2,000,000		30.3	%	$	10,000,000		59.1	%	$	5.00
Total		6,598,850		100.0	%	$	16,931,617		100.0	%

The Aegis Identity Software, Inc. Incentive Stock Option Plan (the “Stock Option Plan”) authorizes the issuance of up to 5,000,000 shares of our common stock to key employees, officers, directors and consultants of the company.  As of November 10, 2015, stock options to purchase an aggregate of 3,201,119 shares of common stock had been granted with exercise prices ranging from $0.68 per share to $2.50 per share.  To the extent that awards granted under the Stock Option Plan are issued and exercised, there will be further dilution to new investors.  The Stock Option Plan provides for the grant of incentive stock options.  Our Board of Directors intends to adopt a new equity incentive award plan before the closing of this offering in order to provide additional types of equity awards including non-qualified stock options and restricted stock units, and to discontinue the use of our existing Stock Option Plan.  We expect that the new plan will reserve for issuance a total number of shares roughly equivalent to the number of shares available for future grant under our existing plan.  The discussion and tables above assume no grants of options under the Stock Option Plan or any new plan and exclude 2,641,866 shares of our common stock reserved for issuance upon the exercise of outstanding warrants and 77,000 shares (minimum) to 140,000 shares (maximum) of our common stock issuable upon exercise of warrants we expect to grant to the underwriters upon the closing of this offering.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to our financial statements included elsewhere in this prospectus.  In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this prospectus.

Overview

We provide IAM products and services for education IT environments, including software applications, platforms and infrastructure, which are available to our customers via cloud computing or on-premise deployment models.

Our current IAM solutions – TridentHE, TridentK12, TridentCloud and EduZone – have been developed, tested and enhanced over the last four years and are being used by more than 60 major universities, private colleges, community college systems and school districts across the United States.  Our IAM solutions are designed to deter and prevent fraudulent activities and thwart the misuse of protected data by establishing digital “identities” of computer system users and validating such users’ access rights.  TridentHE and TridentK12 products include features such as authentication through the identification of users, roles and resources to be accessed and the creation of user accounts, authorization through password creation and management, reconciliation that minimizes security risks and ensures appropriate user access, and auditing where users can create IAM reports and have centralized access to their IAM records.  We also provide TridentCloud that provides software support and applications that we host on our servers via the internet to licensees of our products, making it unnecessary for customers to install and maintain software on their own IT infrastructure.

Our EduZone product is a SaaS technology platform designed to be fully integrated with the educational institution’s identity and information ecosystem.  EduZone is one of the first education community platforms to allow school districts to protect and utilize student data while they rapidly adopt, standardize and share learning applications with students, parents and educators.

Our present and potential customers are major universities and school systems.  There are more than 4,700 universities and colleges and over 13,500 K-12 school districts in the United States.  Our selling efforts are conducted by our internal sales team, which is being expanded to include a reseller channel that will buy and distribute our IAM software products and provide integration and support services.  In 2014, our six largest educational institution customers (by revenue) were IlliniCloud (Illinois K-12), Chicago State University, Radford University, Colorado School of Mines, West Virginia University and City College of San Francisco.  In 2013, this list included University of Oregon, Radford University, Wake Forest University, IlliniCloud (Illinois K-12), St. Edward University and a key California State University, all of which schools continue to use our software.

Our revenue model is based on traditional software licensing.  When a customer downloads our IAM software, we receive an upfront software license fee, with annual revenue and maintenance fees of approximately 20% of the original license fee. Customer pricing is predicated on university size determined by the Carnegie Classification of Institutions of Higher Education. Additionally, we charge our customers a premium for professional services, including custom engineering and development work.  Our average new licensing contract generates an initial fee of approximately $75,000, and new maintenance/service contracts range from approximately $50,000 to $200,000.  We recorded total revenue of $1,186,150 for the six-month period ended June 30, 2015 and total revenue of $1,794,634 and $846,679 for the years ended December 31, 2014 and 2013, respectively.

Matters that May or Are Currently Affecting Our Business

The main challenges and trends that could affect or are affecting our financial results include:

· our ability to expand and diversify our customer base, and to extend the geographic areas we serve;

· our ability to attract competent, skilled technical and marketing professionals and resellers for our operations at acceptable prices to manage our overhead;

· our ability to raise additional equity capital, if and when needed; and

· our ability to control our costs of operations as we expand our infrastructure and capabilities.

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Liquidity and Business Risks

Our independent auditors, in their report dated November 12, 2015, expressed doubt about our ability to continue as a going concern.  At June 30, 2015 and December 31, 2014, our total stockholders’ deficit was $4,057,461 and $3,238,609, respectively.  Our net loss was $1,594,044 and $1,387,119 for the six months ended June 30, 2015 and 2014, respectively, and we used cash in our operations of $467,745 and $945,670 in the six months ended June 30, 2015 and 2014, respectively.  Net cash used in operations has resulted principally from costs incurred in the continued development of our software and marketing efforts.  We have funded our operations since inception through the use of cash obtained principally from the sale of equity securities and the placement of notes, some of which are convertible.  To continue development, we will need to raise additional capital through debt and/or equity financing.  However, additional capital may not be available on terms favorable to us and there can be no assurance that we will be successful in obtaining adequate additional financing.  We are in the process of reducing our costs associated with the delivery of services and are taking steps to grow revenues through enhanced sales effectiveness, additional sales coverage and new product offerings.  Our actual results indicate the existence of a material uncertainty that may cast significant doubt about our ability to continue as a going concern.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined.

We believe that, of the significant accounting policies discussed in Note 2 of Notes to Financial Statements, the following accounting policies require our most difficult, subjective or complex judgments in the preparation of our financial statements.

Revenue Recognition

We enter into arrangements to deliver multiple products or services.  We apply software recognition rules and allocate the total revenues among the elements based on vendor-specific objective evidence (“VSOE”) of fair value of each element.  We recognize revenue on a net basis excluding taxes collected from customers and remitted to government authorities.

Our sources of revenue are as follows:

1. Software licenses, including new software license revenue from granting licenses to use our software products.

2. Maintenance fees – software updates and product support.

3.   4. Professional services – software implementation and customization. Subscription software services - hosted access to the software application for a subscription based fee.

We recognize revenue when all of the following criteria are met:

· Persuasive evidence of an arrangement exists – We have entered into a (pre-determined statement of work arrangement) legally binding arrangement with the customer before the end of the period;

· We have delivered a product or performed a service – Delivery is considered to have occurred when we provide the software and customer has access to the software with login credentials.  Performance of a service has occurred upon receipt of customer acceptance once milestones have been met;

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· The amount of the fees are fixed or determinable and free of contingencies or significant uncertainties – We assess whether a fee is fixed and determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction.  For software licenses, we do not generally offer extended payment terms with typical terms of payment due upon delivery.  For maintenance fees, the initial payment is due upon delivery of the software and then, if renewed, they are due annually.  For professional services, the fees are determined when the arrangement is established and then due upon completion of a milestone; and

· The collection of the related fees is fixed and determinable – We assess collectability on a customer-by-customer basis.  If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied.

VSOE of fair value does not exist for our software licenses; therefore, we allocate revenues to software licenses using the residual method.  Under the residual method, the amount recognized for software licenses is the difference between the total fixed and determinable fees and the VSOE of fair value for the undelivered elements under the arrangement.

The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for these elements when sold separately. VSOE for fair value of maintenance is established using the standard maintenance renewal rate in the customer’s contract.

Our software licenses are considered off-the-shelf products as they can be added to an arrangement with insignificant changes in the underlying software code and can be used by the customer for the customer’s purposes upon installation.  There is no significant production, customization or modification to the off-the-shelf software as it can typically be used as is for customer purposes.  Complex interfaces are not necessary for our software to be functional in the customer’s environment.  Services provided by us typically involve minor enhancements, design and/or standard implementation or integration of the product into the customer’s network or environment.  The services performed by us do not result in significant alteration to the features and functionality of the off-the-shelf software code.  In most arrangements, the service and product elements are stated separately and described such that the total price of the arrangement would vary as a result of the inclusion or exclusion of the services.

Maintenance fees include promises for the right to receive services or unspecified upgrades and enhancements (or both) after the license period begins.  Generally, these services include telephone support and correction of errors (bug fixes or debugging), as well as unspecified upgrades or enhancements.  The maintenance services revenue is recognized ratable over a 12 month period and is generally renewed annually.  These fees are recognized over the period the maintenance is provided.

Professional services consist of fees for strategic consulting, configuration, training, consultation and implementation are included as a part of our services business.  Revenues for professional services are recognized when final acceptance is received from the customer acceptance of each milestone. Software consulting and implementation generally require efforts of up to three to four months on average.

Subscription software revenue is a hosting arrangement subject to the software revenue recognition guidance of ASC 985-605.  SaaS arrangements typically provide hosted access to the software application for a subscription based fee. Subscription revenue delivery of the service includes customer access to the software, typically a fee paid upfront.  Revenue is recognized over the service period or over the customer relationship period.  The customer has the contractual right to take possession of the software at any time during the hosting/subscription period without significant penalty. If feasible the customer may run the software on its own hardware or contract with another party unrelated to the vendor to host the software.  We have not recognized any subscription software revenue for the six months ended June 30, 2015 and 2014.

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Results of Operations

Six Months Ended June 30, 2015 and 2014

The following table sets forth the results of our operations for the six months ended June 30, 2015 compared to our results of operations for the six months ended June 30, 2014.

	Six Months ended June 30,
	2015			2014
Statement of Operations Data:
Total revenue	$	1,186,150		$	787,743
Operating expenses:
Research and development		106,560			170,236
General and administrative expense		1,892,862			1,445,381
Selling expense		317,584			190,608
Amortization and depreciation expense		195,678			189,036
Total operating expenses		2,512,684			1,995,261
Loss from operations		(1,326,534	)		(1,207,518	)
Total interest expense		(267,510	)		(179,601	)
Loss before provision for income taxes		(1,594,044	)		(1,387,119	)
Provision for income taxes		-			-
Net loss	$	(1,594,044	)	$	(1,387,119	)

Revenue

Our total revenue increased by $398,407, from $787,743 for the six-month period ended June 30, 2014 to $1,186,150 for the same period in 2015, an increase of approximately 50.6%.  There was softening in revenue from software license sales that was compensated for from increased revenue from professional services and recurring revenue from maintenance agreements. This increase was primarily attributable to sales related to our Trident software.  Our TridentHE product continues to be our top selling product and we expect that to be the case for the remainder of 2015.  

Operating Expenses

Our total operating expenses, consisting principally of general and administrative expenses, increased by $517,423, from $1,995,261 for the six-month period ended June 30, 2014 to $2,512,684 for the same period in 2015, an increase of approximately 25.9%.  The primary increase in operating expenses was due to general and administrative expense increases, as well as to salaries associated with the expansion of our sales efforts, software development costs and debt service requirements. In addition, our amortization and depreciation expenses increased by $6,642, from $189,036 for the six-month period ended June 30, 2014 to $195,678 for the same period in 2015, an increase of approximately 3.5%.  These expenses remained generally flat due to the consistent amortization of our software.

Interest and Other Expenses

Our interest expense increased by $87,909, from $179,601 for the six-month period ended June 30, 2014 to $267,510 for the same period in 2015, an increase of approximately 48.9%, due to our continued outstanding indebtedness, which we have relied on to meet our operational cash flow requirements.  We expect our interest expenses to decrease significantly following the completion of this offering as we restructure our current high cost of debt to lower cost debt thereby reducing our overall cost.

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Years Ended December 31, 2014 and 2013

The following table sets forth the results of our operations for the year ended December 31, 2014 compared to our results of operations for the year ended December 31, 2013.

	Year ended December 31,
	2014			2013
Statement of Operations Data:
Total revenue	$	1,794,634		$	846,679
Operating expenses:
Research and development		182,314			34,207
General and administrative expense		3,265,530			2,046,559
Selling expense		438,086			229,992
Amortization and depreciation expense		388,077			300,085
Total operating expenses		4,274,007			2,610,843
Loss from operations		(2,479,373	)		(1,764,164	)
Total interest expense		(695,114	)		(346,178	)
Loss before provision for income taxes		(3,174,487	)		(2,110,342	)
Provision for income taxes		-			-
Net loss	$	(3,174,487	)	$	(2,110,342	)

Revenue

Our total revenue increased by $947,955, from $846,679 for the year ended December 31, 2013 to $1,794,634 for the year ended December 31, 2014, an increase of approximately 112.0%.  The growth in our annual total revenue was primarily attributable to increased sales in three revenue streams including software licenses, professional services and recurring revenue from maintenance fees.  The majority of the revenue was associated with the sales of our TridentHE product to the higher education market.

Operating Expenses

Our total operating expenses, consisting principally of general and administrative expenses, increased by $1,663,164, from $2,610,843 for the year ended December 31, 2013 to $4,274,007 for the year ended December 31, 2014, an increase of approximately 63.7%.  The primary increase in operating expenses was due to general and administrative expense increases, as well as to salaries associated with the expansion of our sales efforts and software development costs. In addition, our amortization and depreciation expenses increased by $87,992, from $300,085 for the year ended December 31, 2013 to $388,077 for the year ended December 31, 2014, an increase of approximately 29.3%.  The increase was primarily a result of capitalization of development costs.

Interest and Other Expenses

Our interest expense increased by $348,936, from $346,178 for the year ended December 31, 2013 to $695,114 for the year ended December 31, 2014, an increase of approximately 100.8%, due to our additional borrowings in 2014 to meet our operational cash flow requirements.  We expect our interest expenses to decrease significantly following the completion of this offering as we continue to eliminate some of our indebtedness through conversions to equity and are able to pay for our operations from the net proceeds of this offering.

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Liquidity and Capital Resources

We have funded our operations since inception through the use of cash obtained principally from the sale of equity securities and the placement of notes, some of which are convertible into shares of our common stock.  To continue development, we will need to raise additional capital through debt and/or equity financing.  We believe the net proceeds of this offering, together with operating revenues and the remaining proceeds from our private placement of 281,500 shares of our common stock (which had aggregate gross proceeds of $703,750), will be sufficient to meet our cash, operational and liquidity requirements for at least 12 months if we sell a minimum of 1,100,000 shares and for at least 24 months if we sell all 2,000,000 shares of our common stock in this offering.  While the initial allocation of the net proceeds of this offering represents our best estimates of their use, the amounts actually expended for these purposes may vary significantly from the specific allocation of the net proceeds set forth above, depending on numerous factors, including changes in general economic and/or regulatory climate, and the progress and development of potential strategic partnership arrangements.  However, there can be no assurance these sources of funds, even assuming that this offering is successful, will satisfy all of our requirements for any particular period of time. If we sell only the minimum number of shares yielding insufficient gross proceeds, we may be unable to cover our expenses, sufficiently fund operations or fully execute our business plan.

In November 2015, we completed a private placement of 281,500 shares of our common stock to a small number of accredited investors for aggregate gross proceeds of $703,750.  We also entered into a letter agreement and subscription agreement with Newport Capital Bancorp, LLC, of which our director, John S. Vasquez, is a principal and manager, for the purchase in four installments of an aggregate of an additional 220,000 shares for $550,000 upon the satisfaction of certain events to occur prior to the completion of this offering.  Burnham Securities Inc., one of the underwriters in this offering, was the placement agent for the private placement.  The proceeds of the private placement are being used primarily for working capital and general corporate purposes.

On October 27, 2015, we entered into a loan transaction with an existing stockholder.  The principal amount of the loan is $150,000, the maturity date is January 27, 2016 and the interest rate is 12% per annum.  A warrant to purchase 2,101 shares of our common stock at an exercise price of $2.50 per share with a term of five years was granted in connection with this loan transaction.

Cash, Cash Equivalents and Investments

As of June 30, 2015, we had $7,245 in cash and cash equivalents and a working capital deficit of $3,584,941. Our cash resources increased as additional funds were received in our private placement and loan transaction described above.

Cash Flows from Operating Activities

For the six months ended June 30, 2015, operating activities used $467,745 in cash primarily due to a net loss for the six months ended June 30, 2015 of $1.6 million, which was adjusted for stock-based compensation expenses of $559,181 and the non-favorable impact of trade receivable collections of $131,959 for working capital needs.

For the six months ended June 30, 2014, operating activities used $945,670 in cash, primarily due to a net loss for the six months ended June 30, 2014 of $1.4 million, which was adjusted for stock-based compensation expenses of $343,525 and the non-favorable impact of trade receivable collections of $268,371 for working capital needs.

Cash Flows from Investing Activities

In the six months ended June 30, 2015, $129,736 was used in investing activities due entirely to software development costs. In the six months ended June 30, 2014, $150,643 was used in investing activities including $146,009 for software development and $4,634 in acquisitions of equipment.

Cash Flows from Financing Activities

In the six months ended June 30, 2015, $603,891 of cash was provided by financing activities, primarily from the issuance of convertible notes payable net of debt issuance costs. In the six months ended June 30, 2014, $724,674 of cash was provided by financing activities, primarily from the issuance of $300,000 worth of common stock and $500,000 from the issuance of notes payable.

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Operating Capital and Capital Expenditure Requirements

We expect minimal increases in our operating capital and capital expenditure requirements, which may include expenditures for computer server and storage upgrades and continued new product software development which is capitalized for a short to mid-term period of time.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.  However, we currently maintain operating leases on our Hampden and Broadway facilities, for which full liability value has not been captured on our balance sheet.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted.  Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards.  This means that an “emerging growth company” can make an election to delay the adoption of certain accounting standards until those standards would apply to private companies.  We have elected to delay such adoption of new or revised accounting standards and, as a result, we may not comply with new or revised accounting standards at the same time as other public reporting companies that are not “emerging growth companies.”  This exemption will apply for a period of five years following our first sale of common equity securities under an effective registration statement or until we no longer qualify as an “emerging growth company” as defined under the JOBS Act, whichever is earlier.

Recently Issued Accounting Pronouncements

In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are currently evaluating the impact of the new standard.

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 is not expected to have a material impact on our financial position, results of operations or cash flows.

In November 2014, FASB issued ASU 2014-16, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity” (“ASU 2014-16”). ASU 2014-16 clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendment clarifies that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. ASU 2016-16 is not expected to have a material impact on our financial position, results of operations or cash flows.

In March 2015, FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). We have adopted ASU 2015-03.

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We do not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.

Quantitative and Qualitative Disclosures about Market Risk

We currently have no material exposure to interest rate risk.  In the future, we intend to invest our excess cash primarily in money market funds, debt instruments of the U.S. government and its agencies and in high quality corporate bonds and commercial paper.  Due to the short-term nature of these investments, we do not believe that there will be material exposure to interest rate risk arising from our investments.

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BUSINESS

Overview

We started our business in August 2011 to provide the IAM market with new and specialized software products based on current open-standards technologies and more competitive pricing.  The founding members of our company acquired valuable knowledge from their collective experience in providing IAM services utilizing multiple industry-leading IAM products over the past decade.  This experience and product knowledge led our management team to embark on the development of our proprietary TridentHE software, which is a new, differentiated software product focused exclusively on the education market segment that includes higher education and TridentK12 software aimed at elementary and secondary school districts.  This market segment represents more than $2.5 billion in annual revenue, has fewer competitors than the general IAM software products segment and has a highly demonstrated need for specialized software architecture.  We believe that IAM educational software products are a significant growth opportunity for our company.

Our corporate objective is to provide the education sector with identity infrastructure that enables the protection of digital identities created by the growth of internet technologies.  Through existing personnel and key new hires, we have experience across multiple IAM platforms, including Sun Microsystems, Oracle, Novell, Microsoft, Symplified and other open-source software.  We have a source-code licensing agreement with OpenIAM, LLC, a leader in the development of open-standards identity software, which can be adapted and extended for specific users, to utilize its identity manager software as part of the infrastructure of TridentHE and our other software products.

Industry Overview and Target Markets

The increasing use of internet technologies is transforming the way people work and communicate.  Consequently, more people have access to information, including certain corporate and personal data, which should be restricted.  In the digital age, “identities” are established, validated through an “authoritative source” and certain rights are “provisioned” either by one’s role (i.e., student, faculty or alumni) or by a rule (i.e., a Vice President has more access than a manager).  This administrative software is called “identity and access management” software.  IAM software provides rights and services to individuals accurately and securely, based on validating identities and authorizing access using a variety of contemporary software techniques.

IAM is one of the primary market segments within the broader cyber-security market, which includes, in addition to IAM, risk and compliance management, data encryption, data leakage prevention, data recovery, anti-virus protection, and fire wall and network security.  IAM offers four main security functions: (i) user authentication through the identification of users, roles and resources to be accessed and the creation of user accounts, (ii) authorization through password creation and management, (iii) reconciliation that assesses security risks and ensures appropriate user access, and (iv) auditing where users can create IAM reports and have centralized access to their IAM records.  Key drivers of IAM software and services include:

· meeting compliance requirements for access to critical systems and applications,

· improving internal security,

· enabling growth through secure use of the internet,

· improving end user productivity via a single sign-on enabling access to multiple applications,

· facilitating business-to-business interactions via identity federation, and

· improving IT efficiency by automating user provisioning and reducing calls to the help desk.

There is a particular need in the education market for IAM software due to the unique sources of authentication and the constant turnover of thousands of students each year.  Our TridentHE and TridentK12 software was designed to serve the needs of the education market by connecting to the applications used in that industry and supply provisioning services based on the needs of students, faculty and alumni.

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The diagram below illustrates the intended benefits of our IAM system:

IAM Market Overview

IDC, an independent market research firm, estimated in a November 2014 report that the worldwide IAM market is expected to account for $7.1 billion in license, maintenance and SaaS revenue by 2018.  While IDC’s report showed significant historical revenue growth and predicted strong future growth in the IAM market, it also revealed considerable market fragmentation with respect to the market share and overall number of vendors.  We believe that this fragmentation creates a significant opportunity for our company on which we plan to capitalize through an aggressive product strategy that we believe is superior to the approach to IAM software and services used by several of our competitors.  During the first half of 2015, more than $2.5 billion was invested in the education technology market segment, according to a report by InsideHigherEd, a market research publication.  We believe education technology lags behind numerous other commercial enterprises in terms of technological advancements, leading to greater demand for solutions that enhance student data privacy, a topic of increasing importance as there have been many data breaches in recent years. As we focus exclusively on the education IAM market, we believe demand for our tailored, scalable solutions in the education technology market will continue to increase.

Provisioning, the key IAM function of our TridentHE and TridentK12 software, is the process of providing users such as students, faculty and employees with access to data and technology resources like email, inclusion in certain directories and access to certain information in response to automated or interactive business processes.  Other segments of the IAM market are web single sign-on, enterprise single sign-on and directory services.  We believe that, based on industry data, provisioning accounts for a majority of all IAM market revenues due to further acceptance of the enterprise environment, incorporation of managing identities in cloud computing applications, inroads into the midmarket and continued requirement of significant consulting and integration investment for implementation.

IAM Market Strategy

Our strategy is based on our belief that customers are unsatisfied with many of the products and services offered by the largest companies in the IAM market.  In conversations with a leading provisioning vendor, we were informed that 50% of third-party provisioning products end up as software that is not actually used.  Forrester and other analyst groups have commented about a shift in the way IAM products are being developed by vendors.  A Forrester report released in 2014 noted “[p]roducts that give quick answers to immediate security and audit problems (privileged user, password management, identity audit and enterprise single sign-on) continue to excel and move fast along our adoption curves.”

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We believe that the current state of market fragmentation has created an opportunity for us.  In order to capture this opportunity, we entered into a strategic licensing agreement with OpenIAM to produce and develop our own proprietary identity management software.  In addition, we assembled a highly-experienced leadership team to bring our software products to market.  We offer one of the first open-standards, enterprise-class identity manager software products in the education market.  We believe that our TridentHE and TridentK12 products are higher quality, lower cost, and easier to implement and maintain than the software offered by our competitors.

Target Market Opportunity

We believe that our focus on the education sector provides a significant market opportunity for our company.  Certain members of our management have acquired extensive market knowledge through their respective business experience, including numerous higher education IAM implementations and membership in leading national education organizations such as EDUCAUSE.  We believe this market has significant needs and has demonstrated that IAM continues to be a top priority year after year.  There are over 4,700 universities and colleges and over 13,500 K-12 school districts within the United States, collectively representing a market opportunity of approximately $2.3 billion, according to IDC.

Solving IAM problems can be complex, expensive and difficult to accomplish.  Our ability to offer an innovative software product based on open-standards, common frameworks and well-known methodologies provides significant value to the education sector.  Since we provide software products built on open-standards technology that reduce the cost and complexity of implementing IAM software and services, we believe that we have significant potential to expand into and succeed in markets that were traditionally out of reach to IAM vendors because less human and monetary resources are required.

Our Identity and Access Management Software Products and Services

Our TridentHE, TridentK12 and other software products greatly improve the efficiency of IT systems with automated tools for on-boarding of new users and provisioning of user access rights.  In addition, our software products provide our customers with multiple IAM functions, including user authentication through the identification of users, roles and resources to be accessed and the creation of user accounts, authorization through password creation and management, reconciliation that assesses security risks and ensures appropriate user access, and auditing where users can create IAM reports and have centralized access to their IAM records.  A description of each of our software products is set forth below.

TridentHE for Higher Education Market

TridentHE represents one of the education market’s first open-standards (software that can be easily adapted and extended for specific users) and class identity management software programs dedicated to addressing the specific needs of higher education.  As the only identity management application built specifically for higher education, TridentHE provides comprehensive provisioning, password management and identity synchronization.  TridentHE’s provisioning capabilities allow for the creation of users, roles and resources, access that is role and rule based, automated workflows, delegated access administration and approvals, multiple authoritative sources of record and multiple targets.  TridentHE enables the establishment of a password policy, the synchronization of passwords to all applications, self-service password changes, profile management, access request approvals, white pages and FERPA compliance, and integration of our software with a help desk.  TridentHE’s reconciliation functionality allows connectors to determine if target systems have the correct credentials, automated error detection and correction, and periodic user access confirmation.  TridentHE’s audit abilities include the creation of ad hoc and custom reports.  Our TridentHE software, first released in October 2011, and its associated services and maintenance represented a majority of our total revenue for the six months ended June 30, 2015 and the years ended December 31, 2014 and 2013.  Revenue from TridentHE sales is expected to continue to be a significant percentage of our total revenue for the full 2015 year and for 2016.

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TridentK12 for K-12 Education Market

TridentK12 is an identity management software designed specifically for K-12 education, providing quality provisioning, password management and identity synchronization.  TridentK12 is a cost-effective, open standards-based identity software program that provides “out-of-the-box” integration for K-12 education environments.  TridentK12’s provisioning capabilities allow for near real-time account creation with multiple authoritative sources of record and multiple access targets based on users’ information, roles and resources, as well as automated workflow control and delegated access approvals and administration.  TridentK12’s password management allows for the establishment of a customized password policy, self-service password changes, profile management, access request approvals, white pages and the school’s FERPA compliance, synchronization of passwords to all applications, and integration of our software with a help desk.  TridentK12’s functionality allows for connectors to determine if target systems have the correct credentials, automated error detection and correction, and the periodic sending of access configurations to appropriate access approvers to confirm access of a user. TridentK12’s audit abilities include the creation of ad hoc and custom reports, automated audit workflows to enforce an organization’s access policy and centralized account and access records.  Our TridentK12 software was released in late 2014.  TridentK12 generated minimal revenue in 2014 and the first half of 2015.  We expect that revenue from TridentK12 sales will increase as a percentage of our total revenue in future periods as we expand our marketing and distribution efforts in the K-12 market segment.

EduZone

EduZone is a platform of technologies that brings together an ecosystem we call Digital Citizenship in Education.  Digital “citizenship” is the online presence, via school district systems, of students, teachers, administration, technology leaders, academic leaders, parents, application providers and other partners representing the educational community today and of the future.  In EduZone, digital citizens access a single platform where they find their digital resources, secured by a unique login, that allow them to focus on a student’s performance.  The platform is designed to be fully integrated with school district identity and information systems, under the full control and discretion of the school district, enhancing student data privacy and providing control and fast adoption that the ecosystem requires.  We initially demonstrated a prototype of our EduZone platform in mid 2015 andEduZone is currently in its “pilot stage.”  We expect to roll-out EduZone to the market on a commercial basis following this offering.

EduZone offers the following features:

· EZ Application Launcher – This is a single website where citizens can log-in and access all of a school district’s approved applications.  These applications are all secured by the same login information issued and controlled by the school district so all the participating applications are unlocked once a citizen is logged into the application launcher.

· EZ Application Marketplace – As applications join EduZone, all participating citizens can browse the pool of applications.  Because these applications will have already gone through the integration process, requesting a school district to approve them for use may be made through a mouse click.  Once approved, these apps will appear in the application launcher.

· EZ Identity – Users of school district resources, whether parents, students, teachers or administrators, become digital citizens in education when their on-line persona is created upon registration, enrollment or hire.  The digital identity enables secure access to approved applications by the school district and under the privacy guidelines of the school district.

· EZ Registry – School districts and application providers access a single registry to enroll their organizations in the EduZone platform and become digital citizens.  In the registry, the school district securely sets up access into their authentication information and approves access to other necessary information allowing EduZone to facilitate the identity exchange, as well as making approved data available to applications.  In the registry, the school district controls and sets up agreements with how applications may use and maintain the data.  Application providers use the registry to make their applications available in the EduZone Application Marketplace and agree to the terms of use by the school districts.

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· EZ Data – School districts and applications providers use and generate data that each one needs independently, but when interoperability allows them to share the data, student success is expected to improve.  EduZone data is an interoperable platform that allows the school district to maintain control while facilitating the exchange of data with the application providers.  By using the Application Programming Interface to EduZone Data, application providers have an up-to-date view into school district data while the school district maintains full control over that data and its access.  School districts can enable teachers to have a concise view into student performance, parents to access their children’s snapshot, and administrators to have a consolidated view of their domains.

TridentCloud

TridentCloud is a flexible and simple to implement software designed to provide IAM services to higher education and K-12 institutions from a cloud environment, which we refer to as IDaaS.  Once deployed within their infrastructure, an educational institution can deliver quality provisioning, password management and identity synchronization services with the financial benefits of economies of scale.  The current version of our TridentCloud is operational and is being rolled out to K-12 school districts to provide them with IDaaS services.  Subsequent versions of TridentCloud are being developed in conjunction with strategic educational partners and service providers.

For TridentHE, TridentK12 and EduZone customers, we offer services for Shibboleth software, which principally utilizes the OASIS Security Assertion Markup Language, among other widely used identity standards, to provide a federated single sign-on and attribute exchange framework.  A user authenticates with his or her organizational credentials, and the organization (or identity provider) passes the minimum identity information necessary to the service provider to enable an authorization decision.  Shibboleth also provides extended privacy functionality allowing a user and their home site to control the attributes released to each application.

Actual University Case Study

In 2009, a university located in the southern United States first invested in an IAM solution to create a simplified sign-on environment for its students and faculty.  At the time, the university’s departments could create their own active directories resulting in an individual having upwards of five passwords.  To address this problem, the university sought a more efficient system to manage identities and deployed an IAM solution from Oracle.  When it came time to upgrade the system, Oracle was no longer supporting the software, and the university would have needed to make significant investments in another IAM system.  In order to avoid re-implementing its entire IAM system, the university sought an IAM solution that could improve its existing system.

The university ultimately selected TridentHE software for its compatibility with the university’s existing IT administration system for students and its ability to tie together the university’s Oracle applications for its human resources department and its student IT administration system.  In addition, TridentHE provides the university with key directory, database and password syncing applications.  The TridentHE solution met the university’s needs, as it was easy to deploy and had a smaller hardware/storage footprint than the university’s IAM system because of its use of open standards software.

Once the university fully implemented our TridentHE software, the impact to end users from the upgrade of the IAM system was minimal.  Other than a new, sleek and modern interface, the university’s users saw no change to the university’s IAM system.  The university’s students and employees responded positively to the upgraded system and like the interface of the new self-service portal (where they go to claim their account and set up challenge questions for password protection).  Without inconveniencing users through the adoption of our TridentHE software, the university has:

· reduced the time to implement IAM system changes by six months due to TridentHE’s simplicity and the ability to leverage already documented best practices;

· significantly reduced the amount of hardware needed for data storage; and

· increased flexibility for future IAM system software integrations, with no additional skills needed by IT staff due to TridentHE’s use of open standards software.

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Our Growth and Expansion Strategy

Overall Strategy

We intend to grow organically by expanding our reseller channel, developing our in-house channel support, extending our product line, building our industry position and accelerating our marketing and distribution efforts.  We also intend to commercially launch our EduZone technology platform, which we expect to further broaden our product line and service offerings, and provide additional growth opportunities for our company.

We plan to develop an international market by focusing initially on countries where English is a primary working language, limiting exports to countries with sufficiently robust intellectual property and software copyright laws, enhancing global partnerships, creating greater brand awareness and building customer support infrastructure.

We are also evaluating several well-positioned companies that may be potential acquisition targets.  Areas of interest to us are cyber-security companies that could provide complementary software and/or technology platforms, existing customer bases in various niche or regional markets and experienced technical employees.  As of the date of this prospectus, we have not entered into any term sheets or agreements with respect to an acquisition.  We intend to pursue only those acquisitions that we expect to be accretive and synergistic in terms of immediate revenues, business lines, customers and cross-selling opportunities.

Key Initiatives

We are currently pursuing multiple initiatives to meet our strategic objectives.  These initiatives include the following key elements:

TridentHE Growth.  We intend to promote TridentHE software and services in order to capitalize on the opportunities created by IAM market fragmentation by filling the need for a contemporary open-standards software program in the education market.

Aegis Identity Center of Excellence.  We provide a customer-centric service center through a membership organization owned by our company through which IAM industry vendors can offer a one-stop shop for “proof of concepts” in education.

K-12 Market Initiative.  We will continue to offer our TridentK12 software and EduZone as cost-effective IAM solutions to support the digital evolution in K-12 education.  We provide secure and timely IAM accessibility customized to each user and software that can be rapidly scaled.

Second Vertical Market Evaluation.  We intend to apply our TridentHE software across other vertical markets, capitalizing on the fact that identity issues in the education market are much more difficult to solve than those in the commercial market.  We intend to pursue the selection of a second vertical market in 12 to 18 months.

Customers

Our present and potential customers are major universities and school systems.  Sales are currently performed by our internal sales team that is being expanded to include a reseller channel that will purchase and resell our IAM software products and provide integration and support services.  Our IAM software products are being used by the following schools:

·   California State Polytechnic, Pomona, CA ·   California State University, San Bernardino, CA ·   Colorado School of Mines, Golden, CO ·   Colorado State University, Pueblo, CO ·   Hawaii Pacific University, Honolulu, HI ·   New Jersey Institute of Technology, Newark, NJ ·   Queen’s University, Kingston, Ontario, Canada ·   Radford University, Radford, VA ·   Rockefeller University, New York, NY ·   Southern Illinois University, Carbondale, IL ·   St. Edward’s University, Austin, TX ·   University of Oregon, Eugene, OR ·   Wake Forest University, Winston-Salem, NC ·   Washington College, Chestertown, MD ·   West Virginia University, Morgantown, WV

In 2014, our six largest customers (by revenue) were IlliniCloud, Chicago State University, Radford University, Colorado School of Mines, West Virginia University and City College of San Francisco.  In 2013, this list included University of Oregon, Radford University, Wake Forest University, IlliniCloud, St. Edward University and a key California State University, all of which continue to license our software.

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IlliniCloud and Radford University accounted for $314,253 and $197,955, respectively, or approximately 17.8% and 11.3%, respectively, of our revenue during the year ended December 31, 2014.  Except for IlliniCloud and Radford University, no single customer accounted for more than 10% of our revenue during the year ended December 31, 2014.

Marketing and Distribution

We market and distribute our software products through direct sales and our resellers.  We currently have two resellers located in the United States.  We intend to devote a portion of the net proceeds of this offering to enhance our marketing and distribution efforts.  We expect approximately 20% of software implementations will be performed directly by us with service providers or channel partners being utilized to perform the remaining implementation requirements.

Our IAM software products are sold pursuant to license agreements that allow for the installation and use of each of our licensed products on one IT system.  Our licenses allow our customers to use the version of software initially purchased into perpetuity. Our licenses come with warranties that our IAM software will perform in all material respects according to its documented specifications when used with an operating environment approved by us.  We also sell maintenance services contracts and professional services agreements to educational institutions that have already purchased software licenses for the continued support of the functionality of our IAM software.

Software Maintenance

We provide maintenance services to our educational institution customers, and regard it as a top priority.  Maintenance is provided by our technical support staff based in our main office.  Maintenance services consist of upgrades and technical phone and email support.  After an initial 90-day software warranty period, Maintenance services are provided to customers- at an annual cost of 20% of the software license fee.

We also provide training and certain implementation services to our customers and conduct training seminars.

Our Revenue Model and Pricing

Our revenue model is based on traditional software licensing.  When a customer downloads our IAM software, we receive an upfront software license fee, with annual revenue and maintenance fees of approximately 20% of the original license fee.  We estimate that our average new licensing contract generates an initial fee of approximately $75,000, and that new maintenance/service contracts range from approximately $50,000 to $200,000.

Our Technology Platform and Intellectual Property

We rely on a combination of trademark and trade secret laws in the United States and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our proprietary information, technology and brand.  In October 2015, we submitted a trademark application for our new corporate logo, which is currently pending approval.

We protect our proprietary information and technology, in part, by requiring our employees to enter into agreements providing for the maintenance of confidentiality and the assignment of rights to inventions made by them while employed by us.  We also may enter into non-disclosure and invention assignment agreements with certain of our technical consultants to protect our confidential and proprietary information and technology.  We cannot assure you that our confidentiality agreements with our employees and consultants will not be breached, that we will be able to effectively enforce these agreements, that we will have adequate remedies for any breach of these agreements, or that the our trade secrets and other proprietary information and technology will not be disclosed or will otherwise be protected.

We also rely on contractual and license agreements with third parties in connection with their use of our technology and services.  There is no guarantee that such parties will abide by the terms of such agreements or that we will be able to adequately enforce our rights.  Protection of confidential information, trade secrets and other intellectual property rights in the markets in which we operate and compete is highly uncertain and may involve complex legal questions.  We cannot completely prevent the unauthorized use or infringement of our confidential information or intellectual property rights as such prevention is inherently difficult.  Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential information and intellectual property protection.

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We have developed, tested and enhanced our IAM software products over the last three years.  Research and product development expenditures were $106,560 in the six months ended June 30, 2015 and $182,314 and $34,207 in the years ended December 31, 2014 and 2013, respectively.

Competition and Competitive Advantages

We face significant competition in the education segment of the IAM market.  Oracle, Microsoft, Fischer International, Hitachi, NetIQ and IBM are the primary competitors that we encounter within the education market segment, but none of these competitors focus entirely on educational institutions the way we do.  The primary focus for most of these competitors is the commercial market.  We believe that each of these companies’ IAM software is more expensive and complex than ours.  We believe our competitive advantages include:

Open-Standards Products.  We offer one of the market’s first open-standards, enterprise-class identity management software in the vertical market of higher education and K-12 school districts.  We believe that our TridentHE and TridentK12 software costs less, performs better, offers open standards technology and is easier to install and support than the IAM software offered by our competitors.  Open standards allow both our company and the higher education institution to more easily attract developers and support staff familiar with programming technologies such as Groovy and the Spring Framework.  This results in lower on-going support and maintenance costs.  Whether a customer chooses to have us provide program support, utilize an Aegis Identity partner or handle program support internally, open standards and open source partner technologies reduce a customer’s support costs.

Affordability.  We leverage open standard software to provide affordable software products for higher education.  By using open standards as part of our software, our cost of development and our customers’ ongoing cost of ownership are lower.  Complementing the overall lower cost, we offer very competitive fixed license pricing based on the overall size of the institution instead of the number of users or connectors that are required.  We believe that this makes TridentHE and TridentK12 more affordable for educational institutions with budgetary constraints.  We believe the lower price point of our TridentHE software expands our market opportunity well beyond the current enterprise-focused IAM software offered by most vendors.  For example, Sun Microsystems focused on the top 1,000 universities, and Oracle focuses on the top 600 universities.  We anticipate that our TridentHE software will be able to address the larger market of over 4,700 universities and colleges.  Additionally, we expect our TridentK12 software will be able to effectively address the unique requirements of the over 13,500 K-12 school districts in the United States.

Barriers to Entry.  While there are no absolute barriers to entering the IAM software business for the education market, we believe there are significant hurdles for prospective competitors to overcome.  These barriers include long software development time, the difficult and time-consuming process of acquiring new customers, systems testing, knowledge of the market and specific customer needs, and the cost of developing a sales distribution network.  Unlike new entrants in the industry, we have already established an internal sales force and are building a reseller network, and our software is already installed and operating at more than 35 major universities, private colleges, community college systems and school districts across the United States.

Management Experience.  Our executives have extensive experience managing companies, with significant, practical experience involving numerous IAM implementations utilizing legacy Sun Microsystems, Inc. software to deliver custom IAM services to higher education customers.  Additionally, our management has substantial vertical market expertise in the higher education market.

Higher Education Advisory Board 

We have established a Higher Education Advisory Board comprised of nine members with experience in the areas of information technology, security, identity management and administration.  The members represent some of our largest customer universities such as Radford University, the University of Oregon, California State University, Southern Illinois University and the New Jersey Institute of Technology.  The Advisory Board meets periodically with our Board of Directors and management to discuss matters relating to our product roadmap and strategic direction.  Members of the Advisory board are reimbursed by us for out-of-pocket expenses incurred in serving on the Advisory Board.  To our knowledge, none of the Advisory Board members has any conflict of interest between their obligation to us and their obligations to others.

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Government Regulation

Like many software businesses, our operations are subject to routine regulation by governmental agencies.  Much of this regulation will affect us indirectly, inasmuch as, and to the extent that, it affects our licensees more directly.  A summary of the laws and regulations that might affect our licensees is set forth below.

Companies conducting business on the internet are subject to a number of foreign and domestic laws and regulations.  In addition, laws and regulations relating to user privacy, freedom of expression, content, advertising, information security, and intellectual property rights are being debated and considered for adoption by many countries throughout the world.  Online businesses face risks from some of the proposed legislation that could be passed in the future.

In the United States, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, which include actions for libel, slander, invasion of privacy and other tort claims, unlawful activity, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content generated by users.  Certain foreign jurisdictions are also testing the liability of providers of online services for activities of their users and other third parties.  Any court ruling that imposes liability on providers of online services for activities of their users and other third parties could harm our licensees’ operations, and thus, indirectly, our business.

A range of other laws and new interpretations of existing laws could have an impact on our licensees’ operations.  For example, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, liability for listing, linking, or hosting third-party content that includes materials that infringe copyrights. Various U.S. and international laws restrict the distribution of materials considered harmful to children and impose additional restrictions on the ability of online services to collect information from minors. In the area of data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as California’s Information Practices Act.  The costs of compliance with these laws may increase in the future as a result of changes in interpretation.  Further, any failure on our licensees’ part to comply with these laws may subject them to significant liabilities.

Companies conducting online businesses are also subject to federal, state, and foreign laws regarding privacy and protection of user data.  Any failure by our licensees to comply with their posted privacy policies or privacy related laws and regulations could result in proceedings against them by governmental authorities or others, which could potentially harm their business, and consequently, our business to the extent such proceedings impact licensee revenue and the license fees payable to us stemming from such revenue.  Further, any failure by our licensees to protect their users’ privacy and data could result in a loss of user confidence in their services and ultimately in a loss of users, which could adversely affect their business, and consequently, our business.

We also must comply with the federal Family Educational Rights and Privacy Act, or FERPA, which protects the privacy and restricts the disclosure of student information.  FERPA generally prohibits an educational institution from disclosing personally identifiable information from a student’s education records without the student’s consent if the student is 18 years of age or older.  As an entity that provides IAM software and services to educational institutions, we are indirectly subject to FERPA and may not transfer or otherwise disclose any personally identifiable information from a student record to another party other than in a manner permitted under the statute.  Any violation of us by FERPA could result in a material breach of contract with one or more of our customers and could harm our reputation.  Further, if we disclose student information in violation of FERPA, the Department of Education could require one or more customers to suspend our access to student information for an extended period.

Facilities

Our principal executive offices are located in approximately 7,284 square feet of office space in Englewood, Colorado and 2,000 square feet of office space in Denver, Colorado.  We currently pay rent of $10,692 per month, under a lease that expires in May 2020, for our Englewood office and rent of $2,500 per month for our Denver office, under a one-year sublease that automatically renews on an annual basis with Newport Capital Bancorp, LLC, of which John S. Vasquez, a director of our company, is the Chairman and manager.

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Employees

We currently have 16 employees who work for us on a full-time basis.  Other than five senior executives and administrative personnel, our employees are specifically focused on product development and engineering with five individuals, marketing and sales with four individuals and professional services with two individuals.  Following the closing of this offering, we plan to hire additional employees for our product development and engineering group.  None of these employees is covered by a collective bargaining agreement and management considers relations with employees to be good.

Legal Proceedings

To our knowledge, no federal, state, local or foreign governmental agency is presently contemplating any proceeding against us that would have a materially adverse result on us.  To our knowledge, no director, executive officer or affiliate of our company or owner of record or beneficially of more than 5% of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding.

We received a subpoena for documents from the Colorado Department of Regulatory Authority, Division of Securities, in February 2015.  We provided the documents requested in the subpoena and have received no further correspondence.

We anticipate that we will from time to time become subject to claims and legal proceedings arising in the ordinary course of business.  It is not feasible to predict the outcome of any such proceedings, and no assurance can be made that their ultimate disposition will not have a material adverse effect on our business, financial condition, cash flows or results of operations.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth the names and ages of our executive officers and directors, and their positions with us, as of November 10, 2015:

Name	Age	Position
J. Ralph Armijo	62	Founder and Executive Chairman of the Board
Robert Lamvik	59	President, Chief Executive Officer, Treasurer and Director
Jatinder Pannu	44	Chief Operating Officer
Hadley Evans, Jr.	54	Chief Financial Officer
Thomas Autobee	64	Director
Graham Forman	44	Director
Craig S. Newmaker	50	Director
Sanjeevan Ratnathicam	44	Director
John S. Vasquez	45	Director

The principal occupations for the past five years (and, in some instances, for prior years) of each of our executive officers and directors are as follows:

J. Ralph Armijo has served as our Executive Chairman of the Board since August 2011, when he founded our company with Robert Lamvik.  Mr. Armijo served as our President from August 2011 through May 2014 when Mr. Lamvik assumed this position.  He also served as our first Chief Executive Officer from August 2011 until August 2015 when Mr. Lamvik assumed that position.  Mr. Armijo served as the Chief Executive Officer, President and Chairman of the Board for Aegis Business Group, Inc., an IAM advisory and consulting company, from 2003 through October 2011.  Prior to establishing Aegis Business Group, Inc., Mr. Armijo served as the Chairman of the Board of Navidec, Inc. from 1993 to 2001.  From 1981 to 1993, Mr. Armijo served in multiple senior management roles at Tektronix, Inc.  From 1976 to 1981, he served in various sales and marketing roles at IBM Corporation.  Mr. Armijo was also the creator of DriveOff.com, which was ultimately sold to Microsoft in 2000.  Mr. Armijo has served as a director on multiple corporate boards including: Navidec, Inc. from 1993 to 2002, DriveOff.com from 1998 to 2000, YourAutoChoice.com (an Avis Europe/Navidec joint venture) from 1998 to 2001, and VSI Holding Inc. from 1998 to 2000.  Mr. Armijo received a B.A. degree in economics from Colorado College, an M.B.A. from the Anderson School of Management at the University of California in Los Angeles (UCLA) and an Honorary Doctorate Degree from Colorado College.  In 2001, Mr. Armijo was recognized by Ernst & Young as the Rocky Mountain Region Entrepreneur of the Year in Technology Services.

As our Chairman and single largest stockholder, Mr. Armijo leads the Board and guides our company along with Mr. Lamvik.  Mr. Armijo brings extensive identity and access management industry knowledge to our company and a deep background in launching and growing technology companies.

Robert Lamvik has served as our Chief Executive Officer since August 2015, as President since May 2015 and as Treasurer and a member of our Board of Directors since August 2011, when he co-founded our company with Mr. Armijo.  Mr. Lamvik served as the Chief Operating Officer of our company from August 2011 to August 2015.  Prior to joining our company, Mr. Lamvik was the Chief Operating Officer of SAI Corp., a telecom expense management vendor, from 2008 to 2011, and he remains as a non-executive member of SAI Corp.’s board of directors.  Mr. Lamvik also held executive level positions with The Santa Cruz Operation (SCO), an operating system software company, as Vice President of Field Sales, from 1987 to 1995, and officer level roles at Asknet, an e-commerce services company, from 2007 to 2008, and Embarcadero Technologies, a computer software company, from 2004 to 2007.  From 1998 to 2003, Mr. Lamvik served as Vice President of Field Operations in North, Central and South America, for Sun Microsystems Software Sales, where he directed sales, field systems engineers, and field marketing staff from Canada to Brazil focused on enterprise deployments of Sun Microsystems IAM software, as well as relationships with channel partners and ISVs.  Mr. Lamvik earned a B.S. degree in mathematical sciences from Oregon State University and has completed executive financial management coursework at Stanford University.

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Mr. Lamvik’s 25 years of experience in identity and access management companies, day-to-day operational leadership of our company and in-depth knowledge of our software and services make him well qualified as a member of our Board.

Jatinder Pannu has served as our Chief Operating Officer since August 2015, and has been a member of our management team since 2014, with responsibilities in the areas of management consulting, strategic planning, product development, system integration and enterprise software.  Mr. Pannu previously held positions at InBloom, Inc., a student data tracking company, from March 2013 to September 2014, Promethean, a maker of interactive whiteboards and software for personalized learning, from March 2012 to March 2013, and IBM-Global Services from January 2006 to October 2011.  Mr. Pannu earned B.S. and M.S. degrees in electrical engineering from the University of California, Davis.

Hadley Evans, Jr. has served as our Chief Financial Officer since September 30, 2015.  Mr. Evans previously served as the Chief Financial Officer and a director of CMS Facilities Maintenance, Inc., a facilities maintenance and engineering firm, from February 2014 to September 2015.  He was the managing member of Hailu Consulting, LLC, a consulting and business advisory firm for small companies, from February 2013 to February 2014, and Senior Director, Internal Audits for TIAA-CREF, a national financial services organization, from September 2008 to January 2013.  Mr. Evans also held executive positions with Telwares, as Vice President and Corporate Controller, from 2005 to 2008, AT&T Wireless International, as Chief Financial Officer and Business Unit Vice President, from 2003 to 2005, and General Electric Auto Warranty Services, as Chief Financial Officer from 2002 to 2003.  Mr. Evans earned a M.S. degree in accounting from Colorado Technical University and a B.S. degree in finance from Norfolk State University.  He also completed the General Management Executive Program at the University of North Carolina at Chapel Hill.  Mr. Evans is a certified auditor and a member of the Institute of Internal Auditors.

Thomas Autobee has served as a member of our Board of Directors since February 2012.  Dr. Autobee opened his private dental practice in April 1977.  He has served on the Wells Fargo Bank community board since 1993 and the Pueblo Board of Water Works since November 2005.  He acted as the President of the Pueblo Water Board from 2010 through 2011.  Dr. Autobee has served on the Council on Dental Cares Programs for the Colorado Dental Association and the Admissions Committee for the School of Dental Hygiene at Pueblo Vocational College.  He was named Diplomat by the Academy of Dental Sleep Medicine in 2004 and served as President of southeastern Colorado Dental Society in 1984.  Dr. Autobee is a founding member of and actively participates in the Latino Chamber of Commerce where his business was named the Latino Chamber of Commerce Business of the Year in 2007 and he was named the Latino Chamber of Commerce Professional of the Decade in 2010.   He is also active in the Cultural Alliance of Pueblo, the Hispanic Education Foundation Scholarship Committee, the Kiwanis Club Youth Services Committee, the Pueblo County Revolving Loan Board, the Pueblo Community College Vocational Education Advisory Board and Governor Romer’s Minority Business Opportunities Task Force.  Dr. Autobee was appointed to Colorado State Fair Commission by Governor Romer in January 1992 and served as Treasurer for Congressman John Salazar from 2006 to 2010.  He also served on the Parkview Hospital Board of Directors.  Dr. Autobee holds a B.S. degree in biology from Colorado College and received a Doctorate of Dental Surgery from the University of Iowa’s School of Dentistry.

Dr. Autobee is well qualified to serve as a director of our company due to his substantial knowledge and many years of experience with numerous educational, governmental and community institutions.

Graham Forman has served as a member of our Board of Directors since August 2015.  Since September 2013, Mr. Forman has served as Managing Director of Edovate Capital, a seed and early stage venture capital company that he founded that invests in innovative education companies.  Previously, Mr. Forman was the Vice President of Business Development for Netchemia, a leading provider of cloud-based talent management software specifically developed for the education market, from January 2011 to March 2015, and served as Netchemia’s Vice President of Sales from January 2007 to December 2010.  Mr. Forman was the Vice President of Sales for YearMovie, an early stage company focused on video production and training programs for K12 education, from August 2005 to August 2006, Vice President of Sales and Marketing for eCivis, an early stage SaaS company focused on public sector organizations, from October 2000 to April 2005, and was District Director for California Assemblyman Jack Scott from November 1996 to September 2000.  Mr. Forman earned a M.B.A. degree with a focus on marketing and entrepreneurship from the University of California at Los Angeles Anderson School of Management and a B.A. degree in political science from the University of Chicago.

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Mr. Forman’s in-depth knowledge of the education market and the broad range of companies in the industry make him well qualified as a member of our Board.  He also brings transactional expertise in capital markets.

Craig S. Newmaker has served as a member of our Board of Directors since February 2012.  Mr. Newmaker is currently the Vice President and Chief Operating Officer of Veteran Engineering and Technology, LLC, an IT systems, systems engineering, training, and technical management firm, since 2003.  Mr. Newmaker previously worked as a software technical lead and manager for CTA Incorporated, Client/Server Division of Titan Corporation, and Booz-Allen & Hamilton working in the defense, e-commerce, and telecommunications domains.  Mr. Newmaker served on active duty in the U.S. Army in a variety of assignments with the Army Signal Corps.  Mr. Newmaker has over 19 years of experience in all phases of the software lifecycle including expertise in numerous computer languages and development environments.  Mr. Newmaker holds a B.S. degree in computer science from the U.S. Military Academy at West Point, graduating with academic distinction.

Mr. Newmaker provides decades of experience managing technology and software development operations in growth companies, making him well qualified as a member of our Board.

Sanjeevan Ratnathicam has served as a member of our Board of Directors since August 2015.  Mr. Ratnathicam has served as the Vice President of Finance for TeleTech Holdings, Inc., a technology consulting company, since April 2013.  Previously, he was the Vice President of Finance and Operations for Global Technology Resources Inc., a technology consulting company, from January 2007 to August 2012.  Mr. Ratnathicam was the founder and principal of RJ Support Services, a management consulting firm, from April 2002 to January 2007, the Vice President of Finance and Administration of Fetch Technologies, a data aggregation company, from December 1999 to May 2004, and Manager of Operations Planning, from February 1997 to August 1999, and Regional Controller/Staff Accountant, from November 1993 to February 1997, of Aramark, a service and distribution company.  Mr. Ratnathicam holds a B.S. degree in accounting from Pepperdine University.

Mr. Ratnathicam’s extensive knowledge of complex financial, accounting and technology management issues that are highly relevant to our business makes him well qualified to be a member of our Board.

John S. Vasquez has served as a member of our Board of Directors since April 2014.  Mr. Vasquez co-founded and serves as the Chairman of Newport Capital Bancorp, LLC, a community bank investment firm, since July 2009.  From June 2004 to July 2009, Mr. Vasquez was a principal of Newport Capital Asset Management Group, an activist private equity investment firm.  From June 1997 to June 2004, he was the President of Newport Capital Holdings, Inc., a bridge financing investment firm he founded.  Mr. Vasquez also was a Senior Vice President and Regional Manager for AXA Financial-Donaldson, Lufkin & Jenrette, a financial services and insurance company, from June 1994 to June 1997.

Mr. Vasquez has extensive knowledge of private equity investing, capital markets and mergers and acquisitions, making his input invaluable to the Board’s discussion of our growth strategies.

Board of Directors

Our Board of Directors currently consists of seven directors.  All directors hold office until the next annual meeting of our stockholders following their election, and until their successors have been elected and qualified.  Officers serve at the discretion of our Board of Directors.

When considering whether directors have the experience, qualifications, attributes and skills to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board of Directors focuses primarily on the information discussed in each of the directors’ individual biographies set forth above.  With regard to Messrs. Armijo and Lamvik, the Board considered their demonstrated experience and skills in managing our business to date.  In the cases of Messrs. Autobee, Forman, Newmaker, Ratnathicam and Vasquez, the Board considered their substantial experience in both the education and technology markets and operational areas that will assist our corporate governance responsibilities.

The Board of Directors periodically reviews relationships that directors have with us to determine whether the directors are independent.  Directors are considered “independent” as long as they do not accept any consulting, advisory or other compensatory fee (other than director fees) from us, are not an affiliated person of our company or our subsidiaries (e.g., an officer or a greater than 10% stockholder) and are independent within the meaning of applicable laws, regulations and the Nasdaq listing rules.  In this latter regard, the Board of Directors uses the Nasdaq listing rules (specifically, Section 5605(a)(2) of such rules) as a benchmark for determining which of our directors are independent in order to comply with applicable SEC disclosure rules and the Nasdaq listing rules.

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The Board of Directors has determined that, of our current directors, Messrs. Autobee, Forman, Newmaker and Ratnathicam are independent within the meaning of the Nasdaq listing rule cited above.  In the cases of Messrs. Armijo and Lamvik, their positions as current or recent executive officers of our company, together with Mr. Armijo’s beneficial ownership of more than 10% of our outstanding common stock, preclude them from being considered independent within the meaning of the Nasdaq listing rule.  In the case of Mr. Vasquez, the Board is cognizant of his position with Newport Capital Bancorp, one of our company’s principal lenders and an entity involved in several transactions with our company.

Board Committees

Our Board of Directors has an Audit Committee, Compensation Committee and Nomination and Corporate Governance Committee.  The Audit Committee is chaired by Mr. Ratnathicam and will consist of two other independent directors.  The Compensation Committee is chaired by Dr. Autobee and the Nomination and Corporate Governance Committee will consist of an independent director.

Our Audit Committee, Compensation Committee, and Nomination and Corporate Governance Committee each comply with the listing requirements of The NASDAQ Marketplace rules.  At least one member of the Audit Committee is an “audit committee financial expert,” as that term is defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as that term is defined in Rule 5605(a) of the Nasdaq Marketplace Rules.  Our Board of Directors has determined that Mr. Ratnathicam meets those requirements. 

Codes of Ethics

We have adopted a written code of ethics that applies to all of our directors, officers and employees in accordance with the rules of the Nasdaq Stock Market and the SEC.  We also have adopted a written code of ethics specific to our Chief Executive Officer and senior financial officers.  Prior to the closing of this offering, we will post a copy of both codes of ethics, and intend to post amendments to these codes, or any waivers of their requirements, on our company website.

Conflicts of Interest

Although we do not have a separate conflicts of interest policy, we comply with applicable state law with respect to transactions (including business opportunities) involving potential conflicts. Applicable state corporate law requires that all transactions involving us and any director or executive officer (or other entities with which they are affiliated) are subject to full disclosure and approval of the majority of the disinterested members of our Board of Directors, approval of the majority of our stockholders or the determination that the contract or transaction is intrinsically fair to us.

Indemnification of Directors and Executive Officers

Section 145 of the Delaware General Corporation Law provides for, under certain circumstances, the indemnification of our officers, directors, employees and agents against liabilities that they may incur in such capacities.  A summary follows of the circumstances in which such indemnification may be provided. 

In general, the statute provides that any director, officer, employee or agent of a corporation may be indemnified against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in a proceeding (including any civil, criminal, administrative or investigative proceeding) to which the individual was a party by reason of such status.  Such indemnity may be provided if the indemnified person’s actions resulting in the liabilities: (i) were taken in good faith; (ii) were reasonably believed to have been in or not opposed to our best interest; and (iii) with respect to any criminal action, such person had no reasonable cause to believe the actions were unlawful.  Unless ordered by a court, indemnification generally may be awarded only after a determination of independent members of the Board of Directors or a committee thereof, by independent legal counsel or by vote of the stockholders that the applicable standard of conduct was met by the individual to be indemnified.

The statutory provisions further provide that to the extent a director, officer, employee or agent is wholly successful on the merits or otherwise in defense of any proceeding to which he was a party, he is entitled to receive indemnification against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the proceeding.

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Indemnification in connection with a proceeding by us or in our right in which the director, officer, employee or agent is successful is permitted only with respect to expenses, including attorneys’ fees actually and reasonably incurred in connection with the defense.  In such actions, the person to be indemnified must have acted in good faith, in a manner believed to have been in our best interest and must not have been adjudged liable to us unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expense which the Court of Chancery or such other court shall deem proper.  Indemnification is otherwise prohibited in connection with a proceeding brought on our behalf in which a director is adjudged liable to us, or in connection with any proceeding charging improper personal benefit to the director in which the director is adjudged liable for receipt of an improper personal benefit.

Delaware law authorizes us to reimburse or pay reasonable expenses incurred by a director, officer, employee or agent in connection with a proceeding in advance of a final disposition of the matter.  Such advances of expenses are permitted if the person furnishes to us a written agreement to repay such advances if it is determined that he is not entitled to be indemnified by us.

The statutory section cited above further specifies that any provisions for indemnification of or advances for expenses does not exclude other rights under our certificate of incorporation, corporate bylaws, resolutions of our stockholders or disinterested directors, or otherwise.  These indemnification provisions continue for a person who has ceased to be a director, officer, employee or agent of the corporation and inure to the benefit of the heirs, executors and administrators of such persons.

The statutory provision cited above also grants us the power to purchase and maintain insurance policies that protect any director, officer, employee or agent against any liability asserted against or incurred by him in such capacity arising out of his status as such. Such policies may provide for indemnification whether or not the corporation would otherwise have the power to provide for it.

We currently maintain directors’ and officers’ liability insurance in order to limit the exposure to liability for indemnification of directors and officers, including liabilities under the Securities Act of 1933.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the cash and non-cash compensation awarded to or earned by: (i) each individual who served as the principal executive officer and principal financial officer of our company during the years ended December 31, 2014 and 2013; and (ii) each other individual that served as an executive officer of our company at the conclusion of the years ended December 31, 2014 and 2013 and who received more than $100,000 in the form of salary and bonus during such year. For purposes of this prospectus, these individuals are collectively the “named executives” of the company.

Name and Position	Years	Salary		Bonus		Stock Awards		Option Awards(4)		Non-equity Incentive Plan Compensation		Non-qualified Deferred Compensation Earnings		All Other Compensation(5)		Total
J. Ralph Armijo, Chairman of the Board (1)	2014	$	161,532		—		—		—		—		—	$	8,250	$	169,782
	2013	$	180,617		—	$	394,666	—			—		—	$	6,375	$	581,658
Robert Lamvik, President and Chief Executive Officer (2)	2014	$	155,656		—		—		—		—		—	$	8,250	$	163,906
	2013	$	159,813		—	$	325,489	—			—		—	$	6,375	$	491,677
Hadley Evans, Jr., Chief Financial Officer (3)	2014		—		—		—		—		—		—		—		—
	2013		—		—		—		—		—		—		—		—

_____________________

(1) Mr. Armijo served as our Chief Executive Officer during 2013 and 2014 and until August 25, 2015, and currently serves as our executive Chairman of the Board.

(2) Mr. Lamvik served as our Chief Operating Officer during 2013 and 2014 and until August 25, 2015.  He has served as Treasurer during 2013, 2014 and 2015.  In May 2014, he became our President.  On August 25, 2015, he became our Chief Executive Officer and resigned as our Chief Operating Officer.

(3) Mr. Evans joined our company as Chief Financial Officer on September 30, 2015.  Prior to that time, Mr. Lamvik served as our principal financial and accounting officer.

(4) Includes stock options to purchase 300,000 shares of common stock at an exercise price of $2.20 per share held by Mr. Armijo and stock options to purchase 225,000 shares of common stock at an exercise price of $2.00 per share held by Mr. Lamvik. The options were granted in October 2013 and vest in three equal annual installments based on continued employment. The determination of value of these option awards is based upon the Black-Scholes-Merton Option pricing model, details and assumptions of which are set out in our financial statements included in this prospectus.  The amounts represent the fair value of stock options on the grant date awarded to the named executives.

(5) Represents payments for an automobile.

Employment Agreements and Change-in-Control Provisions

Effective November 1, 2015, each of Robert Lamvik and Hadley Evans, Jr. entered into an employment agreement with us.  The employment agreements with Messrs. Lamvik and Evans extend for a term expiring on December 31, 2016, which term automatically extends for an additional year unless we or the executive gives the other party written notice that we or he does not wish the term to be so extended.  Pursuant to these employment agreements, each of Messrs. Lamvik and Evans has agreed to devote substantially all of his working time, attention and energies to our business as our President and Chief Executive Officer and our Chief Financial Officer, respectively.  The employment agreements provide that Messrs. Lamvik and Evans will receive a base salary during the term at an annual rate of $180,000 and $150,000, respectively, for services rendered in such positions.  Following the closing of this offering, their annual base salaries will be increased to $200,000 and $175,000, respectively.  In addition, each executive is entitled to receive a quarterly bonus of $10,000 for each quarter beginning in 2016 and each year thereafter in which we have positive earnings before interest, taxes, depreciation and amortization.  Each of Messrs. Lamvik and Evans are entitled to participate in our Incentive Stock Option Plan.  We have agreed to provide Mr. Lamvik with a monthly housing allowance and to continue to provide him with an automobile.  We have also agreed to provide Mr. Evans with an automobile following this offering.

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The employment agreements provide for termination by us upon death or disability of the executive or upon (i) conviction of or pleading guilty to a felony, (ii) commission of intentional acts of misconduct that materially impair the goodwill or business of our company or (iii) willful refusal or failure to perform their material duties under the employment agreements after written demand.  In the event either of the employment agreements are terminated by us without cause, such executive will be entitled to an amount equal to 1.5 times the sum of his then base salary and his quarterly bonuses for the year of such termination, prorated for the number of days that have elapsed during such year.

If there is a change in control of our company and, within 18 months after such change in control, either of Messrs. Lamvik and Evans terminates his employment for good reason or he is terminated without cause, the executive will be entitled to receive a lump-sum cash payment equal to 2 times the sum of his then base salary and quarterly bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

The employment agreements also contain covenants (a) restricting the executive from engaging in any activities competitive with our business during the term of such employment agreements and one to two years thereafter (depending on the continued payment of required termination amounts), (b) prohibiting the executive from disclosure of confidential information regarding us at any time, and (c) preventing the executive (or any employer with whom he may ultimately become associated) from hiring any employee of our company at the time of his termination.

Advisory and Consulting Agreements

We entered into a financial and business advisory services agreement with John S. Vasquez in July 2014 and amended the agreement in January 2015.  Under the agreement, as amended, we currently pay Mr. Vasquez $10,000 per month and reimburse him for reasonable out-of-pocket expenses.

We entered into a consulting agreement with M1 Advisors LLC on July 1, 2015 for business consulting and capital market advisory services in connection with this offering.  The term of the consulting agreement is one year and the parties have the option to renew for additional one year terms.  Under the agreement, we pay M1 Advisors $5,000 per month, as well travel expenses and certain limited document preparation expenses incurred by M1 Advisors in connection with its service to our company.  We also agreed to grant M1 Advisors a warrant to purchase 622,532 shares of our common stock.  The warrant has a term of five years, with an exercise price of $2.00 per share, and is exercisable on a cashless basis.  The warrant vests as follows: 15% upon the completion of a pre-going public financing of at least $1,000,000, 15% upon the filing of this registration statement and 70% upon the completion of this offering with a minimum valuation of our company of $50,000,000.  Any unvested warrants will be transferred to Newport Capital Bancorp, LLC on a fully-vested basis.  John S. Vasquez, a director of our company, is the Chairman and manager of Newport Capital Bancorp, LLC.  The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

On July 1, 2015, we entered into a consulting agreement for business consulting and capital market advisory services with Newport Capital Bancorp, LLC, which replaced and terminated a Buy-Side Advisory Agreement, dated May 15, 2015, between us and National Community Development Fund I, LLC.  John S. Vasquez, a director of our company, is the Chairman and manager of Newport Capital Bancorp, LLC and controls National Community Development Fund I, LLC.  No amounts were due under the Buy-Side Advisory Agreement.  The term of the consulting agreement is one year and the parties have the option to renew for additional one year terms.  Under the consulting agreement, we pay travel expenses and certain limited document preparation expenses incurred by Newport Capital Bancorp in connection with its service to our company and issued Newport Capital Bancorp a warrant to purchase 647,532 shares of our common stock.  The warrant has a term of ten years, with an exercise price of $2.00 per share, is exercisable on a cashless basis, and is fully vested.  The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

Outstanding Equity Awards at Fiscal Year End

As of December 31, 2014, we had outstanding stock options to purchase 1,669,036 shares of common stock awarded to our named executives.

Name	Vested Shares	Unvested Shares	Total Shares
J. Ralph Armijo	369,036	400,000	769,036
Robert Lamvik	400,000	300,000	700,000
Hadley Evans, Jr.	0	200,000	200,000

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Aegis Identity Software, Inc. Incentive Stock Option Plan

In October 2011, the Board of Directors adopted, and the shareholders subsequently approved, our Incentive Stock Option Plan.  The Stock Option Plan authorizes the issuance of up to 5,000,000 shares of our common stock to our key employees, including named executives, officers, directors and consultants.  As of November 10, 2015, stock options to purchase an aggregate of 3,201,119 shares of common stock had been granted with exercise prices ranging from $0.68 per share to $2.50 per share.  The Stock Option Plan provides for the grant of incentive stock options.

The exercise price of the stock options may not be less than the fair market value on the date of grant as determined by the Board of Directors and will expire no later than the tenth anniversary of the date of grant.  The Board may establish vesting or other requirements which must be met prior to the exercise of the stock options.  In the event of an adjustment in our capitalization (including, without limitation, any stock dividend, stock split, recapitalization, reclassification or similar capital change), the Board may adjust outstanding awards to preserve the benefits or potential benefits of the awards.

Our Board of Directors intends to adopt a new equity incentive award plan before the closing of this offering in order to provide additional types of equity awards including non-qualified stock options and restricted stock units, and to discontinue the use of our existing Stock Option Plan.  We expect that the new plan will reserve for issuance a total number of shares roughly equivalent to the number of shares available for future grant under our existing plan.  The new plan will also contain various provisions consistent with becoming a publicly-traded company including change in control vesting and Section 162 limitations.

Director Compensation

The following table sets forth the cash and non-cash compensation awarded to or earned by each individual who served as a member of our Board of Directors during the year ended December 31, 2014.

Name	Fees Earned or Paid in Cash
J. Ralph Armijo	$	0
Thomas Autobee		0
Graham Forman(1)		0
Robert Lamvik		0
Craig S. Newmaker		0
Sanjeevan Ratnathicam(1)		0
John S. Vasquez		0

______________________

(1) Joined Board of Directors in August 2015.

Following the closing of this offering, we intend to compensate each non-management director through annual stock option and/or restricted stock grants and by paying cash fees for each Board of Directors and committee meeting attended. We do not currently compensate our directors as such.  Our Board of Directors will review director compensation annually and adjust it according to then current market conditions and good business practices.

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PRINCIPAL STOCKHOLDERS

The following table sets forth the number and percentage of outstanding shares of our common stock beneficially owned as of November 10, 2015 by:

· each person known by us to be the beneficial owner of more than 5% of our outstanding common stock;

· each of our current directors;

· each of our current executive officers; and

· all our current directors and executive officers as a group.

Shares beneficially owned and percentage ownership before this offering is based on 4,598,850 shares of common stock outstanding.  Percentage ownership after this offering is based on 5,698,850 shares (if the minimum number of shares is sold) and 6,598,850 shares (if the maximum number of shares is sold) of common stock issued and outstanding immediately after the closing of this offering.

Beneficial ownership is determined in accordance with the rules of the SEC, and includes general voting power and/or investment power with respect to securities.  Shares of common stock issuable upon exercise of options or warrants that are currently exercisable or exercisable within 60 days of the record rate, and shares of common stock issuable upon conversion of other securities currently convertible or convertible within 60 days, are deemed outstanding for computing the beneficial ownership percentage of the person holding such securities but are not deemed outstanding for computing the beneficial ownership percentage of any other person.  Under the applicable SEC rules, each person’s beneficial ownership is calculated by dividing the total number of shares with respect to which they possess beneficial ownership by the total number of our outstanding shares.  In any case where an individual has beneficial ownership over securities that are not outstanding, but are issuable upon the exercise of options or warrants or similar rights within the next 60 days, that same number of shares is added to the denominator in the calculation described above.  Because the calculation of each person’s beneficial ownership set forth in the “Percentage Beneficially Owned” columns of the table may include shares that are not presently outstanding, the sum total of the percentages set forth in such columns may exceed 100%.  Unless otherwise indicated, the address of each of the following persons is 750 West Hampden Avenue, Suite 500, Englewood, Colorado 80110, and each such person has sole voting and investment power with respect to the shares set forth opposite his, her or its name.

	Shares Beneficially Owned Prior to Offering			Percentage Beneficially Owned Before Offering			Percentage Beneficially Owned After Offering
Name and address of Beneficial Owner							Minimum			Maximum
J. Ralph Armijo		1,783,000	(1)		35.9	%		29.4	%		25.6	%
Robert Lamvik		425,000	(2)		8.5	%		7.0	%		6.1	%
Hadley Evans, Jr.		-			-			-			-
Thomas Autobee		35,000	(3)		*			*			*
Graham Forman		-			-			-			-
Craig S. Newmaker		699,206	(4)		14.7	%		11.9	%		10.3	%
Sanjeevan Ratnathicam		-			-			-			-
John S. Vasquez		1,158,230	(5)		22.0	%		18.2	%		16.0	%
150 Main Street Trust		500,000	(6)		10.3	%		8.4	%		7.3	%
Garage Funding, LLC		500,000	(7)		10.3	%		8.4	%		7.3	%
Veteran Engineering and Technology, LLC		669,206	(4)		14.1	%		11.5	%		9.9	%
Newport Capital Bancorp, LLC		1,144,897	(5)		21.8	%		18.0	%		15.8	%
All directors and executive officers as a group (8 persons)		4,100,436			61.0	%		52.4	%		47.0	%

____________________

*           Less than 1% of outstanding shares.

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(1) Includes 369,036 shares of common stock issuable upon the exercise of stock options granted under our Stock Option Plan, which are currently exercisable.

(2) Includes 400,000 shares of common stock issuable upon the exercise of stock options granted under our Stock Option Plan, which are currently exercisable.

(3) Includes 30,000 shares of common stock issuable upon the exercise of stock options granted under our Stock Option Plan, which are currently exercisable.

(4) Includes 536,706 shares of common stock and warrants to purchase 132,500 shares of common stock held by Veteran Engineering and Technology, LLC, of which Mr. Newmaker is the Vice President and Chief Operating Officer and is deemed to beneficially own such shares.  The address for Veteran Engineering and Technology, LLC is 5475 Mark Dabling Blvd., Suite 300, Colorado Springs, Colorado 80918.  Also includes 30,000 shares of common stock issuable upon the exercise of stock options granted to Mr. Newmaker under our Stock Option Plan, which are currently exercisable.

(5) Includes 497,365 shares of common stock and warrants to purchase 647,532 shares of common stock held by Newport Capital Bancorp, LLC, of which Mr. Vasquez is the Chairman and is deemed to beneficially own such shares.  The address for Newport Capital Bancorp, LLC is 11777 San Vicente Blvd., Suite 550, Los Angeles, California 90049.  Also includes 13,333 shares of common stock issuable upon the exercise of stock options granted to Mr. Vasquez under our Stock Option Plan, which are currently exercisable.

(6) Includes 250,000 shares of common stock issuable upon the exercise of common stock purchase warrants, which are currently exercisable.  The address for 150 Main Street Trust is 10880 Wilshire Blvd., Suite 2100, Los Angeles, California 90024.  Gilbert Cisneros exercises sole voting power and investment control with respect to the shares held by 150 Main Street Trust.

(7) Includes 250,000 shares of common stock issuable upon the exercise of common stock purchase warrants, which are currently exercisable.  The address for Garage Funding, LLC is 11777 San Vicente Blvd., Suite 550, Los Angeles, California 90049.  Alan Goodman, the President of CSH Group, LLC, which is the managing member of Garage Funding, LLC, exercises sole voting power and investment control with respect to the shares held by Garage Funding, LLC.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Agreement between Aegis Business Group, Inc. and the Company

We and Aegis Business Group, Inc. (“ABG”) entered into an agreement, effective as of October 1, 2011, relating to certain administrative services provided to us by ABG, the transfer of the TridentHE trademark and related branding and goodwill.  We issued 2,000,000 shares of our common stock and paid $350,000 in cash to ABG as compensation under the agreement.  J. Ralph Armijo, our Chairman of the Board, previously served as a director and executive officer of ABG.

Agreement between J. Ralph Armijo and the Company

In November 2015, we entered into a letter agreement with J. Ralph Armijo, our Chairman of the Board, in order for the principal and accrued interest due pursuant to a promissory note entered into with Mr. Armijo on November 30, 2011, as amended, be applied toward the exercise of one of his incentive stock option grants.  The total amount due under the note was $55,055.  This amount was applied to the purchase price for the exercise of the option to purchase 80,964 shares of common stock.  The transaction was completed and the note was retired in November 2015.

Loan Transaction with Veteran Engineering & Technology LLC

On October 2, 2012, we entered into a secured loan transaction with Veteran Engineering and Technology, LLC (“VET”) in the principal amount of $381,951 with interest initially accruing at the rate of 12% per year and later increased to 18% year, compounded monthly.  Accrued interest is payable on a quarterly basis with a balloon payment of the principal and any accrued unpaid interest due on February 1, 2016 or the first business day immediately following the effective date of this registration statement, whichever occurs first.  The loan requires us to obtain approval before obtaining additional financing outside of the normal course of business or a change of ownership of more than 10% of our common stock.  The loan is guaranteed by a license agreement between the parties granting an exclusive, irrevocable, royalty free, worldwide license (limited to the department of defense market) to use TridentHE software including, without limitation, the right to manufacture, modify, sell, license, brand, create permitted modifications and take other actions subject to certain restrictions.  This license only becomes activated and effective upon a material default by us or in the event an interest payment is not made within 30 days of when due.  If the license is activated VET will have access to the source code of TridentHE and own any permitted modifications it makes to the software pursuant to the license.  The value of the license was indeterminable at the time of the transaction so, if activated, the parties have agreed to use good faith efforts to determine a mutually agreeable valuation between 50% and 100% of the principal amount of the loan.  On October 2, 2013, the loan was extended to November 2, 2013 with no changes in terms except the due date.  On May 9, 2014, another extension was signed. This extension granted the following: (1) extension of the payment of all amounts to November 2, 2014 with the option to extend for 30 more days at the lender’s discretion; (2) the interest rate was increased to 18%; (3) quarterly interest payments of $17,446 were to be due each quarter at August 2, 2014 and November 4, 2014; (4) we were required to issue warrants to the lender for the purchase of 2,500 shares of our common stock for every full month after May 9, 2014 that the loan remains outstanding, with the warrants having an exercise price of $6.00 per share and a five-year term; and (5) the lender was given the right to convert the outstanding principal and interest balance to shares of the our common stock, at the lender’s sole discretion, at $2.00 per share (until the closing of a negotiated equity transaction at a price greater than $0.50 per share). This extension also required a payment of past due interest totaling $38,772 to the lender. The loan was subsequently extended to January 2, 2015 and then further extended to the earlier of February 1, 2016 or the first business day following the effective date of a registration statement on Form S-1 filed by us.  Prior to this offering, VET beneficially owned 14.1% of our outstanding common stock and Craig Newmaker, a director of our company, is Vice President and Chief Operating Officer of VET.  As of November 10, 2015, the outstanding principal balance of this loan was $381,951.

Loan Transaction with National Community Development Fund I, LLC

On April 2, 2014, we entered into a loan agreement with National Community Development Fund I, LLC (“NCDF”) in the principal amount $500,000, which was paid in two $250,000 tranches, with interest accruing at the rate of 15% per annum.  Accrued interest of $6,250 is payable on a monthly basis.  The loan agreement required our company to issue 250,000 shares of common stock to the lender and warrants which allowed the lender to purchase 250,000 shares of common stock.  The loan is personally guaranteed by Mr. Armijo, our Chairman.  On the same date, NCFD assigned all of its rights, title and interests in the loan and related agreements to CapStar Holdings I, LLC, which has since been renamed Garage Funding, LLC and, prior to this offering, beneficially owned approximately 10.3 % of our outstanding common stock. This loan originally had a maturity date of October 2, 2015, which has been extended to April 2, 2016.  As of November 10, 2015, the outstanding balance of this note was $400,000.  John S. Vasquez, a director of our company, is a principal in Newport Capital Bancorp, LLC and one of the general partner’s managers that manages Newport Capital Bancorp, whose investment vehicle is NCDF.

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Agreement between the Company and John S. Vasquez

We entered into a financial and business advisory services agreement with John S. Vasquez in July 2014 and amended the agreement in January 2015.  Under the agreement, as amended, we currently pay Mr. Vasquez $10,000 per month and reimburse him for reasonable out-of-pocket expenses.

Agreements between the Company and Newport Capital Bancorp, LLC

On July 1, 2015, we entered into a consulting agreement for business consulting and capital market advisory services with Newport Capital Bancorp, LLC, which replaced and terminated a Buy-Side Advisory Agreement, dated May 15, 2015, between us and NCDF.  John S. Vasquez, a director of our company, is the Chairman and manager of Newport Capital Bancorp.  Under the consulting agreement, we pay travel expenses and certain limited document preparation expenses incurred by Newport Capital Bancorp in connection with its service to our company and issued Newport Capital Bancorp a warrant to purchase 647,532 shares of our common stock.  The warrant has a term of ten years, with an exercise price of $2.00 per share, is exercisable on a cashless basis, and is fully vested. The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

We currently pay rent of $2,500 per month for our Denver office, under a one-year sublease that automatically renews on an annual basis with Newport Capital Bancorp, LLC, of which John S. Vasquez, a director of our company, is the Chairman and manager.

2015 Private Placement

In November 2015, we completed a private placement of 281,500 shares of our common stock to a small number of accredited investors for aggregate gross proceeds of $703,750.  We also entered into a letter agreement and subscription agreement with Newport Capital Bancorp, LLC, of which our director, John S. Vasquez, is a principal and manager, for the purchase in four installments of an aggregate of an additional 220,000 shares for $550,000 upon the satisfaction of certain events to occur prior to the completion of this offering.  Burnham Securities Inc., one of the underwriters in this offering, was the placement agent for the private placement.

Agreements between Newport Capital Bancorp, LLC and Veteran Engineering & Technology LLC and Thomas Autobee

Upon the closing of Newport Capital Bancorp’s acquisition of 497,365 shares of our common stock from shareholders Andy Dunfee and David Smizik (which will occur following the filing of the registration statement of which this prospectus forms a part), Newport Capital Bancorp intends to sell 124,341 shares of our common stock to VET and 124,341 shares of our common stock to Thomas Autobee, a director of our company, at privately negotiated prices.  Newport Capital Bancorp also intends to sell shares to a small number of individuals who participated in Newport Capital Bancorp’s acquisition of the shares at privately negotiated purchase prices.

Related Party Transaction Policy and Related Matters

In all cases, we abide by applicable state corporate law when approving all transactions, including transactions involving officers, directors or affiliates.  More particularly, our policy is to have any related party transactions (i.e., transactions involving a director, an officer or an affiliate of our company) be approved solely by a majority of the disinterested directors serving on the board.  Presently, we have four independent directors serving on the Board, and intend to maintain a board consisting of a majority of independent directors. 

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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Stock

Before this offering, there was no market for our common stock.  We have applied to list our common stock for trading on the Nasdaq Capital Market under the trading symbol “AIDM.”

Record Holders

As of November 10, 2015, there were approximately 90 holders of record of our common stock.

Dividends

We do not expect to pay cash dividends or make any other distributions in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

In October 2011, the Board of Directors adopted, and the shareholders subsequently approved, our Incentive Stock Option Plan.  The Stock Option Plan authorizes the issuance of options exercisable for up to 5,000,000 shares of our common stock to our key employees, including named executives, officers, directors and consultants.  As of November 10, 2015, stock options to purchase an aggregate of 3,201,119 shares of common stock had been granted with exercise prices ranging from $0.68 per share to $2.50 per share.  The Stock Option Plan provides for the grant of incentive stock options.

The exercise price of the stock options may not be less than the fair market value on the date of grant as determined by the Board of Directors and will expire no later than the tenth anniversary of the date of grant.  The Board may establish vesting or other requirements which must be met prior to the exercise of the stock options.  In the event of an adjustment in our capitalization (including, without limitation, any stock dividend, stock split, recapitalization, reclassification or similar capital change), the Board may adjust outstanding awards to preserve the benefits or potential benefits of the awards.

Our Board of Directors intends to adopt a new equity incentive award plan before the closing of this offering in order to provide additional types of equity awards including non-qualified stock options and restricted stock units, and to discontinue the use of our existing Stock Option Plan.  We expect that the new plan will reserve for issuance a total number of shares roughly equivalent to the number of shares available for future grant under our existing plan.  The new plan will also contain various provisions consistent with becoming a publicly-traded company including change in control vesting and Section 162 limitations.

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DESCRIPTION OF CAPITAL STOCK

The following is a description of our capital stock and the material provisions of our certificate of incorporation, bylaws and other agreements to which we and our stockholders are parties, in each case upon the closing of this offering.  The following is only a summary and is qualified by applicable law and by the provisions of our certificate of incorporation, bylaws and other agreements, copies of which are available as set forth under “Where You Can Find More Information.”

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.  As of November 10, 2015, there were 4,598,850 shares of our common stock issued and outstanding and there were no shares of our preferred stock issued and outstanding.

Common Stock

The holders of our common stock are entitled to one vote for each share on all matters voted on by stockholders, including elections of directors, and, except as otherwise required by law or provided in any resolution adopted by our Board of Directors with respect to any series of preferred stock, the holders of its common stock possess all voting power.  Our certificate of incorporation does not provide for cumulative voting in the election of directors.  Subject to any preferential rights of any outstanding series of our preferred stock created by our Board of Directors from time to time, the holders of common stock are entitled to dividends, if any, as may be declared from time to time by the Board of Directors from funds available therefore and upon liquidation are entitled to receive pro rata all assets available for distribution to such holders.  For a more complete discussion of our dividend policy, please see “Dividend Policy.”

The holders of our common stock do not have preemptive rights.  The rights, preferences and privileges of holders of common stock may be subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which we may designate and issue in the future.

Preferred Stock

Our shares of preferred stock may be issued from time to time by our Board of Directors in one or more series.  Subject to the provisions of our certificate of incorporation and limitations prescribed by law, our Board of Directors is expressly authorized to adopt resolutions to issue the shares, to fix the number of shares and to change the number of shares constituting any series and to provide for or change the voting powers, designations, preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, including dividend rights (including whether dividends are cumulative), dividend rates, terms of redemption, redemption  prices, conversion rights and liquidation preferences of the shares constituting any series of the preferred stock, in each case without any further action or vote by the stockholders.  We have no current plans to issue any shares of preferred stock.

Limitations on Directors’ Liability; Indemnification of Directors and Officers

Our certificate of incorporation and bylaws contain provisions indemnifying our directors and officers to the fullest extent permitted by law.  In addition, as permitted by Delaware law, our certificate of incorporation provides that no director will be liable to us or our stockholders for monetary damages for breach of certain fiduciary duties as a director.  The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of certain fiduciary duties as a director, except that a director will be personally liable for:

· any breach of his or her duty of loyalty to us or our stockholders;

· acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law;

· the payment of dividends or the redemption or purchase of stock in violation of Delaware law; or

· any transaction from which the director derived an improper personal benefit.

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This provision does not affect a director’s liability under the federal securities laws.

Article 8 of our corporate bylaws provides that we shall indemnify our directors, officers, employees and agents.  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we understand that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

We currently maintain directors’ and officers’ liability insurance in order to limit the exposure to liability for indemnification of directors and officers, including liabilities under the Securities Act of 1933.

Provisions of Our Certificate of Incorporation, Bylaws and/or Delaware Law that May Have an Anti-Takeover Effect

Certain provisions set forth in our certificate of incorporation, in our bylaws and/or in Delaware law, which are summarized below, may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

Our certificate of incorporation contains provisions that permit us to issue, without any further vote or action by the stockholders, up to 10,000,000 shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series.

Delaware Takeover Statute

In general, Section 203 of the Delaware General Corporation Law prohibits a Delaware corporation that is a public company from engaging in any “business combination” (as defined below) with any “interested stockholder” (defined generally as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with such entity or person) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

Potential for Anti-Takeover Effects

While certain provisions of our certificate of incorporation, bylaws and/or Delaware law may have an anti-takeover effect, these provisions are intended to enhance the likelihood of continuity and stability in the composition of our Board of Directors and in the policies formulated by the Board, and to discourage certain types of transactions that may involve an actual or threatened change of control.  In that regard, these provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal.  The provisions also are intended to discourage certain tactics that may be used in proxy fights.  However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts.  Such provisions also may have the effect of preventing changes in our management.

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Stock Exchange Listing

We have applied to have our common stock approved for listing on the Nasdaq Capital Market under the trading symbol “AIDM.”

Transfer Agent and Registrar

Upon the closing of this offering, the transfer agent and registrar for our shares of common stock will be Continental Stock Transfer & Trust Company, located at 17 Battery Place, 8th Floor, New York, New York 10004.

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UNDERWRITING

We have entered into an underwriting agreement with Burnham Securities Inc. for itself and as representative (the “Representative”) of the underwriters named therein, with respect to the shares of our common stock in this offering.  Under the terms and subject to the conditions contained in the underwriting agreement, we have agreed to issue and sell to the public through the underwriters, and the underwriters have agreed to offer and sell, up to 2,000,000 shares of our common stock, on a best efforts basis.

The underwriting agreement provides that the obligation of the underwriters to arrange for the offer and sale of the shares of our common stock, on a best efforts basis, is subject to certain conditions precedent, including but not limited to (i) receipt of a listing approval letter from the Nasdaq Capital Market, (ii) delivery of legal opinions and (iii) delivery of auditor comfort letters.  The underwriters are under no obligation to purchase any shares of our common stock for their own account.  As a “best efforts” offering, there can be no assurance that the offering contemplated hereby will ultimately be consummated, or even if consummated that we will in fact obtain a listing on the Nasdaq Capital Market.  The underwriters may, but are not obligated to, retain other selected dealers that are qualified to offer and sell the shares and that are members of the Financial Industry Regulatory Authority, Inc.  The underwriters propose to offer the shares to investors at the public offering price, and will receive the underwriting commissions, set forth on the cover of this prospectus.  The gross proceeds of this offering will be deposited at Signature Bank, New York, New York, in an escrow account established by us, until we have sold a minimum of 1,100,000 shares of common stock and otherwise satisfy the listing conditions to trade our common stock on the Nasdaq Capital Market.  Once we satisfy the minimum stock sale and Nasdaq listing conditions, the funds will be released to us.

We anticipate the shares of our common stock will be listed on the Nasdaq Capital Market under the symbol “AIDM.”  In order to list, the Nasdaq Capital Market requires that, among other criteria, at least 1,000,000 publicly-held shares of our common stock be outstanding, the shares be held in the aggregate by at least 300 round lot holders, the market value of the publicly-held shares of our common stock be at least $15.0 million, our stockholders’ equity after giving effect to the sale of our shares in this offering be at least $4.0 million, the bid price per share of our common stock be $4.00 or more, and there be at least three registered and active market makers for our common stock.  If the application is approved, trading of our shares on the Nasdaq Capital Market is expected to begin within five days after the date of initial issuance of the common stock.

The following table and the two succeeding paragraphs summarize the underwriting compensation and estimated expenses we will pay:

		Public Offering Price	Underwriting Commissions		Proceeds to Us, Before Expenses
Per share	$	5.00	$	0.35	$	4.65
Total minimum offering	$	5,500,000	$	385,000	$	5,115,000
Total maximum offering	$	10,000,000	$	700,000	$	9,300,000

We have agreed to reimburse the underwriters for expenses incurred relating to the offering, including all actual fees and expenses incurred by the underwriters in connection with, among other things, due diligence costs, the underwriters’ “road show” expenses, and the fees and expenses of the underwriters’ counsel.  The fees and expenses of underwriters’ counsel shall not exceed $100,000.  We estimate that the total expenses of this offering, excluding underwriting commissions described above, will be approximately $562,000 (if the minimum number of shares is sold) and $592,000 (if the maximum number of shares is sold).  We paid the representative an advisory fee of $50,000 upon the signing of the engagement letter between us and them and have also agreed to pay the representative an additional $25,000 at the time of our initial filing of this registration statement and $25,000 at the closing of this offering.

As additional compensation to the underwriters, upon consummation of this offering, we will issue to the underwriters or their designees warrants to purchase an aggregate number of shares of our common stock equal to 7% of the number of shares of common stock issued in this offering, at an exercise price per share equal to 100.0% of the initial public offering price (the “Underwriter Warrants”).  The Underwriter Warrants and the underlying shares of common stock will not be exercised, sold, transferred, assigned, or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the Underwriter Warrants by any person for a period of 180 days from the effective date of the registration statement for this offering in accordance with FINRA Rule 5110.  The Underwriter Warrants will expire on the fifth anniversary of the effective date of the registration statement for this offering.

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The underwriters have informed us that they may provide an allowance not in excess of $____ per share to other dealers out of the underwriters’ commission of $____ per share.  No underwriters or selling group members will receive any fees or warrants in connection with the purchase by any of our officers or directors or their respective affiliates of shares of common stock in this offering. 

A prospectus in electronic format may be made available on the websites maintained by the underwriters, or selling group members, if any, participating in the offering.  The underwriters may agree to allocate a number of shares to selling group members for sale to their online brokerage account holders.  Internet distributions will be allocated by the underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of our company or any securities convertible into or exercisable or exchangeable for shares of capital stock of our company; (ii) file or cause to be filed any registration statement with the SEC relating to the offering of any shares of capital stock of our company or any securities convertible into or exercisable or exchangeable for shares of capital stock of our company; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of our company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of our company or such other securities, in cash or otherwise, in each case without the prior consent of the Representative for a period of 180 days after the date of this prospectus, other than (A) the shares of our common stock to be sold hereunder, (B) the issuance by us of shares of our common stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date of this offering, hereafter issued pursuant to our currently existing or hereafter adopted equity compensation plans or employment or consulting agreements or arrangements of which the representative has been advised in writing or which have been filed with the Commission or (C) the issuance by us of stock options or shares of capital stock of our company under any currently existing or hereafter adopted equity compensation plan or employment/consulting agreements or arrangements of our company.

Our directors, executive officers and holders of 5% or more of our outstanding shares of common stock following this offering will enter into lock-up agreements with the representative prior to the commencement of this offering pursuant to which each of these persons or entities, for a period of 180 days after the date of this prospectus, will not, without the prior written consent of the Representative, (i) sell, offer to sell, contract or agree to sell, hypothecate, assign, transfer, pledge, grant any option to purchase or otherwise dispose of, or announce the intention to otherwise dispose of, directly or indirectly, any shares of our common stock (including, without limitation, common stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated under the Securities Act, as the same may be amended or supplemented from time to time (such shares, the “Beneficially Owned Shares”)) or securities convertible into or exercisable or exchangeable for shares of our common stock, or any warrants or other rights to purchase, the foregoing (ii) enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic risk of ownership of the Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for shares of our common stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or (iii) engage in any short selling of the our common stock or securities convertible into or exercisable or exchangeable for shares of our common stock, or (iv) publicly announce an intention to effect any transaction specified in clause (i) or (ii) above.

The underwriting agreement provides that we will indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or contribute to payments the underwriters may be required to make in respect thereof.

We have applied to have our common stock approved for listing on the Nasdaq Capital Market under the symbol “AIDM.”  If the application is approved, trading of our common stock on the Nasdaq Capital Market is expected to begin within five days after the date of initial issuance of the common stock.  We will not consummate and close this offering without a listing approval letter from the Nasdaq Capital Market.  Our receipt of a listing approval letter is not the same as an actual listing on the Nasdaq Capital Market.  The listing approval letter will serve only to confirm that, if we sell a number of shares in this best efforts offering sufficient to satisfy applicable listing criteria, our common stock will in fact be listed.

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Prior to this offering, there has been no public market for our common stock.  The initial public offering price has been determined by negotiations between us and the underwriters.  In determining the initial public offering price, we and the underwriters have considered a number of factors including:

· the information set forth in this prospectus and otherwise available to the underwriters;

· our prospects and the history and prospects for the industry in which we compete;

· an assessment of our management;

· our prospects for future earnings;

· the general condition of the securities markets at the time of this offering;

· the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

· other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for shares of our common stock, or that the shares will trade in the public market at or above the initial public offering price.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offering, our current common stockholders will own 4,598,850 shares of our common stock, representing approximately 80.7% (if the minimum number of shares is sold) and 69.7% (if the maximum number of shares is sold) of the total outstanding shares of our common stock.  We will also have 3,201,119 shares of our common stock reserved for issuance under our Stock Option Plan and 2,641,866 shares of our common stock reserved for issuance upon the exercise of outstanding warrants.  Upon completion of this offering, 5,698,850 shares (minimum) and 6,598,850 shares (maximum) of our common stock will be issued and outstanding.  In addition, upon the closing of this offering, we will issue to the underwriters warrants to purchase 77,000 shares (minimum) to 140,000 (maximum) shares of our common stock.  See “Underwriting.”

Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person is entitled to sell those shares without complying with any of the requirements of Rule 144.  

In general, under Rule 144 as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon the expiration of the lock-up agreements described below, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

· 1% of the number of shares of common stock then outstanding, which will equal approximately 56,989 shares (minimum) and 65,989 (maximum) immediately after our initial public offering, or

· the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

In general, under Rule 701 as currently in effect, any of our employees, consultants or advisors who purchase shares from us in connection with a compensatory stock or option plan or other written agreement in a transaction (i) occurring before the effective date of our initial public offering (ii) that was completed in reliance on Rule 701 and (iii) that complied with the requirements of Rule 701 will, subject to the lock-up restrictions described below, be eligible to resell such shares 90 days after the date of this prospectus in reliance on Rule 144, but without compliance with certain restrictions, including the holding period, contained in Rule 144.

Lock-Up Agreements and Market Standoff Provisions

Our directors, executive officers and holders of 5% or more of our outstanding shares of common stock following this offering will enter into lock-up agreements with the representative prior to the commencement of this offering pursuant to which each of these persons or entities will agree not to sell any common stock or securities convertible into or exercisable or exchangeable for shares of common stock for a period of 180 days after the date of this prospectus, subject to certain exceptions.  See “Underwriting” for a description of these lock-up provisions.

Registration Statement

We intend to file a registration statement on Form S-8 under the Securities Act covering all of the shares of common stock reserved for future issuance under our Stock Option Plan.  We expect to file this registration statement as soon as practicable after our initial public offering.  Nevertheless, none of the shares registered on Form S-8 will be eligible for resale until the expiration of the lock-up agreements to which they are subject.

-65-

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Section 145 of the Delaware General Corporation Law, as amended, authorizes us to indemnify any director or officer under certain prescribed circumstances and subject to certain limitations against certain costs and expenses, including attorney’s fees actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which a person is a party by reason of being one of our directors or officers if it is determined that such person acted in accordance with the applicable standard of conduct set forth in such statutory provisions.  Our certificate of incorporation contains provisions relating to the indemnification of director and officers and our by-laws extend such indemnities to the full extent permitted by Delaware law.  We currently maintain insurance for the benefit of any director or officer, which cover claims for which we could not indemnify such persons.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

LEGAL MATTERS

Olshan Frome Wolosky LLP, New York, New York, will pass upon the validity of the issuance of the shares of our common stock being offered by this prospectus as our counsel.  DLA Piper LLP (US), New York, New York, is acting as counsel for the underwriters in connection with this offering.

EXPERTS

The consolidated financial statements of Aegis Identity Software, Inc. as of December 31, 2014 and December 31, 2013, have been included herein and in the registration statement in reliance upon the report of RRBB Accountants & Advisors, independent registered public accounting firm, appearing elsewhere herein and in the registration statement, upon the authority of said firm as experts in auditing and accounting.  As indicated in its reports with respect thereto, these consolidated financial statements are included in this prospectus and in the registration statement of which this prospectus is a part in reliance upon the authority of RRBB Accountants & Advisors as experts in auditing and accounting, with respect to each such respective report.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 (including the exhibits, schedules, and amendments to the registration statement) under the Securities Act, with respect to the shares of our common stock offered by this prospectus.  This prospectus does not contain all the information set forth in the registration statement.  For further information with respect to us and the shares of our common stock to be sold in this offering, we refer you to the registration statement.  Statements contained in this prospectus as to the contents of any contract, agreement or other documents to which we make reference are not necessarily complete.  In each instance, we refer you to the copy of such contract, agreement or other document filed as an exhibit to the registration statement.

Following this offering, we will be subject to the reporting and information requirements of the Exchange Act, and, as a result, we file annual, quarterly and current reports, and other information with the SEC.  You may read and copy this information at the Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Copies of all or any part of the registration statement may be obtained from the SEC’s offices upon payment of fees prescribed by the SEC.  The SEC maintains an Internet site that contains periodic and current reports, information statements, and other information regarding issuers that file electronically with the SEC.  The address of the SEC’s website is http://www.sec.gov.

We will provide a copy of our annual report to stockholders, including our audited financial statements, at no charge upon written request sent to Aegis Identity Software, Inc., 750 West Hampden Avenue, Suite 500, Englewood, Colorado 80110.  Our corporate website is located at http://www.aegisidentity.com.  The information on, or that can be accessed through, our website is not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus.

-66-

AEGIS IDENTITY SOFTWARE, INC.

INDEX TO FINANCIAL STATEMENTS

AUDITED FINANCIAL STATEMENTS	Page
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets for December 31, 2014 and 2013	F-3
Statements of Operations for the Years Ended December 31, 2014 and 2013	F-4
Statements of Stockholders’ Equity for the Years Ended December 31, 2014 and 2013	F-5
Statements of Cash Flows for the Years Ended December 31, 2014 and 2013	F-6
Notes to Financial Statements	F-7

UNAUDITED INTERIM FINANCIAL STATEMENTS

Condensed Balance Sheets for June 30, 2015 (Unaudited) and December 31, 2014	F-28
Condensed Statements of Operations for the Six Months Ended June 30, 2015 and 2014 (Unaudited)	F-29
Condensed Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014 (Unaudited)	F-30
Notes to Financial Statements	F-31

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Aegis Identity Software, Inc.

We have audited the accompanying balance sheets of Aegis Identity Software, Inc. as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2014. Aegis Identity Software, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these 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 audit to obtain reasonable assurance about whether the 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 audit 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Aegis Identity Software, Inc. as of December 3,1 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency and a significant stockholders’ deficit, and has limited cash availability.  This raises substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Rosenberg Rich Baker Berman & Company

Somerset, NJ

November 12, 2015

F-2

Aegis Identity Software, Inc.
Balance Sheets
December 31, 2014 and 2013
	2014			2013
Assets
Current Assets
Cash and cash equivalents	$	835		$	397,846
Trade receivable, net		101,021			19,501
Due from related party		10,000			-
Other current assets		12,915			-
Total Current Assets		124,771			417,347
Software, net		585,319			707,117
Equipment, net		3,939			-
		589,258			707,117
Other Assets, deposit		4,214			4,214
Total Assets	$	718,243		$	1,128,678
Liabilities and Stockholders' Equity
Current Liabilities
Current portion of notes payable, net	$	264,539		$	273,007
Current portion of notes payable, related party, net		477,100			105,600
Current portion of convertible notes payable, net		956,000			126,000
Current portion of convertible notes payable, related party net		381,951			381,951
Accounts payable		214,115			194,293
Deferred maintenance revenue		206,111			95,273
Due to related party		29,975			29,975
Other accrued liabilities		415,452			395,143
Total Current Liabilities		2,945,243			1,601,242
Long-term Notes Payable
Notes payable, net		922,859			956,898
Convertible notes payable, net		88,750			118,750
		1,011,609			1,075,648
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.001 par value, authorized 10,000,000; no shares issued or outstanding
Common stock, $0.001 par value, authorized 100,000,000;		3,872			3,452
issued and outstanding- 3,871,737 shares at December 31, 2014
and 3,451,812 shares at December 31, 2013
Additional paid in capital		4,685,084			3,201,414
Accumulated deficit		(7,927,565	)		(4,753,078	)
Total Stockholders' deficit		(3,238,609	)		(1,548,212	)
Total Liabilities and Stockholders' Equity	$	718,243		$	1,128,678

The accompanying notes are an integral part of the financial statements.

F-3

Aegis Identity Software, Inc.
Statements of Operations
For the Years Ended December 31, 2014 and 2013
	2014			2013
Software licenses	$	611,225		$	356,100
Professional services		966,947			395,350
Maintenance fees		216,462			95,229
Total revenue		1,794,634			846,679
Operating expense
Research and development		182,314			34,207
General and administrative expense		3,265,530			2,046,559
Selling expense		438,086			229,992
Amortization and depreciation expense		388,077			300,085
Total operating expenses		4,274,007			2,610,843
Loss from operations		(2,479,373	)		(1,764,164	)
Interest expense		(576,790	)		(290,664	)
Interest expense, related party		(118,324	)		(55,514	)
		(695,114	)		(346,178	)
Loss before income taxes		(3,174,487	)		(2,110,342	)
Income tax expense		-			-
Net loss	$	(3,174,487	)	$	(2,110,342	)
Loss per share, basic and diluted	$	(0.85	)	$	(0.70	)
Common shares outstanding, basic and diluted		3,717,464			3,023,507

The accompanying notes are an integral part of the financial statements.

F-4

Aegis Identity Software, Inc.
Statements of Stockholders' Equity
For the Years Ended December 31, 2014 and 2013
	Number of Shares		Par Value		Additional Paid In Capital		Retained Earnings			Total Equity (Deficit)
Balance, December 31, 2012		2,717,994	$	2,718	$	1,451,031	$	(2,642,736	)	$	(1,188,987	)
Common stock issued		733,818		734		1,417,000		-			1,417,734
Stock-based compensation		-		-		311,168		-			311,168
Stock warrants issued		-		-		22,215		-			22,215
Net loss		-		-		-		(2,110,342	)		(2,110,342	)
Balance, December 31, 2013		3,451,812	$	3,452	$	3,201,414	$	(4,753,078	)	$	(1,548,212	)
Common stock issued		417,425		417		330,659		-			331,076
Stock-based compensation		-		-		766,210		-			766,210
Stock warrants issued		-		-		376,804		-			376,804
Conversion of notes payable to common stock		2,500		3		9,997		-			10,000
Net loss		-		-		-		(3,174,487	)		(3,174,487	)
Balance, December 31, 2014		3,871,737	$	3,872	$	4,685,084	$	(7,927,565	)	$	(3,238,609	)

The accompanying notes are an integral part of the financial statements.

F-5

Aegis Identity Software, Inc.
Statements of Cash Flows
For the Years Ended December 31, 2014 and 2013
	2014			2013
Cash flows from operating activities:
Net loss	$	(3,174,487	)	$	(2,110,342	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization and depreciation expense		388,077			300,085
Stock based compensation		766,210			311,168
Stock warrant expense		376,804			22,215
Changes in operating assets and liabilities:
Trade receivable		(81,520	)		(3,173	)
Prepaid and other current assets		(22,915	)		10,848
Accounts payable		19,822			103,350
Other accrued liabilities		137,646			(442,482	)
Net cash used in operating activities		(1,590,363	)		(1,808,331	)
Cash flows from investing activities:
Purchase of equipment		(4,634	)		-
Software development costs		(265,583	)		(342,911	)
Net cash used in investing activities		(270,217	)		(342,911	)
Cash flows from financing activities:
Proceeds from issuance of common stock		331,076			1,417,734
Proceeds from notes payable		15,000			1,305,503
Proceeds from notes payable, related party		500,000			6,750
Proceeds from convertible notes payable		840,000			253,750
Payments on notes payable		(58,007	)		(259,597	)
Payments on notes payable, related party		(128,500	)		(180,500	)
Payments of convertible notes		(36,000	)		(9,000	)
Net cash provided by  financing activities		1,463,569			2,534,640
Net Increase (Decrease) in Cash and Cash Equivalents		(397,011	)		383,399
Cash and Cash Equivalents, Beginning of Year		397,846			14,447
Cash and Cash Equivalents, End of Year	$	835		$	397,846
Supplemental disclosures
Cash payments during the year for income taxes	$	-		$	-
Cash payments during the year for interest	$	226,339		$	243,859
Noncash investing and financing activities
Conversion of notes payable to common stock	$	10,000		$	-

The accompanying notes are an integral part of the financial statements.

F-6

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Note 1 – Nature of Organization

Aegis Identity Software, Inc. (the “Company”, “Our”, “Us” or “We”) was founded in August 2011 by experienced software industry executives focused on developing Identity and Access Management (“IAM”) solutions needed to support the growth of internet technologies and associated proliferation of digital identities.

The Company is an IAM solution provider to the Educational Technology (“Ed-Tech”) sector and currently provides two solutions that generate on-going revenues from both universities and K-12 schools.  The education market has significant need for our IAM solutions as demonstrated by the fact that acquiring and integrating IAM solutions continue to be a top priority year-over-year for school administrators to meet the Family Educational Rights and Privacy Act compliance and manage the access to an ever increasing number of applications.

The Company offers customers the option to purchase software products and related services to manage their own environments, or to access its IAM solution through a comprehensive cloud service offering.  Customers that purchase software products may elect to purchase software license updates and product support contracts, which provide customers with rights to unspecified product upgrades and maintenance releases issued during the support period as well as technical support assistance.

The Company also offers customers a broad set of services offerings including consulting services, advanced customer support services and training services.

In July 2015, the Company effected a one (1) for four (4) reverse split of its common stock. Upon the effectiveness of the reverse stock split, (i) every four (4) shares of outstanding common stock was combined into one (1) share of common stock, (ii) the number of shares of common stock for which each outstanding option or warrant to purchase common stock is exercisable was proportionally decreased on a one (1) for four (4) basis, (iii) the exercise price of each outstanding option or warrant to purchase common stock was proportionately increased on a one (1) for four (4) basis, and (iv) the conversion price of each outstanding convertible obligation was proportionately increased on a one (1) for four (4) basis. All of the outstanding common stock share numbers, warrants, share prices, exercise prices and per share amounts have been adjusted in these financial statements, on a retroactive basis to reflect this one (1) for four (4) reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock were not adjusted as a result of the reverse stock split.

Note 2 - Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in the understanding of the Company's financial statements. The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates affecting the financial statements include collection of trade and other receivables for contract reserves, recoverability of certain assets, conversion of certain notes payable and income taxes. The valuation of the stock options using a Black Scholes model is based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions. It is at least reasonably possible that the estimates used will change in the near term.

F-7

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments (with original maturities of three months or less) at date of acquisition as cash equivalents, including money market funds. Cash equivalents are reported at fair value. As of December 31, 2014 and 2013 the Company did not have any cash equivalents.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are customer obligations due under normal trade terms. The Company reviews accounts receivable for uncollectible accounts and provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The Company considers trade accounts receivable past due for more than 90 days to be delinquent. The Company writes off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers.

The Company records recoveries of accounts previously written off as an increase in allowance for doubtful accounts when received. To the extent data the Company uses to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. The total allowance for doubtful accounts at December 31, 2014 and 2013 was $-0-.

Concentration of Business and Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash, cash equivalents and trade receivables. We believe that concentrations of credit risk with respect to trade receivables are limited as they are primarily from education agencies.

The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk.

At times, cash balances may exceed federally insured limits and this potentially subjects the Company to a concentration of credit risk. The Company has not experienced any losses in such accounts.

For the year ended December 31, 2014, the Company had two customers that represented approximately 17.8% and 11.3% of sales, respectively.

Reportable Segment

The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the others. Accordingly all significant operating decisions are based on the analysis of financial results provided by one single business.

Financial Instruments

The carrying values of cash and cash equivalents, trade receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The Company has determined that it is not practical to estimate the fair value of our notes payable and convertible notes because of their unique nature and the costs that would be incurred to obtain an independent valuation. The Company does not have comparable outstanding debt on which to base an estimated current borrowing rate or other discount rate for purposes of estimating the fair value of the notes payable and have not yet obtained or developed a valuation model.

F-8

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Revenue Recognition

The Company enters into arrangements to deliver multiple products or services (multiple-elements).  The Company applies software recognition rules and allocates the total revenues among the elements based on vendor-specific objective evidence (“VSOE”) of fair value of each element.  The Company recognizes revenue on a net basis excluding taxes collected from customers and remitted to government authorities.

The Company’s sources of revenue are as follows:

1. Software licenses, including new software licenses revenue from granting licenses to use our software products.

2. Maintenance fees – software updates and product support.

3. Professional services – software implementation and order fulfillment and installations.

4. Subscription Software Revenue - hosted access to the software application for a subscription based fee.

The Company recognizes revenue when all of the following criteria are met:

· Persuasive evidence of an arrangement exists – The Company has entered into a (pre-determined statement of work arrangement) legally binding arrangement with the customer before the end of the period;

· The Company has delivered a product or performed a service – Delivery is considered to have occurred when the Company provides the software and customer has access to the software with login credentials.  Performance of a services has occurred when milestones have been met;

· The amount of the fees are fixed or determinable and free of contingencies or significant uncertainties – The Company assesses whether a fee is fixed and determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction.  For software licenses, the Company does not generally offer extended payment terms with typical terms of payment due upon delivery.  For maintenance fees, the initial payment is due upon delivery of the software and then, if renewed, they are due annually.  For professional services, the fees are determined when the arrangement is established and then due upon completion of a milestone; and

· The collection of the related fees is reasonably assumed – The Company assesses collectability on a customer-by-customer basis.  If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied.

The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for these elements when sold separately. VSOE for fair value of maintenance is established using the standard maintenance renewal rate in the customer’s contract.

The Company's software licenses are considered off-the-shelf products as they can be added to an arrangement with insignificant changes in the underlying software code and can be used by the customer for the customer's purposes upon installation. There is no significant production, customization or modification to the off-the-shelf software as it can typically be used as is for customer purposes. Complex interfaces are not necessary for the Company's software to be functional in the customer's environment. Services provided by the Company typically involve minor enhancements, design and/or standard implementation or integration of the product into the customer's network or environment. The services performed by the Company does not result in significant alteration to the features and functionality of the off-the-shelf software code. In most arrangements, the service and product elements are stated separately and described such that the total price of the arrangement would vary as a result of the inclusion or exclusion of the services.

F-9

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Maintenance Fees include promises for the right to receive services or unspecified upgrades and enhancements (or both) after the license period begins. Generally, these services include telephone support and correction of errors (bug fixes or debugging), as well as unspecified upgrades or enhancements. The maintenance services revenue is recognize ratable over a 12 month period (1/12) and is generally renewed annually. These fees are recognized over the period the maintenance is provided.

Professional Services consisting of fees for strategic consulting, configuration, training, consultation and implementation are included as a part of the Company services business. Revenues for professional services are recognized when acceptance is received from the customer for each milestone.

Subscription Software Revenue is a hosting arrangement subject to the software revenue recognition guidance of ASC 985-605. Software as a Service (SAAS) arrangements typically provide hosted access to the software application for a subscription based fee. Subscription revenue delivery of the service includes customer access to the software, typically a fee paid upfront. Revenue is recognized over the service period or over the customer relationship period. The customer has the contractual right to take possession of the software at any time during the hosting/subscription period without significant penalty. If feasible the customer may run the software on its own hardware or contract with another party unrelated to the Company to host the software.  The Company has not recognized any subscription software revenue for the years ended December 31, 2014 and 2013.

Deferred Revenue

Deferred revenue consists of billings or payments received in advance of revenue recognition from the Company’s maintenance revenues and professional services described above and are recognizable as the revenue recognition criteria are met. The Company generally invoices the customers in annual installments. Accordingly, the deferred revenue balance does not represent the total contract value of annual or multi-year non-cancellable subscription agreements. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as noncurrent.

Research and Development

The Company expenses research and development costs, including costs to develop software products to be marketed to external users, before technological feasibility of such products is reached.

Equipment

Equipment is stated at cost less accumulated depreciation. Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets, ranging from three to seven years. The cost of normal maintenance and repairs is charged to operating expenses as incurred. Material expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset.For the years ended December 31, 2014 and 2013 depreciation expense was $695 and $-0-, respectively.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, which include equipment and software, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment losses were required to be recognized at December 31, 2014 and 2013.

F-10

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Capitalized Computer Software Development Costs

The Company capitalizes certain computer software development costs in accordance with the FASB Accounting Standards Codification Costs of Software to be Sold, Leased or Marketed Topic. Costs incurred internally to create a computer software product or to develop an enhancement to an existing product are charged to expense when incurred as research and development expense until technological feasibility for the respective product is established.  Thereafter, all software development costs are capitalized and reported at the lower of unamortized costs or net realizable value. Capitalization ceases when the product or enhancement is available for general release to customers. Capitalized computer software development costs are being amortized ratably on a straight-line basis over three years.

The Company makes ongoing evaluations of the recoverability of the capitalized software by comparing the amount capitalized for each product to the estimated net realizable value of the product. If such evaluations indicate that the unamortized software development costs exceed the net realizable value, the Company writes off the amount by which the unamortized software development costs exceed net realizable value. There was no impairment charge related to capitalized software development costs during the years ended December 31, 2014 and 2013.

Total expenditures for capitalized computer software development costs and amortization of capitalized computer software development costs are as follows:

		Year Ended December 31,
		2014		2013
Total capitalized software development costs	$	265,583	$	342,911
Total amortization of capitalized software development costs	$	378,382	$	300,085

Capitalized computer software development costs consist of the following at December 31, 2014 and 2013:

	2014			2013
Capitalized software development costs	$	1,385,656		$	1,120,072
Accumulated amortization		( 800,337	)		(412,955	)
	$	585,319		$	707,117

Of the capitalized software development costs that are currently completed and being amortized, the Company expects amortization expense for the next four years to be as follows:

2015	$	366,248
2016		161,800
2017		55,754
2018		1,581
	$	585,319

Deferred Offering Costs

Deferred offering costs consist principally of professional fees, primarily legal and accounting, and other costs such as printing and registration costs incurred in connection with the planned initial public offering ("IPO") of the Company's common stock. As of December 31, 2014, the Company had not incurred any costs directly attributable to its proposed IPO, which have been deferred. Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed.

F-11

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Warrants

The Company evaluates its warrants for appropriate classification as either a liability or equity. The Company first evaluates whether or not the warrants are indexed to the Company's common stock and if so, it further evaluates whether or not it meets the requirements for equity treatment. Warrants that are accounted for as a liability are adjusted to fair value at each reporting date through the statement of operations in an account entitled "Change in fair value of warrant liability." Warrants accounted for as equity are not adjusted in subsequent periods. The Company issued warrants to a lender with an unspecified number of warrants to be issued. The agreement requires the Company to issue 2,500 warrants for each month the loan is not paid in full.

The requirements of this loan agreement caused the Company to consider Derivative Accounting for the extended terms, primarily because there is not a limit on the number of warrants that could be issued under this transaction. The Company has evaluated this accounting method and management and insiders would control the vote to increase the number of authorized shares which would allow the Company enough time to settle this issue with the lender.

Stock-Based Compensation

The Company accounts for its stock-based compensation awards in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718 ("ASC"), Compensation-Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, including grants of employee stock options and restricted stock and modifications to existing stock options, to be recognized in the statements of operations based on their fair values.

The Company uses the Black-Scholes option pricing model to determine the fair value of options granted. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the awards, which is generally the vesting term.

Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 505, Equity Based Payments to Non-Employees, or ASC 505. ASC 505 defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of the non-employee performance is complete. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505.

Income Taxes

Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company accounts for uncertain tax positions in accordance with the provisions of FASB ASC Topic 740, Income Taxes ("ASC 740"). ASC 740 provides a comprehensive model for the recognition, measurement and disclosure in the financial statements of uncertain tax positions that the Company has taken or expects to take on a tax return. Under this standard, the Company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

F-12

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Additionally, the Company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties, if any, are classified as income tax expense in the financial statements. As of December 31, 2014 and 2013, the Company does not have any uncertain tax positions.

Advertising

All advertising costs are expensed as incurred. The total advertising expense for December 31, 2014 and 2013 was $2,020 and $9,251, respectively.

Recent Accounting Pronouncements

In November 2014, FASB issued ASU 2014-16, "Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity" ("ASU 2014-16"). ASU 2014-16 clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendment clarifies that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. ASU 2014-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. ASU 2014-16 is not expected to have a material impact on our financial position, results of operations or cash flows.

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is currently evaluating the impact of the new standard.

In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"), which provides guidance on management's responsibility in evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In March 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle.

F-13

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company has adopted ASU 2015-03 in these financial statements and it did not have a material impact on the Company’s financial position, results of operations and cash flows.

Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.

Liquidity and Business Risk

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  At December 31, 2014 and 2013, the Company’s total stockholders’ deficit was $3,238,609 and $1,548,212, respectively. The net loss was $3,174,487 and $2,110,342 for the years ended December 31, 2014 and 2013, respectively, and the Company used cash in our operations of $1,590,363 and $1,808,331 for the years ended December 31, 2014 and 2013, respectively. Net cash used in operations has resulted principally from costs incurred in the continued development of the software and marketing efforts. The Company has funded its operations since inception through the use of cash obtained principally from the sale of equity securities and the placement of notes, some of which are convertible. To continue development, the Company will need to raise additional capital through debt and/or equity financing. However, additional capital may not be available on terms favorable to the Company and there can be no assurance that the Company will be successful in obtaining adequate additional financing. The Company is in the process of reducing its costs associated with delivery of services and taking steps to grow revenues through enhanced sales effectiveness, additional sales coverage, and new product offerings. The actual results of the Company indicate the existence of a material uncertainty of which may cast significant doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

Note 3. Fair Value Measurements

Current accounting guidelines defines fair value, establishes a framework for measuring fair value in accordance with ASC section 820, and requires certain disclosures for measuring fair values.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below:

Level 1:  Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The types of financial instruments in Level 1 include listed equities and listed derivatives.

Level 2:  Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and fair value that is determined through the use of models or other valuation methodologies. Financial instruments in this category generally include corporate bonds and loans, less liquid and restricted equity securities, certain over-the-counter derivatives and redeemable investments in alternative investment funds. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

F-14

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Level 3:  Inputs that are unobservable for the asset or liability and that include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

Note 4. Other Accrued Liabilities

Other accrued liabilities consist of the following at December 31, 2014 and 2013:

	2014		2013
Accrued wages and benefits	$	168,516	$	103,455
Accrued interest		246,936		116,008
Customer deposits		-		82,675
Other		-		93,005
	$	415,452	$	395,143

Note 5. Notes Payable

Notes payable consist of the following at December 31, 2014 and 2013:

	2014			2013
Notes payable		$	1,673,623		$	1,345,130
Less discount			9,125			9,625
Notes payable, net of discount		$	1,664,498		$	1,335,505
Current portion of notes payable			741,639			378,607
Long term portion of notes payable		$	922,859		$	956,898

On October 31, 2012, the Company entered into a note payable with an individual which had an original principal balance of $100,000. The note accrues interest at 12% annually, to be paid on the maturity date. The original due date was June 30, 2014. Subsequent to June 30, 2014, the lender agreed to extend the due date of this note to December 31, 2015. The balance of this note at December 31, 2014 and 2013 was $100,000. Accrued interest on this note was $26,000 and $14,000 at December 31, 2014 and 2013.

On November 30, 2011, the Company entered into a note payable with a shareholder, founder and current Executive Chairman of the Board of Directors with an original balance of $333,100. The original due date of this note was January 31, 2012. The intent of this loan was to aggregate several advances made by the lender during 2011. Effective July 24, 2013 the parties agreed to amend the note and extend the due date to December 1, 2013. On December 1, 2014, the parties agreed to extend the due date to March 31, 2015. Subsequent to March 2015, the parties agreed to extend the due date to November 1, 2015. Beginning on December 1, 2014, the note has accrued interest at 12% annually. Subsequent to November 1, 2015 the principal and accrued interest of the note were applied to the proceeds for the exercise of an incentive stock option by the lender for 80,964 shares of common stock. The balance of this note at December 31, 2014 and 2013 was $49,600. Accrued interest on this note was $496 and $-0- at December 31, 2014 and 2013, respectively.

F-15

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

On February 14, 2013, the Company entered into a note payable with a shareholder, founder and current Executive Chairman of the Board of Directors with an original balance of $11,000. The original due date of the note was June 1, 2013. The note accrued interest at 12% annually. This loan was paid in full and the accrued interest was forgiven by the lender during 2014, therefore recorded as an increase in additional paid in capital on the balance sheet. The balance of the note at December 31, 2014 and 2013 was $-0- and $11,000, respectively. Accrued interest on this note was $-0- and $1,155 at December 31, 2014 and 2013, respectively.

On August 30, 2013, the Company entered into a Loan Agreement with a shareholder. The original balance of the loan was $100,000 at an interest rate of 5.25%. If the loan is not paid at its first maturity date the interest will be changed to the lenders bank’s prime plus 2%. The loan is secured by all the personal property of the Company. The loan agreement required the payment of an origination fee of $1,000 and a loan fee of $10,000 on February 3, 2014. The Company recorded these fees as a debt discount and amortized it over the term of the loan. The loan agreement requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. This loan was originally due August 30, 2014. The parties extended the maturity date to September 5, 2015 with all other terms remaining the same. Subsequent to September 5, 2015, the parties agreed to extend the note and fee agreement to October 5, 2016. The balance of the note at December 31, 2014 and 2013 was $100,000. Accrued interest on this note was $7,000 and $1,750 at December 31, 2014 and 2013, respectively.

On July 8, 2013, the Company entered into a note payable with an entity owned by a shareholder and a member of the Board of Directors.  The note had an original principal balance totaling $20,000. The original due date of this note was January 8, 2014. The note accrues interest at 12% annually. On May 15, 2015 the parties agreed to extend this note to November 1, 2015. Prior to November 1, 2015 the total principal and accrued interest were converted to shares of common stock at $4.00 per share. The balance of this note at December 31, 2014 and 2013 was $2,500 and $20,000, respectively. Accrued interest on this note was $300 and $1,250 at December 31, 2014 and 2013.

On November 15, 2013, the Company entered into a note payable with an entity owned by a shareholder and a member of the Board of Directors. The note had an original principal balance totaling $25,000. The original due date of this note was March 31, 2014. The note accrues interest at 12% annually starting December 16, 2013. The note payable required the payment of a handling fee of 1% of the original balance payable at maturity. On May 15, 2015 the parties agreed to extend this note to November 1, 2015. Prior to November 1, 2015 the total principal and accrued interest were converted to shares of common stock at $4.00 per share. The balance of this note at December 31, 2014 and 2013 was $25,000. Accrued interest on this note was $375 and $3,000 at December 31, 2014 and 2013, respectively.

On April 4, 2013, the Company entered into a loan agreement with a less than 5% shareholder of the Company and an entity owned by the same shareholder. The original principal balance of the loan was $1,000,000 with a fixed interest rate of 4.5% for five years and then variable based on the rate at the outside third party financial institution. The loan is secured by all the personal property of the Company. The loan requires monthly payments of principal and interest in the amount of $6,494 with a final due date of April 4, 2033. The loan agreement required the payment of an origination fee of $10,000. This loan fee has been treated as a discount to the debt and is currently being amortized on a straight line basis over the term of the loan. The debt discount balance at December 31, 2014 and 2013 was $9,125 and $9,625, respectively. The fee agreement also requires the Company to pay the lender a fee of 1.25% of the outstanding loan balance quarterly during the term of this loan. This quarterly fee is recorded as interest expense when due. The lender, at its discretion, may convert the amount of this quarterly fee to common stock of the Company at $2.00 per share. The loan agreement requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. The balance of this note, net of debt issuance costs, at December 31, 2014 and 2013 was $957,398 and $989,905, respectively. Accrued interest on this loan was $3,624 and $-0- at December 31, 2014 and 2013, respectively. Also included in accrued interest is the unpaid lender fee which totaled $86,492 and $37,681 at December 31, 2014 and 2013, respectively.

F-16

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

On July 18, 2013, the Company entered into a note payable with an entity owned by a shareholder. The original principal balance of the note was $40,000. The note accrues interest at 9.5% annually. The original due date of the note was October 19, 2013. Subsequent to December 31, 2014, the parties agreed to extend this note to December 31, 2015. The balance of this note at December 31, 2014 and 2013 was $30,000 and $40,000. Accrued interest on this note was $4,829 and $633 at December 31, 2014 and 2013, respectively.

On April 2, 2014, the Company entered into a loan agreement with an entity primarily owned by a shareholder and current member of the Board of Directors. Simultaneously, the lender of this loan assigned all rights, title and interest to Cap-Star Holdings, I, LLC. The original principal balance of this loan was $500,000 with a due date of October 2, 2014. The loan accrues interest at 15% annually. The loan is personally guaranteed by a shareholder, founder and current Executive Chairman of the Board of Directors. The loan agreement required the Company to issue 250,000 share of common stock of the Company to the lender and warrants which allowed the lender to purchase 250,000 shares of common stock of the Company. The issuance of the common stock and the warrants have been accounted for as a debt discount and amortized fully as interest expense in 2014. The debt discount was calculated to be $324,759 on April 2, 2014. The total proceeds of the loan were allocated based on the relative fair value each component of the transaction.  The fair value of the note payable was $500,000, the fair value of the common stock was $500,000, and the fair value of the warrants was $426,609. The fair value of the warrants was determined by utilizing the Black-Scholes model. The original due date of October 2, 2014 was extended to October 2, 2015. On October 9, 2015, the parties agreed to extend the due date to April 2, 2016. The balance of the loan at December 31, 2014 and 2013 was $400,000 and $-0-, respectively. Accrued interest on this loan was $5,000 and $-0- at December 31, 2014 and 2013, respectively.

Future maturities of notes payable over the next five years are as follows:

For the year ended December 31,
2015	$	741,639
2016		36,031
2017		37,829
2018		39,592
2019		41,437
Thereafter		777,095
		1,673,623
Less Discount		9,125
	$	1,664,498

Note 6. Convertible Notes Payable

Convertible notes payable consist of the following at December 31, 2014 and 2013:

	2014		2013
Convertible notes	$	1,436,951	$	642,951
Less discount		10,250		16,250
Convertible notes, net of discount		1,426,701		626,701
Current portion of convertible notes		1,337,951		507,951
Long term portion of convertible notes	$	88,750	$	118,750

F-17

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

In 2014, the Company issued $840,000 aggregate principal amount of convertible notes (collectively the “12% Convertible Notes”) with maturity dates originally ranging from March 15, 2015 to June 19, 2015. All the notes carry an interest rate of 12.0% and are entitled to convert to common stock at $4.00 per share. All of these convertible notes were treated as current as of December 31, 2014. Accrued interest on these convertible notes was $10,055 and $0 at December 31, 2014 and 2013, respectively.

Subsequent to December 31, 2014, several of the 12% Convertible Notes were extended, paid in full and converted. Two notes totaling $270,000 were extended to February 1, 2016. A total of $42,500 was paid in full. The remaining $527,500 were converted to 527,500 shares of common stock. In some cases, the interest was also converted at the same rate as the convertible notes. Subsequent to December 31, 2014, the Company issued new 12% Convertible Notes totaling $88,500.

The Company had a convertible note payable to an individual with an original principal balance of $10,000. The note carried an interest rate of 12%. The note was originally entered into in January 2013. During 2014 the note holder elected to convert the note to common stock. The outstanding balance of the note was $-0- and $10,000 at December 31, 2014 and 2013, respectively.

On September 13, 2013, the Company entered into a loan agreement with an individual stockholder to assist with the development, expansion and marketing of its primary software product. The original loan amount was $180,000. The loan agreement provides for collateral of all the personal property of the Company. The loan requires monthly principal payments of not less than $3,000 beginning October 13, 2013 with final payment due September 13, 2018. The loan requires a fee to be paid quarterly at an annual rate of 10% of the outstanding principal balance. This fee has been treated as interest expense. The lender may elect, at the lenders sole discretion, to receive common stock at $2.00 per share in lieu of cash. The loan agreement also required an initial loan fee of $18,000 which is equal to 10% of the original principal balance. This loan fee has been treated as a debt issuance cost and is currently being amortized on a straight line basis over the term of the loan. The debt issuance cost balance at December 31, 2014 and 2013 was $10,250 and $16,250, respectively. The loan agreement further requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. The outstanding balance, net of debt issuance costs, at December 31, 2014 and 2013 was $124,750 and 154,750, respectively. Accrued interest on this loan was $-0- and $6,000 at December 31, 2014 and 2013, respectively.

On May 17, 2013, the Company entered into a convertible note agreement with an individual.  The original principal balance of this note was $75,000. However, the loan was increased by a lump sum interest requirement of $5,000 which made the total original balance $80,000. The note requires interest payments of $5,000 per month since original issuance. The original due date of this loan was June 17, 2013 unless the lender exercised its option to convert the loan before that date. The loan also required collateral of certain accounts receivables from two customers. The lender, at his sole discretion, can convert this loan into common stock of the Company at $2.00 per share.  Subsequent to December 31, 2014 the parties agreed to convert all the original principal balance of $75,000 plus accrued interest of $145,000 totaling $220,000 into 110,000 shares of the Company’s common stock at $2.00 per share. The outstanding balance at December 31, 2014 and 2013 was $80,000. Accrued interest on this loan was $92,500 and $32,500 at December 31, 2014 and 2013, respectively.

F-18

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

On October 2, 2012, the Company entered into a loan agreement with a stockholder of the Company. An owner of the lender is also a member of the Board of Directors. The original principal amount of the loan was $381,951. The proceeds of the loan were used to repay another loan to an individual. The loan originally required payment of quarterly interest at an annual rate of 12% with the balance paid October 2, 2013. The loan requires the Company to obtain approval before obtaining additional financing outside of the normal course of business or a change of ownership greater than 10%. Upon default, the loan agreement provides for a perpetual license on the Company’s primary software (i.e. TridentHE) for use in the military defense market only. On October 2, 2013, the loan was extended to November 2, 2013 with no changes in terms except the due date. On May 9, 2014 another extension was signed. This extension granted the following: (1) extension of the payment of all amounts to November 2, 2014 with the three options to extend for 30 more days at the lender’s discretion; (2) the interest rate will be modified from the date of the last extended due date at 18%; (3) quarterly interest payments of $17,446 will be due each quarter at August 2, 2014 and November 4, 2014; (4) the Company will issue stock warrants providing for 2,500 shares to the lender for every full month after May 9, 2014 which the loan is still outstanding. The exercise price of the warrants will be $6.00 per share and they will have a 5 year life; and (5) the lender will have the right to convert the outstanding principal and interest balance to shares of the Company’s common stock, at the lender’s sole discretion, at $2.00 per share. This extension also required a payment of past due interest totaling $38,772 to the lender by the Company. The loan was extended again, by way of two of the 30 day options by the lender, to January 2, 2015. The requirements above cause the Company to consider Derivative Accounting for the extended terms, primarily because there is not a limit on the number of warrants that could be issued under this transaction. The Company has evaluated this accounting method and management and insiders would control the vote to increase the number of authorized shares which would allow the Company enough time to settle this issue with the lender. The Company evaluated this transaction as it relates to Debt Modification Accounting. The transaction was not significant and therefore the warrants are recorded as additional financing fees as they are granted on a monthly basis. On October 14, 2015, the lender agreed to extend this note to the earlier of February 1, 2016 or the first business day following an effective date of a registration statement on Form S-1 filed by the Company. The outstanding balance of this note at December 31, 2014 and 2013 was $381,951. Accrued interest on this loan was $ 7,639 and $14,743 at December 31, 2014 and 2013, respectively.

Future maturities of convertible notes payable over the next four years are as follows:

For the year ended December 31,
2015	$	1,337,951
2016		36,000
2017		36,000
2018		27,000
		1,436,951
Less Discount		10,250
	$	1,426,701

The Company evaluated the features of the convertible notes to ascertain if any embedded conversion features were required to be bifurcated and accounted for as a derivative. The Company evaluated whether the embedded feature met the definition of a derivative and determined that the conversion options does not as they do not meet the "net settlement" requirement. The underlying shares of the Company are those of a private company and are not considered readily convertible to cash, and therefore bifurcation is not required. The Company will continue to reevaluate these features.

F-19

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Note 7. Commitments and Contingencies

The Company is obligated under a lease agreement for its primary office space. Subsequent to December 31, 2014, the Company and the landlord amended the lease to include additional space and extend the lease to May 31, 2020. The lease provides for base rent payments plus other operating costs.

Subsequent to December 31, 2014, the Company entered into a lease agreement with a related party for additional offices space. The lease term is 12 months and requires a base rent payment of $2,500 per month. The Company can increase the amount of space and related monthly base rent.

Minimum annual payments under a non-cancelable operating lease as of December 31, 2014 are as follows:

For the year ended December 31,
2015	$	98,303
2016		153,077
2017		135,361
2018		142,645
2019		149,929
Thereafter		63,735
	$	743,050

Rent expense for the years ended December 31, 2014 and 2013 was $72,134 and $88,928, respectively.

Note 8. Stock Option Plan

Effective October 1, 2011, the Company approved the Aegis Identity Software, Inc. Incentive Stock Option Plan (the "Plan"). The Plan provides for the issuance of up to 2,500,000 shares of common stock in the aggregate. The options generally vest yearly beginning one (1) year after the date of grant over a three (3) year period. The options have a ten-year contractual maturity. Granting of options under the Plan is at the discretion of the board of directors.

Option costs related to stock options recognized for the years ended December 31, 2014 and 2013 amounted to $766,211 and $311,168, respectively, of which $722,024 and $284,694 has been included in general and administrative expenses for the years ended December 31, 2014 and 2013, respectively, in the accompanying statements of operations. In addition $44,187 and $26,474 has been capitalized as computer software development costs for the years ended December 31, 2014 and 2013, respectively.

The Company has estimated the fair value of all stock option awards as of the date of grant by applying the Black-Scholes option pricing model. The weighted average assumptions used in determining the fair value of options granted and the weighted average grant date fair value of options granted during the years ended December 31, 2014 and 2013 is as follows:

		2014		2013
Weighted-average range of risk-free interest rate		2.11 to 2.29	%	1.27 to 2.26	%
Weighted-average range of volatility		80.99 to 83.44	%	76.28 to 79.90	%
Dividend yield		-0-	%	-0-	%
Weighted-average range of expected life in years		1.75 to 6.0		2.25 to 6.0
Weighted-average fair value at grant date	$	$0.35		$0.34

F-20

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Historical information for a selection of similar publicly traded companies was the primary basis for the expected volatility. Historical information and management expectations were the primary basis for the expected dividend yield. The expected lives of the options are based upon the simplified method. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

As of December 31, 2014, there was approximately $1,584,549 of unrecognized compensation cost, related to unamortized stock option compensation which is expected to be recognized over a weighted average period of 2.5 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. In addition, as future grants are made, additional compensation costs will be incurred. Exercise prices range from $0.60 to $2.00 per share as of December 31, 2014.

A summary of the Company's stock option activity and related information for the years ended December 31, 2014 and 2013 are as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted-Average Contractual Term in Years	Aggregate Intrinsic Value
Outstanding at January 1, 2013		743,750		$	0.60 to $2.00	5 to 10	$	0.40 to $1.36
Granted		997,500		$	2.00	5 to 10
Expired		(125,000	)
Outstanding, December 31, 2013		1,616,250		$	0.60 to $2.00	5 to 10	$	0.40 to $1.40
Granted		792,500		$	2.00	5 to 10
Expired		(62,500	)
Awards outstanding, December 31, 2014		2,346,250		$	0.60 to $2.00	5 to 10	$	0.40 to $1.44
Vested and exercisable		1,437,333		$	0.60 to $2.00	5 to 10	$	0.40 to $1.44

Note 9. Warrants

In connection with the issuance of certain notes payable, the Company issued 250,000 warrants to purchase common stock to the respective note holders at a strike price of $2.00 per warrant and an expiration date of 10 years after issuance. The warrants are exercisable immediately and were accounted for as equity. Proceeds of $149,519 were allocated to these warrants based on the relative fair values of the warrants.

In connection with convertible note financing obtained during 2012 (see Note 5), the Company issued the lender 70,000 warrants to purchase common stock at an exercise price of $2.00 per share.

The warrants were a requirement of an extension agreement entered into on May 2, 2014. The Company is required to issue 2,500 warrants per month the note is outstanding. The warrants expire 10 years after their issuance. The number of shares to be issued are dependent on the number of shares into which the debt is converted (i.e. each warrant is exercisable for one share of common stock for each one share issued upon the conversion of the lender's note). During 2014, the Company issued 17,500 warrants related to this agreement with an aggregate value of $14,088. The fair value of these warrants at their respective commitment dates were recorded as additional financing fees. The fair value of the warrants is estimated at each commitment date using the Black Scholes valuation model.

F-21

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

The assumptions used in computing the fair value of the warrants as of December 31, 2014 are as follows:

	December 31, 2014
Fair value of common stock	$	2.00
Conversion price	$	2.00
Expected volatility		78.30	%
Remaining term (years)		5.0
Risk-free rate		0.63	%
Expected dividend yield		0.00	%

In connection with certain consulting and professional service agreements entered into between 2011 and 2014, the Company issued the consultants 950,000 warrant to purchase common stock at an exercise price ranging from $0.60 to $2.00 per share. The total warrants vested at December 31, 2014 were 812,500. The warrants expire ranging from 5 to 10 years after their issuance. The fair value of these warrants at their respective commitment were recorded as additional paid in capital with a corresponding discount on the convertible debt it relates to, and is being amortized into interest expense over the term of the debt.

Warrant costs related to these stock warrants recognized for the years ended December 31, 2014 and 2013 amounted to $29,552 and $16,081, respectively, which are included in general and administrative expenses in the accompanying statements of operations. As of December 31, 2014, there was approximately $17,492 of unrecognized expense, related to unamortized stock warrant expense which is expected to be recognized over a weighted average period of 1.5 years. Total unrecognized expense will be adjusted for future changes in estimated forfeitures. In addition, as future warrants are made, additional compensation costs will be incurred.

A summary of the activity related to these stock warrants for the years ended December 31, 2014 and 2013 are as follows:

Outstanding, January 1, 2013	649,701
Issued	325,000
Outstanding, December 31, 2013	974,701
Issued	305,000
Outstanding, December 31, 2014	1,279,701

The fair value of the warrants is estimated at the end of each quarterly reporting period using the Black Scholes valuation model. The assumptions used in computing the fair value of the warrants as of December 31, 2014 and 2013 are as follows:

	2014			2013
Range of fair value of warrant	$	0.68 to $1.44		$	0.68 to $1.28
Range of conversion price	$	0.60 to $2.00		$	0.60 to $2.00
Range of expected volatility	86.2 to 87.0  %			75.2 to 86.0  %
Range of remaining term (years)	5.0 to 10.0			5.0 to 10.0
Range of risk-free rate	2.12 to 2.80 %			1.52 to 2.43 %
Expected dividend yield	$	0.00	%		0.00	%

Historical information for a selection of similar publicly traded companies was the primary basis for the expected volatility. Historical information and management expectations were the primary basis for the expected dividend yield. The expected lives of the options are based upon the simplified method. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

F-22

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Note 10. Preferred and Common Stock

Preferred Stock

The Company had 10,000,000 shares of Preferred Stock, par value $0.001, authorized for issuance, of which no shares of Preferred Stock were issued or outstanding.

Common Stock

The Company had 100,000,000 shares of Common Stock, par value $0.001, authorized for issuance, of which the Company had issued and outstanding shares totaling 3,871,737 and 3,451,812 as of December 31, 2014 and 2013, respectively.

Issuances during 2013

The Company issued 733,818 shares of common stock for total proceeds of $1,417,734.

Issuance during 2014

The Company issued 419,925 shares of common stock for total proceeds of $341,076.

Note 11. Net Loss per Share

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. There were no shares of the Company's common stock outstanding subject to repurchase or forfeiture for the years ended December 31, 2014 and 2013.

The Company has excluded all common stock equivalents from its calculation of diluted net loss per share because their effects would be anti-dilutive.

The following table sets forth the number of shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive.  The number of shares as of December 31, 2014 and 2013 are as follows:

	2014		2013
Options to purchase common shares		2,346,250		1,616,250
Outstanding warrants		1,279,701		974,701
Convertible notes payable		361,738		160,738
		3,987,689		2,751,689

Note 12. Retirement Benefit Plan

The Company sponsors a 401(k) retirement plan for its qualified employees, which was adopted and implemented in June 10, 2013. The plan provides for the statutory contributions by plan participants and an optional and discretionary matching of contributions by the Company. For the years ended December 31, 2014 and 2013 the Company has elected not to match any employee contributions to the plan.

F-23

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Note 13. Income Taxes

The components of the Company's income tax expense for the years ended December 31, 2014 and 2013 are as follows:

	December 31, 2014		December 31, 2013
Current Tax Expense (Benefit)
Federal	$	-	$	-
State		-		-
	$	-	$	-
Deferred Tax Expense (Benefit)
Federal	$	-	$	-
State		-		-
	$	-	$	-
Total Tax Expense (Benefit)	$	-	$	-

As of December 31, 2014, the Company has available unused federal and state net operating loss (NOL) carry-forwards of approximately $5,837,000, which will expire in various years from 2031 to 2034.

The effective rate differs from the statutory rate of 35% for 2014 and 2013 primarily due to the following:

	2014		2013
Federal income tax provision at statutory rate	(35.00	%)		(35.00	%)
State income taxes, net of federal benefit	(3.25	%)		(3.25	%)
Issuance of Stock Options	8.45	%		5.16	%
Issuance of Stock Warrants	4.15	%		0.37	%
Other	2.58	%		(4.23	%)
Change in valuation allowance	23.07	%		36.95	%
	0.00	%		0.00	%

F-24

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

The tax effect of temporary differences and net operating loss carry-forwards as of December 31, 2014 and 2013 is as follows:

	2014			2013
Current deferred tax asset:
Current liabilities	$	301,055		$	179,684
Current assets		(42,240	)		(7,459	)
Valuation allowance		(258,815	)		(172,225	)
Net current deferred tax asset	$	-		$	-
Non-current deferred tax assets (liabilities)
Issuance of Stock Options	$	472,062		$	178,990
Issuance of Stock Warrants		163,754			19,626
Net Operating Losses		2,232,601			1,545,102
Charitable Contributions		3,866			3,241
Total	$	2,872,283		$	1,746,959
Less Valuation Allowance	$	(2,872,283	)	$	(1,746,959	)
Net non-current deferred tax asset	$	-		$	-

Ownership changes may limit the future utilization of these net operating loss carry-forwards as defined by the Internal Revenue Code. The net deferred tax asset has been fully offset by a valuation allowance due to our history of taxable losses and uncertainty regarding our ability to generate sufficient taxable income in the future to utilize these deferred tax assets.

The Company's 2011, 2012, 2013 and 2014 Federal and Colorado tax returns remain subject to examination by the respective taxing authorities. In addition, net operating losses and research tax credits arising from prior years are also subject to examination at the time that they are utilized in future years. Neither the Company's federal or state tax returns are currently under examination.

Note 14. Subsequent Events

In February 2015, the Incentive Stock Option Plan was amended to increase the number of shares available for issuance by 2,500,000. The total number of shares available for issuance is now 5,000,000.

In July 2015, the Company initiated a private offering of up to 800,000 shares of its common stock at a price of $2.50 per share to accredited investors. The offering closed in November 2015. The Company issued 281,500 shares of common stock in this offering for a total of $703,750. The Company entered into a letter agreement and subscription agreement with Newport Capital Bancorp for the purchase of an additional 220,000 shares for $550,000. Under the terms of these documents Newport Capital Bancorp, an entity controlled by one of the directors of the Company, has committed to purchase a specified number of shares upon the occurrence of certain defined events related to the registration of the Company’s securities. The obligation of Newport Capital Bancorp to purchase the shares terminates on March 31, 2016 in the event the registration is not previously completed.

F-25

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

Effective July 1, 2015, the Company terminated the Buy-Side Advisory Agreement, dated May 15, 2015, and the Amended and Restated Agreement, dated January 27, 2014, with National Community Development Fund I, LLC. There were no amounts due under either of these agreements. John Vasquez, a director of the Company, is the Chairman of National Community Development Fund I, LLC.

On July 1, 2015, the Company entered into a Consulting Agreement with M1 Advisors for consulting services relating to the offering. As compensation for its advisory services M1 Advisors received a warrant to purchase 622,532 shares of common stock at an exercise price of $2.00 per share with a five (5) year term. This warrant vests upon the occurrence of certain targets. Any unvested warrants revert to Newport Capital Bancorp on a fully vested basis. The term of the Consulting Agreement is one (1) year and the parties have the option to renew for additional one (1) year terms.

Effective as of July 1, 2015, the Company entered into a Consulting Agreement with Newport Capital Bancorp to assist the company with its transition to a public company. Newport Capital Bancorp is controlled by a director of the Company. As compensation for its advisory services, Newport Capital Bancorp received a fully vested warrant to purchase 647,532 shares of common stock at an exercise price of $2.00 per share with a term of ten (10) years. In addition, Newport Capital Bancorp would receive any warrants issued to M1 Advisors that did not vest and these warrants would also be fully vest. The term of the Consulting Agreement is one (1) year and the parties have the option to renew for additional one (1) year terms.

On July 1, 2015, the Company entered into an Advisory Consulting Agreement with Strategic Universal Advisors for acquisition identification and support, brand strategy, customer introductions, identification and introduction to institutional investors and media and technical exposure. As compensation for its services, Strategic Universal Advisors received a monthly fee of $5,500 and a fully vested warrant to purchase 250,000 shares of common stock at an exercise price of $4.00 per share with a term of five (5) years. This agreement was terminated September 14, 2015.

On July 13, 2015, the Company entered into a promissory note with Ralph Armijo, the Executive Chairman of the Board of Directors, in the principal amount of $25,000 with a loan fee of 1%.  The maturity date was September 1, 2015.

The Company received a subpoena for documents from the Colorado Department of Regulatory Authority, Division of Securities, in February 2015. The Company complied with the subpoena by providing the documents requested. As of November 2015, The Company has received no further correspondence.

In September 2015, the Company entered into a letter agreement with ABEET, LLC, an entity owned by a director of the Company, for the conversion of $34,319.07 representing all principal and accrued interest due under promissory notes dated July 8, 2013 and November 15, 2013 into shares at a conversion price of $4.00 per share. In October 2015, the conversion was completed and the debt was retired.

On September 29, 2015, the Company entered into a promissory note with ABEET LLC, an entity owned by a director of the Company, in the principal amount of $9,500 that accrues interest at a rate of 12% per annum. The maturity date is November 29, 2015.

On September 30, 2015, the Company entered into a letter agreement with a stockholder to convert an outstanding loan into shares of common stock at $2.00 per share. The principal balance of the loan was $111,000 and the accrued fee was $2,700 for a total amount converted of $113,700.  This transaction was completed and the loan was retired.

In October 2015, the Company entered in a sublease agreement for its new corporate headquarters’ office located in Denver, Colorado. See also Note 7.

F-26

Aegis Identity Software, Inc.

Notes to Financial Statements

December 31, 2014 and 2013

On October 9, 2015, the Company and National Community Development Fund I, LLC agreed to extend the maturity date of the bridge loan transaction to April 2, 2016. National Community Development Fund I, LLC is controlled by a director of the Company.

On October 9, 2015, the Company and Neighborhood Services, Inc. agreed to extend the maturity date of the Promissory Note, dated July 8, 2013, to December 31, 2015. A balloon payment of the principal and accrued interest are due on the maturity date.

On October 9, 2015, the Company and Dr. Richard Rivera agreed to extend the maturity date of the loan transaction, dated August 30, 2014, to October 5, 2016. The Company is required to make interest-only monthly payments at a rate of 5.25% per annum and the principal is due on October 5, 2016.

On October 9, 2015, the Company and Veteran Engineering & Technology, LLC agreed to extend the maturity date of the bridge loan transaction the first to occur of the first business day immediately following the closing date of the registration statement on Form S-1 or February 1, 2016. Veteran Engineering & Technology, LLC is a stockholder and an officer of Veteran Engineering & Technology LLC is a director of the Company.

On October 12, 2015, the Company and James Sullivan agreed to extend the maturity date of the convertible promissory note, dated December 19, 2014, to the first to occur of the first business day immediately following the closing date of the registration statement on Form S-1 or February 1, 2016.

On October 16, 2015, the Company entered into a letter agreement with Paul Thompson related to the conversion of the principal and all accrued interest due totaling $220,000 under the convertible promissory note, dated May 17, 2013, into 110,000 shares of common stock. The conversion was completed on October 30, 2015.

On October 27, 2015, the Company entered into a loan transaction with an existing shareholder.  The principal amount of the loan was $150,000 and the due date is January 27, 2016.  The interest rate is 12% per annum. A warrant to purchase 2,101 shares of common stock at an exercise price of $2.50 per share with a term of 5 years was granted in connection with this loan transaction.

In November 2015, the Company entered into a letter agreement with Ralph Armijo, the Executive Chairman of the Board of Directors, requesting that the principal and accrued interest due pursuant to the promissory note entered into on November 30, 2011, as amended, be applied toward the exercise of one of his incentive stock option grants. The total amount due under the note was $55,056.00. This amount was applied to the purchase price for the exercise of the option to purchase 80,964 shares of common stock. The transaction was completed and the note was retired in November 2015.

On November 9, 2015, the Company entered into a promissory note payable with Robert D. Lamvik, an officer and director of the Company, in the principal amount of $35,000 that accrues interest at a rate of 12% per annum. The maturity date is December 9, 2015.

F-27

Aegis Identity Software, Inc.
Condensed Balance Sheets
June 30, 2015 and December 31, 2014
	June 30,			December 31,
	2015			2014
Assets	(unaudited)
Current Assets
Cash and cash equivalents	$	7,245		$	835
Trade receivable, net		232,980			101,021
Due from related party		10,000			10,000
Other current assets		45,044			12,915
Total Current Assets		295,269			124,771
Software, net		519,841			585,319
Equipment, net		3,475			3,939
		523,316			589,258
Other Assets, deposit		4,214			4,214
Total Assets	$	822,799		$	718,243
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of notes payable, net	$	264,717		$	264,539
Current portion of notes payable, related party, net		477,100			477,100
Current portion of convertible notes payable, net		1,389,659			956,000
Current portion of convertible notes payable, related party, net		381,951			381,951
Accounts payable		231,524			214,115
Deferred maintenance revenue		252,921			206,111
Due to related party		29,975			29,975
Other accrued liabilities		852,363			415,452
Total Current Liabilities		3,880,210			2,945,243
Long-term Notes Payable
Notes payable, net		905,800			922,859
Convertible notes payable, net		94,250			88,750
		1,000,050			1,011,609
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $0.001 par value, authorized 10,000,000; no shares issued or outstanding		-			-
Common stock, $0.001 par value, authorized 100,000,000; issued and outstanding- 3,946,036 shares at June 30, 2015 and 3,871,737 shares at December 31, 2014		3,946			3,872
Additional paid in capital		5,460,202			4,685,084
Accumulated deficit		(9,521,609	)		(7,927,565	)
Total Stockholders’ deficit		(4,057,461	)		(3,238,609	)
Total Liabilities and Stockholders' Equity	$	822,799		$	718,243

The accompanying notes are an integral part of the condensed financial statements.

F-28

Aegis Identity Software, Inc.
Condensed Statements of Operations (unaudited)
For the Six Months Ended June 30, 2015 and 2014
	2015			2014
Software licenses	$	182,900		$	312,125
Professional services		854,163			397,592
Maintenance fees		149,087			78,026
Total revenue		1,186,150			787,743
Operating expense
Research and development		106,560			170,236
General and administrative expense		1,892,862			1,445,381
Selling expense		317,584			190,608
Amortization and depreciation expense		195,678			189,036
Total operating expenses		2,512,684			1,995,261
Loss from operations		(1,326,534	)		(1,207,518	)
Interest expense		(198,508	)		(121,849	)
Interest expense, related party		(69,002	)		(57,752	)
		(267,510	)		(179,601	)
Loss before income taxes		(1,594,044	)		(1,387,119	)
Income tax expense		-			-
Net loss	$	(1,594,044	)	$	(1,387,119	)
Loss per share, basic and diluted	$	(0.41	)	$	(0.39	)
Common shares outstanding, basic and diluted		3,889,508			3,559,974

The accompanying notes are an integral part of the condensed financial statements.

F-29

Aegis Identity Software, Inc.
Condensed Statements of Cash Flows (unaudited)
For the Six Months Ended June 30, 2015 and 2014
	2015			2014
Cash flows from operating activities:
Net loss	$	(1,594,044	)	$	(1,387,119	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation expense		195,678			189,036
Amortization of debt discount		7,218			3,250
Stock based compensation		559,181			343,525
Stock warrant expense		17,505			1,986
Changes in operating assets and liabilities:
Trade receivable		(131,959	)		(268,371	)
Other current assets		(32,129	)		(41,650	)
Accounts payable		17,409			90,604
Other accrued liabilities		493,396			123,070
Net cash used in operating activities		(467,745	)		(945,670	)
Cash flows from investing activities:
Purchase of equipment		-			(4,634	)
Software development costs		(129,736	)		(146,009	)
Net cash used in investing activities		(129,736	)		(150,643	)
Cash flows from financing activities:
Proceeds from issuance of common stock		-			324,550
Proceeds from notes payable, related party		-			500,000
Proceeds from convertible notes payable		638,500			-
Payments on notes payable		(17,109	)		(66,376	)
Payments of convertible notes, related party		(17,500	)		(18,500	)
Payments of convertible notes		-			(15,000	)
Net cash provided by  financing activities		603,891			724,674
Net Increase (Decrease) in Cash and Cash Equivalents		6,410			(371,639	)
Cash and Cash Equivalents, Beginning of Period		835			397,846
Cash and Cash Equivalents, End of Period	$	7,245		$	26,207
Supplemental disclosures
Cash payments during the year for income taxes	$	-		$	-
Cash payments during the year for interest	$	150,486		$	119,495
Noncash investing and financing activities
Conversion of notes payable and accrued interest to common stock	$	222,197		$	10,000
Issuance of stock for services	$	5,000		$	-
Exchange of common stock for exercise of stock options	$	15,000		$	-

The accompanying notes are an integral part of the condensed financial statements.

F-30

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Note 1 – Nature of Organization

Aegis Identity Software, Inc. (the “Company”, “Our”, “Us” or “We”) was founded in August 2011 by experienced software industry executives focused on developing Identity and Access Management (“IAM”) solutions needed to support the growth of internet technologies and associated proliferation of digital identities.

The Company is an IAM solution provider to the Educational Technology (“Ed-Tech”) sector and currently provides two solutions that generate on-going revenues from both universities and K-12 schools. The education market has significant need for our IAM solutions as demonstrated by the fact that acquiring and integrating IAM solutions continue to be a top priority year-over-year for school administrators to meet the Family Educational Rights and Privacy Act compliance and manage the access to an ever increasing number of applications.

The Company offers customers the option to purchase software products and related services to manage their own environments, or to access its IAM solution through a comprehensive cloud service offering.  Customers that purchase software products may elect to purchase software license updates and product support contracts, which provide customers with rights to unspecified product upgrades and maintenance releases issued during the support period as well as technical support assistance.

The Company also offers customers a broad set of services offerings including consulting services, advanced customer support services and training services.

In July 2015, the Company effected a one (1) for four (4) reverse split of its common stock. Upon the effectiveness of the reverse stock split, (i) every four (4) shares of outstanding common stock was combined into one (1) share of common stock, (ii) the number of shares of common stock for which each outstanding option or warrant to purchase common stock is exercisable was proportionally decreased on a one (1) for four (4) basis, (iii) the exercise price of each outstanding option or warrant to purchase common stock was proportionately increased on a one (1) for four (4) basis, and (iv) the conversion price of each outstanding convertible obligation was proportionately increased on a one (1) for four (4) basis. All of the outstanding common stock share numbers, warrants, share prices, exercise prices and per share amounts have been adjusted in these financial statements, on a retroactive basis to reflect this one (1) for four (4) reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock were not adjusted as a result of the reverse stock split.

Note 2 - Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in the understanding of the Company's financial statements.  The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity.

Basis of Presentations

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. The results of operations for the six-month periods ended June 30, 2015 and 2014 are not necessarily indicative of the results to be expected for the full year. The condensed balance sheet as of December 31, 2014 was derived from the audited financial statements. The accompanying unaudited condensed financial statements and notes thereto should be read in conjunction with the audited financial statements for the year ended December 31, 2014.

F-31

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

Significant estimates affecting the financial statements include collection of trade and other receivables for contract reserves, recoverability of certain assets, conversion of certain notes payable and income taxes. The valuation of the stock options using a Black Scholes model is based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions. It is at least reasonably possible that the estimates used will change in the near term.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments (with original maturities of three months or less) at date of acquisition as cash equivalents, including money market funds. Cash equivalents are reported at fair value. As of June 30, 2015 and December 31, 2014 the Company did not have any cash equivalents.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are customer obligations due under normal trade terms. The Company reviews accounts receivable for uncollectible accounts and provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. The Company considers trade accounts receivable past due for more than 90 days to be delinquent. The Company writes off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers.

The Company records recoveries of accounts previously written off as an increase in allowance for doubtful accounts when received. To the extent data the Company uses to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. The total allowance for doubtful accounts at June 30, 2015 and December 31, 2014 was $-0-.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash, cash equivalents and trade receivables. We believe that concentrations of credit risk with respect to trade receivables are limited as they are primarily from education agencies.

The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk.

At times, cash balances may exceed federally insured limits and this potentially subjects the Company to a concentration of credit risk. The Company has not experienced any losses in such accounts.

F-32

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Reportable Segment

The Company has one reportable segment. The Company’s activities are interrelated and each activity is dependent upon and supportive of the others. Accordingly all significant operating decisions are based on the analysis of financial results provided by one single business.

Financial Instruments

The carrying values of cash and cash equivalents, trade receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The Company has determined that it is not practical to estimate the fair value of our notes payable and convertible notes because of their unique nature and the costs that would be incurred to obtain an independent valuation. The Company does not have comparable outstanding debt on which to base an estimated current borrowing rate or other discount rate for purposes of estimating the fair value of the notes payable and have not yet obtained or developed a valuation model.

Revenue Recognition

The Company enters into arrangements to deliver multiple products or services (multiple-elements).  The Company applies software recognition rules and allocates the total revenues among the elements based on vendor-specific objective evidence (“VSOE”) of fair value of each element.  The Company recognizes revenue on a net basis excluding taxes collected from customers and remitted to government authorities.

The Company’s sources of revenue are as follows:

1. Software licenses, including new software licenses revenue from granting licenses to use our software products.

2. Maintenance fees – software updates and product support.

3. Professional services – software implementation and order fulfillment and installations.

4. Subscription Software Revenue - hosted access to the software application for a subscription based fee.

The Company recognizes revenue when all of the following criteria are met:

· Persuasive evidence of an arrangement exists – The Company has entered into a (pre-determined statement of work arrangement) legally binding arrangement with the customer before the end of the period;

· The Company has delivered a product or performed a service – Delivery is considered to have occurred when the Company provides the software and customer has access to the software with login credentials.  Performance of a services has occurred when milestones have been met;

· The amount of the fees are fixed or determinable and free of contingencies or significant uncertainties – The Company assesses whether a fee is fixed and determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction.  For software licenses, the Company does not generally offer extended payment terms with typical terms of payment due upon delivery.  For maintenance fees, the initial payment is due upon delivery of the software and then, if renewed, they are due annually.  For professional services, the fees are determined when the arrangement is established and then due upon completion of a milestone; and

· The collection of the related fees is reasonably assumed – The Company assesses collectability on a customer-by-customer basis.  If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied.

F-33

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

The VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for these elements when sold separately. VSOE for fair value of maintenance is established using the standard maintenance renewal rate in the customer’s contract.

The Company's software licenses are considered off-the-shelf products as they can be added to an arrangement with insignificant changes in the underlying software code and can be used by the customer for the customer's purposes upon installation. There is no significant production, customization or modification to the off-the-shelf software as it can typically be used as is for customer purposes. Complex interfaces are not necessary for the Company's software to be functional in the customer's environment. Services provided by the Company typically involve minor enhancements, design and/or standard implementation or integration of the product into the customer's network or environment. The services performed by the Company does not result in significant alteration to the features and functionality of the off-the-shelf software code. In most arrangements, the service and product elements are stated separately and described such that the total price of the arrangement would vary as a result of the inclusion or exclusion of the services.

Maintenance Fees include promises for the right to receive services or unspecified upgrades and enhancements (or both) after the license period begins. Generally, these services include telephone support and correction of errors (bug fixes or debugging), as well as unspecified upgrades or enhancements. The maintenance services revenue is recognized ratable over a 12 month period (1/12) and is generally renewed annually. These fees are recognized over the period the maintenance is provided.

Professional Services consisting of fees for strategic consulting, configuration, training, consultation and implementation are included as a part of the Company services business. Revenues for professional services are recognized when acceptance is received from the customer for each milestone.

Subscription Software Revenue is a hosting arrangement subject to the software revenue recognition guidance of ASC 985-605. Software as a Service (SAAS) arrangements typically provide hosted access to the software application for a subscription based fee. Subscription revenue delivery of the service includes customer access to the software, typically a fee paid upfront. Revenue is recognized over the service period or over the customer relationship period. The customer has the contractual right to take possession of the software at any time during the hosting/subscription period without significant penalty. If feasible the customer may run the software on its own hardware or contract with another party unrelated to the Company to host the software.  The Company has not recognized any subscription software revenue for the six months ended June 30, 2015 and 2014.

Deferred Revenue

Deferred revenue consists of billings or payments received in advance of revenue recognition from the Company’s maintenance revenues and professional services described above and are recognizable as the revenue recognition criteria are met. The Company generally invoices the customers in annual installments. Accordingly, the deferred revenue balance does not represent the total contract value of annual or multi-year non-cancellable subscription agreements. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as noncurrent.

Research and Development

The Company expenses research and development costs, including costs to develop software products to be marketed to external users, before technological feasibility of such products is reached.

Equipment

Equipment is stated at cost less accumulated depreciation. Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets, ranging from three to seven years. The cost of normal maintenance and repairs is charged to operating expenses as incurred. Material expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset.For the six months ended June 31, 2015 and 2014 depreciation expense was $463 and $232, respectively.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, which include equipment and software, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment losses were required to be recognized at June 30, 2015 and December 31, 2014.

Capitalized Computer Software Development Costs

The Company capitalizes certain computer software development costs in accordance with the FASB Accounting Standards Codification Costs of Software to be Sold, Leased or Marketed Topic. Costs incurred internally to create a computer software product or to develop an enhancement to an existing product are charged to expense when incurred as research and development expense until technological feasibility for the respective product is established.  Thereafter, all software development costs are capitalized and reported at the lower of unamortized costs or net realizable value. Capitalization ceases when the product or enhancement is available for general release to customers. Capitalized computer software development costs are being amortized ratably on a straight-line basis over three years.

The Company makes ongoing evaluations of the recoverability of the capitalized software by comparing the amount capitalized for each product to the estimated net realizable value of the product. If such evaluations indicate that the unamortized software development costs exceed the net realizable value, the Company writes off the amount by which the unamortized software development costs exceed net realizable value. There was no impairment charge related to capitalized software development costs during the six months ended June 30, 2015 and 2014.

Total expenditures for capitalized computer software development costs and amortization of capitalized computer software development costs are as follows:

	Six Months Ended June 30,
	2015		2014
Total capitalized software development costs	$	129,736	$	146,009
Total amortization of capitalized software development costs	$	195,214	$	188,805

Capitalized computer software development costs consist of the following at June 30, 2015 and December 31, 2014:

	June 30, 2015			December 31, 2014
Capitalized software development costs	$	1,515,392		$	1,385,656
Accumulated amortization		( 995,551	)		(800,337	)
	$	519,841		$	585,319

F-34

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Of the capitalized software development costs that are currently completed and being amortized, the Company expects amortization expense for the next four years ending December 31:

2015 (remaining)	$	195,946
2016		205,045
2017		98,999
2018		19,851
	$	519,841

Deferred Offering Costs

Deferred offering costs consist principally of professional fees, primarily legal and accounting, and other costs such as printing and registration costs incurred in connection with the planned initial public offering ("IPO") of the Company's common stock. As of June 30, 2015, the Company had not incurred any costs directly attributable to its proposed IPO, which have been deferred. Such costs are deferred until the closing of the offering, at which time the deferred costs are offset against the offering proceeds. In the event the offering is unsuccessful or aborted, the costs will be expensed.

Warrants

The Company evaluates its warrants for appropriate classification as either a liability or equity. The Company first evaluates whether or not the warrants are indexed to the Company's common stock and if so, it further evaluates whether or not it meets the requirements for equity treatment. Warrants that are accounted for as a liability are adjusted to fair value at each reporting date through the statement of operations in an account entitled "Change in fair value of warrant liability." Warrants accounted for as equity are not adjusted in subsequent periods. The Company issued warrants to a lender with an unspecified number of warrants to be issued. The agreement requires the Company to issue 2,500 warrants for each month the loan is not paid in full. The requirements of this loan agreement caused the Company to consider Derivative Accounting for the extended terms, primarily because there is not a limit on the number of warrants that could be issued under this transaction. The Company has evaluated this accounting method and management and insiders would control the vote to increase the number of authorized shares which would allow the Company enough time to settle this issue with the lender.

Stock-Based Compensation

The Company accounts for its stock-based compensation awards in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718 ("ASC"), Compensation-Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, including grants of employee stock options and restricted stock and modifications to existing stock options, to be recognized in the statements of operations based on their fair values.

The Company uses the Black-Scholes option pricing model to determine the fair value of options granted. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the awards, which is generally the vesting term.

Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 505, Equity Based Payments to Non-Employees, or ASC 505. ASC 505 defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of the non-employee performance is complete. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505.

F-35

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Income Taxes

Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company accounts for uncertain tax positions in accordance with the provisions of FASB ASC Topic 740, Income Taxes ("ASC 740"). ASC 740 provides a comprehensive model for the recognition, measurement and disclosure in the financial statements of uncertain tax positions that the Company has taken or expects to take on a tax return. Under this standard, the Company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized.

The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Additionally, the Company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties, if any, are classified as income tax expense in the financial statements. As of June 30, 2015 and December 31, 2014, the Company does not have any uncertain tax positions.

Advertising

All advertising costs are expensed as incurred. The total advertising expense for the six months ended June 30, 2015 and 2014 was $2,209 and $-0-, respectively.

Recent Accounting Pronouncements

In November 2014, FASB issued ASU 2014-16, "Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity" ("ASU 2014-16"). ASU 2014-16 clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendment clarifies that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. ASU 2014-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. ASU 2014-16 is not expected to have a material impact on our financial position, results of operations or cash flows.

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is currently evaluating the impact of the new standard.

F-36

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"), which provides guidance on management's responsibility in evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In March 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company has adopted ASU 2015-03 in these financial statements and it did not have a material impact on the Company’s financial position, results of operations and cash flows.

Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.

Liquidity and Business Risk

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  At June 30, 2015 and December 31, 2014, the Company’s total stockholders’ deficit was $4,057,461 and $3,238,609, respectively. The net loss was $1,594,044 and $1,387,119 for the six months ended June 30, 2015 and 2014, respectively, and the Company used cash in our operations of $467,745 and $945,670 for the six months ended June 30, 2015 and 2014, respectively. Net cash used in operations has resulted principally from costs incurred in the continued development of the software and marketing efforts. The Company has funded its operations since inception through the use of cash obtained principally from the sale of equity securities and the placement of notes, some of which are convertible. To continue development, the Company will need to raise additional capital through debt and/or equity financing. However, additional capital may not be available on terms favorable to the Company and there can be no assurance that the Company will be successful in obtaining adequate additional financing. The Company is in the process of reducing its costs associated with delivery of services and taking steps to grow revenues through enhanced sales effectiveness, additional sales coverage, and new product offerings. The actual results of the Company indicate the existence of a material uncertainty of which may cast significant doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

F-37

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Note 3. Fair Value Measurements

Current accounting guidelines defines fair value, establishes a framework for measuring fair value in accordance with ASC section 820, and requires certain disclosures for measuring fair values.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below:

Level 1:  Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The types of financial instruments in Level 1 include listed equities and listed derivatives.

Level 2:  Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and fair value that is determined through the use of models or other valuation methodologies. Financial instruments in this category generally include corporate bonds and loans, less liquid and restricted equity securities, certain over-the-counter derivatives and redeemable investments in alternative investment funds. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

Level 3:  Inputs that are unobservable for the asset or liability and that include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

Note 4. Other Accrued Liabilities

Other accrued liabilities consist of the following at June 30, 2015 and December 31, 2014

	June 30, 2015		December 31, 2014
Accrued wages and benefits	$	528,403	$	168,516
Accrued interest payable		323,960		246,936
	$	852,363	$	415,452

F-38

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Note 5. Notes Payable

Notes payable consist of the following at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
Notes payable	$	1,656,492	$	1,673,623
Less discount		8,875		9,125
Notes payable, net of discount	$	1,647,617	$	1,664,498
Current portion of notes payable		741,817		741,639
Long term portion of notes payable	$	905,800	$	922,859

On October 31, 2012, the Company entered into a note payable with an individual which had an original principal balance of $100,000. The note accrues interest at 12% annually, to be paid on the maturity date. The original due date was June 30, 2014. Subsequent to June 30, 2014, the lender agreed to extend the due date of this note to December 31, 2015. The balance of this note at June 30, 2015 and December 31, 2014 was $100,000. Accrued interest on this note was $32,000      and $26,000 at June 30, 2015 and December 31, 2014, respectively.

On November 30, 2011, the Company entered into a note payable with a shareholder, founder and current Executive Chairman of the Board of Directors with an original balance of $333,100. The original due date of this note was January 31, 2012. The intent of this loan was to aggregate several advances made by the lender during 2011. Effective July 24, 2013 the parties agreed to amend the note and extend the due date to December 1, 2013. On December 1, 2014, the parties agreed to extend the due date to March 31, 2015. Subsequent to March 2015, the parties agreed to extend the due date to November 1, 2015. Beginning on December 1, 2014, the note has accrued interest at 12% annually. Subsequent to November 1, 2015 the principal and accrued interest of the note were applied to the proceeds for the exercise of an incentive stock option by lender for 80,964 shares of common stock. The balance of this note at June 30, 2015 and December 31, 2014 was $49,600. Accrued interest on this note was $3,472 and $496 at June 30, 2015 and December 31, 2014, respectively.

On February 14, 2013, the Company entered into a note payable with a shareholder, founder and current Executive Chairman of the Board of Directors with an original balance of $11,000. The original due date of the note was June 1, 2013. The note accrued interest at 12% annually. This loan was paid in full and the accrued interest was forgiven by the lender during 2014, therefore recorded as an increase in additional paid in capital on the balance sheet. The balance of the note at June 30, 2015 and December 31, 2014 was $-0-. Accrued interest on this note was $-0- at June 30, 2015 and December 31, 2014.

On August 30, 2013, the Company entered into a Loan Agreement with a shareholder. The original balance of the loan was $100,000 at an interest rate of 5.25%. If the loan is not paid at its first maturity date the interest will be changed to the lenders bank’s prime plus 2%. The loan is secured by all the personal property of the Company. The loan agreement required the payment of an origination fee of $1,000 and a loan fee of $10,000 on February 3, 2014. The Company recorded these fees as a debt discount and amortized it over the term of the loan. The loan agreement requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. This loan was originally due August 30, 2014. The parties extended the maturity date to September 5, 2015 with all other terms remaining the same. Subsequent to September 5, 2015, the parties agreed to extend the note and fee agreement to October 5, 2016. The balance of the note at June 30, 2015 and December 31, 2014 was $100,000. Accrued interest on this note was $438 and $7,000 at June 30, 2015 and December 31, 2014, respectively.

F-39

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

On July 8, 2013, the Company entered into a note payable with an entity owned by a shareholder and a member of the Board of Directors. The note had an original principal balance totaling $20,000. The original due date of this note was January 8, 2014. The note accrues interest at 12% annually. On May 15, 2015 the parties agreed to extend this note to November 1, 2015. Prior to November 1, 2015 the total principal and accrued interest were converted to shares of common stock at $4.00 per share. The balance of this note at June 30, 2015 and December 31, 2014 was $2,500. Accrued interest on this note was $450 and $300 at June 30, 2015 and December 31, 2014, respectively.

On November 15, 2013, the Company entered into a note payable with an entity owned by a shareholder and a member of the Board of Directors. The note had an original principal balance totaling $25,000. The original due date of this note was March 31, 2014. The note accrues interest at 12% annually starting December 16, 2013. The note payable required the payment of a handling fee of 1% of the original balance payable at maturity. On May 15, 2015 the parties agreed to extend this note to November 1, 2015. Prior to November 1, 2015 the total principal and accrued interest were converted to shares of common stock at $4.00 per share. The balance of this note at June 30, 2015 and December 31, 2014 was $25,000. Accrued interest on this note was $4,500 and $3,000 at June 30, 2015 and December 31, 2014, respectively.

On April 4, 2013, the Company entered into a loan agreement with a less than 5% shareholder of the Company and an entity owned by the same shareholder. The original principal balance of the loan was $1,000,000 with a fixed interest rate of 4.5% for five years and then variable based on the rate at the outside third party financial institution. The loan is secured by all the personal property of the Company. The loan requires monthly payments of principal and interest in the amount of $6,494 with a final due date of April 4, 2033. The loan agreement required the payment of an origination fee of $10,000. This loan fee has been treated as a discount to the debt and is currently being amortized on a straight line basis over the term of the loan. The debt discount balance at June 30, 2015 and December 31, 2014 was $8,875 and $9,125, respectively. The fee agreement also requires the Company to pay the lender a fee of 1.25% of the outstanding loan balance quarterly during the term of this loan. This quarterly fee is recorded as interest expense when due. The lender, at its discretion, may convert the amount of this quarterly fee to common stock of the Company at $2.00 per share. The loan agreement requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. The balance of this note, net of debt issuance costs, at June 30, 2015 and December 31, 2014 was $940,517 and $957,398, respectively. Accrued interest on this loan was $3,560 and $3,624 at June 30, 2015 and December 31, 2014, respectively. Also included in accrued interest is the unpaid lender fee which totaled $110,262 and $86,492 at June 30, 2015 and December 31, 2014, respectively.

On July 18, 2013, the Company entered into a note payable with an entity owned by a shareholder. The original principal balance of the note was $40,000. The note accrues interest at 9.5% annually. The original due date of the note was October 19, 2013. Subsequent to December 31, 2014, the parties agreed to extend this note to December 31, 2015. The balance of this note at June 30, 2015 and December 31, 2014 was $30,000. Accrued interest on this note was $6,254 and $4,829 at June 30, 2015 and December 31, 2014, respectively.

On April 2, 2014, the Company entered into a loan agreement with an entity primarily owned by a shareholder and current member of the Board of Directors. Simultaneously, the lender of this loan assigned all rights, title and interest to Cap-Star Holdings I, LLC. The original principal balance of this loan was $500,000 with a due date of October 2, 2014. The loan accrues interest at 15% annually. The loan is personally guaranteed by a shareholder, founder and current Executive Chairman of the Board of Directors. The loan agreement required the Company to issue 250,000 share of common stock of the Company to the lender and warrants which allowed the lender to purchase 250,000 shares of common stock of the Company. The issuance of the common stock and the warrants have been accounted for as a debt discount and amortized fully as interest expense in 2014. The debt discount was calculated to be $324,759 on April 2, 2014. The total proceeds of the loan were allocated based on the relative fair value each component of the transaction. The fair value of the note payable was $500,000, the fair value of the common stock was $500,000, and the fair value of the warrants was $426,609. The fair value of the warrants was determined by utilizing the Black-Scholes model. The original due date of October 2, 2014 was extended to October 2, 2015. On October 9, 2015, the parties agreed to extend the due date to April 2, 2016. The balance of the loan at June 30, 2015 and December 31, 2014 was $400,000. Accrued interest on this loan was $1,151 and $5,000 at June 30, 2015 and December 31, 2014, respectively.

F-40

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

As of June 30, 2015, future maturities of notes payable over the next five years are as follows:

For the year ended December 31,
2015 (remaining)	$	741,817
2016		36,031
2017		37,829
2018		39,592
2019		41,437
Thereafter		759,786
		1,656,492
Less Discount		8,875
	$	1,647,617

Note 6. Convertible Notes Payable

Convertible notes payable consist of the following at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
Convertible notes	$	1,892,951	$	1,436,951
Less discount		27,091		10,250
Convertible notes, net of discount		1,865,860		1,426,701
Current portion of convertible notes		1,771,610		1,337,951
Long term portion of convertible notes	$	94,250	$	88,750

In 2014, the Company issued $840,000 aggregate principal amount of convertible notes with maturity dates originally ranging from March 15, 2015 to June 19, 2015. In 2015, the Company issued an additional $88,500 aggregate principal amount of convertible notes with maturity dates originally ranging from July 2, 2015 to July 30, 2015 (collectively the “12% Convertible Notes”). All the notes carry an interest rate of 12.0% and are entitled to convert to common stock at $4.00 per share. All of these convertible notes were treated as current as of June 30, 2015 and December 31, 2014.  The total balance outstanding at June 30, 2015 and December 31, 2014 was $746,000 and $840,000, respectively. Accrued interest on these convertible notes was $20,024 and $10,055 at June 30, 2015 and December 31, 2014, respectively.

Prior to June 30, 2015, $165,000 of the 12% Convertible Notes were converted into shares of common stock. The lenders elected to convert additional interest of $7,197 to common stock. A total of $17,500 was paid on principal before June 30, 2015. Subsequent to June 30, 2015, several of the 12% Convertible Notes were extended, paid in full and converted. A total of $746,000 of the 12% Convertible Notes were outstanding following June 30, 2015, of which $421,000 has been converted to shares of common stock, $25,000 has been paid on principal and $300,000 has been extended to the earlier of February 1, 2016 or the first business day following an effective date of a registration statement on Form S-1 filed by the Company. In some cases, the interest was also converted at the same rate as the convertible notes.

F-41

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

On May 27, 2015, the Company entered into a convertible note payable to an individual with a principal balance of $50,000. The note accrues interest at a rate of 12% per annum and is convertible into shares of common stock at a conversion price equal to 50% of the per share price paid by institutional investors which is equal to $5.00 per share. The maturity date is November 30, 2015. Subsequent to June 30, 2015, the Company received a request to convert $25,000 of the note into shares of common stock and has agree to amend the conversion price to $4.00 per share. The total balance outstanding at June 30, 2015 and December 31, 2014 was $50,000 and $-0-, respectively. Accrued interest on this convertible note was $500 and $-0- at June 30, 2015 and December 31, 2014, respectively.

On May 29, 2015, the Company entered into a convertible note payable to an individual with a principal balance of $500,000. The note accrues interest at a rate of 12% per annum and is convertible into shares of common stock at a conversion price of $4.00 per share. The maturity date is November 30, 2015. The Company issued 12,500 shares of common stock to the lender on June 2, 2015 pursuant to the terms of the note. This issuance of the common stock has been treated as a discount to the debt based on the relative fair value and is currently being amortized on a straight line basis over the term of the loan. The debt discount was $19,841 and $-0- at June 30, 2015 and December 31, 2014, respectively. The total balance outstanding, net of debt discount at June 30, 2015 and December 31, 2014 was $480,159 and $-0-, respectively. Accrued interest on this convertible note was $5,000 and $-0- on June 30, 2015 and December 31, 2014, respectively.

The Company had a convertible note payable to an individual with an original principal balance of $10,000. The note was non-interest bearing. The note was originally entered into in January 2013. During 2014 the note holder elected to convert the note to common stock. The total balance outstanding at June 30, 2015 and December 31, 2014 was $-0-.

On September 13, 2013, the Company entered into a loan agreement with an individual stockholder to assist with the development, expansion and marketing of its primary software product. The original loan amount was $180,000. The loan agreement provides for collateral of all the personal property of the Company. The loan requires monthly principal payments of not less than $3,000 beginning October 13, 2013 with final payment due September 13, 2018. The loan requires a fee to be paid quarterly at an annual rate of 10% of the outstanding principal balance. This fee has been treated as interest expense. The lender may elect, at the lenders sole discretion, to receive common stock at $2.00 per share in lieu of cash. The loan agreement also required an initial loan fee of $18,000 which is equal to 10% of the original principal balance. This loan fee has been treated as a debt issuance cost and is currently being amortized on a straight line basis over the term of the loan. The debt issuance cost balance at June 30, 2015 and December 31, 2014 was $7,250 and $10,250, respectively. The loan agreement further requires the Company to meet certain covenants which require the approval of the lender prior to entering into certain transactions and maintaining certain operating activities of the business. The outstanding balance, net of debt issuance costs, at June 30, 2015 and December 31, 2014 was $127,750 and $124,750, respectively. Accrued interest on this loan was $2,925 and $-0- at June 30, 2015 and December 31, 2014, respectively.

On May 17, 2013, the Company entered into a convertible note agreement with an individual.  The original principal balance of this note was $75,000. However, the loan was increased by a lump sum interest requirement of $5,000 which made the total original balance $80,000. The note requires interest payments of $5,000 per month since original issuance. The original due date of this loan was June 17, 2013 unless the lender exercised its option to convert the loan before that date. The loan also required collateral of certain accounts receivables from two customers. The lender, at his sole discretion, can convert this loan into common stock of the Company at $2.00 per share. Subsequent to June 30, 2015 the parties agreed to convert all the original principal balance of $75,000 plus accrued interest of $145,000 totaling $220,000 into 110,000 shares of the Company’s common stock at $2.00 per share. The outstanding balance at June 30, 2015 and December 31, 2014 was $80,000. Accrued interest on this loan was $122,500 and $92,500 at June 30, 2015 and December 31, 2014, respectively.

F-42

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

On October 2, 2012, the Company entered into a loan agreement with a stockholder of the Company. An owner of the lender is also a member of the Board of Directors. The original principal amount of the loan was $381,951. The proceeds of the loan were used to repay another loan to an individual. The loan originally required payment of quarterly interest at an annual rate of 12% with the balance paid October 2, 2013. The loan requires the Company to obtain approval before obtaining additional financing outside of the normal course of business or a change of ownership greater than 10%. Upon default, the loan agreement provides for a perpetual license on the Company’s primary software (i.e. TridentHE) for use in the military defense market only. On October 2, 2013, the loan was extended to November 2, 2013 with no changes in terms except the due date. On May 9, 2014 another extension was signed. This extension granted the following: (1) extension of the payment of all amounts to November 2, 2014 with the three options to extend for 30 more days at the lender’s discretion; (2) the interest rate will be modified from the date of the last extended due date at 18%; (3) quarterly interest payments of $17,446 will be due each quarter at August 2, 2014 and November 4, 2014; (4) the Company will issue stock warrants providing for 2,500 shares to the lender for every full month after May 9, 2014 which the loan is still outstanding. The exercise price of the warrants will be $6.00 per share and they will have a 5 year life; and (5) the lender will have the right to convert the outstanding principal and interest balance to shares of the Company’s common stock, at the lender’s sole discretion, at $2.00 per share. This extension also required a payment of past due interest totaling $38,772 to the lender by the Company. The loan was extended again, by way of two of the 30 day options by the lender, to January 2, 2015.

The requirements above cause the Company to consider Derivative Accounting for the extended terms, primarily because there is not a limit on the number of warrants that could be issued under this transaction. The Company has evaluated this accounting method and management and insiders would control the vote to increase the number of authorized shares which would allow the Company enough time to settle this issue with the lender. The Company evaluated this transaction as it relates to Debt Modification Accounting. The transaction was not significant and therefore the warrants are recorded as additional financing fees as they are granted on a monthly basis. On October 14, 2015, the lender agreed to extend this note to the earlier of February 1, 2016 or the first business day following an effective date of a registration statement on Form S-1 filed by the Company. The outstanding balance of this note at June 30, 2015 and December 31, 2014 was $381,951. Accrued interest on this loan was $ 10,925 and $7,639 at June 30, 2015 and December 31, 2014, respectively.

As of June 30, 2015, future maturities of convertible notes payable over the next four years are as follows:

For the year ended December 31,
2015 (remaining)	$	1,793,951
2016		36,000
2017		36,000
2018		27,000
		1,892,951
Less Discount		27,091
	$	1,865,860

The Company evaluated the features of the convertible notes to ascertain if any embedded conversion features were required to be bifurcated and accounted for as a derivative. The Company evaluated whether the embedded feature met the definition of a derivative and determined that the conversion options do not as they do not meet the "net settlement" requirement. The underlying shares of the Company are those of a private company and are not considered readily convertible to cash, and therefore bifurcation is not required. The Company will continue to reevaluate these features.

F-43

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Note 7. Commitments and Contingencies

The Company is obligated under a lease agreement for its primary office space. Subsequent to December 31, 2014, the Company and the landlord amended the lease to include additional space and extend the lease to May 31, 2020.  The lease provides for base rent payments plus other operating costs.

Subsequent to December 31, 2014, the Company entered into a lease agreement with a related party for additional offices space.  The lease term is 12 months and requires a base rent payment of $2,500 per month. The Company can increase the amount of space and related monthly base rent.

As of June 30, 2015, the minimum annual payments under a non-cancelable operating lease as of December 31, 2014 are as follows:

For the year ended December 31,
2015 (remaining)	$	66,914
2016		153,077
2017		135,361
2018		142,645
2019		149,929
Thereafter		63,735
	$	711,661

Rent expense for the six month ended June 30, 2015 and 2014 was $38,192 and $33,400, respectively.

From time to time, the Company may become involved in routine litigation arising in the ordinary course of business.  While the results of such litigation cannot be predicted with certainty, the Company believes that the final outcome of such matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Note 8. Stock Option Plan

Effective October 1, 2011, the Company approved the Aegis Identity Software, Inc. Incentive Stock Option Plan (the "Plan"). The Plan provides for the issuance of up to 2,500,000 shares of common stock in the aggregate. The options generally vest yearly beginning one (1) year after the date of grant over a three (3) year period. The options have a ten-year contractual maturity. Granting of options under the Plan is at the discretion of the board of directors.

Option costs related to stock options recognized for the six months ended June 30, 2015 and 2014 amounted to $559,181 and $326,849, respectively, of which $537,358 and $282,952 has been included in general and administrative expenses for the six months ended June 30, 2015 and 2014, respectively, in the accompanying statements of operations.

In addition $21,823 and $43,897 has been capitalized as computer software development costs for the six months ended June 30, 2015 and 2014, respectively.

The Company has estimated the fair value of all stock option awards as of the date of grant by applying the Black-Scholes option pricing model. The weighted average assumptions used in determining the fair value of options granted and the weighted average grant date fair value of options granted during the six months ended June 30, 2015 and 2014 is as follows:

	2015			2014
Weighted-average range of risk-free interest rate		1.67 to 1.99	%	2.11 to 2.26	%
Weighted-average range of volatility		76.61 to 83.64	%	81.00 to 82.02	%
Dividend yield		-0-	%	-0-	%
Weighted-average range of expected life in years		3.5 to 6.0		6.0
Weighted-average range of grant date fair value	$	$0.32		$0.35

F-44

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Historical information for a selection of similar publicly traded companies was the primary basis for the expected volatility. Historical information and management expectations were the primary basis for the expected dividend yield. The expected lives of the options are based upon the simplified method. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

As of June 30, 2014, there was approximately $2,086,464 of unrecognized compensation cost, related to unamortized stock option compensation which is expected to be recognized over a weighted average period of 2.5 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. In addition, as future grants are made, additional compensation costs will be incurred. Exercise prices range from $0.60 to $2.00 per share as of June 30, 2015.

A summary of the Company's stock option activity and related information for the six months ended June 30, 2015 are as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted-Average Contractual Term in Years	Aggregate Intrinsic Value
Outstanding at January 1, 2015		2,346,250	$	0.60 to $2.00	5 to 10	$	0.40 to $1.44
Granted		802,500	$	2.00	5 to 10
Expired		-
Outstanding, June 30, 2015		3,148,750	$	0.60 to $2.00	5 to 10	$	0.40 to $1.40

Note 9. Warrants

In December 2013, the Company granted a warrant to purchase 250,000 shares of common stock to an investor in connection with an equity investment. The exercise price is $2.00 per share. The warrant is exercisable immediately and has a term of 10 years.

In connection with a loan transaction the Company granted a warrant to purchase 250,000 shares of common stock to Cap-Star Holdings I, LLC at an exercise price of $2.00 per share with an expiration date of 10 years after grant. The warrants are exercisable immediately and were accounted for as equity. Proceeds of $149,519 were allocated to these warrants based on the relative fair values of the warrants. The fair value of these warrants at their respective commitment dates were recorded as additional financing fees. The fair value of the warrants is estimated at each commitment date using the Black Scholes valuation model.

In connection with a loan transaction during 2012 (see Note 6), the Company granted the lender warrants to purchase 17,500 shares of common stock at an exercise price of $6.00 per share as of December 31, 2014. These warrants were a requirement of an extension agreement entered into on May 9, 2014. The Company is required to issue warrants to purchase an additional 2,500 shares of common stock for each month the note is outstanding. The warrants expire 5 years after their issuance. During the six months ended June 30, 2015, the Company granted warrants to purchase 15,000 shares of common stock related to this loan transaction with an aggregate value of $12,075. The fair value of these warrants at their respective commitment dates were recorded as additional financing fees. The fair value of the warrants is estimated at each commitment date using the Black Scholes valuation model.

The Company had granted warrants to purchase 262,500 shares of common stock to consultants and advisors as of December 31, 2014.  These warrants have an exercise price ranging from $0.60 to $2.00 per share. All of these warrants were vested at December 31, 2014. The warrants have terms ranging from 5 to 10 years after their date of grant. As of June 30, 2015, the Company had granted warrants to purchase an additional 75,000 shares of common stock to consultants with an exercise price of $2.00 per share and a term of 5 years. Warrants to purchase 13,000 shares of common stock were vested as of June 30, 2015. The fair value of these warrants at their respective commitment were recorded as additional paid in capital with a corresponding discount on the convertible debt it relates to, and is being amortized into interest expense over the term of the debt.

F-45

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

The Company granted warrants to purchase 499,701 shares of common stock as part of unit offerings during 2011 and 2012. These warrants have an exercise price of $10.00 per share and a term of 10 years after their date of grant. All of these warrants are vested.

As of June 30, 2015, there were warrants to purchase 1,369,701 shares of common stock granted with exercise prices ranging from $0.60 to $10.00 per share and terms ranging from 5 to 10 years.

Warrant costs related to these stock warrants recognized for the six months ended June 30, 2015 and 2014 amounted to $17,505 and $1,986, respectively, which are included in general and administrative expenses in the accompanying statements of operations. As of December 31, 2014, there was approximately $17,492 of unrecognized expense, related to unamortized stock warrant expense which is expected to be recognized over a weighted average period of 1.5 years. Total unrecognized expense will be adjusted for future changes in estimated forfeitures. In addition, as future warrants are made, additional compensation costs will be incurred.

A summary of the activity related to these stock warrants for the six months ended June 30, 2015 are as follows:

Outstanding, January 1, 2015	1,279,701
Issued	90,000
Outstanding, June 30, 2015	1,369,701

The fair value of the warrants is estimated at the end of each quarterly reporting period using the Black Scholes valuation model. The assumptions used in computing the fair value of the warrants as of June 30, 2015 and December 31, 2014 are as follows:

Range of fair value of warrant	$	0.68 to $1.44
Range of conversion price	$	0.60 to $2.00
Range of expected volatility		86.2 to 87.0	%
Range of remaining term (years)		5.0 to 10.0
Range of risk-free rate		2.12 to 2.80	%
Expected dividend yield	$	0.00	%

Historical information for a selection of similar publicly traded companies was the primary basis for the expected volatility. Historical information and management expectations were the primary basis for the expected dividend yield. The expected lives of the options are based upon the simplified method. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

Note 10. Preferred and Common Stock

Preferred Stock

The Company had 10,000,000 shares of Preferred Stock, par value $0.001, authorized for issuance, of which no shares of Preferred Stock were issued or outstanding.

Common Stock

The Company had 100,000,000 shares of Common Stock, par value $0.001, authorized for issuance, of which the Company had issued and outstanding shares totaling 3,946,036 and 3,871,737 as of June 30, 2015 and December 31, 2014, respectively.

F-46

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Issuances during the six months ended June 30, 2014

The Company issued 312,025 shares of common stock for total proceeds of $16,525.

Issuance during the six months ended June 30, 2015

The Company issued 74,299 shares of common stock for total proceeds of $172,025 related to the conversion of notes payable.

Note 11. Net Loss per Share

The Company utilizes FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive. There were no shares of the Company's common stock outstanding subject to repurchase or forfeiture for the periods ended June 30, 2015 and 2014.

The Company has excluded all common stock equivalents from its calculation of diluted net loss per share because their effects would be anti-dilutive.

The following table sets forth the number of shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive. The potentially dilutive securities as of June 30, 2015 and 2014 are as follows:

	June 30, 2015		June 30, 2014
Options to purchase common shares		3,148,750		1,863,750
Outstanding warrants		1,369,701		1,139,701
Convertible notes payable		473,238		358,019
		4,991,689		3,361,470

Note 12. Retirement Benefit Plan

The Company sponsors a 401(k) retirement plan for its qualified employees, which was adopted and implemented in June 10, 2013. The plan provides for the statutory contributions by plan participants and an optional and discretionary matching of contributions by the Company. For the six months ended June 30, 2015 and 2014 the Company has elected not to match any employee contributions to the plan.

F-47

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

Note 13. Income Taxes

The Company is primarily subject to United States federal and Colorado state income tax.  The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.  As of June 30, 2015 and December 31, 2014, the Company had no accruals for interest or penalties related to income tax matters.

Note 14. Subsequent Events

In July 2015, the Company initiated a private offering of up to 800,000 shares of its common stock at a price of $2.50 per share to accredited investors. The offering closed in November 2015. The Company issued 281,500 shares of common stock in this offering for a total of $703,750. The Company entered into a letter agreement and subscription agreement with Newport Capital Bancorp for the purchase of an additional 220,000 shares for $550,000. Under the terms of these documents Newport Capital Bancorp, an entity controlled by one of the directors of the Company, has committed to purchase a specified number of shares upon the occurrence of certain defined events related to the registration of the Company’s securities. The obligation of Newport Capital Bancorp to purchase the shares terminates on March 31, 2016 in the event the registration is not previously completed.

Effective July 1, 2015, the Company terminated the Buy-Side Advisory Agreement, dated May 15, 2015, and the Amended and Restated Agreement, dated January 27, 2014, with National Community Development Fund I, LLC. There were no amounts due under either of these agreements. John Vasquez, a director of the Company, is the Chairman of National Community Development Fund I, LLC.

On July 1, 2015, the Company entered into a Consulting Agreement with M1 Advisors for consulting services relating to the offering. As compensation for its advisory services M1 Advisors received a warrant to purchase 622,532 shares of common stock at an exercise price of $2.00 per share with a five (5) year term. This warrant vests upon the occurrence of certain targets. Any unvested warrants revert to Newport Capital Bancorp on a fully vested basis. The term of the Consulting Agreement is one (1) year and the parties have the option to renew for additional one (1) year terms.

Effective as of July 1, 2015, the Company entered into a Consulting Agreement with Newport Capital Bancorp to assist the company with its transition to a public company. Newport Capital Bancorp is controlled by a director of the Company. As compensation for its advisory services, Newport Capital Bancorp received a fully vested warrant to purchase 647,532 shares of common stock at an exercise price of $2.00 per share with a term of ten (10) years. In addition, Newport Capital Bancorp would receive any warrants issued to M1 Advisors that did not vest and these warrants would also be fully vest. The term of the Consulting Agreement is one (1) year and the parties have the option to renew for additional one (1) year terms.

On July 1, 2015, the Company entered into an Advisory Consulting Agreement with Strategic Universal Advisors for acquisition identification and support, brand strategy, customer introductions, identification and introduction to institutional investors and media and technical exposure. As compensation for its services, Strategic Universal Advisors received a monthly fee of $5,500 and a fully vested warrant to purchase 250,000 shares of common stock at an exercise price of $4.00 per share with a term of five (5) years. This agreement was terminated September 14, 2015.

On July 13, 2015, the Company entered into a promissory note with Ralph Armijo, the Executive Chairman of the Board of Directors, in the principal amount of $25,000 with a loan fee of 1%.  The maturity date was September 1, 2015.

F-48

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

The Company received a subpoena for documents from the Colorado Department of Regulatory Authority, Division of Securities, in February 2015. The Company complied with the subpoena by providing the documents requested. As of November 2015, The Company has received no further correspondence.

In September 2015, the Company entered into a letter agreement with ABEET, LLC, an entity owned by a director of the Company, for the conversion of $34,319.07 representing all principal and accrued interest due under promissory notes dated July 8, 2013 and November 15, 2013 into shares at a conversion price of $4.00 per share. In October 2015, the conversion was completed and the debt was retired.

On September 29, 2015, the Company entered into a promissory note with ABEET LLC, an entity owned by a director of the Company, in the principal amount of $9,500 that accrues interest at a rate of 12% per annum. The maturity date is November 29, 2015.

On September 30, 2015, the Company entered into a letter agreement with a stockholder to convert an outstanding loan into shares of common stock at $2.00 per share. The principal balance of the loan was $111,000 and the accrued fee was $2,700 for a total amount converted of $113,700.  This transaction was completed and the loan was retired.

In October 2015, the Company entered in a sublease agreement for its new corporate headquarters’ office located in Denver, Colorado. See also Note 7.

On October 9, 2015, the Company and National Community Development Fund I, LLC agreed to extend the maturity date of the bridge loan transaction to April 2, 2016. National Community Development Fund I, LLC is controlled by a director of the Company.

On October 9, 2015, the Company and Neighborhood Services, Inc. agreed to extend the maturity date of the Promissory Note, dated July 8, 2013, to December 31, 2015. A balloon payment of the principal and accrued interest are due on the maturity date.

On October 9, 2015, the Company and Dr. Richard Rivera agreed to extend the maturity date of the loan transaction, dated August 30, 2014, to October 5, 2016. The Company is required to make interest-only monthly payments at a rate of 5.25% per annum and the principal is due on October 5, 2016.

On October 9, 2015, the Company and Veteran Engineering & Technology, LLC agreed to extend the maturity date of the bridge loan transaction the first to occur of the first business day immediately following the closing date of the registration statement on Form S-1 or February 1, 2016. Veteran Engineering & Technology, LLC is a stockholder and an officer of Veteran Engineering & Technology LLC is a director of the Company.

On October 12, 2015, the Company and James Sullivan agreed to extend the maturity date of the convertible promissory note, dated December 19, 2014, to the first to occur of the first business day immediately following the closing date of the registration statement on Form S-1 or February 1, 2016.

On October 16, 2015, the Company entered into a letter agreement with Paul Thompson related to the conversion of the principal and all accrued interest due totaling $220,000 under the convertible promissory note, dated May 17, 2013, into 110,000 shares of common stock. The conversion was completed on October 30, 2015.

On October 27, 2015, the Company entered into a loan transaction with an existing shareholder.  The principal amount of the loan was $150,000 and the due date is January 27, 2016.  The interest rate is 12% per annum. A warrant to purchase 2,101 shares of common stock at an exercise price of $2.50 per share with a term of 5 years was granted in connection with this loan transaction.

F-49

Aegis Identity Software, Inc.

Notes to Financial Statements

June 30, 2015

In November 2015, the Company entered into a letter agreement with Ralph Armijo, the Executive Chairman of the Board of Directors, requesting that the principal and accrued interest due pursuant to the promissory note entered into on November 30, 2011, as amended, be applied toward the exercise of one of his incentive stock option grants. The total amount due under the note was $55,056. This amount was applied to the purchase price for the exercise of the option to purchase 80,964 shares of common stock. The transaction was completed and the note was retired in November 2015.

On November 9, 2015, the Company entered into a promissory note payable with Robert D. Lamvik, an officer and director of the Company, in the principal amount of $35,000 that accrues interest at a rate of 12% per annum. The maturity date is December 9, 2015.

F-50

2,000,000 Shares

Common Stock

PROSPECTUS

_____, 2016

Lead Underwriter Co-Manager  

Until _____, 2016, all dealers that effect transactions in these securities may be required to deliver a prospectus, regardless of whether they are participating in this offering.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than underwriting commissions, to be paid in connection with the sale of all 2,000,000 shares of common stock being registered, all of which we will pay.  All amounts, other than the SEC registration fee, the Nasdaq Capital Market listing application fee and the FINRA filing fee are estimates.

SEC registration fee	$	1,007
Nasdaq listing application fee		50,000
Printing expenses		10,000
FINRA filing fee		2,500
Representative’s advisory fee		100,000
Legal fees and expenses		300,000
Accounting fees and expenses		100,000
Transfer agent fees		5,000
Miscellaneous		28,493
Total	$	592,000	*

* Assumes the maximum number of shares is sold in the offering.  If the minimum number of shares is sold in the offering, the total expenses are estimated to be $562,000.

Item 14.  Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law provides for, under certain circumstances, the indemnification of our officers, directors, employees and agents against liabilities that they may incur in such capacities.  A summary of the circumstances in which such indemnification provided for is contained herein.

Item 15.  Recent Sales of Unregistered Securities

The following discloses all sales of unregistered securities by the Company within the last three years:

Common Stock Purchase Warrants Issued to Consultants and Advisors

The Company entered into a consulting agreement with M1 Advisors LLC on July 1, 2015 for business consulting and capital market advisory services in connection with this offering.  The term of the consulting agreement is one year and the parties have the option to renew for additional one year terms.  Under the agreement, we pay M1 Advisors $5,000 per month, as well travel expenses and certain limited document preparation expenses incurred by M1 Advisors in connection with its service to the Company.  The Company also agreed to grant M1 Advisors a warrant to purchase 622,532 shares of the Company’s common stock.  The warrant has a term of five years, with an exercise price of $2.00 per share, and is exercisable on a cashless basis.  The warrant vests as follows: (i) 15% upon the completion of a pre-going public financing of at least $1,000,000, (ii) 15% upon the filing of this registration statement and (iii) 70% upon the completion of this offering with a minimum valuation of the Company of $50,000,000.  Any unvested warrants revert to Newport Capital Bancorp, LLC on a fully-vested basis.  John S. Vasquez, a director of the Company, is the Chairman and manager of Newport Capital Bancorp, LLC.  The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

On July 1, 2015, the Company entered into a consulting agreement for business consulting and capital market advisory services with Newport Capital Bancorp, LLC, which replaced and terminated a Buy-Side Advisory Agreement, dated May 15, 2015, between the Company and National Community Development Fund I, LLC.  No amounts were due under the Buy-Side Advisory Agreement.  The term of the consulting agreement is one year and the parties have the option to renew for additional one year terms.  Under the consulting agreement, the Company pays travel expenses and certain limited document preparation expenses incurred by Newport Capital Bancorp in connection with its service to the Company and issued Newport Capital Bancorp a warrant to purchase 647,532 shares of the Company’s common stock.  The warrant has a term of ten years, with an exercise price of $2.00 per share, is exercisable on a cashless basis, and is fully vested.The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

II-1

The Company entered into an advisory consulting agreement with Strategic Universal Advisors, LLC on July 1, 2015.  In exchange for acquisition identification and support, strategy and brand development and customer and investor introduction services, the Company agreed to pay Strategic Universal Advisors $5,500 per month.  The Company also agreed to grant Strategic Universal Advisors a warrant to purchase 250,000 shares of the Company’s common stock.  The warrant has a term of five years, with an exercise price of $4.00 per share, is exercisable on a cashless basis, and is fully vested.  On September 25, 2015, the Company terminated this advisory consulting agreement and no further payments were made to Strategic Universal Advisors.  The warrant is a restricted security and any shares issued upon exercise of the warrant will be restricted securities.

Convertible Note Issuances

On October 2, 2012, we entered into a secured loan transaction with Veteran Engineering and Technology, LLC (“VET”) in the principal amount of $381,951 with interest initially accruing at the rate of 12% per year and later increased to 18% year, compounded monthly.  Accrued interest is payable on a quarterly basis with a balloon payment of the principal and any accrued unpaid interest due on February 1, 2016 or the first business day immediately following the effective date of this registration statement, whichever occurs first.  The loan requires us to obtain approval before obtaining additional financing outside of the normal course of business or a change of ownership of more than 10% of our common stock.  The loan is guaranteed by a license agreement between the parties granting an exclusive, irrevocable, royalty free, worldwide license (limited to the department of defense market) to use TridentHE software including, without limitation, the right to manufacture, modify, sell, license, brand, create permitted modifications and take other actions subject to certain restrictions.  This license only becomes activated and effective upon a material default by us or in the event an interest payment is not made within 30 days of when due.  If the license is activated VET will have access to the source code of TridentHE and own any permitted modifications it makes to the software pursuant to the license.  The value of the license was indeterminable at the time of the transaction so, if activated, the parties have agreed to use good faith efforts to determine a mutually agreeable valuation between 50% and 100% of the principal amount of the loan.  On October 2, 2013, the loan was extended to November 2, 2013 with no changes in terms except the due date.  On May 9, 2014 another extension was signed. This extension granted the following: (1) extension of the payment of all amounts to November 2, 2014 with the option to extend for 30 more days at the lender’s discretion; (2) the interest rate was increased to 18%; (3) quarterly interest payments of $17,446 were to be due each quarter at August 2, 2014 and November 4, 2014; (4) we were required to issue warrants to the lender for the purchase of 2,500 shares of our common stock for every full month after May 9, 2014 that the loan remains outstanding, with the warrants having an exercise price of $6.00 per share and a five-year term; and (5) the lender was given the right to convert the outstanding principal and interest balance to shares of the our common stock, at the lender’s sole discretion, at $2.00 per share (until the closing of a negotiated equity transaction at a price greater than $2.00 per share). This extension also required a payment of past due interest totaling $38,772 to the lender. The loan was subsequently extended to January 2, 2015 and then further extended to the earlier of February 1, 2016 or the first business day following the effective date of a registration statement on Form S-1 filed by us.  Prior to this offering, VET beneficially owned 14.1% of our outstanding common stock and Craig Newmaker, a director of our company, is Vice President and Chief Operating Officer of VET.  As of November 10, 2015, the outstanding balance of this loan was $381,951.

On May 17, 2013, the Company entered into a convertible note agreement with an individual.  The original principal balance of this note was $75,000. However, the loan was increased by a lump sum interest requirement of $5,000 which made the total original balance $80,000. The note requires interest payments of $5,000 per month. The original due date of this loan was June 17, 2013 unless the lender exercised its option to convert the loan before that date. The loan also required collateral of certain accounts receivables from two customers. The lender, at his sole discretion, can convert this loan into common stock of the Company at $2.00 per share.  Subsequent to December 31, 2014 the parties agreed to convert all the original principal balance of $75,000 plus accrued interest of $145,000 totaling $220,000 into 110,000 shares of the Company’s common stock at $2.00 per share. As of November 10, 2015, the outstanding balance of this loan was $0.

On September 13, 2013, the Company entered into a loan agreement with an individual stockholder to assist with the development, expansion and marketing of the Company’s primary software product. The original loan amount was $180,000. The loan agreement provides for collateral of all the personal property of the Company. The loan requires monthly principal payments of not less than $3,000 beginning October 13, 2013 with final payment due September 13, 2018. The loan requires a fee to be paid quarterly at an annual rate of 10%.  This fee has been treated as interest expense, and the lender may elect, at the lender’s sole discretion, to receive Company common stock at a price of $2.00 per share in lieu of cash for payment of the quarterly fee. The loan agreement also required an initial loan fee of $18,000 which is equal to 10% of the original principal balance. The loan agreement further requires the Company to comply with certain covenants which require the approval of the lender prior to amending its charter or changing the nature of operations of the Company. As of November 10, 2015, the outstanding balance of this loan was $0.

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In January 2013, the Company issued a convertible note payable to an individual with an original principal balance of $10,000. During 2014, the note holder elected to convert the note to common stock.  As of November 10, 2015, the outstanding balance of this note was $0.

In 2014, the Company issued $840,000 aggregate principal amount of convertible notes with maturity dates originally ranging from March 15, 2015 to June 19, 2015.  In 2015, the Company issued an additional $88,500 aggregate principal amount of convertible notes with maturity dates originally ranging from July 2, 2015 to July 30, 2015 (collectively, the “12% Convertible Notes”).  All the notes carry an interest rate of 12.0% and are entitled to convert to common stock at $4.00 per share.  Prior to June 30, 2015, $165,000 of the 12% Convertible Notes were converted into shares of common stock.  The lenders elected to convert additional interest of $7,197 to common stock. A total of $17,500 was paid on principal before June 30, 2015. Subsequent to June 30, 2015, several of the 12% Convertible Notes were extended, paid in full and converted.  A total of $746,000 of the 12% Convertible Notes were outstanding following June 30, 2015, of which $421,000 has been converted to shares of common stock, $25,000 has been paid on principal and $300,000 has been extended to the earlier of February 1, 2016 or the first business day following an effective date of a registration statement on Form S-1 filed by the Company. In some cases, the interest was also converted at the same rate as the convertible notes.

2015 Private Placement

In 2015, the Company completed a private placement of 281,500 shares of our common stock to a small number of accredited investors for aggregate gross proceeds of $703,750.  The proceeds of the financing are being used primarily for working capital and general corporate purposes.  Burnham Securities Inc., one of the underwriters in this offering, served as the Company’s placement agent.

Other Issuances

In September 2015, the Company entered into a letter agreement with ABEET, LLC, an entity owned by a director of the Company, for the conversion of $34,319.07 representing all principal and accrued interest due under promissory notes dated July 8, 2013 and November 15, 2013 into shares at a conversion price of $4.00 per share. In October 2015, the conversion was completed and the debt was retired.

On October 16, 2015, the Company entered into a letter agreement with an existing shareholder related to the conversion of the principal and all accrued interest due totaling $220,000 under a convertible promissory note held by him, dated May 17, 2013, into 110,000 shares of common stock. The conversion was completed on October 30, 2015.

On October 27, 2015, the Company entered into a loan transaction with an existing shareholder.  The principal amount of the loan was $150,000 and the due date is January 27, 2016.  The interest rate is 12% per annum.  A warrant to purchase 2,101 shares of common stock at an exercise price of $2.50 per share with a term of five years was granted in connection with this loan transaction.

In November 2015, the Company entered into a letter agreement with J. Ralph Armijo, the Chairman of the Board of Directors of the Company, in order for the principal and accrued interest due pursuant to a promissory note entered into with Mr. Armijo on November 30, 2011, as amended, be applied toward the exercise of one of his incentive stock option grants. The total amount due under the note was $55,055. This amount was applied to the purchase price for the exercise of the option to purchase 80,964 shares of common stock. The transaction was completed and the note was retired in November 2015.

For each of the above transactions exempt from the registration requirements under Section 4(a)(2) of the Securities Act of 1933.  For each such sale, no advertising or general solicitation was employed in offering the securities.  The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of ours or our executive officers, and transfer was restricted by us in accordance with the requirements of the Securities Act.  Each of such persons represented to us that they were accredited or sophisticated investors, that they had been given access to the information they requested to make their investment decision, that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment.  Accordingly, we believe that the issuances of the securities listed above were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act.

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Item 16.  Exhibits and Financial Statement Schedules

(a) Exhibits

The exhibits listed in the following Exhibit Index are filed as part of this Registration Statement.

Exhibit
Number	Description
1.1*	Form of Underwriting Agreement.
1.2*	Form of Underwriter Warrant (included in Underwriting Agreement filed as Exhibit 1.1).
3.1	Articles of Incorporation of the Company, as amended.
3.2	Bylaws of the Company.
4.1	Specimen Common Stock Certificate.
5.1*	Opinion of Olshan Frome Wolosky LLP, as to the legality of the common stock.
10.1	Employment Agreement between the Company and Robert Lamvik.
10.2	Employment Agreement between the Company and Hadley Evans, Jr.
10.3	Aegis Identity Software, Inc. Incentive Stock Option Plan.
10.4	Loan Agreement with Veteran Engineering & Technology, LLC.
10.5	Loan Agreement with National Community Development Fund I, LLC.
10.6	Form of Escrow Deposit Agreement for offering.
10.7	Form of Subscription Agreement for offering.
10.8	Form of Software License Agreement.
10.9	Form of Support Services and Maintenance Agreement.
10.10	Form of Professional Services Agreement.
14.1	Code of Ethics and Business Conduct.
14.2	Code of Ethics for the CEO and Senior Financial Officers.
21.1	Subsidiaries of the Company.
23.1*	Consent of Olshan Frome Wolosky LLP (included in the opinion filed as Exhibit 5.1).
23.2*	Consent of RRBB Accountants & Advisors.
24.1	Power of Attorney (contained on signature page).

____________________

*  To be filed by amendment.

(b)               Financial Statement Schedules

None.

Item 17.  Undertakings

1.           The undersigned registrant hereby undertakes:

a.           To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

i.           To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

ii.           To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

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iii.           To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

b.           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

c.           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

d.           For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

i.           Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

ii.           Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

iii.           The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv.           Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

e.           To provide to the placement agent at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the placement agent to permit prompt delivery to each purchaser.

f.           That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

g.           That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

2.           Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this draft registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Englewood, State of Colorado, on the ___ day of November 2015.

AEGIS IDENTITY SOFTWARE, INC.
By:
	Robert Lamvik President and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned officers and directors of Aegis Identity Software, Inc., hereby severally constitute and appoint J. Ralph Armijo and Robert Lamvik, and each of them (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution, for us and in our stead, in any and all capacities, to sign any and all amendments (including pre-effective and post-effective amendments) to this registration statement and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting to said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents, or any of them, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this draft registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
	Chairman of the Board	November __, 2015
J. Ralph Armijo
	President, Chief Executive Officer and Director (principal executive officer)	November __, 2015
Robert Lamvik
	Chief Financial Officer and Treasurer (principal financial and accounting officer)	November __, 2015
Hadley Evans, Jr.
	Director	November __, 2015
Thomas Autobee
	Director	November __, 2015
Graham Forman
	Director	November __, 2015
Craig Newmaker
	Director	November __, 2015
Sanjeevan Ratnathicam
	Director	November __, 2015
John S. Vasquez

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EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION

OF

AEGIS IDENTITY SOFTWARE, INC.

Pursuant to the provisions of the Colorado Business Corporation Act, the articles of incorporation of Aegis Identity Software, Inc. (the “Corporation”) are hereby stated in their entirety and shall be effective from the time that these Articles of Incorporation (the “Articles of Incorporation”) are accepted for filing by the Secretary of State of Colorado:

ARTICLE I

Corporate Name

The name of this Corporation shall be Aegis Identity Software, Inc.

ARTICLE II

Period of Duration

This Corporation shall exist perpetually unless dissolved according to law.

ARTICLE III

Principal Office and Registered Agent and Office

The address of the Corporation's principal office in this state is 5555 DTC Parkway, Suite D-3001, Greenwood Village, Colorado  80111.

The registered office of the Corporation shall be at 5555 DTC Parkway, Suite D-3001, Greenwood Village, Colorado  80111, and the name of the registered agent at such address remains as set forth on the records of the Secretary of State as: J. Ralph Armijo.  Either the registered office or the registered agent may be changed in the manner provided by law.

ARTICLE IV

Corporate Powers

The purpose of this Corporation is to engage in any lawful act or activity for which a Corporation may be organized pursuant to the Colorado Business Corporation Act.

ARTICLE V

Capital Stock

Section 1.                      Capital Stock.  The authorized capital stock of the Corporation and its par value is:

100,000,000 shares of common stock, par value $.001 per share, and

10,000,000 shares of preferred stock, par value $.001 per share.

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The shares of the Corporation’s common and preferred stock may be issued from time to time in one or more series with preferences, limitations and relative rights as the Board of Directors may so determine.

Section 2.                      Share Options and Other Rights.  The Corporation may create and issue share options and other rights, as that term is defined in Section 7-106-205 of the Colorado Business Corporation Act, and shall determine the rights, form and content, and the consideration, if any, for which shares or fractions of shares, assets, debts or other obligations of the Corporation are to be issued pursuant to such share options and other rights.

Section 3.                      Share Transfer Restrictions.  The Board of Directors may impose transfer restrictions on the Corporation’s outstanding securities, and may require that certificates be issued to reflect that the shares bear an appropriate legend.  These restrictions may include, but are not limited to any restrictions required by federal or applicable state securities laws.

ARTICLE VI

Cumulative Voting

Cumulative voting of any shares of stock is not authorized.

ARTICLE VII

Preemptive Rights

Unless specifically authorized by an amendment to these Articles of Incorporation or a resolution adopted by the Corporation’s Board of Directors pursuant to Section 7-106-102 of the Colorado Business Corporation Act, no shareholder of any stock in the Corporation shall be entitled, as a matter of right, to purchase, subscribe for, or otherwise acquire any new or additional shares of stock of the Corporation of any class, or any options or warrants to purchase, subscribe for or otherwise acquire any such new or additional shares, bonds, debentures, or other securities convertible into or carrying options or warrants to purchase, subscribe for or otherwise acquire any such new or additional shares.

ARTICLE VIII

Board of Directors

The business and affairs of the Corporation shall be managed under the direction of the Board of Directors.  The number of directors authorized to serve on the Board of Directors shall be as few as one director or as many as seven directors.

ARTICLE IX

Amendment to Bylaws

In furtherance and not in limitation of the powers conferred by the Colorado Business Corporation Act, the Board of Directors is expressly authorized to make, alter, or repeal the Bylaws of the Corporation.

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ARTICLE X

Indemnification of Directors, Officers, Employees, Fiduciaries and Agents

Section 1.                      Mandatory Indemnification.  The Corporation shall indemnify, to the full extent permitted by applicable law from time to time, any person, and the estate and personal representative of any such person, against all liability and expense (including attorneys’ fees) incurred by reason of the fact that he/she is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation as a director, officer, trustee, employee, fiduciary or agent of or in any similar managerial or fiduciary position of another domestic or foreign corporation or other individual or entity or an employee benefit plan.

Section 2.                      Indemnification by Resolution or Contract.  The Corporation also shall indemnify any person who is serving or has served the Corporation as a director, officer, employee, fiduciary, or agent and that person’s estate and personal representative, to the extent and in the manner provided in any bylaw, resolution of the shareholders or directors, contract, or otherwise, so long as such provision is legally permissible.

Section 3.                      Indemnification Not Exclusive Right.  The foregoing rights of indemnification shall not be exclusive of other rights to which he/she may be entitled to under applicable state law.

ARTICLE XI

Limitation on Liability

Section 1.                      Limitation on Liability.  A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director; except that this provision shall not eliminate or limit the liability of a director to the Corporation or its shareholders for monetary damages otherwise existing for:

(a) any breach of a director’s duty of loyalty to the Corporation or its shareholders;

(b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;

(c) acts specified in Section 7-108-403 of the Colorado Business Corporation Act; or

(d) any transaction from which the director directly or indirectly derived any improper personal benefit.

Section 2.                      Further Amendment.  If the Colorado Business Corporation Act is hereafter amended to eliminate or limit further the liability of a director, then, in addition to the elimination or limitation of liability provided by the preceding sentence, the liability of each director shall be eliminated or limited to the fullest extent permitted by the Colorado Business Corporation Act as so amended.

Section 3.           Effect of Repeal or Amendment.  Any repeal or modification of this Article XI by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation under this Article XI as in effect immediately prior to the repeal or modification, with respect to any liability that would have accrued, but for this Article XI, prior to the repeal or modification.

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ARTICLE XII

Voting of Shareholders

Any action required or permitted to be taken at any annual or special shareholders' meeting may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders or by proxy for the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted.

***

The name and address of the person who caused these Articles of Incorporation to be filed and to whom the Secretary of State may deliver notice if filing of this document is refused is Stacy R. Dees, Esq., 5555 DTC Parkway, Suite D-3001, Greenwood Village, CO 80111.

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AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

AEGIS IDENTITY SOFTWARE, INC.

Pursuant to the provisions of the Colorado Business Corporation Act, the Articles of Incorporation, of Aegis Identity Software, Inc. (the “Corporation”) are hereby amended.

This Amendment of the Articles of Incorporation was approved and adopted at a duly called meeting of the Corporation’s Board of Directors held on July 10, 2015 and approved by a written consent of the Corporation’s stockholders on July 15, 2015.

Article V (Capital Stock) shall hereby be amended to include the following paragraphs to the end of Section 1:

“Effective upon the effective date of the filing with the Secretary of State of the State of Colorado of the Certificate of Amendment to the Articles of Incorporation (the “Effective Time”), every four (4) shares of Common Stock of the Corporation, par value $0.001 per share (the “Existing Common”), issued and outstanding or reserved for issuance or held in treasury, shall automatically, and without any action by the holder thereof, be changed and reclassified into one (1) share of Common Stock of the Corporation, par value $0.001 per share (the “New Common”), and each certificate which, prior to the Effective Time, represented four (4) shares of the Existing Common shall, from and after the Effective Time, be deemed to represent one (1) share of the New Common.

No fractional shares of New Common will be issued but, in lieu thereof, each holder of shares of Existing Common who would otherwise be entitled to a fraction of a share of New Common (by virtue of holding a number of shares of Existing Common not evenly divisible by 4 or by virtue of holding fewer than four (4) shares of Existing Common prior to the Effective Time), upon surrender of their certificates for Existing Common (and after aggregating all fractional shares of New Common to be received by such holder), shall receive the number of shares of New Common which such holder would otherwise be entitled to receive, rounded up to the next number of whole shares of New Common.  Notwithstanding the forgoing, the authorized capital of the Corporation shall remain as stated in Section 1 of this Article V.”

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EX-3.2

Exhibit 3.2

Bylaws

of

AEGIS IDENTITY SOFTWARE, INC.

Pursuant to the provisions of the Colorado Business Corporation Act and the Articles of Incorporation of Aegis Identity Software, Inc. (the “Corporation”), the Bylaws of the Corporation are hereby set forth in their entirety.

The Bylaws were approved and adopted at a meeting of the Corporation’s Board of Directors held on August 8, 2011.

The following sets forth the Bylaws of Aegis Identity Group, Inc. effective as of August 8, 2011:

Article I

Shareholders

1.           Annual Shareholders' Meeting.  The annual shareholders' meeting shall be held on the date and at the time and place fixed from time to time by the board of directors; provided, however, that the first annual meeting shall be held on a date that is within six months after the close of the first fiscal year of the Corporation, and each successive annual meeting shall be held on a date that is within the earlier of six months after the close of the last fiscal year or fifteen months after the last annual meeting.

2.           Special Shareholders' Meeting.  A special shareholders' meeting for any purpose or purposes, may be called by the board of directors or the president.  The Corporation shall also hold a special shareholders' meeting in the event it receives, in the manner specified in Section VII.3., one or more written demands for the meeting, stating the purpose or purposes for which it is to be held, signed and dated by the holders of shares representing  not less than one-tenth of all of the votes entitled to be cast on any issue at the meeting.  Special meetings shall be held at the principal office of the Corporation or at such other place as the board of directors or the president may determine.

3.           Record Date for Determination of Shareholders.

(a)           In order to make a determination of shareholders (1) entitled  to notice of or to vote at any shareholders' meeting or at any adjournment of a shareholders'  meeting, (2) entitled to demand a special shareholders' meeting, (3) entitled to take any other action, (4) entitled to receive payment of a share dividend or a distribution, or (5) for any other purpose, the board of directors may fix a future date as the record date for such determination of shareholders.  The record date may be fixed not more than seventy days before the date of the proposed action.

(b)           Unless otherwise specified when the record date is fixed, the time of day for determination of shareholders shall be as of the Corporation's close of business on the record date.

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(c)           A determination of shareholders entitled to be given notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which the board shall do if the meeting is adjourned to a date more than one hundred twenty days after the date fixed for the original meeting.

(d)           If no record date is otherwise fixed, the record date for determining shareholders entitled to be given notice of and to vote at an annual or special shareholders' meeting is the day before the first notice is given to shareholders.

(e)           The record date for determining shareholders entitled to take action without a meeting pursuant to Section I.10 is the date a writing upon which the action is taken is first received by the Corporation.

4.           Voting List.

(a)           After a record date is fixed for a shareholders' meeting, the secretary shall prepare a list of the names of all its shareholders who are entitled to be given notice of the meeting.  The list shall be arranged by voting groups and within each voting group by class or series of shares, shall be alphabetical within each class or series, and shall show the address of, and the number of shares of each such class and series that are held by, each shareholder.

(b)           The shareholders' list shall be available for inspection by any shareholder, beginning the earlier of ten days before the meeting for which the list was prepared or two business days after notice of the meeting is given and continuing through the meeting, and any adjournment thereof, at the Corporation's principal office or at a place identified in the notice of the meeting in the city where the meeting will be held.

(c)           The secretary shall make the shareholders' list available at the meeting, and any shareholder or agent or attorney of a shareholder is entitled to inspect the list at any time during the meeting or any adjournment.

5.           Notice to Shareholders.

(a)           The secretary shall give notice to shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than sixty days before the date of the meeting; except that, if the articles of incorporation are to be amended to increase the number of authorized shares, at least thirty days' notice shall be given.  Except as otherwise required by the Colorado Business Corporation Act, the secretary shall be required to give such notice only to shareholders entitled to vote at the meeting.

(b)           Notice of an annual shareholders' meeting need not include a description of the purpose or purposes for which the meeting is called unless a purpose of the meeting is to consider an amendment to the articles of incorporation, a restatement of the articles of incorporation, a plan of merger or share exchange, disposition of substantially all of the property of the Corporation, consent by the Corporation to the disposition of property by another entity, or dissolution of the Corporation.

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(c)           Notice of a special shareholders' meeting shall include a description of the purpose or purposes for which the meeting is called.

(d)           Notice of a shareholders' meeting shall be in writing and shall be given

(1)           by deposit in the United States mail, properly addressed to the shareholder's address shown in the Corporation's current record of shareholders, first class postage prepaid, and, if so given, shall be effective when mailed; or

(2)            by telegraph, teletype, electronically transmitted facsimile, electronic mail, mail, or private carrier or by personal delivery to the shareholder, and, if so given, shall be effective when actually received by the shareholder.

(e)            If an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment; provided, however, that, if a new record date for the adjourned meeting is fixed pursuant to Section I.3.(c), notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date.

(f)           If three successive notices are given by the Corporation, whether with respect to a shareholders' meeting or otherwise, to a shareholder and are returned as undeliverable, no further notices to such shareholder shall be necessary until another address for the shareholder is made known to the Corporation.

6.           Quorum.  Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter.  One-third of the votes entitled to be cast on the matter by the voting group shall constitute a quorum of that voting group for action on the matter.  If a quorum does not exist with respect to any voting group, the president or any shareholder or proxy that is present at the meeting, whether or not a member of that voting group, may adjourn the meeting to a different date, time, or place, and (subject to the next sentence) notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed pursuant to Section I.3.(c),  notice of the adjourned meeting shall be given pursuant to Section I.5. to persons who are shareholders as of the new record date.  At any adjourned meeting at which a quorum exists, any matter may be acted upon that could have been acted upon at the meeting originally called; provided, however, that, if new notice is given of the adjourned meeting, then such notice shall state the purpose or purposes of the adjourned meeting sufficiently to permit action on such matters.  Once a share is represented for any purpose at a meeting, including the purpose of determining that a quorum exists, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or shall be set for that adjourned meeting.

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7.           Voting Entitlement of Shares.Except as stated in the articles of incorporation, each outstanding share, regardless of class, is entitled to one vote, and each fractional share is entitled to a corresponding fractional vote, on each matter voted on at a shareholders' meeting.

8.           Proxies; Acceptance of Votes and Consents.

(a)           A shareholder may vote either in person or by proxy.

(b)           An appointment of a proxy is not effective against the Corporation until the appointment is received by the Corporation.  An appointment is valid for eleven months unless a different period is expressly provided in the appointment form.

(c)           The Corporation may accept or reject any appointment of a proxy, revocation of appointment of a proxy, vote, consent, waiver, or other writing purportedly signed by or for a shareholder, if such acceptance or rejection is in accordance with the provisions of the Colorado Business Corporation Act.

9.           Waiver of Notice.

(a)           A shareholder may waive any notice required by the Colorado Business Corporation Act, the articles of incorporation or these bylaws, whether before or after the date or time stated in the notice as the date or time when any action will occur or has occurred.  The waiver shall be in writing, be signed by the shareholder entitled to the notice, and be delivered to the Corporation for inclusion in the minutes or filing with the corporate records, but such delivery and filing shall not be conditions of the effectiveness of the waiver.

(b)           A shareholder's attendance at a meeting waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice, and waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

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10.           Action by Shareholders Without a Meeting.   Any action required or permitted to be taken at any annual or special shareholders' meeting may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders or by proxy for the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing.  Action taken pursuant to this section shall be effective as of the date the last writing necessary to effect the action is received by the Corporation, unless all of the writings necessary to effect the action specify another date, which may be before or after the date the writings are received by the Corporation.  Any action taken pursuant to such written consent of the shareholders shall have the same force and effect as if taken at a meeting of the shareholders.  Any shareholder who has signed a writing describing and consenting to action taken pursuant to this section may revoke such consent by a writing signed by the shareholder describing the action and stating that the shareholder’s prior consent thereto is revoked, if such writing is received by the Corporation before the effectiveness of the action.

11.           Meetings by Telecommunications.  To the extent provided by resolution of the Board of Directors or in the notice of the meeting, any or all of the shareholders may participate in an annual or special shareholders' meeting by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting.  A shareholder participating in a meeting by this means is deemed to be present in person at the meeting.

Article II

Directors

1.           Authority of the  Board of Directors.  The corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, a board of directors.

2.           Number.   Subject to the provisions of the Articles of Incorporation, the number of directors shall be fixed by resolution of the board of directors from time to time  and may be increased or decreased by resolution adopted by the board of directors from time to time, but no decrease in the number of directors shall have the effect of shortening the term of any incumbent director.

3.           Qualification.  Directors shall be natural persons at least eighteen years old but need not be residents of the State of Colorado or shareholders of the Corporation.

4.           Election.  The board of directors shall be elected at the annual meeting of the shareholders or at a special meeting called for that purpose.

5.           Term.  Each director shall be elected to hold office until the next annual meeting of shareholders and until the director’s successor is elected and qualified.

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6.           Resignation.  A director may resign at any time by giving written notice of his or her resignation to any other director or (if the director is not also the secretary) to the secretary.  The resignation shall be effective when it is received by the other director or secretary, as the case may be, unless the notice of resignation specifies a later effective date.  Acceptance of such resignation shall not be necessary to make it effective unless the notice so provides.

7.           Removal.  Any director may be removed by the shareholders of the voting group that elected the director, with or without cause at a meeting called for that purpose.  The notice of the meeting shall state that the purpose, or one of the purposes, of the meeting is removal of the director.  A director may be removed only if the number of votes cast in favor of removal exceeds the number of votes cast against removal.

8.           Vacancies.

(a)           If a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directors:

(1)           The shareholders may fill the vacancy at the next annual meeting or at a special meeting called for that purpose; or

(2)           The board of directors may fill the vacancy; or

(3)            If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

(b)           Notwithstanding Section II.8.(a), if the vacant office was held by a director elected by a voting group of shareholders, then, if one or more of the remaining directors were elected by the same voting group, only such directors are entitled to vote to fill the vacancy if it is filled by directors, and they may do so by the affirmative vote of a majority of such directors remaining in office; and only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders.

(c)           A vacancy that will occur at a specific later date, by reason of a resignation that will become effective at a later date under Section II.6. or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.

9.           Meetings.  The board of directors may hold regular or special meetings in or out of Colorado.   A regular meeting shall be held in the principal office of the Corporation on such date or dates, and at such time, as may be established by resolution of the board of directors.  If the board shall establish a date and time for a regular meeting of the board, such meeting may be held without notice of the date, time, place, or purpose of the meeting  The board of directors may, by resolution, establish other dates, times and places for additional regular meetings, which may thereafter be held without further notice.  Special meetings may be called by the president or by any two directors and shall be held at the principal office of the Corporation unless another place is consented to by every director.  At any time when the board consists of a single director, that director may act at any time, date, or place without notice.

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10.           Notice of Special Meeting.  Notice of a special meeting shall be given to every director at least twenty four hours before the time of the meeting, stating the date, time, and place of the meeting.  The notice need not describe the purpose of the meeting.  Notice may be given orally to the director, personally or by telephone or other wire or wireless communication.  Notice may also be given  in writing by telegraph, teletype, electronically transmitted facsimile, electronic mail, mail, or private carrier.  Notice shall be effective at the earliest of the time it is received; five days after it is deposited in the United States mail, properly addressed to the last address for the director shown on the records of the Corporation, first class postage prepaid; or the date shown on the return receipt if mailed by registered or certified mail, return receipt requested,  postage prepaid, in the United States mail and if the return receipt is signed by the director to which the notice is addressed.

11.           Quorum.  Except as provided in Section II.8., a majority of the number of directors fixed in accordance with these Bylaws shall constitute a quorum for the transaction of business at all meetings of the board of directors.  The act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as otherwise specifically required by law.

12.           Waiver of Notice.

   (a)           A director may waive any notice of a meeting before or after the time and date of the meeting stated in the notice.  Except as provided by Section II.12.(b), the waiver shall be in writing and shall be signed by the director.  Such waiver shall be delivered to the secretary for filing with the corporate records, but such delivery and filing shall not be conditions of the effectiveness of the waiver.

   (b)           A director's attendance at or participation in a meeting waives any required notice to him or her of the meeting unless, at the beginning of the meeting or promptly upon his or her later arrival, the director objects to holding the meeting or transacting business at the meeting because of lack of notice or defective notice and does not thereafter vote for or assent to action taken at the meeting.

13.           Attendance by Telephone.  One or more directors may participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting.  A director participating in a meeting by this means is deemed to be present in person at the meeting.

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14.           Deemed Assent to Action.  A director who is present at a meeting of the board of directors when corporate action is taken shall be deemed to have assented to all action taken at the meeting unless:

(1)            The director objects at the beginning of the meeting, or promptly upon his or her arrival, to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to any action taken at the meeting;

(2)           The director contemporaneously requests that his or her dissent or abstention as to any specific action taken be entered in the minutes of the meeting; or

(3)           The director causes written notice of his or her dissent or abstention as to any specific action to be received by the presiding officer of the meeting before adjournment of the meeting or by the secretary (or, if the director is the secretary, by another director) promptly after adjournment of the meeting.

The right of dissent or abstention pursuant to this Section II.14. as to a specific action is not available to a director who votes in favor of the action taken.

15.           Action by Directors Without a Meeting.   Any action required or permitted by law to be taken at a board of directors' meeting may be taken without a meeting if all members of the board consent to such action in writing.  Action shall be deemed to have been so taken by the board at the time the last director signs a writing describing the action taken, unless, before such time, any director has revoked his or her consent by a writing signed by the director and received by the secretary or any other person authorized by the bylaws or the board of directors to receive such a revocation. Such action shall be effective at the time and date it is so taken unless the directors establish a different effective time or date.  Such action has the same effect as action taken at a meeting of directors and may be described as such in any document.

16.           Nominations of Directors.  The Board of Directors may nominate persons to stand for election to the board of directors at any time prior to a meeting of shareholders at which directors are to be elected.  Any shareholder may nominate a person to stand for election to the Board of Directors provided such shareholder provides written notification of the intention to nominate such persons at the next shareholder meeting not less than 90 days in advance of such meeting, and provided further such notice is accompanied by information regarding the proposed nominee meeting the requirements of part III of SEC Regulation SB or Regulation SK (as applicable to the Corporation) and information regarding all direct and indirect business or personal relationships between the shareholder and the proposed nominee.

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Article III

Committees of the Board of Directors

1.           Committees of the Board of Directors.

(a)           Subject to the provisions of the Colorado Business Corporation Act, the board of directors may create one or more committees and appoint one or more members of the board of directors to serve on them. The creation of a committee and appointment of members to it shall require the approval of a majority of all the directors in office when the action is taken, whether or not those directors constitute a quorum of the board.

(b)           The provisions of these bylaws governing meetings, action without meeting, notice, waiver of notice, and quorum and voting requirements of the board of directors apply to committees and their members as well.

(c)           To the extent specified by resolution adopted from time to time by a majority of all the directors in office when the resolution is adopted, whether or not those directors constitute a quorum of the board, each committee shall exercise the authority of the board of directors with respect to the corporate powers and the management of the business and affairs of the Corporation; except that a committee shall not:

(1)           Authorize distributions;

(2)           Approve or propose to shareholders action that the Colorado Business Corporation Act requires to be approved by shareholders;

(3)           Fill vacancies on the board of directors or on any of its committees;

(4)           Amend the articles of incorporation pursuant to the Colorado Business Corporation Act;

(5)           Adopt, amend, or repeal bylaws;

(6)           Approve a plan of merger not requiring shareholder approval;

(7)           Authorize or approve reacquisition of shares, except according to a formula or method prescribed by the board of directors; or

(8)           Authorize or approve the issuance or sale of shares, or a contract for the sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares; except that the board of directors may authorize a committee or an officer to do so within limits specifically prescribed by the board of directors.

(d)           The creation of, delegation of authority to, or action by, a committee does not alone constitute compliance by a director with applicable standards of conduct.

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Article IV

Officers

1.           General.  The Corporation shall have as officers a president and a secretary, each of whom who shall be appointed by the board of directors.  The board of directors may appoint as additional officers a chairman and other officers of the board.  The board of directors, the president, and such other subordinate officers as the board of directors may authorize from time to time, acting singly, may appoint as additional officers one or more vice presidents, assistant secretaries, assistant treasurers, and such other subordinate officers as the board of directors, the president, or such other appointing officers deem necessary or appropriate.  The officers of the Corporation shall hold their offices for such terms and shall exercise such authority and perform such duties as shall be determined from time to time by these Bylaws, the board of directors, or (with respect to officers whom are appointed by the president or other appointing officers) the persons appointing them; provided, however, that the board of directors may change the term of offices and the  authority of any officer appointed by the president or other appointing officers.  Any two or more offices may be held by the same person.  The officers of the Corporation shall be natural persons at least eighteen years old.

2.           Term.  Each officer shall hold office from the time of appointment until the time of removal or resignation pursuant to Section IV.3. or until the officer's death.

3.           Removal and Resignation.  Any officer appointed by the board of directors may be removed at any time by the board of directors.  Any officer appointed by the president or other appointing officer may be removed at any time by the board of directors or by the person appointing the officer.  Any officer may resign at any time by giving written notice of resignation to any director (or to any director other than the resigning officer if the officer is also a director), to the president, to the secretary, or to the officer who appointed the officer.  Acceptance of such resignation shall not be necessary to make it effective, unless the notice so provides.

4.           President.  The president shall preside at all meetings of shareholders, and shall also preside at all meetings of the board of directors unless the board of directors has appointed a chairman, vice chairman, or other officer of the board and has authorized such person to preside at meetings of the board of directors instead of the president.   Subject to the direction and control of the board of directors, the president of the Corporation shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the board of directors are carried into effect.  The president may negotiate, enter into, and execute contracts, deeds, and other instruments on behalf of the Corporation as are necessary and appropriate to the conduct to the business and affairs of the Corporation or as are approved by the board of directors.  The president shall have such additional authority and duties as are appropriate and customary for the office of president, except as the same may be expanded or limited by the board of directors from time to time.

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5.           Vice President.  The vice president, if any, or, if there are more than one, the vice presidents in the order determined by the board of directors or the president (or, if no such determination is made, in the order of their appointment), shall be the officer or officers next in seniority after the president.  Each vice president shall have such authority and duties as are prescribed by the board of directors or president.  Upon the death, absence, or disability of the president, the vice president, if any, or, if there are more than one, the vice presidents in the order determined by the board of directors or the president, shall have the authority and duties of the president.

6.           Secretary.  The secretary shall be responsible for thepreparation and maintenance of minutes of the meetings of the board of directors and of the shareholders and of the other records and information required to be kept by the Corporation under the Colorado Business Corporation Act and for authenticating records of the corporation.  The secretary shall also give, or cause to be given, notice of all meetings of the shareholders and special meetings of the board of directors, keep the minutes of such meetings, have charge of the corporate seal, if any, and have authority to affix the corporate seal to any instrument requiring it (and, when so affixed, it may be attested by the secretary’s signature), be responsible for the maintenance of all other corporate records and files and for the preparation and filing of reports to governmental agencies (other than tax returns), and have such other authority and duties as are appropriate and customary for the office of secretary, except as the same may be expanded or limited by the board of directors from time to time.

7.           Assistant Secretary.  The assistant secretary, if any, or, if there are more than one, the assistant secretaries in the order determined by the board of directors or the secretary (or, if no such determination is made, in the order of their appointment) shall, under the supervision of the secretary, perform such duties and have such authority as may be prescribed from time to time by the board of directors or the secretary.  Upon the death, absence, or disability of the secretary, the assistant secretary, if any, or, if there are more than one, the assistant secretaries in the order designated by the board of directors or the secretary (or, if no such determination is made, in the order of their appointment), shall have the authority and duties of the secretary.

8.           Treasurer.  The treasurer, if any, shall have control of the funds and the care and custody of all stocks, bonds, and other securities owned by the Corporation, and shall be responsible for the preparation and filing of tax returns.  The treasurer shall receive all moneys paid to the Corporation and, subject to any limits imposed by the board of directors, shall have authority to give receipts and vouchers, to sign and endorse checks and warrants in the Corporation’s name and on the Corporation’s behalf, and give full discharge for the same.  The treasurer shall also have charge of disbursement of funds of the Corporation, shall keep full and accurate records of the receipts and disbursements, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as shall be designated by the board of directors.  The treasurer shall have such additional authority  and duties as are appropriate and customary for the office of treasurer, except as the same may be expanded or limited by the board of directors from time to time.

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9.           Compensation.  Officers shall receive such compensation for their services as may be authorized or ratified by the board of directors.  Election or appointment of an officer shall not of itself create a contractual right to compensation for services performed as such officer.

Article V

Indemnification

1.           Definitions. As used in this article:

(a)           "Corporation"  includes any domestic or foreign entity that is a predecessor of the Corporation  by reason of a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.

(b)            "Director" means an individual who is or was a director of the Corporation or an individual who, while a director of the Corporation, is or was serving at the Corporation's request as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign corporation or other person or of an employee benefit plan.  A director is considered to be serving an employee benefit plan at the Corporation's request if his or her duties to the Corporation also impose duties on, or otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan.  "Director" includes, unless the context requires otherwise, the estate or personal representative of a director.

(c)           "Expenses" includes counsel fees.

(d)           "Liability" means the obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses.

(e)           "Official capacity" means, when used with respect to a director, the office of director in the Corporation and, when used with respect to a person other than a director as contemplated in Section V.2.(a), the office in the Corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by the employee, fiduciary, or agent on behalf of the Corporation.  "Official capacity" does not include service for any other domestic or foreign corporation or other person or employee benefit plan.

(f)           "Party" includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding.

(g)           "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.

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2.           Authority to indemnify directors.

(a)           Except as  provided  in Section V.2.(d), the Corporation may indemnify a person made a party to a proceeding because the person is or was a director against liability incurred in the proceeding if:

(1)           The person conducted himself or herself in good faith; and

(2)           The person reasonably believed:

 (A)           In the case of conduct in an official capacity with the Corporation, that his or her conduct was in the Corporation's best interests; and

 (B)           In all other cases, that his or her conduct was at least not opposed to the Corporation's best interests; and

(3)           In the case of any criminal proceeding, the person had no reasonable cause to believe his or her conduct was unlawful.

(b)           A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement of Section V.2.(a)(2)(B).  A director's conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirements of Section V.2.(a)(1).

(c)           The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this Section V.2.

(d)           The Corporation may not indemnify a director under this Section V.2.

(1)           connection with a proceeding by or in the right of the Corporation in which the director was adjudged liable to the Corporation; or

(2)           In connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the director was adjudged liable on the basis that he or she derived an improper personal benefit.

(e)           Indemnification permitted under this Section V.2 in connection with a proceeding by or in the right of the Corporation is limited to reasonable expenses incurred in connection with the proceeding.

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3.           Mandatory indemnification of directors. The Corporation shall indemnify a person who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the person was a party because the person is or was a director, against reasonable expenses incurred by him or her in connection with the proceeding.

4.           Advance of expenses to directors.

(a)           The Corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:

(1)           The director furnishes to the Corporation a written affirmation of the director's good faith belief that he or she has met the standard of conduct described in Section V.2.

(2)           The director furnishes to the Corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct; and

(3)           A determination is made that the facts then known to those making the determination would not preclude indemnification under this article.

(b)           The undertaking required by Section V.4.(a)(2) shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

(c)           Determinations and authorizations of payments under this Section V.4 shall be made in the manner specified in Section V.6.

5.           Court-ordered indemnification of directors.  A director who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction.  On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification in the following manner:

(1)           If it determines that the director is entitled to mandatory indemnification under Section V.3., the court shall order indemnification, in which case the court shall also order the Corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification.

(2)           If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in Section V.2.(a) or was adjudged liable in the circumstances described in Section V.2.(d), the court may order such indemnification as the court deems proper; except that the indemnification with respect to any proceeding in which liability shall have been adjudged in the circumstances described in Section V.2.(d) is limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification.

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6.           Determination and authorization of indemnification of directors.

(a)           The Corporation may not indemnify a director under Section V.2 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in Section V.2.  The Corporation shall not advance expenses to a director under Section V.4 unless authorized in the specific case after the written affirmation and undertaking required by Section V.4(a)(1) and V.4.(a)(2) are received and the determination required by Section V.4.(a)(3) has been made.

(b)           The determinations required by Section V.6.(a) shall be made:

(1)           By the board of directors by a majority vote of those present at a meeting at which a quorum is present, and only those directors not parties to the proceeding shall be counted in satisfying the quorum; or

(2)           If a quorum cannot be obtained, by a majority vote of a committee of the board of directors designated by the board of directors, which committee shall consist of two or more directors not parties to the proceeding; except that directors who are parties to the proceeding may participate in the designation of directors for the committee.

(c)           If a quorum cannot be obtained as contemplated in Section V.6.(b)(1), and a committee cannot be established under Section V.6.(b)(2) if a quorum is obtained or a committee is designated, if a majority of the directors constituting such quorum or such committee so directs, the determination required to be made by Section V.6.(a) shall be made:

(1)           By independent legal counsel selected by a vote of the board of directors or the committee in the manner specified in Section V.6.(b)(1) or V.6.(b)(2), or, if a quorum of the full board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board of directors; or

(2)           By the shareholders.

(d)           Authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible; except that, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected such counsel.

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7.           Indemnification of officers, employees, fiduciaries, and agents.

(a)           An officer is entitled to mandatory indemnification under Section V.3. and is entitled to apply for court-ordered indemnification under Section V.5., in each case to the same extent as a director;

(b)           The Corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the Corporation to the same extent as to a director; and

(c)           The Corporation may also indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent than is provided in these bylaws, if not inconsistent with public policy, and if provided for by general or specific action of its board of directors or shareholders or by contract.

8.           Insurance.The Corporation may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the Corporation, or who, while a director, officer, employee, fiduciary, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign corporation or other person or of an employee benefit plan, against liability asserted against or incurred by the person in that capacity or arising from his or her status as a director, officer, employee, fiduciary, or agent, whether or not the Corporation would have power to indemnify the person against the same liability under Section V.2., V.3., or V.7.  Any such insurance may be procured from any insurance company designated by the board of directors, whether such insurance company is formed under the laws of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the Corporation has an equity or any other interest through stock ownership or otherwise.

9.           Notice to shareholders of indemnification of director.If the Corporation indemnifies or advances expenses to a director under this article in connection with a proceeding by or in the right of the Corporation, the Corporation shall give written notice of the indemnification or advance to the shareholders with or before the notice of the next shareholders' meeting.  If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action.

Article VI

Shares

1.           Certificates.  Certificates representing shares of the capital stock of the Corporation shall be in such form as is approved by the board of directors and shall be signed by the chairman or vice chairman of the board of directors (if any), or the president and by the secretary or an assistant secretary or the treasurer or an assistant treasurer.  All certificates shall be consecutively numbered, and the names of the owners, the number of shares, and the date of issue shall be entered on the books of the Corporation.  Each certificate representing shares shall state upon its face

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(a)           That the Corporation is organized under the laws of the State of Colorado;

(b)           The name of the person to whom issued;

(c)           The number and class of the shares and the designation of the series, if any, that the certificate represents;

(d)           The par value, if any, of each share represented by the certificate;

(e)           Any restrictions imposed by the Corporation upon the transfer of the shares represented by the certificate.

2.           Facsimile Signatures.  Where a certificate is signed

(a)           By a transfer agent other than the Corporation or its employee, or

(b)           By a registrar other than the Corporation or its employee, any or all of the officers’ signatures on the certificate required by Section VI.1. may be facsimile.  If any officer, transfer agent or registrar who has signed, or whose facsimile signature or signatures have been placed upon, any certificate, shall cease to be such officer, transfer agent, or registrar, whether because of death, resignation, or otherwise, before the certificate is issued by the Corporation, it may nevertheless be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

3.           Transfers of Shares.  Transfers of shares shall be made on the books of the Corporation only upon presentation of the certificate or certificates representing such shares properly endorsed by the person or persons appearing upon the face of such certificate to be the owner, or accompanied by a proper transfer or assignment separate from the certificate, except as may otherwise be expressly provided by the statutes of the State of Colorado or by order of a court of competent jurisdiction.  The officers or transfer agents of the Corporation may, in their discretion, require a signature guaranty before making any transfer.  The Corporation shall be entitled to treat the person in whose name any shares are registered on its books as the owner of those shares for all purposes and shall not be bound to recognize any equitable or other claim or interest in the shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interest.

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4.           Shares Held for Account of Another.  The board of directors may adopt by resolution a procedure whereby a shareholder of the Corporation may certify in writing to the Corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons.  The resolution shall set forth

(a)           The classification of shareholders who may certify;

(b)           The purpose or purposes for which the certification may be made;

(c)           The form of certification and information to be contained herein;

(d)           If the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or the closing of the stock transfer books within which the certification must be received by the Corporation; and

(e)           Such other provisions with respect to the procedure as are deemed necessary or desirable.  Upon receipt by the Corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

Article VII

Miscellaneous

1.           Corporate Seal.  The board of directors may adopt a seal, circular in form and bearing the name of the Corporation and the words “SEAL” and “COLORADO,” which, when adopted, shall constitute the seal of the Corporation.  The seal may be used by causing it or a facsimile of it to be impressed, affixed, manually reproduced, or rubber stamped with indelible ink.  Even if the Corporation has adopted a corporate seal, properly authorized actions of the Corporation are effective whether or not any writing evidencing such action is sealed.

2.           Fiscal Year.  The board of directors may, by resolution, adopt a fiscal year for the Corporation.

3.           Receipt of Notices by the Corporation.  Notices, shareholder writings consenting to action, and other documents or writings shall be deemed to have been received by the Corporation when they are received

(a)           At the registered office of the Corporation in the State of Colorado;

(b)           At the principal office of the Corporation (as that office is designated in the most recent document filed by the Corporation with the Secretary of State for the State of Colorado designating a principal office) addressed to the attention of the secretary of the Corporation;

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(c)           By the secretary of the corporation wherever the secretary may be found.; or

(d)           By any other person authorized from time to time by the board of directors, the president, or the secretary to receive such writings, wherever such person is found.

4.           Facsimile Signature.  Where, under these Bylaws or under the Colorado Business Corporation Act, as amended, a signature of a director, officer or shareholder of the Corporation is required, such signature may be presented either in original form or by a facsimile copy thereof, to the extent permitted by law.

5.           Amendment of Bylaws.  These Bylaws may at any time and from time to time be amended, supplemented, or repealed by the board of directors.

The undersigned certifies the Board of Directors approved and adopted the foregoing as the Bylaws of Aegis Business Group Inc. effective August 8, 2011.

___________________________

Stacy Dees, Secretary

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EX-4.1

Exhibit 4.1

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into effective November 1, 2015 (the “Effective Date”), by and between Aegis Identity Software, Inc., a Colorado corporation (the “Company”), and Robert Lamvik (“Executive”) (collectively, referred to as the “Parties”).

RECITALS

WHEREAS, Executive is employed by the Company as its President and Chief Executive Officer;

WHEREAS, the Company recognizes the important role that Executive plays in the success and continued success of the Company;

WHEREAS, the Company and Executive recognize the need for this Employment Agreement to clarify the Executive’s and the Company’s respective rights and obligations and to assure the services of Executive for the Company; and

WHEREAS, Executive is willing and desires to continue to be employed by the Company, and the Company is willing to continue to employ Executive, upon the terms, covenants and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the Parties do hereby agree as follows:

1.           Employment. The Company hereby employs Executive as President and Chief Executive Officer of the Company.  Executive will have such duties, responsibilities, power and authority as assigned to him by the Chairman (“Chairman”) of the Company’s Board of Directors (“Board”).  During his employment by the Company, he will devote substantially all his entire working time, attention and energies to the business of the Company and will not, without the prior written consent of the Board undertake any other business activities.

2.           Term of Employment. The term of this Agreement shall be for an initial period of fourteen (14) months commencing on the Effective Date and subject to termination as provided in Sections 7 or 8, will end on December 31, 2016; provided, that on December 31, 2016 and each subsequent December 31st, the term of Executive’s employment will automatically be extended by an additional year unless the Company or Executive gives the other party written notice, at least 60 days prior to the expiration of the then existing term, that it or he does not want the term to be so extended.  Such employment period, as may be so extended, will hereinafter be referred to as the “Term.”

3.           Base Salary.  During the Term, the Company will pay Executive a minimum base salary at the annual rate of $180,000, payable in accordance with the Company's regular payroll practices. Upon the Company’s receipt of funding from an Initial Stock Offering (“ISO”), the Company will pay Executive a minimum base salary of $200,000, payable in accordance with the Company’s regular payroll practices.  The Board’s Compensation Committee will review Executive’s base salary annually and may, in its sole discretion, increase his base salary based on his performance and the Company's performance. Such base salary, as may be increased, will hereinafter be referred to as his “Base Salary.”

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4.           Quarterly Bonus. During the Term, Executive will be eligible to receive a quarterly bonus of $10,000 for each quarter beginning in 2016 and each year thereafter in which the Company experiences positive earnings before interest, taxes, depreciation and amortization (“EBITDA”) (the “Quarterly Bonus”). If earned, the Company shall pay Executive his Quarterly Bonus within 30 days of the end of each quarter.

5.           Existing Stock Options.  The Company expressly acknowledges that it will honor Executive’s previously awarded stock options, which are set forth as follows:

Options Awarded	Date Awarded	Vesting Date	Strike Price
125,000	10/1/2011	9/30/2014	$0.60
125,000	8/8/2012	8/7/2015	$2.00
225,000	10/22/2013	10/21/2016	$2.00
225,000	2/18/2015	2/17/2018	$2.00

The terms and conditions of the stock options awards addressed above shall remain in full force and effect independent of any ISO.

6.           Housing Allowance and the Right to Commute.  Executive intends to own a residence in California, beginning effective July 1, 2016, Executive will be provided a monthly housing allowance of $2,500 (“Housing Allowance”) and grant the Executive the right to commute to Denver from California.  The Housing Allowance will be paid to the Executive monthly.

7.           Other Benefits.

(a)           Employee Benefits. Executive will be eligible to participate in the employee benefit plans, programs and arrangements maintained by the Company.

(b)           Vacation. Executive will be entitled to not less than 15 days of paid vacation per calendar year in accordance with the Company's vacation policy as in effect from time to time.

(c)           Reimbursement. The Company will reimburse Executive for all reasonable expenses and disbursements in carrying out his duties and responsibilities under this Agreement in accordance with Company policy for executive officers as in effect from time to time.

(d)           Automobile Allowance. The Company will continue to provide the Executive with an automobile consistent with the Parties’ existing arrangement during the Term of this Agreement.

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8.           Termination of Employment (Non-Change in Control). Subject to Sections 10 and 14:

(a)           Resignation for Good Reason or Termination Without Cause. If Executive terminates his employment for Good Reason (as defined below) or he is terminated by the Company without Cause (as defined below) at any time during the Term, including by the Company giving him notice that it does not want the Term to be extended as provided in Section 1, Executive will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

(ii)           an amount equal to 1.5 times the sum of (x) his then Base Salary and (y) his Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

(iii)           In addition to the foregoing lump-sum payment:

(iv)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits) for the 18 month period following the date of such termination;

(v)           outplacement services during the 6-month period following such termination provided by a service provider selected by the Company for the benefit of the Executive; and

(b)           Termination Other than for Good Reason or Termination for Cause. If Executive terminates his employment other than for Good Reason (including if Executive gives notice that he does not want to extend the Term as provided in Section 1) or if Executive is terminated by the Company for Cause, Executive will receive no further payments, compensation or benefits under this Agreement, except he will be eligible to receive, immediately upon the effectiveness of such termination, amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing prior to the effectiveness of Executive’s termination and such compensation or benefits that have been earned and will become payable without regard to future services.

(c)           Death, Disability or Retirement.If Executive’s employment terminates by reason of death, disability or retirement (as defined in the Company's equity compensation plan then in effect), Executive or his beneficiaries will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

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(ii)           Executive’s Quarterly Bonus for such year, prorated for the number of days that have elapsed during such year.

If Executive’s employment terminates by reason of Executive’s retirement, then in addition to benefits to which Executive may be entitled pursuant to this Agreement, his entitlements in connection with a termination of his employment pursuant to his retirement under the Company's otherwise applicable employee benefit and retirement plans and programs (including without limitation under the Company's equity compensation plans), will be determined in accordance with such applicable plans and programs.

For purposes of this Agreement, “Good Reason” means the Company's breach of any of its material obligations under this Agreement, excluding immaterial actions (or failures of action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days of receipt of notice thereof given by Executive. For purposes of this Agreement, “Cause” means any of the following: (i) conviction of or pleading guilty to a felony, (ii) commission of intentional acts of misconduct that materially impair the goodwill or business of the Company or cause material damage to its property, goodwill or business, or (iii) willful refusal or willful failure to perform Executive’s material duties under this Agreement after written demand that Executive does so. Termination of Executive’s employment shall not be deemed to be for Cause hereunder unless and until (A) written notice has been delivered to Executive by the Company that specifically identifies the Cause, which is the basis of the termination and, if the Cause is capable of cure, Executive has failed to cure or remedy the act or omission so identified within 14 calendar days after written notice of such breach. For purposes of this provision, no act or failure to act on Executive’s part shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause without reasonable notice to Executive setting forth the reasons, facts and circumstances for the Company's intention to terminate for Cause and an opportunity for Executive, together with his counsel, to be heard before the Board.

9.           Change in Control. Subject to Sections 10 and 14:

(a)           General.If there is a Change in Control (as defined below) and, within 18 months of such Change in Control, Executive terminates his employment for CIC Good Reason (as defined below) or he is terminated by the Company without Cause, Executive will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination;

(ii)           an amount equal to 2 times the sum of (x) his then Base Salary; and

(iii)           Executive’s Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

(iv)           In addition to the foregoing lump-sum payment:

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(v)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits), for the 24-month period following the date of such termination; and

(vi)           all unvested stock options, restricted stock and other equity awards then held by Executive will fully vest and become exercisable as of the effective date of such termination.

For purposes of this Agreement, “Change in Control” shall mean the first to occur of:

(i) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as from time to time amended) of the beneficial ownership of securities of the Company possessing more than 50% of the total combined voting power of all outstanding securities of the Company;

(ii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;

(iii) a reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding directly or indirectly those securities immediately prior to such merger;

(iv) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company;

(v) the approval by the shareholders of a plan or proposal for the liquidation or dissolution of the Company; or

(vi) as a result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who are members of the board of directors of the Company before the Transaction will cease to constitute a majority of the board of directors of the Company or any successor thereto.

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Notwithstanding the foregoing, in no event will a Change in Control be considered to have occurred as a result of (i) the distribution by the Company to its stockholders of stock in an Affiliate; (ii) the contribution by the Company of some or all of its assets in a transaction governed by Section 351 of the Code; (iii) any inter-company sale or transfer of assets between the Company and any Affiliate; (iv) a dividend distribution by the Company; (v) a loan by the Company to any third party or an Affiliate; (vi) a Transaction, or series of Transactions, after which an Affiliate of the Company before such Transaction or series of Transactions, is either directly or indirectly in control of the Company thereafter; (vii) if the controlling shareholder is a trust, the acquisition, directly or indirectly, of the beneficial ownership of securities of the Company by any beneficiary of such trust if such beneficiary has a greater than 25% interest in such trust, or any descendants, spouse, estate or heirs of any such beneficiary, or a trust established for such beneficiary or for any descendants, spouse or heirs of such beneficiary; or (viii) the first underwritten primary public offering of the shares of common stock of the Company pursuant to an effective registration statement (other than a registration statement on Form S-4 or Form S-8 or any similar or successor form) under the Securities Act of 1933, as from time to time amended (an ISO). For purposes of this Agreement, “Affiliate” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the Company, including, without limitation, any member of an affiliated group of which the Company is a common parent corporation asprovided in Section 1504 of the Internal Revenue Code of 1986, as from time to time amended (the "Code").

For purposes of this Agreement, “CIC Good Reason” means any of:

(i) the material diminution of Executive’s position (including titles and reporting relationships), duties or responsibilities, excluding immaterial actions not taken in bad faith;

(ii) the breach by the Company of any of its material obligations under this Agreement, excluding immaterial actions (or failures or action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days after receipt of notice thereof given by Executive;

(iii) any requirement by the Company that Executive relocate to the Denver metropolitan area or any restriction on Executive’s ability to commute from California as set forth in Section 6 above.

(b)           Tax Indemnity.If it is determined that any payments and benefits that Executive receives from the Company or an Affiliate as a result of the Change in Control will result in him being subject to an excise tax under Section 4999 of the Code, then the Company will make a Gross-Up Payment (as defined below) to or on his behalf as and when any such determination is made; provided, Executive takes such action (other than waiving his right to any payments or benefits) as the Company reasonably requests under the circumstances to mitigate or challenge such tax. Any such determination will be made in accordance with Sections 280G and 4999 of the Code and any other applicable law, regulations, rulings or case law. If the Company reasonably requests that Executive take action to avoid assessment of, or to mitigate or challenge, any such tax or assessment, including restructuring his right to receive any payments or benefits to which he is entitled (other than under this paragraph), Executive agrees to consider such request (but in no event

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to waive or limit his right to any payments or benefits in a manner that would not be neutral to him from a financial point of view), and in connection with any such consideration, the Company will provide such information and advice as Executive may reasonably request and will pay for all reasonable expenses incurred in effecting his compliance with such request and any related taxes, fines, penalties, interest and other assessments. The term “Gross-Up Payment”means an additional amount such that he will, on an after-tax basis (including any income tax, payroll tax, further excise tax, interest, penalties and other assessments levied on any payment or benefit) receive the full amount of the payments and benefits for which the Company is liable, as if there was no excise tax under Section 4999 of the Code on any of his payments or benefits. To the extent permitted by applicable law, Executive agrees to return to the Company the excess of any Gross-Up Payment made to him over the payment that would have been sufficient to put Executive in such same after-tax position. Nothing in this Section 9 is intended to violate the Sarbanes-Oxley Act and to the extent that any advance or payment obligation hereunder would do so, such obligation will be modified so as to make the advance a nonrefundable payment to him and the payment obligation null and void. This Section 9 will continue in effect until Executive agrees that all of the Company's obligations to him under this Section 9 have been satisfied in full or a court of competent jurisdiction makes a final determination that the Company has no further obligations to him under this Section 9, whichever comes first.

10.           Release. Other than if Executive’s employment terminates by reason of death or disability, any payment or benefit that he is eligible to receive under Sections 8 or 9 will be contingent on Executive’s execution of a release prior to or concurrently with the provision of such payment or benefit. The payments or benefits Executive is eligible to receive under Sections 8 or 9 are in lieu of any termination payments or benefits which he might otherwise be eligible to receive under any standard severance policy maintained by the Company and/or its Affiliates.

11.           Covenants. In exchange for the remuneration outlined above, in addition to providing service to the Company as set forth in this Agreement, Executive agrees to the following covenants:

(a)           Confidentiality. Executive acknowledges that during his employment, he will occupy a position of trust and confidence. Accordingly, Executive agrees that following any termination of his employment, he will keep confidential any trade secrets and confidential or proprietary information of the Company and its affiliates which are now known to him or which hereafter may become known to Executive as a result of his employment or association with the Company and will not at any time directly or indirectly disclose any such information to any person, firm or corporation, or use the same in any way other than in connection with the business of the Company during, and at all times after, the termination of his employment. For purposes of this Agreement, “trade secrets and confidential or proprietary information”means information unique to the Company or an affiliate of the Company which has a significant business purpose and is not known or generally available from sources outside the Company or typical of industry practice, but will not include any of the foregoing (i) that becomes a matter of public record or is published in a newspaper, magazine or other periodical available to the general public, other than as a result of any act or omission of Executive, or (ii) that is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency; provided that Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order or confidential treatment.

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(b)           Non-Competition. Executive further covenants that during his employment and during the Restricted Period (as defined below), he will not, for himself or on behalf of any other person, partnership, company or corporation, in the United States of America, directly or indirectly, engage in, acquire any financial or beneficial interest in (except as provided in the next sentence), be employed by, or own, manage, operate or control any entity which is engaged in, any business in competition with any business of the Company or any subsidiary of the Company. Notwithstanding the preceding sentence, (i) Executive will not be prohibited from owning less than 1% of any publicly traded corporation, whether or not such corporation is in competition with the Company, and (ii) will not be prohibited during the Restricted Period from being employed by or providing services to a company with multiple product-lines and/or service lines where one or more of its product-lines or service-lines is in competition with the Company so long as Executive has no direct or indirect contact with the units(s) involved with the competitive products/services. For purposes of this Agreement, “Restricted Period” means the longer of (i) the 1-year period following termination of Executive’s employment, or (ii) in the event Executive receives payments pursuant to Sections 8(a), the 18-month period following termination of Executive’s employment, or (iii) in the event he receives payments pursuant to Section 9(a), the 2-year period following termination of Executive’s employment.

(c)           Non-Solicitation of Employees.Executive further covenants that during his employment and during the Restricted Period, Executive will not, directly or indirectly, hire, or cause to be hired by an employer with whom he may ultimately become associated, any employee of the Company or a subsidiary of the Company at the time of termination of Executive’s employment with the Company.

(d)           Equitable Relief and Other Remedies.Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of this Section 10 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, will be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available.

(e)           Reformation.If it is determined by a court of competent jurisdiction that any restriction in this Section 11 is excessive in duration or scope or is unreasonable or unenforceable under the law of that jurisdiction, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that jurisdiction.

(f)           Survival of Provisions.Without effect as to the survival of other provisions of this Agreement intended to survive the termination or expiration of Executive’s employment, the obligations contained in this Section 11 will survive the termination or expiration of Executive’s employment with the Company and will be fully enforceable thereafter.

12.           Indemnification. The Company will indemnify and make permitted advances to Executive to the fullest extent permitted by applicable law, if Executive is made or threatened to be made a party to a proceeding by reason of his being or having been an officer, director or employee of the Company or any of its subsidiaries or affiliates or his having served on any other enterprise as a director, officer or employee at the request of the Company. In addition, the Company will maintain insurance, at its expense, to protect Executive against any such expense, liability or loss to which Executive would be entitled to indemnification or reimbursement under the foregoing sentence.

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13.           Representations. By signing this Agreement, Executive represents that he is not subject to any employment agreement or non-competition agreement that could subject the Company or any of its affiliates to any future liability or obligation to any third party as a result of the execution of this Agreement and his employment by the Company.

14.           Timing and Form of Payments under Sections 8 and 9. All payments due to Executive under Sections 8 and 9 above shall be made no later than two and one-half months following his separation from service unless the following provisions pertaining to specified employees is applicable. Executive is likely to be a specified employee (as defined in Treas. Reg. §1.409A-l(i)) as of the date of a separation from service. All payments to be made to Executive under Sections 8 or 9 may not be made before the date that is six months after the date of separation from service (or, if earlier than the end of the six-month period, the date of Executive’s death). For this purpose, if Executive is not a specified employee as of the date of a separation from service, he will not be treated as subject to this requirement even if Executive would have become a specified employee if he had continued to provide services through the next specified employee effective date. Similarly, if Executive is treated as a specified employee as of the date of a separation from service, he will be subject to this requirement even if he would not have been treated as a specified employee after the next specified employee effective date had Executive continued providing services through the next specified employee effective date.

15.           Miscellaneous Provisions.

(a)           This Agreement may not be amended or terminated without the prior written consent of the Executive and the Company.

(b)           This Agreement may be executed in any number of counterparts, which together will constitute but one agreement.

(c)           This Agreement will be binding on and inure to the benefit of the Parties’ respective successors and permitted assigns and Executive’s heirs and other legal representatives. If Executive should die while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate. The rights and obligations described in this Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, the Company may assign its rights and obligations described in this Agreement without Executive’s consent upon the transfer of all or substantially all of the business and/or assets of the Company (whether by purchase, merger, consolidation or otherwise).

(d)           Subject to Section 10, all disputes arising under or related to this Agreement will be resolved by arbitration under the Commercial Arbitration Rules of the American Arbitration Association then in effect, with such arbitration to be conducted by the Judicial Arbitration Group, 1801 Blake Street, Suite 400, Denver, Colorado 80202, as the sole and exclusive remedy of either party.

(e)           All notices under this Agreement will be in writing and will be deemed effective when delivered in person, by email, by overnight mail, or 5 days after deposited in the U.S. mail, postage prepaid, for delivery and registered or certified mail, addressed to the respective party at the address or email address set forth below or to such other address or email address as may later be designated by the Parties.  Unless otherwise notified, notice will be sent to each party as follows:

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To Executive:

Robert Lamvik

750 W Hampden Ave Ste. 500

Englewood, CO 80110

e-mail: bob.lamvik@aegisidentity.com

To Company:

Aegis Identity Software, Inc.

990 S Broadway #420

Denver, CO 80209

Attn:  Ralph Armijo

Chairman of the Board

e-mail: ralph.armijo@aegisidentity.com

(f)           This Agreement will be governed by and construed and entered in accordance with the laws of the State of Colorado without reference to rules relating to conflict of laws.

(g)           This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements and understandings, both written and oral, between the Company (or its affiliates) and Executive with respect to the subject matter hereof.  This Agreement further supersedes any inconsistent provisions of any plan, policies or arrangements that would otherwise be applicable to Executive to the extent such provisions would limit any rights granted to Executive hereunder or expand any restrictions imposed upon Executive.  Notwithstanding the foregoing to the contrary, Executive’s prior agreements relating to his stock options identified in Section 5 and Executive’s Benefits identified in Section 6 above, shall remain in full force and effect.

IN WITNESS THEREOF, the Parties hereto have caused this Employment Agreement to be executed as of the Effective Date.

EMPLOYEE

By: /s/ Robert D. Lamvik

      Robert D. Lamvik

Aegis Identity Software, Inc.,

a Colorado corporation

By: /s/ J. Ralph Armijo

       J. Ralph Armijo, Executive Chairman of the Board

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into effective November 1, 2015 (the “Effective Date”), by and between Aegis Identity Software, Inc., a Colorado corporation (the “Company”), and Hadley Evans, Jr. (“Executive”) (collectively, referred to as the “Parties”).

RECITALS

WHEREAS, Executive is employed by the Company as its Chief Financial Officer;

WHEREAS, the Company recognizes the important role that Executive plays in the success and continued success of the Company;

WHEREAS, the Company and Executive recognize the need for this Employment Agreement to clarify the Executive’s and the Company’s respective rights and obligations and to assure the services of Executive for the Company; and

WHEREAS, Executive is willing and desires to continue to be employed by the Company, and the Company is willing to continue to employ Executive, upon the terms, covenants and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the Parties do hereby agree as follows:

1.           Employment. The Company hereby employs Executive as Chief Financial Officer of the Company.  Executive will have such duties, responsibilities, power and authority as assigned to him by the President of the Company (“President”) and the Audit Committee of the Company’s Board of Directors (“Audit Committee”).  During his employment by the Company, Executive will devote substantially all his entire working time, attention and energies to the business of the Company and will not, without the prior written consent of the Board undertake any other business activities.

2.           Term of Employment. The term of this Agreement shall be for an initial period of fourteen (14) months commencing on the Effective Date and subject to termination as provided in Sections 7 or 8, will end on December 31, 2016; provided, that on December 31, 2016 and each subsequent December 31st, the term of Executive’s employment will automatically be extended by an additional year unless the Company or Executive gives the other party written notice, at least 60 days prior to the expiration of the then existing term, that it or he does not want the term to be so extended.  Such employment period, as may be so extended, will hereinafter be referred to as the “Term.”

3.            Base Salary.  During the Term, the Company will pay Executive a minimum base salary at the annual rate of $150,000, payable in accordance with the Company's regular payroll practices. Upon the Company’s receipt of funding from an Initial Stock Offering (“ISO”), the Company will pay Executive a minimum base salary of $175,000, payable in accordance with the Company’s regular payroll practices.  The President will review Executive’s base salary annually and may, in his sole discretion, increase his base salary based on his performance and the Company's performance. Such base salary, as may be increased, will hereinafter be referred to as Executive’s “Base Salary.”

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4.           Quarterly Bonus. During the Term, Executive will be eligible to receive a quarterly bonus of $10,000 for each quarter beginning in 2016 and each year thereafter in which the Company experiences positive earnings before interest, taxes, depreciation and amortization (“EBITDA”) (the “Quarterly Bonus”). If earned, the Company shall pay Executive his Quarterly Bonus within 30 days of the end of each quarter.

5.           Existing Stock Options.  The Company expressly acknowledges that it will honor Executive’s previously awarded stock options, which are set forth as follows:

Options Awarded	Date Awarded	Vesting Date	Strike Price
200,000	8/3/2015	8/2/2017	$2.50

The terms and conditions of the stock options awards addressed above shall remain in full force and effect independent of any ISO.

6.           Other Benefits.

(a)           Employee Benefits. Executive will be eligible to participate in the employee benefit plans, programs and arrangements maintained by the Company.

(b)           Vacation. Executive will be entitled to not less than 15 days of paid vacation per calendar year in accordance with the Company's vacation policy as in effect from time to time.

(c)           Reimbursement. The Company will reimburse Executive for all reasonable expenses and disbursements in carrying out his duties and responsibilities under this Agreement in accordance with Company policy for executive officers as in effect from time to time.

(d)           Automobile Allowance. Upon the Company’s receipt of funding from an ISO, the Company will provide the Executive with an automobile during the Term of this Agreement.

7.           Termination of Employment (Non-Change in Control). Subject to Sections 9 and 13:

(a)           Resignation for Good Reason or Termination Without Cause. If Executive terminates his employment for Good Reason (as defined below) or he is terminated by the Company without Cause (as defined below) at any time during the Term, including by the Company giving him notice that it does not want the Term to be extended as provided in Section 1, Executive will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

(ii)           an amount equal to 1.5 times the sum of (x) his then Base Salary and (y) his Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

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(iii)           In addition to the foregoing lump-sum payment:

(iv)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits) for the 18 month period following the date of such termination;

(v)           outplacement services during the 6-month period following such termination provided by a service provider selected by the Company for the benefit of the Executive; and

(b)           Termination Other than for Good Reason or Termination for Cause. If Executive terminates his employment other than for Good Reason (including if Executive gives notice that he does not want to extend the Term as provided in Section 1) or if Executive is terminated by the Company for Cause, Executive will receive no further payments, compensation or benefits under this Agreement, except he will be eligible to receive, immediately upon the effectiveness of such termination, amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing prior to the effectiveness of Executive’s termination and such compensation or benefits that have been earned and will become payable without regard to future services.

(c)           Death, Disability or Retirement.If Executive’s employment terminates by reason of death, disability or retirement (as defined in the Company's equity compensation plan then in effect), Executive or his beneficiaries will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination; and

(ii)           Executive’s Quarterly Bonus for such year, prorated for the number of days that have elapsed during such year.

If Executive’s employment terminates by reason of Executive’s retirement, then in addition to benefits to which Executive may be entitled pursuant to this Agreement, his entitlements in connection with a termination of his employment pursuant to his retirement under the Company's otherwise applicable employee benefit and retirement plans and programs (including without limitation under the Company's equity compensation plans), will be determined in accordance with such applicable plans and programs.

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For purposes of this Agreement, “Good Reason” means the Company's breach of any of its material obligations under this Agreement, excluding immaterial actions (or failures of action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days of receipt of notice thereof given by Executive. For purposes of thisAgreement, “Cause” means any of the following: (i) conviction of or pleading guilty to a felony, (ii) commission of intentional acts of misconduct that materially impair the goodwill or business of the Company or cause material damage to its property, goodwill or business, or (iii) willful refusal or willful failure to perform Executive’s material duties under this Agreement after written demand that Executive does so. Termination of Executive’s employment shall not be deemed to be for Cause hereunder unless and until (A) written notice has been delivered to Executive by the Company that specifically identifies the Cause, which is the basis of the termination and, if the Cause is capable of cure, Executive has failed to cure or remedy the act or omission so identified within 14 calendar days after written notice of such breach. For purposes of this provision, no act or failure to act on Executive’s part shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause without reasonable notice to Executive setting forth the reasons, facts and circumstances for the Company's intention to terminate for Cause and an opportunity for Executive, together with his counsel, to be heard before the Board.

8.           Change in Control. Subject to Sections 9 and 13:

(a)           General.If there is a Change in Control (as defined below) and, within 18 months of such Change in Control, Executive terminates his employment for CIC Good Reason (as defined below) or he is terminated by the Company without Cause, Executive will receive a lump-sum cash payment equal to the sum of:

(i)           any earned but unpaid Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits owing under or in accordance with the Company's otherwise applicable employee benefit plans or programs, including retirement plans and programs) accrued or owing through the date of termination;

(ii)           an amount equal to 2 times the sum of (x) his then Base Salary; and

(iii)           Executive’s Quarterly Bonuses for the fiscal year of such termination, prorated for the number of days that have elapsed during such year.

In addition to the foregoing lump-sum payment:

(iv)           the Company will continue Executive’s participation in the Company's medical, dental and vision plans (or if Executive is ineligible to continue to participate under the terms thereof, in substitute arrangements adopted by the Company providing substantially comparable benefits), for the 24-month period following the date of such termination; and

(v)           all unvested stock options, restricted stock and other equity awards then held by Executive will fully vest and become exercisable as of the effective date of such termination.

For purposes of this Agreement, “Change in Control” shall mean the first to occur of:

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(i) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as from time to time amended) of the beneficial ownership of securities of the Company possessing more than 50% of the total combined voting power of all outstanding securities of the Company;

(ii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;

(iii) a reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding directly or indirectly those securities immediately prior to such merger;

(iv) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company;

(v) the approval by the shareholders of a plan or proposal for the liquidation or dissolution of the Company; or

(vi) as a result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who are members of the board of directors of the Company before the Transaction will cease to constitute a majority of the board of directors of the Company or any successor thereto.

Notwithstanding the foregoing, in no event will a Change in Control be considered to have occurred as a result of (i) the distribution by the Company to its stockholders of stock in an Affiliate; (ii) the contribution by the Company of some or all of its assets in a transaction governed by Section 351 of the Code; (iii) any inter-company sale or transfer of assets between the Company and any Affiliate; (iv) a dividend distribution by the Company; (v) a loan by the Company to any third party or an Affiliate; (vi) a Transaction, or series of Transactions, after which an Affiliate of the Company before such Transaction or series of Transactions, is either directly or indirectly in control of the Company thereafter; (vii) if the controlling shareholder is a trust, the acquisition, directly or indirectly, of the beneficial ownership of securities of the Company by any beneficiary of such trust if such beneficiary has a greater than 25% interest in such trust, or any descendants, spouse, estate or heirs of any such beneficiary, or a trust established for such beneficiary or for any descendants, spouse or heirs of such beneficiary; or (viii) the first underwritten primary public offering of the shares of common stock of the Company pursuant to an effective registration statement (other than a registration statement on Form S-4 or Form S-8 or any similar or successor form) under the Securities Act of 1933, as from time to time amended (an ISO). For purposes of this Agreement, “Affiliate” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the Company, including, without limitation, any member of an affiliated group of which the Company is a common parent corporation asprovided in Section 1504 of the Internal Revenue Code of 1986, as from time to time amended (the "Code").

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For purposes of this Agreement, “CIC Good Reason” means any of:

(i) the material diminution of Executive’s position (including titles and reporting relationships), duties or responsibilities, excluding immaterial actions not taken in bad faith;

(ii) the breach by the Company of any of its material obligations under this Agreement, excluding immaterial actions (or failures or action) not taken (or omitted to be taken) in bad faith and which, if capable of being remedied, are remedied by the Company within 30 days after receipt of notice thereof given by Executive;

(iii) any requirement by the Company that Executive relocate to the Denver metropolitan area or any restriction on Executive’s ability to commute from California as set forth in Section 6 above.

(b)           Tax Indemnity.If it is determined that any payments and benefits that Executive receives from the Company or an Affiliate as a result of the Change in Control will result in him being subject to an excise tax under Section 4999 of the Code, then the Company will make a Gross-Up Payment (as defined below) to or on his behalf as and when any such determination is made; provided, Executive takes such action (other than waiving his right to any payments or benefits) as the Company reasonably requests under the circumstances to mitigate or challenge such tax. Any such determination will be made in accordance with Sections 280G and 4999 of the Code and any other applicable law, regulations, rulings or case law. If the Company reasonably requests that Executive take action to avoid assessment of, or to mitigate or challenge, any such tax or assessment, including restructuring his right to receive any payments or benefits to which he is entitled (other than under this paragraph), Executive agrees to consider such request (but in no event to waive or limit his right to any payments or benefits in a manner that would not be neutral to him from a financial point of view), and in connection with any such consideration, the Company will provide such information and advice as Executive may reasonably request and will pay for all reasonable expenses incurred in effecting his compliance with such request and any related taxes, fines, penalties, interest and other assessments. The term “Gross-Up Payment”means an additional amount such that he will, on an after-tax basis (including any income tax, payroll tax, further excise tax, interest, penalties and other assessments levied on any payment or benefit) receive the full amount of the payments and benefits for which the Company is liable, as if there was no excise tax under Section 4999 of the Code on any of his payments or benefits. To the extent permitted by applicable law, Executive agrees to return to the Company the excess of any Gross-Up Payment made to him over the payment that would have been sufficient to put Executive in such same after-tax position. Nothing in this Section 10 is intended to violate the Sarbanes-Oxley Act and to the extent that any advance or payment obligation hereunder would do so, such obligation will be modified so as to make the advance a nonrefundable payment to him and the payment obligation null and void. This Section 9 will continue in effect until Executive agrees that all of the Company's obligations to him under this Section 9 have been satisfied in full or a court of competent jurisdiction makes a final determination that the Company has no further obligations to him under this Section 10, whichever comes first.

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9.           Release. Other than if Executive’s employment terminates by reason of death or disability, any payment or benefit that he is eligible to receive under Sections 7 or 8 will be contingent on Executive’s execution of a release prior to or concurrently with the provision of such payment or benefit. The payments or benefits Executive is eligible to receive under Sections 7 or 8 are in lieu of any termination payments or benefits which he might otherwise be eligible to receive under any standard severance policy maintained by the Company and/or its Affiliates.

10.           Covenants. In exchange for the remuneration outlined above, in addition to providing service to the Company as set forth in this Agreement, Executive agrees to the following covenants:

(a)           Confidentiality. Executive acknowledges that during his employment, he will occupy a position of trust and confidence. Accordingly, Executive agrees that following any termination of his employment, he will keep confidential any trade secrets and confidential or proprietary information of the Company and its affiliates which are now known to him or which hereafter may become known to Executive as a result of his employment or association with the Company and will not at any time directly or indirectly disclose any such information to any person, firm or corporation, or use the same in any way other than in connection with the business of the Company during, and at all times after, the termination of his employment. For purposes of this Agreement, “trade secrets and confidential or proprietary information”means information unique to the Company or an affiliate of the Company which has a significant business purpose and is not known or generally available from sources outside the Company or typical of industry practice, but will not include any of the foregoing (i) that becomes a matter of public record or is published in a newspaper, magazine or other periodical available to the general public, other than as a result of any act or omission of Executive, or (ii) that is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency; provided that Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order or confidential treatment.

(b)            Non-Competition. Executive further covenants that during his employment and during the Restricted Period (as defined below), he will not, for himself or on behalf of any other person, partnership, company or corporation, in the United States of America, directly or indirectly, engage in, acquire any financial or beneficial interest in (except as provided in the next sentence), be employed by, or own, manage, operate or control any entity which is engaged in, any business in competition with any business of the Company or any subsidiary of the Company. Notwithstanding the preceding sentence, (i) Executive will not be prohibited from owning less than 1% of any publicly traded corporation, whether or not such corporation is in competition with the Company, and (ii) will not be prohibited during the Restricted Period from being employed by or providing services to a company with multiple product-lines and/or service lines where one or more of its product-lines or service-lines is in competition with the Company so long as Executive has no direct or indirect contact with the units(s) involved with the competitive products/services. For purposes of this Agreement, “Restricted Period” means the longer of (i) the 1-year period following termination of Executive’s employment, or (ii) in the event Executive receives payments pursuant to Sections 7(a), the 18-month period following termination of Executive’s employment, or (iii) in the event he receives payments pursuant to Section 8(a), the 2-year period following termination of Executive’s employment.

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(c)           Non-Solicitation of Employees.Executive further covenants that during his employment and during the Restricted Period, Executive will not, directly or indirectly, hire, or cause to be hired by an employer with whom he may ultimately become associated, any employee of the Company or a subsidiary of the Company at the time of termination of Executive’s employment with the Company.

(d)           Equitable Relief and Other Remedies.Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of this Section 10 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, will be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available.

(e)           Reformation.If it is determined by a court of competent jurisdiction that any restriction in this Section 10 is excessive in duration or scope or is unreasonable or unenforceable under the law of that jurisdiction, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that jurisdiction.

(f)           Survival of Provisions.Without effect as to the survival of other provisions of this Agreement intended to survive the termination or expiration of Executive’s employment, the obligations contained in this Section 11 will survive the termination or expiration of Executive’s employment with the Company and will be fully enforceable thereafter.

11.           Indemnification. The Company will indemnify and make permitted advances to Executive to the fullest extent permitted by applicable law, if Executive is made or threatened to be made a party to a proceeding by reason of his being or having been an officer, director or employee of the Company or any of its subsidiaries or affiliates or his having served on any other enterprise as a director, officer or employee at the request of the Company. In addition, the Company will maintain insurance, at its expense, to protect Executive against any such expense, liability or loss to which Executive would be entitled to indemnification or reimbursement under the foregoing sentence.

12.            Representations. By signing this Agreement, Executive represents that he is not subject to any employment agreement or non-competition agreement that could subject the Company or any of its affiliates to any future liability or obligation to any third party as a result of the execution of this Agreement and his employment by the Company.

13.           Timing and Form of Payments under Sections 8 and 9. All payments due to Executive under Sections 7 and 8 above shall be made no later than two and one-half months following his separation from service unless the following provisions pertaining to specified employees is applicable. Executive is likely to be a specified employee (as defined in Treas. Reg. §1.409A-l(i)) as of the date of a separation from service. All payments to be made to Executive under Sections 7 or 8 may not be made before the date that is six months after the date of separation from service (or, if earlier than the end of the six-month period, the date of Executive’s death). For this purpose, if Executive is not a specified employee as of the date of a separation from service, he will not be treated as subject to this requirement even if Executive would have become a specified employee if he had continued to provide services through the next specified employee effective date. Similarly, if Executive is treated as a specified employee as of the date of a separation from service, he will be subject to this requirement even if he would not have been treated as a specified employee after the next specified employee effective date had Executive continued providing services through the next specified employee effective date.

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14.           Miscellaneous Provisions.

(a)           This Agreement may not be amended or terminated without the prior written consent of the Executive and the Company.

(b)           This Agreement may be executed in any number of counterparts, which together will constitute but one agreement.

(c)           This Agreement will be binding on and inure to the benefit of the Parties’ respective successors and permitted assigns and Executive’s heirs and other legal representatives. If Executive should die while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate. The rights and obligations described in this Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, the Company may assign its rights and obligations described in this Agreement without Executive’s consent upon the transfer of all or substantially all of the business and/or assets of the Company (whether by purchase, merger, consolidation or otherwise).

(d)           Subject to Section 10, all disputes arising under or related to this Agreement will be resolved by arbitration under the Commercial Arbitration Rules of the American Arbitration Association then in effect, with such arbitration to be conducted by the Judicial Arbitration Group, 1801 Blake Street, Suite 400, Denver, Colorado 80202, as the sole and exclusive remedy of either party.

(e)           All notices under this Agreement will be in writing and will be deemed effective when delivered in person, by email, by overnight mail, or 5 days after deposited in the U.S. mail, postage prepaid, for delivery and registered or certified mail, addressed to the respective party at the address or email address set forth below or to such other address or email address as may later be designated by the Parties.  Unless otherwise notified, notice will be sent to each party as follows:

To Executive:

Hadley Evans, Jr.

750 W Hampden Ave Ste. 120

Englewood, CO 80110

e-mail: hadley.evans@aegisidentity.com

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To Company:

Aegis Identity Software, Inc.

750 W Hampden Ave Ste. 120

Englewood, CO 80110

Attn:  Robert Lamvik

President

e-mail: bob.lamvik@aegisidentity.com

(f)           This Agreement will be governed by and construed and entered in accordance with the laws of the State of Colorado without reference to rules relating to conflict of laws.

(g)           This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereto and supersedes all prior agreements and understandings, both written and oral, between the Company (or its affiliates) and Executive with respect to the subject matter hereof.  This Agreement further supersedes any inconsistent provisions of any plan, policies or arrangements that would otherwise be applicable to Executive to the extent such provisions would limit any rights granted to Executive hereunder or expand any restrictions imposed upon Executive.  Notwithstanding the foregoing to the contrary, Executive’s prior agreements relating to his stock options identified in Section 5 and Executive’s Benefits identified in Section 6 above, shall remain in full force and effect.

IN WITNESS THEREOF, the Parties hereto have caused this Employment Agreement to be executed as of the Effective Date.

EMPLOYEE

By: /s/ Hadley Evans, Jr.

      Hadley Evans, Jr.

Aegis Identity Software, Inc.,

a Colorado corporation

By: /s/ Robert D. Lamvik

       Robert D. Lamvik, President and CEO

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EX-10.3

Exhibit 10.3

AEGIS IDENTITY SOFTWARE, INC.

INCENTIVE STOCK OPTION PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE

1.1           Establishment.  Aegis Identity Software, Inc., a Colorado corporation (the "Company"), hereby establishes a stock option plan for key employees providing material services to the Company or any subsidiary of the Company as described herein, which shall be known as the "INCENTIVE STOCK OPTION PLAN" (the "Plan").  It is intended that the options issued to employees pursuant to the Plan constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code.  The Company shall enter into stock option agreements with recipients of options pursuant to the Plan.

1.2           Purpose.  The purpose of the Plan is to enhance shareholder value by attracting, retaining and motivating key employees of the Company and of any subsidiary of the Company by providing them with a means to acquire a proprietary interest in the Company's success.

ARTICLE II

DEFINITIONS

2.1           Definitions.  Whenever used herein, the following terms shall have the respective meanings set forth below, unless the context clearly requires otherwise, and when such meaning is intended, the term shall be capitalized.

(a)           "Board" means the Board of Directors of the Company.

(b)           "Code" means the Internal Revenue Code of 1986, as amended.

(c)           "Committee" shall mean the Committee provided for by Article IV hereof, which may be created at the discretion of the Board.

(d)           "Company" means Aegis Identity Software, Inc., a Colorado corporation.

(e)           "Date of Exercise" means the date the Company receives notice, by an Optionee, of the exercise of an Option pursuant to Section 8.1 of the Plan.  Such notice shall indicate the number of shares of Stock the Optionee intends to acquire pursuant to exercise of the Option.

(f)           "Employee" means any person, including an officer or director of the Company or a Subsidiary Corporation, who is employed by the Company or a Subsidiary Corporation.

(g)           "Fair Market Value" means the fair market value of Stock upon which an option is granted under the Plan, determined as follows:

(i)           If the Stock is listed on a national secu­rities exchange or admitted to unlisted trading privileges on such exchange, the Fair Market Value shall be the last re­ported sale price of the Stock on the composite tape of such exchange on the date of issuance of this option, or if such day is not a normal trading day, the last trading day prior to the date of issuance of this option, and if no such sale is made on such day, the Fair Market Value shall be the average closing bid and asked prices for such day on the composite tape of such exchange; or

(ii)           If the Stock is not so listed or admitted to unlisted trading privileges, the Fair Market Value shall be the mean of the last reported bid and asked prices reported by the National Association of Securities Dealers Quotation System (or, if not so quoted on NASDAQ, by the National Quotation Bureau, Inc.) on the last trading day prior to the date of issuance of the option; or

(iii)           If the Stock is not so listed or admitted to unlisted trading privileges and its prices are not reported on NASDQ or otherwise, then the Board shall make a good faith determination of the Fair Market Value.

(h)           "Incentive Stock Option" means an Option granted under the Plan which is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Code.

(i)           "Option" means the right, granted under the Plan, to purchase Stock of the Company at the option price for a specified period of time.

(j)           "Optionee" means an Employee holding an Option under the Plan.

(k)           "Parent Corporation" shall have the meaning set forth in Section 424(e) of the Code with the Company being treated as the employer corporation for purposes of this definition.

(l)           "Subsidiary Corporation" shall have the meaning set forth in Section 424(f) of the Code with the Company being treated as the employer corporation for purposes of this definition.

(m)           "Significant Shareholder" means an individual who, within the meaning of Section 422(b)(6) of the Code, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Parent Corporation or Subsidiary Corporation of the Company.  In determining whether an individual is a Significant Shareholder, an individual shall be treated as owning stock owned by certain relatives of the individual and certain stock owned by corporations in which the individual is a shareholder, partnerships in which the individual is a partner, and estates or trusts of which the individual is a beneficiary, all as provided in Section 424(d) of the Code.

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(n)           "Stock" means the $.001 par value common stock of the Company.

2.2           Gender and Number.  Except when otherwise indicated by the context, any masculine terminology when used in the Plan also shall include the feminine gender, and the definition of any term herein in the singular also shall include the plural.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

All Employees are eligible to participate in the Plan and receive Incentive Stock Options under the Plan.  Optionees in the Plan shall be selected by the Board, in its sole discretion, from among those Employees who, in the opinion of the Board, are in a position to contribute materially to the Company's continued growth and development and to its long-term financial success.

ARTICLE IV

ADMINISTRATION

The Board shall be responsible for administering the Plan.

(a)           The Board is authorized to interpret the Plan; to prescribe, amend, and rescind rules and regulations relating to the Plan; to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company; and to make all other determinations necessary or advisable for the administration of the Plan.  Determinations, interpretations, or other actions made or taken by the Board with respect to the Plan and Options granted under the Plan shall be final and binding and conclusive for all purposes and upon all persons.

(b)           At the discretion of the Board the Plan may be administered by a Committee constituted in such a manner as to satisfy the applicable laws (the "Committee").  The Committee shall have full power and authority, subject to the limitations of the Plan and any limitations imposed by the Board, to construe, interpret and administer the Plan and to make determinations which shall be final, conclusive and binding upon all persons, including any persons having any interests in any Options which may be granted under the Plan, and, by resolution or resolutions to provide for the creation and issuance of any Option, to fix the terms upon which, the time or times at or within which, and the price or prices at which any shares of Stock may be purchased from the Company upon the exercise of an Option.  Such terms, time or times and price or prices shall, in every case, be set forth or incorporated by reference in the instrument or instruments evidencing an Option, and shall be consistent with the provisions of the Plan.

(c)           Where a Committee has been created by the Board pursuant to this Article IV, references in the Plan to actions to be taken by the Board shall be deemed to refer to the Committee as well, except where limited by the Plan or by the Board.

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(d)           No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted under it.

ARTICLE V

STOCK SUBJECT TO THE PLAN

5.1           Number.  The total number of shares of Stock hereby made available and reserved for issuance under the Plan upon exercise of Options shall be 2,500,000 shares.1  Notwithstanding anything to the contrary contained in the foregoing, to the extent that options are issued under any other current Stock Option Plan adopted by the Company, the shares of Stock reserved for issuance pursuant to Options granted under the Plan shall be reduced.  The aggregate number of shares of Stock available under the Plan shall be subject to adjustment as provided in Section 5.3.

5.2           Unused Stock.  If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the Plan shall have terminated) become available for other Options under the Plan.

5.3           Adjustment in Capitalization.  In the event of any change in the outstanding shares of Stock by reason of a stock dividend or split, recapitalization, reclassification, or other similar capital change, the aggregate number of shares of Stock set forth in Section 5.1 shall be appropriately adjusted by the Board, whose determination shall be conclusive.  In any such case, the number and kind of shares of Stock that are subject to any Option and the Option price per share shall be proportionately and appropriately adjusted without any change in the aggregate Option price to be paid therefor upon exercise of the Option.

ARTICLE VI

DURATION OF THE PLAN

Subject to approval of shareholders, the Plan shall be in effect for ten years from the date of its adoption by the Board.  Any Options outstanding at the end of such period shall remain in effect in accordance with their terms.  The Plan shall terminate before the end of such period if all Stock subject to it has been purchased pursuant to the exercise of Options granted under the Plan.

ARTICLE VII

TERMS OF STOCK OPTIONS

7.1           Grant of Options.  Subject to Section 5.1, Options may be granted to Employees at any time and from time to time as determined by the Board.  The Board shall have complete discretion in determining the terms and conditions and number of Options granted to each Optionee.  In making such determinations, the Board may take into account the nature of services rendered by such Employees, their present and potential contributions to the Company and its Subsidiary Corporations, and such other factors as the Board in its discretion shall deem relevant.  The Board is expressly given the authority to issue amended or replacement Options with respect to shares of Stock subject to an Option previously granted hereunder, subject to the provisions of Section 7.7 which prohibit the repricing of any outstanding Option after the grant thereof to provide for a lower Option exercise price without shareholder approval.  An amended Option amends the terms of an Option previously granted and thereby supersedes the previous Option.  A replacement Option is similar to a new Option granted hereunder except that it provides that it shall be forfeited to the extent that a previously granted Option is exercised, or except that its issuance is conditioned upon the termination of a previously granted Option.

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1 In February 2015, the Incentive Stock Option Plan was amended to increase the number of shares available for issuance by 2,500,000. The total number of shares available for issuance is now 5,000,000.

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7.2           No Tandem Options.  Where an Option granted under the Plan is intended to be an Incentive Stock Option, the Option shall not contain terms pursuant to which the exercise of the Option would affect the Optionee's right to exercise another Option, or vice versa, such that the Option intended to be an Incentive Stock Option would be deemed a tandem stock option within the meaning of the regulations under Section 422 of the Code.

7.3           Option Agreement; Terms and Conditions to Apply Unless Otherwise Specified.  As determined by the Board on the date of grant, each Option shall be evidenced by an Option agreement (the "Option Agreement") that includes the non-transferability provisions required by Section 10.2 hereof and that specifies: the Option price; the duration of the Option; the number of shares of Stock to which the Option applies; such vesting or exercisability restrictions which the Board may impose and any other terms or conditions which the Board may impose.  All such terms and conditions shall be determined by the Board at the time of grant of the Option.

(a)           If not otherwise specified by the Board, the following terms and conditions shall apply to Options granted under the Plan:

(i)           Term.  The duration of the Option shall be for ten years from the date of grant.

(ii)           Exercise of Option.  Unless an Option is terminated as provided hereunder, an Optionee may exercise an Option pursuant to a vesting and exercisability schedule as determined by the Board, which vesting and exercisability schedule shall provide that an Option held by an Optionee who terminates his employment with the Company  for reasons other than death, permanent and total disability, or termination of employment by the Company for cause shall upon such termination become exercisable to the extent vested immediately prior to such termination.

(iii)           Termination.  Each Option granted pursuant to the Plan shall expire upon the earliest to occur of:

(A)           The date set forth in such Option, not to exceed ten years from the date of grant (five years in the case of a Significant Shareholder);

(B)           The completion of the merger or sale of substantially all of the Stock or assets of the Company with or to another company in a transaction in which the Company is not the survivor, except for the merger of the Company into a wholly-owned subsidiary and, provided that the Company shall have given the Optionee at least thirty days' prior written notice of its intent to enter into such merger or sale (and the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of a reverse triangular merger);

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(C)           Ninety days following the termination of the employment of an Optionee, except for termination for cause by the Company or termination because of the Optionee's death or disability (in which event of termination of employment due to the Optionee's death or disability, the Option shall expire one year following the termination of employment of an Optionee); or

(D)           Immediately upon the termination of the employment of an Optionee by the Company for cause.

(iv)           Acceleration.  An Option shall become fully vested and exercisable irrespective of its other provisions (A) immediately prior to the completion of the merger or sale of substantially all of the stock or assets of Company in a transaction in which the Company is not the survivor, except for the merger of the Company into a wholly-owned subsidiary (and the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of a reverse triangular merger); or (B) upon termination of the Optionee's employment with the Company or a Subsidiary Corporation because of death, disability or normal retirement upon reaching the age of sixty-five.

(v)           Nontransferability.  All Options granted under the Plan shall be nontransferable by the Optionee, other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by the Optionee.

(b)           The Board shall be free to specify terms and conditions other than and in addition to those set forth above, in its discretion.

(c)           All Option Agreements shall incorporate the provisions of the Plan by reference.

7.4           Option Price.  No Option granted pursuant to the Plan shall have an Option price that is less than the Fair Market Value of Stock on the date the Option is granted.  Incentive Stock Options granted to Significant Shareholders shall have an Option price of not less than 110% of the Fair Market Value of Stock on the date of grant.  The Option exercise price shall be subject to adjustment as provided in Section 5.3 above.

7.5           $100,000 Per Year Limitation.  To the extent that the aggregate fair market value of Stock (determined as of the time the option with respect to such Stock is granted) with respect to which incentive stock options are exercisable for the first time by any Optionee during any calendar year (under this Plan and all other plans of the Company and any Parent Company or Subsidiary Corporation) exceeds $100,000, such options shall be treated as options which are not incentive stock options.  The foregoing provision shall be applied by taking options into account in the order in which they were granted.

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7.6           Payment.  Payment for all shares of Stock shall be made at the time that an Option, or any part thereof, is exercised, and no shares shall be issued until full payment therefor has been made.  Payment shall be made (i) in cash, or (ii) if acceptable to the Board, in Stock or in some other form; provided, however, in the case of an Incentive Stock Option, that such other form of payment does not prevent the Option from qualifying for treatment as an "incentive stock option" within the meaning of the Code.

7.7           No Repricing Without Shareholder Approval.  No outstanding Option shall be repriced after the grant thereof to provide for a lower Option exercise price, whether through adjustment or amendment to the Option exercise price, issuance of an amended Option, cancellation of the Option and issuance of a replacement Option, or by any other means with substantially the same economic effect, without approval of the shareholders.

ARTICLE VIII

WRITTEN NOTICE, ISSUANCE OF STOCK

CERTIFICATES, SHAREHOLDER PRIVILEGES

8.1           Written Notice.  An Optionee wishing to exercise an Option shall give written notice to the Company, in the form and manner prescribed by the Board.  Full payment for the shares of Stock to be acquired pursuant to the exercise of the Option must accompany the written notice.

8.2           Issuance of Stock Certificates.  As soon as practicable after the receipt of written notice and payment, the Company shall deliver to the Optionee a certificate or certificates for the requisite number of shares of Stock.

8.3           Privileges of a Shareholder.  An Optionee or any other person entitled to exercise an Option under the Option Agreement shall not have shareholder privileges with respect to any Stock covered by the Option until the date of issuance of a stock certificate for such Stock.

ARTICLE IX

TERMINATION OF EMPLOYMENT OR SERVICES

9.1           Death or Disability.  Subject to any prior partial exercise of the Option, if an Optionee's employment terminates by reason of Optionee's death or permanent and total disability, the Option may be exercised up to one hundred percent of the shares originally subject to the Option at any time prior to the expiration date of the Option or within 12 months after the date of such death or disability, whichever period is the shorter, by the person or persons entitled to do so under the Optionee's will or, if the Optionee shall fail to make a testamentary disposition of an Option or shall die intestate, the Optionee's legal representative or representatives.

9.2           Termination other than for Cause or Due to Death.  In the event of an Optionee's termination of employment other than by reason of death or permanent and total disability, the Optionee may exercise such portion of his Option as was vested and exercisable by him at the date of such termination (the "Termination Date") at any time within ninety days of the Termination Date.

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In any event, the Option cannot be exercised after the expiration of the term of the Option.  Options not exercised within the applicable period specified above shall terminate.

(a)           In the case of an Employee, a change of duties or position within the Company or an assignment of employment in a Subsidiary Corporation or Parent Corporation of the Company, if any, or from such a Corporation to the Company, shall not be considered a termination of employment for purposes of the Plan.

(b)           The Option Agreements may contain such provisions as the Board shall approve with reference to the effect of approved leaves of absence upon termination of employment.

9.3           Termination for Cause.  In the event of an Optionee's termination of employment, which termination is by the Company or a Subsidiary Corporation for cause, any Option or Options held by him under the Plan, to the extent not exercised before such termination, shall terminate upon notice of termination for cause.

ARTICLE X

RIGHTS OF OPTIONEES

10.1           Service.  Nothing in the Plan shall interfere with or limit in any way the right of the Company or a Subsidiary Corporation to terminate any Employee's employment at any time, nor confer upon any Employee any right to continue in the employ of the Company or a Subsidiary Corporation.

10.2           Non-transferability.  All Options granted under the Plan shall be nontransferable by the Optionee, other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee's lifetime only by the Optionee.

ARTICLE XI

OPTIONEE-EMPLOYEE'S TRANSFER

OR LEAVE OF ABSENCE

For purposes of the Plan:

(a)           A transfer of an Optionee who is an Employee from the Company to a Subsidiary Corporation or Parent Corporation, or from one such Corporation to another, or

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(b)           A leave of absence for such an Optionee (i) which is duly authorized in writing by the Company or a Subsidiary Corporation, and (ii) if the Optionee holds an Incentive Stock Option, which qualifies under the applicable regulations under the Code which apply in the case of incentive stock options,

shall not be deemed a termination of employment.  However, under no circumstances may an Optionee exercise an Option during any leave of absence, unless authorized by the Board.

ARTICLE XII

AMENDMENT, MODIFICATION, AND

TERMINATION OF THE PLAN

(a)           The Board may at any time terminate and from time to time may amend or modify the Plan, provided, however, that no such action of the Board, without approval of the shareholders, may:

(i)           increase the total amount of Stock which may be purchased through Options granted under the Plan, except as provided in Article V;

(ii)           change the class of Employees eligible to receive Options;

(iii)           change the provisions of the Plan to permit the repricing of any outstanding Option after the grant thereof to provide for a lower Option exercise price without shareholder approval; or

(iv)           otherwise amend or modify the Plan where approval of the shareholders is required by any law or regulation governing the Company.

(b)           No amendment, modification, or termination of the Plan shall in any manner adversely affect any outstanding Option under the Plan without the consent of the Optionee holding the Option.

ARTICLE XIII

ACQUISITION, MERGER OR LIQUIDATION

13.1           Acquisition.

(a)           In the event that an acquisition occurs with respect to the Company, the Company shall have the option, but not the obligation, to cancel Options outstanding as of the effective date of such acquisition, whether or not such Options are then exercisable, in return for payment to the Optionees of an amount equal to a reasonable estimate of an amount (hereinafter the "Spread"), determined by the Board, equal to the difference between the net amount per share payable in the acquisition or as a result of the acquisition, less the exercise price of the Option.  In estimating the Spread, appropriate adjustments to give effect to the existence of the Options shall be made, such as deeming the Options to have been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise of the Options as being outstanding in determining the net amount per share.

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(b)           For purposes of this section, an "acquisition" shall mean any transaction in which substantially all of the Company's assets are acquired or in which a controlling amount of the Company's outstanding shares are acquired, in each case by a single person or entity or an affiliated group of persons and entities.  For purposes of this section, a controlling amount shall mean more than 50% of the issued and outstanding shares of Stock of the Company.  The Company shall have the above option to cancel Options regardless of how the acquisition is effectuated, whether by direct purchase, through a merger or similar corporate transaction, or otherwise.  In cases where the acquisition consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable with respect to shares upon a distribution and liquidation by the Company after giving effect to expenses and charges, including but not limited to taxes, payable by the Company before the liquidation can be completed.

(c)           Where the Company does not exercise its option under this Section 13.1 the remaining provisions of this Article XIII shall apply, to the extent applicable.

13.2           Merger or Consolidation.  If the Company shall be the surviving corporation in any merger or consolidation, any Option granted hereunder shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to the Option would have been entitled in such merger or consolidation, provided that the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of a reverse triangular merger.

13.3           Other Transactions.  A dissolution or a liquidation of the Company or a merger and consolidation in which the Company is not the surviving corporation (the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of a reverse triangular merger) shall cause every Option outstanding hereunder to terminate as of the effective date of such dissolution, liquidation, merger or consolidation.  However, the Optionee either (i) shall be offered a firm commitment whereby the resulting or surviving corporation in a merger or consolidation will tender to the Optionee an option (the "Substitute Option") to purchase its shares on terms and conditions both as to number of shares and otherwise, which will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder granted by the Company, or (ii) shall have the right immediately prior to such dissolution, liquidation, merger, or consolidation to exercise any unexercised Options whether or not then vested, subject to the provisions of the Plan.  The Board shall have absolute and uncontrolled discretion to determine whether the Optionee has been offered a firm commitment and whether the tendered Substitute Option will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder.  In any event, any Substitute Option for an Incentive Stock Option shall comply with the requirements of Code § 424(a).

ARTICLE XIV

SECURITIES REGISTRATION

14.1           Securities Registration.  In the event that the Company shall deem it necessary or desirable to register under the Securities Act of 1933, as amended, or any other applicable statute, any Options or any Stock with respect to which an Option may be or shall have been granted or exercised, or to qualify any such Options or Stock under the Securities Act of 1933, as amended, or any other statute, then the Optionee shall cooperate with the Company and take such action as is necessary to permit registration or qualification of such Options or Stock.

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14.2           Representations.  Unless the Company has determined that the following representation is unnecessary, each person exercising an Option under the Plan may be required by the Company, as a condition to the issuance of the shares pursuant to exercise of the Option, to make a representation in writing (i) that he is acquiring such shares for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof within the meaning of the Securities Act of 1933, (ii) that before any transfer in connection with the resale of such shares, he will obtain the written opinion of counsel for the Company, or other counsel acceptable to the Company, that such shares may be transferred without registration thereof.  The Company may also require that the certificates representing such shares contain legends reflecting the foregoing.  To the extent permitted by law, including the Securities Act of 1933, nothing herein shall restrict the right of a person exercising an Option to sell the shares received in an open market transaction.

ARTICLE XV

TAX WITHHOLDING

Whenever shares of Stock are to be issued in satisfaction of Options exercised under the Plan, the Company shall have the power to require the recipient of the Stock to remit to the Company an amount sufficient to satisfy federal, state, and local withholding tax requirements, if any.

ARTICLE XVI

INDEMNIFICATION

To the extent permitted by law, each person who is or shall have been a member of the Board or the Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company's approval, or paid by him in satisfaction of judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's certificate of incorporation or bylaws, as a matter of law, or otherwise, or any power that the Company or any Subsidiary Corporation may have to indemnify them or hold them harmless.

ARTICLE XVII

REQUIREMENTS OF LAW

17.1           Requirements of Law.  The granting of Options and the issuance of shares of Stock upon the exercise of an Option shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

17.2           Governing Law.  The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Colorado.

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ARTICLE XVIII

EFFECTIVE DATE OF PLAN

The Plan shall be effective on October 1, 2011.

ARTICLE XIX

COMPLIANCE WITH CODE

Incentive Stock Options granted hereunder are intended to qualify as "incentive stock options" under Code § 422.  If any provision of the Plan is susceptible to more than one interpretation, such interpretation shall be given thereto as is consistent with Incentive Stock Options granted under the Plan being treated as incentive stock options under the Code.

ARTICLE XX

NO OBLIGATION TO EXERCISE OPTION

The granting of an Option shall impose no obligation upon the holder thereof to exercise such Option.

ARTICLE XXI

SHAREHOLDER APPROVAL

The Plan was approved by a vote of the majority of the shares of common stock of the Company on September 25, 2012.

THIS INCENTIVE STOCK OPTION PLAN was adopted by the Board of Directors of Aegis Identity Software, Inc. on October 13, 2011, to be effective as of October 1, 2011.

AEGIS IDENTITY SOFTWARE, INC.

By:    

Name:   J. Ralph Armijo

Title:  President and Chief Executive Officer

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EX-10.4

Exhibit 10.4

LOAN AGREEMENT

THIS LOAN AGREEMENT (“Agreement”) is made as of October 2, 2012 by and among VETERAN ENGINEERING AND TECHNOLOGY LLC, a Colorado limited liability company whose address is 7222 Commerce Center Drive, Suite 185 Colorado Springs, Colorado 80919 (“Lender”) and AEGIS IDENTITY SOFTWARE, INC., a Colorado corporation (“Borrower”) whose address is 3498 E. Ellsworth Avenue, Suite 908, Denver, Colorado 80209 on the following terms and conditions.

Lender is making a commercial loan to Borrower pursuant to the terms and conditions of this Agreement and the other loan documents referenced herein (the “Loan”).  Borrower understands and agrees that in granting the Loan Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement and the other loan documents.  Capitalized terms in this Agreement are defined in Section 11 or otherwise within this Agreement.

For valuable consideration, the parties agree as follows:

1.           COVENANTS AND AGREEMENTS OF BORROWER.

1.1           TERM.  This Agreement shall be effective as of the date first set forth above, and shall continue in full force and effect until such time as the Loan to Borrower in favor of Lender has been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges arising from the Loan.

1.2           THE LOAN AMOUNT.  The loan amount shall be Three Hundred Eighty-One Thousand Nine Hundred Fifty-One and 04/100 U.S. Dollars ($381,951.04) and shall be advanced and disbursed, subject to all the provisions and conditions of this Agreement and any related Loan Documents.  Indebtedness advanced to Borrower pursuant to this Agreement shall be subject to a separate Note.  Additional terms of the Loan are more specifically described on Schedule 1, attached hereto and incorporated herein by reference.

2.           CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender’s obligation to make any disbursement or advance under this Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of the conditions in this Agreement and in the other Loan Documents, including without limitation those conditions set forth below.

2.1           Loan Documents.  Borrower shall provide to Lender the following documents for the Loan:  (1) the Note; (2) the License Agreement; and (3) all such other Loan Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender’s legal counsel.

2.2           Borrower’s Authorization.  Borrower shall provide in form and substance satisfactory to Lender properly certified resolutions, duly authorizing, ratifying and confirming the execution and delivery of this Agreement, the Note and the other Loan Documents.  In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its legal counsel may require.  All such resolutions shall be provided to Lender on or before October 4, 2012.

2.3           Payment of Fees and Expenses.  Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Loan Document or by Lender.

2.4           Representations and Warranties.  The representations and warranties set forth in this Agreement, in the other Loan Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

2.5           No Event of Default.  There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Loan Document.

3.           REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds and at all times any indebtedness exists:

3.1           Organization.  Borrower is a Colorado corporation and the Borrower is and at all times shall be duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Colorado.  Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business.  Specifically, Borrower is, and at all times shall be, duly qualified as a foreign entity in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition.  Borrower has the power and authority to own its assets and properties and to transact the business in which it is presently engaged or presently proposes to engage.  Borrow maintains an office at and its complete address is:  3498 East Ellsworth Avenue, Suite 908, Denver, Colorado 80209.

Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral.  Borrower will notify Lender of any change in the location of Borrower’s principal office.  Borrower shall do all things necessary to preserve and to keep in full force and affect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities and the Collateral.

3.2           Assumed Business Names.  Borrower does not use any assumed business names.

3.3           Authorization.  Borrower’s execution, delivery, and performance of this Agreement and all the other Loan Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of Borrower’s articles of incorporation, bylaws or shareholder agreements, or any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties or the Collateral.

3.4           Financial Information.  Any Borrower financial statements supplied to Lender hereunder truly and completely disclosed Borrower’s financial condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to Lender.  Borrower has no material contingent obligations except as disclosed in such financial statements.

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3.5           Legal Effect.  This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute, legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

3.6           Properties and Assets.  Except for the security interest granted to Liquid Capital Exchange, Inc. disclosed to Lender and as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender, Borrower owns and has good title to all of Borrower’s properties and assets including that certain identity management software and related rights and documentation (“TridentHE”) which is conditionally licensed to Lender pursuant to the License Agreement; and that Borrower has all necessary intellectual property or third party rights necessary to grant the rights specified herein and in the License Agreement to Lender and that, to the best knowledge of Borrower, the TridentHE software and License Agreement does not and will not violate any statute, law, regulation or code, or infringe upon any right of any third party.  All of Borrower’s properties and assets, including without limitation the TridentHE, are titled in Borrower’s legal name.

3.7           Litigation and Claims.  No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or, to the best knowledge of Borrower, threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties or assets or the TridentHE, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.

3.8           Taxes.  To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

3.9           Liens.  Borrower has not entered into or granted any security agreement, or permitted the filing or attachment of any security interest on or affecting any of the TridentHE directly or indirectly which could adversely impact the right and conditional rights of Lender under the Loan Documents.

3.10         Binding Effect.  This Agreement, the Note, the License Agreement, and all other Loan Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

4.           AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

4.1           Notices of Claims and Litigation.  Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower which could materially affect the financial condition of Borrower and/or the TridentHE.

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4.2           Financial Records.  Maintain its books and records in accordance with GAAP or other acceptable accounting practices, applied on a consistent basis, and permit Lender to examine and audit Borrower’s books and records at all reasonable times.

4.3           Financial Statements.  Furnish Lender with the following:  annual financial statements, tax returns and any other financial information deemed necessary by Lender in its sole discretion.

4.4           Annual Statements.  As soon as available, but in no event later than sixty (60) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, prepared by Borrower and reviewed by an independent accountant satisfactory to Lender.

4.5           Interim Statements.  As soon as available, but in no event later than thirty (30) days after the end of each interim period, as determined by Lender, Borrower’s balance sheet and profit and loss statement for the period ended, compiled by Borrower.

4.6           Tax Returns.  Furnish to Lender, as soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by an independent certified public accountant satisfactory to Lender, for Borrower.

4.7           Additional Information.  Furnish such additional information and statements, as Lender may request from time to time.

Other Requirements:

Except as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting principles or other customary accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct.

4.8           Insurance.  Intentionally Omitted.

4.9           Insurance Reports.  Intentionally Omitted.

4.10         Subordination.  Intentionally Omitted.

4.11         Other Agreements.  Intentionally omitted.

4.12         Loan Proceeds.  Use all Loan proceeds shall be solely for the following specific purposes:  full repayment of all principal, interest, and other fees and costs due by Borrower to Dan E. DeRosa pursuant to that certain Promissory Note dated April 2, 2012 in the original principal amount of $350,000.00 (the “DeRosa Note”).  Borrower shall obtain a pay-off statement from DeRosa for the date of the Note and Lender may pay DeRosa directly with the Loan proceeds or require Borrower to pay DeRosa directly and immediately upon receiving the Loan proceeds.

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4.13           Taxes, Charges and Liens.  Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties and assets (including without limitation the TridentHE), income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties and assets (including without limitation the TridentliE), income, or profits and that could adversely impact any of Lender’s rights under the Loan Documents.

4.14           Performance.  Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the other Loan Documents.  Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

4.15           Operations.  Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

4.16           Compliance with Governmental Requirements.  Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s properties and assets (including without limitation the TridentHE), businesses and operations, and to the use or licensing of the TridentHE.  Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the TridentHE are not jeopardized.  Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest.

4.17           Inspection.  Permit employees or agents of Lender at any reasonable time to inspect the TridentHE software code and documentation and Borrower’s other properties and assets and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and records.  If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender copies of any records it may request, all at Borrower’s expense.

4.18           Compliance Certificates.  Unless waived in writing by Lender, provide Lender within thirty (30) days after the end of each fiscal quarter and at the time of each disbursement of Loan proceeds, with a certificate executed by Borrower’s chief financial officer, or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.

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4.19           Additional Assurances.  Make, execute and deliver to Lender such promissory notes, assignments, financial statements, licenses, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and guarantee the rights of Lender under the Loan Documents.

5.           RECOVERY OF ADDITIONAL COSTS.  If the imposition of or any change in any law, rule, regulation or guideline, or the interpretation or application of any thereof by any court or administrative or governmental authority (including any request or policy not having the force of law) shall impose, modify or make applicable any taxes (except federal, state or local income or franchise taxes imposed on Lender), reserve requirements, capital adequacy requirements or other obligations which would (A) increase the cost to Lender for extending or maintaining the credit facilities to which this Agreement relates, (B) reduce amounts payable to Lender under this Agreement or the other Loan Documents, or (C) reduce the rate of return on Lender’s capital as a consequence of Lender’s obligations with respect to the credit facilities to which this Agreement relates, then Borrower agrees to pay Lender such additional amounts as will compensate Lender therefore, within five (5) days after Lender’s written demand for such payment, which demand shall be accompanied by an explanation of such imposition or charge and a calculation in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the absence of manifest error.

6.           LENDER’S EXPENDITURES.  If any action or proceeding is commenced that would adversely affect Lender’s interest in the TridentHE or if Borrower fails to comply with any provision of this Agreement or any other Loan Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any other Loan Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any TridentHE and paying all costs for insuring, maintaining and preserving any TridentHE.  All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note unless payment of interest at that rate would be contrary to applicable law, in which event such expenses shall bear interest at the highest rate permitted by applicable law from the date incurred or paid by Lender to the date of repayment by Borrower.  All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity.

7.           NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

7.1           Indebtedness and Liens.  Sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber TridentHE or any of Borrower’s assets other than in the ordinary course of business and in no event in any way that would or reasonably could adversely impact Lender’s rights under the Loan Documents.

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7.2           Continuity of Operations.  (1) cease operations, liquidate, merge, transfer, acquire  or consolidate with any other entity, change its name, dissolve or transfer or sell TridentHE out of the ordinary course of business, or (2) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.

8.           ADVANCES.  If Lender has made any commitment to make any loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if:  (1) Borrower is in default under the terms of this Agreement or any of the other Loan Documents or any other agreement that Borrower has with Lender; (2) Borrower becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; or (3) there occurs a material adverse change in Borrower’s financial condition or in the value of the TridentHE securing any Loan.

9.           DEFAULT.  Each of the following shall constitute an Event of Default under this Agreement:

9.1           Payment Default.  Borrower fails to make any payment when due under the Loan.

9.2           Other Defaults.  Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the other Loan Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

9.3           Default in Favor of Third Parties.  Borrower defaults under any material loan, extension of credit, security agreement, purchase or sales agreement, in favor of any other creditor or person that may materially affect TridentHE or Borrower’s ability to repay the Loan or perform their respective obligations under this Agreement or any of the other Loan Documents.

9.4           False Statements.  Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement, the Note, or the other Loan Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

9.5           Insolvency.  The dissolution or termination of Borrower’s existence, the insolvency of Borrower or the death of any member, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

9.6           Defective License.  This Agreement or any of the other Loan Documents, specifically including but without limitation the License Agreement, ceases to be in full force and effect at any time and for any reason.

9.7           Creditor or Forfeiture Proceedings.  Commencement of forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against the TridentHE guaranteeing the Loan.  This includes a garnishment of any of Borrower’s accounts.  However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

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9.8           Change in Ownership.  Any change in ownership of ten percent (10%) or more in the shares of stock in Borrower.

9.9           Adverse Change.  A material adverse change occurs in Borrower’s financial condition or Lender reasonably believes the prospect of payment or performance of the Loan is impaired or an adverse change occurs in TridentHE.

9.10           Insecurity.  Lender in good faith believes itself insecure.

10.           MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of this Agreement:

10.1           Amendments.  This Agreement, together with any other Loan Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement.  No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

10.2           Attorneys’ Fees; Expenses.  Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lenders attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement or any other Loan Document, including without limitation the License Agreement.  Lender may hire or pay someone else to help enforce this Agreement and/or other Loan Documents, and Borrower shall pay the costs and expenses of such enforcement.  Costs and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services.  Borrower also shall pay all court costs and such additional fees as may be directed by the court.

10.3           Caption Headings.  Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

10.4           Consent to Loan Participation.  Intentionally Omitted.

10.5           Governing Law.  This Agreement will be governed by, construed and enforced in accordance with Federal law and the laws of the State of Colorado.

10.6           No Waiver by Lender.  Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement in the future.  No prior waiver by Lender, nor any course of dealing between Lender and Borrower shall constitute a waiver of any of Lender’s rights or of any of Borrower’s obligations as to any future transactions.  Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

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10.7           Notices.  Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by facsimile or email (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beg-inning of this Agreement.  Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address.  For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address and other contact infounation including telephone and facsimile numbers and a valid email address.  Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

10.8           Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance.  If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable.  If the offending provision cannot be so modified, it shall be considered deleted from this Agreement.  Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

10.9           Subsidiaries and Affiliates of Borrower.  To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s subsidiaries and affiliates.  Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrowers subsidiaries or affiliates.

10.10           Successors and Assigns.  All covenants and agreements contained by or on behalf of Borrower shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender, its successors and assigns.  Borrower shall not, however, have the right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender.  Lender has the right to assign all or part of its interest under this Agreement without the prior consent of Borrower.

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10.11           Survival of Representations and Warranties.  Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the other Loan Documents.  Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Loan Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.

10.12           Time is of the Essence.  Time is of the essence in the performance of this Agreement.

10.13           Cross Default.  Any default pursuant to this Loan Agreement shall be deemed a default under any promissory note, deed of trust, security agreement or any related loan documents between Borrower and Lender.  Similarly, any default under any promissory note, deed of trust, security agreement or any other loan document between Lender and Borrower shall be deemed an Event of Default under this Loan Agreement.

11.           DEFINITIONS.  The following capitalized words and terms shall have the following meanings when used in this Agreement.  Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.  Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require.  Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code.  Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:

11.1           “Advance” means any loan from Lender to Borrower or the disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a line of credit, loan(s), or multiple advance basis under the terms and conditions of this Loan Agreement.

11.2           “Agreement” means this Loan Agreement, as this Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Loan Agreement from time to time.

11.3           “Borrower” means all persons and entities signing the Note and the person or persons identified as Borrower at the beginning of this Agreement.

11.4           “Collateral” Intentionally Omitted.

11.5           “Event of Default” means any Event of Default set forth in this Agreement in the Default section of this Agreement.

11.6           “GAAP” means generally accepted accounting principles.

11.7           “Indebtedness” means the indebtedness evidenced by the Note or other Loan Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the other Loan Documents.

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11.8           “Lender” means the Lender named in the beginning of the form, and its successors and assigns.

11.9           “License Agreement” means the license agreement between Borrower and Lender dated on or about the date of this Agreement, wherein Borrower conditionally grants Lender a license to Borrower’s software known as TridentHE and certain other rights and covenants and whereby said license shall be activated and effective only in the event of default under said License Agreement, this Agreement, the Note or any other Loan Document as more specifically set forth in the License Agreement.

11.10           “Loan” means any and all loans and financial accommodations from Lender to Borrower as evidenced by the Note.

11.11           “Note” means the Promissory Note or the credit agreement evidencing the loan obligation.

11.12           “Permitted Liens” Intentionally omitted.

11.13           “Loan Documents” means the Note, License Agreement and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan.

11.14           “Security Agreement” Intentionally Omitted.

11.15           “Security Interest” Intentionally omitted.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS.

THIS LOAN AGREEMENT AND THE SECURITY INSTRUMENTS REFERENCED MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL, AGREEMENTS BETWEEN THE PARTIES HERETO.  EXECUTED AND EFFECTIVE ON THE DATE INDICATED AT THE BEGINNING OF THIS AGREEMENT.

Borrower:			Lender:
AEGIS IDENTITY SOFTWARE, INC., a Colorado corporation			VETERAN ENGINEERING AND TECHNOLOGY LLC, a Colorado limited liability company
By:	/s/ Ralph Armijo		By:	/s/ Norman H. Andersson
		(Authorized Representative)			(Authorized Representative)
	Title:	President and CEO		Title:	Chief Executive Officer
	Date:	10-2-12		Date:	2 Oct 2012

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SCHEDULE 1

LOAN INFORMATION

Maximum Loan Amount:  $381,951.04

Payments:  Payments of accrued interest only shall be paid on December 31, 2012, March 31, 2013, June 30, 2013 with a final balloon payment of all interest and principal payable on or before October 1, 2013.

Maturity Date:  October 2, 2013.

Interest Rate:  fixed interest rate of 12% per annum, simple interest, compounded monthly on the outstanding principal.

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EX-10.5

Exhibit 10.5

LOAN AGREEMENT

By and Between

AEGIS IDENTITY SOFWARE, INC.

as Borrower

and

NATIONAL COMMUNITY DEVELOPMENT FUND I, LLC

LOAN AGREEMENT

This Loan Agreement (“Agreement”) is dated effective as of April 2, 2014, by and between Aegis Identity Software, Inc., a Colorado corporation (“AEGIS” or “Borrower”), with a current address of 750 W. Hampden Ave., Suite 120, Englewood, CO 80110, and National Community Development Fund I, LLC a Delaware limited liability company (“NCDF”), with a current address of 11777 San Vicente Blvd, Suite 550, Los Angeles, CA 90049.  The parties to this Agreement shall be referred to collectively herein as the “Parties.”

WITNESSETH

WHEREAS, All capitalized terms used in this Agreement without definition have the meanings set forth below in Section 1 or as otherwise set forth or referenced in this Agreement.

WHEREAS, NFDC has agreed to make the Loan to Borrower in the Maximum Loan Amount.  Borrower will use the Loan for business operations and capital investment pursuant to that certain Promissory Note dated April 1, 2014, by and between NFDC and Borrower, in the principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) (the “Promissory Note”) attached collectively hereto as Exhibit A.

WHEREAS, The Loan is evidenced by that certain Promissory Note.

WHEREAS, Guarantor(s) have agreed to guaranty Borrower’s obligations to NCDF in accordance with the Guaranty.

WHEREAS, In consideration for the Loan, AEGIS agrees to issue to a party designed by NDCF (the “Unit Assignee-) up to one million (1,000,000) Units, as defined herein and pursuant to the terms of this Agreement.

NOW, THEREFORE, In consideration of the above recitals and other good and valuable consideration, the receipt, adequacy and sufficiency of which are acknowledged and affirmed by the Parties, NCDF and Borrower agree as follows:

AGREEMENT

1.           Definitions.

As used in this Agreement, the following terms have the meanings set forth below:

“Agreement- means this Loan Agreement and all exhibits attached hereto, as such agreement may be modified and amended from time to time.

“Borrower” means Aegis Identity Software, Inc., a Colorado corporation.

“Closing” means the closing of the transactions contemplated by this Agreement to take place at the offices of Aegis Identity Software, Inc., 750 W. Hampden Ave., Suite 120, Englewood, CO, or at such other location as NCDF and Borrower shall mutually agree, at 10:00 a.m. local time on the date of this Agreement.

“Closing Checklist” means the checklist of the Loan Documents maintained by counsel for NCDF and circulated among the Parties.

“Closing Date” means the date of this Agreement.

“Collateral” means certain contracts and accounts receivable of the Borrower and any proceeds related thereto as listed on Schedule A (Contracts), as mutually agreed and designated by the Parties with an aggregate value of at least the Maximum Loan Amount.

“Costs” means those costs as defined and described in Section 2.4 and 2.9 herein.

“Financial Information” means all financial statements and other financial information currently required under the Loan Documents.

“Financing Statement” means a UCC financing statement naming Borrower as debtor, in favor of NCDF, as secured party, to be filed in the Office of the Secretary of State of Colorado and such other offices as may be required by NCDF.

“GAAP” means generally accepted accounting principles in the United States, applied on a consistent basis.

“Guarantor(s)” means Ralph Annijo, an individual.

“Guaranty.” or “Guaranties” means, individually and collectively, each Payment Guaranty of even date herewith executed by a Guarantor and providing such Guarantor’s guaranty of the Loan, attached hereto as Exhibit B.

“Interest Rate” means the rate of interest provided for in the Note of fifteen percent (15%).

“Loan” means the loan contemplated herein from NCDF to Borrower in the Maximum Loan Amount.

“Loan Documents” means, collectively, this Agreement, the Promissory Note, the Security Agreement, attached hereto as Exhibit C, the Guaranties, the Warrant Agreement together with all of their exhibits and schedules, security agreements, financing statements, and lockbox agreements attached thereto, and all other documents which evidence, guaranty, secure or otherwise pertain to the Loan.

“Material Adverse Change” means all or any of the following:  (a) as to Borrower, the likely inability or reasonably anticipated inability of Borrower to pay and perform its respective obligations under and in full compliance with the terms of the Loan Documents as a result of (i) a material and adverse effect on the condition (financial or otherwise), assets or business of Borrower (other than change solely as a result of a change in the financial markets), or (ii) a material and adverse effect on the status of the liens in favor of NCDF on the Collateral; and (b) as to a Guarantor, a material and adverse effect on the condition (financial or otherwise), assets or business of a Guarantor (other than a change solely as a result of a change in the financial markets).

“Maximum Loan Amount” means the maximum principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00)

“Requirements” means all applicable laws, regulations, orders, building codes, restrictions and requirements of, and all agreements with and commitments to, all governmental, judicial or legal authorities having jurisdiction over the Collateral.

“Settlement Statements” means the statements detailing all inflows, outflows, costs and expenses of the transaction for both parties, including without limitation the Disbursement Request and Authorization to be executed by Borrower at Closing.

“Unit” means one (1) share of issued and outstanding common stock of Borrower, par value $.001 per share, and one (1) Warrant.

“Warrant” means a common stock purchase warrant allowing the Unit Assignee to purchase one (1) share of issued and outstanding common stock of Borrower, at a price per share of Fifty Cents ($0.50), for a period of ten (10) years from the date of issuance of the warrant, such warrant being in the form attached hereto as Exhibit D.

2.           Loan Agreement.

2.1.           Disbursements.  NCDF will make disbursements of the Loan in two (2) advances of Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00).  The initial advance of Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00) shall be made at Closing pursuant to the terms of the Promissory Note (“Initial Advance”).  The second advance of Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00) shall be made no later than ninety (90) days after the date of Closing pursuant to the terms of the Promissory Note (“Second Advance”), at the request of Borrower, in its sole discretion, and subject to NCDF’s approval of sufficient collateral.  Borrower may draw amounts under the Initial Advance and Second Advance from time to time as determined by Borrower and NCDF, but in no event shall the principal balance outstanding under either the Initial Advance or Second Advance exceed Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00).  Borrower is not obligated to draw on the Second Advance.  Borrower may continue to draw on the Initial Advance until the maximum amount is outstanding and is required to draw on the Second Advance for any additional funds.

2.2.           Right to Sell.  NCDF shall have the right to sell, transfer or assign this Loan Agreement or any of its rights, title, interests and obligations under this Loan Agreement or Loan Documents.  Borrower shall reasonably cooperate with respect to any such sale, transfer or assignment of NCDF’s rights and such cooperation shall include the execution and delivery of such documents as NCDF shall reasonably require to complete such sale, transfer or assignment.

2.3.           Loan Term.  The initial term of the Loan shall be six (6) months and shall begin immediately following the Parties’ execution of the Loan Documents on the Closing Date.

2.4.           Additional Loan Terms.  Borrower shall pay NCDF’s attorneys fees and costs of Three Thousand Five Hundred and No/100 Dollars ($3,500.00) to be paid by Borrower at Closing.

2.5.           Granting of Units.  Borrower shall issue Units to the Unit Assignee, in accordance with the following vesting schedules:

(i)           Initial Advance Vesting Dates:

(a)          one hundred sixty-six thousand six hundred sixty six (166,666) Units shall be issued to NCDF on May 2, 2014;

(b)          one hundred sixty-six thousand six hundred sixty six (166,666) Units shall be issued to NCDF on June 2, 2014;

(c)          one hundred sixty-six thousand six hundred sixty seven (166,667) Units shall be issued to NCDF on July 2, 2014;

The Units vested under these Sections 2.5(i)(a)-(c) shall be hereinafter referred to as the “Initial Advance Units”.

(ii)           Second Advance Vesting Dates:

(a)          one hundred sixty-six thousand six hundred sixty seven (166,667) Units shall be issued to NCDF on the date thirty (30) days after the date the Second Advance is made;

(b)          one hundred sixty-six thousand six hundred sixty seven (166,667) Units shall be issued to NCDF on the date sixty (60) days after the date the Second Advance is made;

(c)          one hundred sixty-six thousand six hundred sixty seven (166,667) Units shall be issued to NCDF on the date ninety (90) days after the date the Second Advance is made.

The Units vested under these Sections 2.5(ii)(a)-(c) shall be hereinafter referred to as the “Second Advance Units”.

Notwithstanding anything contained herein to the contrary, if Borrower pays the outstanding balance of the Initial Advance in full prior to an Initial Advance Vesting Date set forth in Sections 2.5(i)(a)-(c) above, and no other advances are made under the Initial Advance, all rights of NCDF to receive Initial Advance Units granted after such date the full payment is made, shall terminate.  If, however, Borrower makes any advance under the Second Advance, all unvested Initial Advance Units shall become immediately vested to NCDF.  If Borrower pays the outstanding balance of the Second Advance in full prior to a Second Advance Vesting Date set forth in Sections 2.5(i)(a)-(c) above, and no other advances are made under the Second Advance, all rights of NCDF to receive Second Advance Units granted after such date the full payment is made, shall terminate.  If Borrower does not take an advance under the Second Advance then no Second Advance Units will be due or issued.  Borrower will issue the Initial Advance Units and the Second Advance Units in two separate instances within five (5) business days of the final vesting for the applicable advance.

(iii)           Restricted Legend.  It is understood that the certificates evidencing the shares of common stock issued in connection with the Unit will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECRITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE ACT.”

(iv)           Representations and Warranties of NCDF.  NCDF represents and warrants to Borrower, as of each issuance of the Units upon vesting, as follows:

(1)           Entirely for Own Account.  This Agreement is made with NCDF in reliance upon NCDF’s representation to Borrower, which by NCDF’s execution of this Agreement confirms, that the Units to be received by the Unit Assignee, will be acquired for investment for the Unit Assignee’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Unit Assignee, has no present intention of selling, granting any participation in, or otherwise distributing the same.  By executing this Agreement, the Parties acknowledge that upon execution of this Agreement, NCDF has assigned its rights to receive the Units to the Unit Assignee and that the Borrower shall issue the Units directly to the Unit Assignee.

(2)           Disclosure of Information.  NCDF believes it has received all the information it considers necessary or appropriate for deciding whether to receive the Units.  NCDF further represents that it has had an opportunity to ask questions and receive answers from Borrower regarding the Units and the business, properties, prospects and financial condition of Borrower and to obtain additional information (to the extent Borrower possessed such information or could acquire it without unreasonable effort or expense) and/or conduct its own independent investigation necessary to verify the accuracy of any information furnished to NCDF or to which NCDF had access.

(3)           Investment Experience.  NCDF is experienced in evaluating and investing in private placement transactions in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Units.  NCDF represents that this is a suitable investment for it.

(4)           Restricted Securities.  NCDF understands that the Units are being issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).  NCDF also understands that Units may not be sold, transferred or otherwise disposed of by it without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Units or the underlying shares or an available exemption from registration under the Securities Act, the Units and the underlying shares must be held indefinitely.  In particular, NCDF is aware that the Units and the underlying shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that rule are met.  Among the conditions for use of Rule 144 may be the availability of current information to the public about Borrower.  Such information is not now available and Borrower has no present plans to make such information available.  In this connection, NCDF represents that it is familiar with Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(5)           Transfer Restrictions.  Without in any way limiting the representations set forth above, NCDF further agrees that the Unit Assignee, shall not to make any disposition of all or any portion of the Units or the underlying shares unless and until the transferee has agreed in writing for the benefit of Borrower to be bound by this Section 2.5(iv), provided and to the extent this Section and such agreement are then applicable.

(6)           Illiquid Investment.  NCDF understands that Borrower has no present intention of registering the Units or the underlying shares.  NCDF further understands that no market exists for the Units or the underlying shares, and there can be no assurance that a market will develop.  Accordingly, the Units and the underlying shares represent a very illiquid investment with no assurance of an available exit strategy for NCDF.

(7)           Residence.  NCDF resides at the address listed in this Agreement.

(8)           Accredited Investor.  NCDF represents and warrants that it is familiar with the definition of “accredited investor” under the Securities Act, and, that it is an “accredited investor” within the meaning of the rules and regulations of the Securities Act.

2.6.           Permits, Licenses and Approvals.  Borrower shall properly obtain, comply with and keep in effect all permits, licenses and approvals which are required to be obtained from governmental bodies in order to construct, occupy, operate, market and lease or sell the business operations of Borrower.  If requested by NCDF, Borrower shall promptly deliver copies of all such permits, licenses and approvals to NCDF.

2.7.           Site Visits.  Borrower shall permit NCDF and its agents and representatives, at any reasonable time and at their own risk, to enter and visit the Borrower’s premises for the purposes of performing an appraisal, observing the work of construction and examining all materials, plans, specifications, working drawings and other matters relating to the Borrower’s premises.  NCDF also has the right to examine, copy and audit the books, records, accounting data and other documents of Borrower and its contractors and NCDF may conduct lien waiver audits.  In each instance, NCDF shall give Borrower reasonable notice before visiting Borrower.  NCDF shall make reasonable efforts to avoid interfering with Borrower’s use of the Collateral when exercising any of the rights granted in this Section and will not disclose confidential or proprietary information to third parties or use such information except in accordance with this Agreement.

2.8.           Insurance.  Borrower, at its expense, shall obtain and deliver to NCDF policies of insurance providing the following:

(a)           Policies of insurance evidencing general liability coverage in amounts not less than One Million and No/100 Dollars ($1,000,000.00) (each occurrence), and Two Million and No/100 Dollars ($2,000,000.00) (aggregate) shall be in effect with respect to Borrower.  Such policies must be written on an occurrence basis so as to provide blanket contractual liability, broad form property damage coverage, and coverage for products and completed operations;

(b)           If applicable, evidence of worker’s compensation insurance coverage satisfactory to NCDF;

(c)           Such other insurance as NCDF may reasonably require; and

(d)           All insurance policies shall (i) be issued by an insurance company having a rating of “A” VII or better by A.M. Best Co., in Best’s Rating Guide, (ii) name NCDF as an additional insured on all liability insurance and as mortgagee and loss payee on all casualty insurance, (iii) provide that NCDF is to receive thirty (30) days written notice prior to non-renewal or cancellation, (iv) be evidenced by a certificate of insurance to be held by NCDF, and (v) be in form and amounts reasonably acceptable to NCDF.

2.9.           Payment of Expenses.  Borrower shall pay NCDF’s costs and expenses reasonably incurred in connection with the making, disbursement and administration of the Loan, as well as any revisions, extensions, renewals or “workouts” of the Loan, and in the exercise of any of NCDF’s rights or remedies under this Agreement, except to the extent prohibited by law.  Such costs and expenses include charges for filing, recording and escrow charges, fees for appraisal and appraisal review, architectural and engineering review, construction services and environmental services, inspections, mortgage taxes, legal fees and expenses of NCDF’s counsel and any other reasonable fees and costs for services, regardless of whether such services are furnished by NCDF’s employees or agents or independent contractors.  Borrower acknowledges that amounts payable under this Section are not included in any loan or commitment fees for the Loan.  All such sums incurred by NCDF and not reimbursed by Borrower within five (5) business days of receipt of invoice shall be considered an additional loan to Borrower secured by the collateral at the Default Rate provided in the Promissory Note.

2.10.           Financial and Other Information of Borrower.  Borrower shall keep true and correct financial books and records, using GAAP, or such other accounting principles as NCDF in its reasonable judgment may find acceptable from time to time.  Borrower shall provide to NCDF the following:

(a)           Within thirty (30) days after the filing thereof, signed copies of Borrower’s federal and state tax returns and all supporting schedules (including K-1’ s); and

(b)           Within thirty (30) days after the end of each calendar quarter, operating statements (as applicable) for Borrower, and such other information as NCDF may reasonably request.

2.11.           Financial and Other Information of Guarantors.  Borrower shall cause each Guarantor to keep true and correct financial books and records, using GAAP, or such other accounting principles as NCDF in its reasonable judgment may find acceptable from time to time.  Borrower shall cause each Guarantor to provide to NCDF the following:

(a)           Within thirty (30) days of the annual expiration of the previous financial statement provided to NCDF, Guarantors’ annual financial statements, real estate and asset schedule and statement of contingent liabilities on NCDF approved forms.

2.12.           Notices.  Borrower shall promptly notify NCDF in writing of:

(a)           Any litigation affecting Borrower or any manager of Borrower where the amount claimed is Seventy Five Thousand Dollars ($75,000.00.00) or more or any litigation affecting any Guarantor where the amount claimed is Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) or more;

(b)           Any communication, whether written or oral, that Borrower receives from any governmental, judicial or legal authority, giving notice of any claim or assertion that the Collateral fails in any material respect to comply with any of the Requirements or any other applicable governmental law;

(c)           Any material adverse change in the condition of the Collateral or Borrower’s financial condition or operations;

(d)           Any material default not timely cured under any lease; and

(e)           Any material default not timely cured of Borrower or its affiliates under any other material agreement, contract or order.

2.13.           Keeping Guarantors Informed.  Borrower shall keep Guarantors informed of Borrower’s financial condition and business operations, the condition and all uses of the Collateral, including all changes in condition or use, and any and all other circumstances which may affect Borrower’s ability to pay or perform its obligations under the Loan Documents.  In addition, Borrower shall deliver to Guarantors all of the financial information described in Section 2.10 above as well as the Schedule K-1 or equivalent relating to any tax return filed by Borrower.

2.14.           Performance of Acts.  Upon request by NCDF, Borrower shall perform all reasonable acts (including the execution of documents) which may be necessary or advisable to perfect any lien or security interest provided for in the Loan Documents, to complete an assigmnent of the Loan Documents, or to carry out the intent of the Loan Documents.

2.15.           Lock Box Agreement.  Lender may request at any and all times that contracts and accounts receivable of Borrower be paid through a Lock Box Agreement, as determined by Lender, for the receipt of payments on the accounts receivable of Borrower, in accordance with a form and execution as determined by Lender.

2.16.           Negative Covenants.  Without NCDF’s prior written consent, Borrower shall not:

(a)           engage in any business activities substantially different from Borrower’s present business;

(b)           liquidate or dissolve Borrower’s business;

(c)           acquire or purchase any business or substantially all of the assets of any business such that the acquisition or purchase materially impairs Borrower’s obligations under this Agreement;

(d)           enter into any consolidation, merger, pool, joint venture, syndicate, or other combination;

(e)           sell or otherwise dispose of any assets, including the Collateral, for less than fair market value or in the ordinary course of business;

(f)           enter into any sale and leaseback agreement covering the Collateral or any of the fixed or capital assets of Borrower;

(g)           allow liens on the Collateral other than liens in favor of NCDF with the prior consent of, NCDF;

(h)           other than the Loan, incur, assume or become liable for any additional direct, indirect or contingent liabilities, above the aggregate amount of One Hundred Thousand and No/100 Dollars ($100,000.00).

2.17.           Appraisals.  NCDF has the right to order appraisals of the Collateral from time to time from an appraiser selected by NCDF, which appraisals shall comply with all federal and state standards for appraisals and otherwise shall be satisfactory to NCDF in all material respects.  Borrower shall pay all costs and expenses for any appraisals, appraisal reviews or updates to such appraisals and update reviews.

2.18.           Waiver of Fee.  As an inducement for Borrower, NCDF has agreed to waive any and all fees that it would be entitled to under that certain Amended and Restated Agreement, dated as of January 27, 2014, between Borrower and NCDF, in connection with the consummation of this transaction.

3.           Representations and Warranties.  Borrower promises that each representation and warranty set forth below is true, accurate and correct in all material respects to the actual knowledge of Borrower as of the date of this Agreement.  Each draw request shall be deemed to be a reaffirmation at the time of such request of each and every representation and warranty made by Borrower in this Agreement.

3.1.           Authority.  Borrower has complied in all material respects with any and all laws and regulations concerning its organization, existence and the transaction of its business.  Borrower has the right and power to own and lease the Collateral.

3.2.           Compliance.  Borrower is familiar and has complied in all material respects with all of the Requirements, as well as all other applicable laws, regulations and ordinances.  Borrower has properly obtained all permits, licenses and approvals necessary to construct, occupy, operate, market and lease or sell the Collateral in accordance with all Requirements, and if requested, Borrower has delivered true and correct copies of them to NCDF.

3.3.           Enforceability.  Borrower is authorized to execute, deliver and perform under the Loan Documents.  Upon execution the Loan Documents will be valid and binding obligations of Borrower.

3.4.           No Violation.  To the best of Borrower’s knowledge, Borrower is not in violation of any law, regulation or ordinance, or any order of any court or governmental entity, and no provision or obligation of Borrower contained in any of the Loan Documents violates any of the Requirements, any other applicable law, regulation or ordinance, or any order or ruling of any court or governmental entity.  No such provision or obligation conflicts with, or constitutes a breach or default under, any agreement binding or regulating the Collateral.

3.5.           No Claims.  There are no claims, actions, proceedings or investigations pending against Borrower or affecting the Collateral except for those previously disclosed by Borrower to NCDF in writing.  To the best of Borrower’s knowledge, there has been no threat of any such claim, action, proceeding or investigation, except for those previously disclosed by Borrower to NCDF in writing.

3.6.           Financial Information.  All financial information which has been and will be delivered to NCDF, including all information relating to the financial condition of Borrower or any of Borrower’s managing or other members, or Guarantors, or the Collateral, fairly and accurately represents the financial condition being reported on.  All such information was prepared in accordance with GAAP, unless otherwise noted.  There has been no material adverse change in any financial condition reported at any time to NCDF.

3.7.           Accuracy.  All reports, documents, instruments, information and forms of evidence which have been delivered to NCDF concerning the Loan or required by the Loan Documents are accurate, correct and sufficiently complete in all material respects to give NCDF true and accurate knowledge of their subject matter.  To Borrower’s knowledge, none of them contains any material misrepresentation or omission.

3.8.           Taxes.  Borrower has filed all required state, federal and local income tax returns or obtained extensions, and has paid all taxes which are due and payable.  Borrower knows of no basis for any additional assessment of taxes.

3.9.           Borrower Not a “Foreign Person”.  Borrower is not a “foreign person” within the meaning of Section 1445(0(3) of the Internal Revenue Code of 1986, as amended from time to time.

3.10.           Disclosure to Guarantors.  Before Guarantors became obligated in connection with the Loan, Borrower made full disclosure to Guarantors regarding Borrower’s financial condition and business operations, the present and former condition, uses and ownership of the Collateral, and all other circumstances bearing upon Borrower’s ability to pay and perform its obligations under the Loan Documents.

3.11.           Office of Foreign Asset Control.  Neither Borrower nor any Guarantor shall (a) be or become subject at any time to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits NCDF from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower and the Guarantors, or (b) fail to provide documentary and other evidence of Borrower’s identity as may be requested by NCDF at any time to enable NCDF to verify Borrower’s identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318 (the “Patriot Act”).  In addition, Borrower hereby agrees to provide to NCDF any additional information that NCDF deems necessary from time to time in order to ensure compliance with all applicable laws, rules and regulations concerning money laundering and similar activities.

3.12.           Stock Restrictions.  Except for (a) Borrower’s obligations under the Stock Purchase Agreement, dated March 18, 2014, between DLW, LLC and Borrower, the Fee Agreement, dated September 13, 2013, between James E. Sullivan and Borrower and the Fee Agreement, dated August 30, 2013, between Richard Rivera, MD and Borrower, and (b) employee stock options granted in the ordinary course of business, no additional issuance of shares, warrants, options or stock rights of any kind shall be made by approval.  No transfer, sale of stock, stock dividends or issuance of stock rights shall be made without NCDF’s approval.  No pledge of stock as collateral shall be made without NCDF’s approval which shall not be unreasonably withheld, conditioned or delayed.  No re-organization, no re-capitalization or restructure of the company’s equity, in all forms, shall be made without NCDF’s approval.  Further, Borrower represents that there are no stock options, or other stock rights, currently outstanding other than those provided for herein or previously disclosed to NCDF, including any employee stock consideration in whatever form.

4.           Conditions Precedent to Closing.  Satisfaction of the following are conditions precedent to NCDF’s obligations to close the Loan:

4.1.           Financial Statements of Borrower and Guarantors and Other Financial Information.  Borrower shall deliver to NCDF the Financial Information, certified as being true, correct and complete in all material respects by an authorized officer or the managing member of the Borrower.

4.2.           Organizational Documents.  Borrower has provided at Borrower’s cost and expense, all organization documents requested by NCDF in its sole and exclusive discretion including all consents of Borrower authorizing the execution of this Agreement and the Loans contemplated herein.

4.3.           Insurance.  Borrower has provided evidence of the insurance required by Section 3.3 above.

4.4.           General Information.  If requested by NCDF, Borrower has provided NCDF with legible copies of all ongoing construction agreements for any and all leases, letters of intent and sales contracts affecting the Collateral, and such other Collateral-related information which NCDF may reasonably request.

4.5.           Loan Documents.  Borrower has executed or obtained the execution of, and delivered to NCDF, all applicable documents and instruments in form and content required by NCDF and its counsel, including, without limitation, the following Loan Documents, and any and all other such documentation reasonably required by NCDF:

(a)           This Agreement;

(b)           The Note;

(c)           The Financing Statement, which shall be duly filed with the Colorado Secretary of State;

(d)           The Guaranties;

(e)           Such certificates and resolutions as may be required by NCDF relating to Borrower;

(f)           Such other documents included in the Closing Checklist or as NCDF may reasonably require.

4.6.           Fees.  Borrower has paid to NCDF, in immediately available funds, all fees and costs called for under this Agreement.

4.7.           No Material Adverse Change.  Subsequent to the date that Borrower’s initial request for the Loan was submitted to NCDF, there has been no Material Adverse Change with respect to Borrower, any Guarantor or the Collateral.

4.8.           Miscellaneous.  Borrower has delivered to NCDF any other item or items reasonably deemed necessary to NCDF, and has fulfilled any other condition reasonably required by NCDF.

5.           Default and Remedies.

5.1.           Events of Default.  The occurrence of any one or more of the following events is a default under this Agreement (each, an “Event of Default”):

(a)           Borrower or Guarantors fail to pay on the date due any monetary amount under any Loan Document; or

(b)           Borrower or Guarantors fail to comply with any non-monetary covenant contained in this Agreement or any other Loan Document that is not otherwise expressly addressed in this Section 5.1 and does not cure such failure within thirty (30) days after written notice from NCDF; provided, however, Borrower has such additional time to cure any such failure, not to exceed a total of sixty (60) days, if Borrower at all times diligently pursues the cure of such failure to NCDF’s reasonable satisfaction; or

(c)           Borrower or any Guarantor becomes insolvent or the subject of any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships, and, with respect to any such proceeding that is involuntary, such proceeding is not dismissed within sixty (60) days of the filing thereof (“Insolvency Proceeding”); or

(d)           Borrower or Guarantors dissolve, terminate or liquidate; or

(e)           Borrower’s managing member or senior management ceases for any reason to act in that capacity or any other change occurs in the current senior management of Borrower; or

(f)           Any representation or warranty made or given in any of the Loan Documents proves to be false or misleading in any material respect; or

(g)           Borrower fails to comply in any material respect with any provision contained in this Agreement, and does not cure that failure either (i) within an initial cure period of thirty (30) consecutive days after written notice from NCDF, or (ii) within sixty (60) days after such written notice, so long as Borrower begins within the initial cure period and diligently continues to cure the failure, and NCDF, exercising reasonable judgment, determines that the cure cannot reasonably be completed at or before expiration of the initial cure period; or

(h)           An Event of Default (as defined in the applicable Loan Document) occurs under any of the Loan Documents; or

(i)           Any Guarantor fails to comply in any material respect with any covenant contained in the Guaranty and such failure remains uncured after all applicable notice and cure periods set forth in the Guaranty have expired; or

(j)           As a result of any act or omission of Borrower, NCDF fails to have an enforceable first lien on or security interest in any property given as security for the Loan (except as otherwise agreed by NCDF in writing); or

(k)           There is a Material Adverse Change with respect to Borrower, any Guarantor or the Collateral, or an event or condition that materially impairs Borrower’s intended use of the Collateral or Borrower’s or Guarantor’s ability to repay the Loan; or

(l)           Any failure, breach or default by Borrower under the Other Loans, it being the intention and agreement of NCDF and Borrower to cross-default the Loan and the Other Loans with one another.  As used in this paragraph, “Other Loans” means any existing or future loans by NCDF with Borrower; or

(m)           Any sale of an ownership interest in Borrower without the prior written consent of NCDF, which consent shall not be unreasonably withheld, conditioned or delayed; or

(n)           Notwithstanding anything contained herein to the contrary, if any Event of Default, other than an Event of Default under Section 5.1(a) above, is curable and if Borrower has not been given a notice of breach of the same provision of this Agreement within the preceding sixty (60) days, such Event of Default may be cured if Borrower, after NCDF sends written notice to Borrower demanding cure of such default:  (I) cures the default within twenty (20) days; or (2) if the cure requires more than twenty (20) days, immediately initiates steps which NCDF deems in NCDF’s sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance within sixty (60) days from the date of delivery of written notice to Borrower of such Event of Default.

5.2.           Remedies.

(a)           if an Event of Default occurs under this Agreement, NCDF may exercise any right or remedy which it has under any of the Loan Documents, or which is otherwise available at law or in equity or by statute and all of NCDF’s rights and remedies shall be cumulative.

(b)           Upon the occurrence of an Event of Default, all of Borrower’s obligations under the Loan Documents may become immediately due and payable without additional notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other additional notices or demands of any kind or character, all at NCDF’s option, exercisable in its sole discretion.

6.           Jury Waiver.  THE UNDERSIGNED BORROWER, GUARANTORS AND NCDF HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND NCDF ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT OR ANY OTHER RELATED DOCUMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT TO NCDF TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER LOAN DOCUMENTS.

7.           Miscellaneous Provisions.

7.1.           Right to Set Off.  Borrower grants to NCDF (i) the right at any time and from time to time after any Event of Default, in the absolute and sole discretion of NCDF and without demand or notice to Borrower, to set-off and apply any amounts held in Borrower’s funds account, the Loan funds account and any or all other deposits (whether certificates of deposit, demand, general, savings, special, time or other, and whether provisional or final) held and any other liabilities or other obligations of NCDF to Borrower (“Deposits, Liabilities and Obligations”) against or to Borrower’s obligations under the Loan Documents, regardless of whether such Deposits, Liabilities or Obligations are contingent, matured or unmatured, and (ii) a security interest in the Deposits, Liabilities and Obligations.

7.2.           No Waiver; Consents.  Each waiver by NCDF must be in writing, and no waiver shall be construed as a continuing waiver.  No waiver shall be implied from NCDF’s delay in exercising or failure to exercise any right or remedy against Borrower or any security.  Consent by NCDF to any act or omission by Borrower shall not be construed as a consent to any other or subsequent act or omission or as a waiver of the requirement for NCDF’s consent to be obtained in any future or other instance.  All rights and remedies of NCDF are cumulative.

7.3.           Purpose and Effect of NCDF Approval.  NCDF’s approval of any matter in connection with the Loan shall be for the sole purpose of protecting NCDF’s security and rights.  No such approval shall result in a waiver of any default of Borrower under this Agreement.  In no event shall NCDF’s approval be a representation of any kind with regard to the matter being approved.

7.4.           Reserved for Future Use.

7.5.           Joint and Several Liability.  If Borrower consists of more than one person or entity, each shall be jointly and severally liable to NCDF for the faithful performance of this Agreement.

7.6.           Notices.  All notices given under this Agreement shall be in writing and shall be given either by personal delivery, overnight receipted courier (such as Federal Express), or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below, or via electronic mail.  Notices are effective upon receipt or when proper delivery is refused.  Addresses for notice may be changed by either party by notice to the other party in accordance with this Section.  Service of any notice on Borrower is effective service on Borrower for all purposes.

Address where notices to NCDF are to be sent:

National Community Development Fund I, LLC

c/o John Vasquez

11777 San Vicente Blvd, Suite 550,

Los Angeles, CA  90049

With a copy to:

Donelson Barry, LLC

c/o Stephen W. Donelson, Esq.

8001 Arista Place - Suite 400

Broomfield, Colorado  80021

Address where notices to Borrower are to be sent:

AEGIS Identity Software, Inc.

c/o Ralph Armijo

750 W. Hampden Ave., Suite 120

Englewood, CO  80110

7.7.           Authority to File Notices and Power of Attorney.  Borrower irrevocably appoints NCDF as its attorney-in-fact, with full power of substitution, to file for record, at Borrower’s cost and expense and in Borrower’s name, any notices of completion, notices of cessation of labor, or any other notices that NCDF in its sole discretion may consider necessary or desirable to protect its security under the Loan Documents, if Borrower fails to do so after three (3) day’s written notice from the NCDF.  Further, Borrower irrevocably appoints NCDF as its attorney-in-fact, with full power of substitution, to execute, file, seal, deliver and file for record, financing statement to NCDF in the place of Borrower if Borrower does not execute and deliver such financing statement upon NCDF’s request.  The appointments granted in this Section 7.7 shall each be deemed to be a power coupled with an interest.  Notwithstanding anything contained herein to the contrary, the appointments granted in this Section 7.7 shall expire upon the full payment of the Loan and termination of this Agreement.

7.8.           Actions.  NCDF has the right, but not the obligation, to commence, appear in, and defend any action or proceeding which might affect its security or its rights, duties or liabilities relating to the Loan, the Collateral, or any of the Loan Documents.  Borrower shall pay promptly on demand all of NCDF’s reasonable out-of-pocket costs, expenses, and legal fees and expenses of NCDF’s counsel incurred in those actions or proceedings.

7.9.           Attorneys’ Fees.  Borrower agrees to pay all of NCDF’s reasonable costs and expenses, including attorneys’ fees, which may be incurred in enforcing or protecting NCDF’s rights or interests under the Loan Documents.  From the date due to the law firm pursuant to the terms of its invoice until paid in full to NCDF, all such sums shall bear interest at the default rate.  Whenever Borrower is obligated to pay or reimburse NCDF for any attorneys’ fees, those fees shall include the allocated costs for services of in-house counsel.

7.10.           Indemnification.  Except as it may conflict with Section 7.9 above with regard to disputes between Borrower and NCDF, to the fullest extent permitted by law, Borrower agrees to protect, indemnify, defend and save harmless NCDF, its directors, officers, agents and employees for, from and against any and all liability, expense or damage of any kind or nature and for, from and against any suits, claims or demands, including reasonable legal fees and expenses on account of any matter or thing or action or failure to act by Borrower, whether in suit or not, arising out of this Agreement or in connection herewith, excluding, however, all matters arising out of the NCDF’s or its agents’ gross negligence or willful misconduct.  Upon receiving knowledge of any suit, claim or demand asserted by a third party that NCDF believes is covered by this indemnity, NCDF shall give Borrower notice of the matter and an opportunity to defend it, at Borrower’s sole cost and expense, with legal counsel satisfactory to NCDF.  NCDF may also require Borrower to so defend the matter.  The obligations on the part of Borrower under this Section 8.10 shall survive the closing of the Loan and the repayment thereof.

7.11.           Governing Law and Jurisdiction.  This Agreement and the Loan Documents are governed by, and construed in accordance with, the laws of the State of Colorado.  Borrower hereby submits to jurisdiction and venue in the City and County of Denver, Colorado the (“County”), and agrees that any and all litigation or arbitration proceedings shall be maintained in the County.  Without limiting the generality of the foregoing, Borrower hereby waives and agrees not to assert by way of motion, defense, or otherwise in such suit, action, or proceeding, any claim that any Borrower is not personally subject to the jurisdiction of the courts of the County, and the United States District Court for the State of Colorado, that such suit, action, or proceeding is brought in an inconvenient forum, or that the venue of such suit, action, or proceeding is improper.

7.12.           Heirs, Successors and Assigns; Participations.  The terms of this Agreement bind and benefit the heirs, personal representatives, successors and assigns of the parties; provided, however, that Borrower may not assign this Agreement or any Loan funds, or assign or delegate any of its rights or obligations, without the prior written consent of NCDF in each instance.  NCDF in its sole discretion may sell or assign participations or other interests in all or part of the Loan on the terms and subject to the conditions of the Loan Documents, all without notice to or the consent of Borrower.  Also without notice to or the consent of Borrower, NCDF may disclose to any actual or prospective purchaser of any securities issued or to be issued by NCDF, and to any actual or prospective purchaser or assignee of any participation or other interest in the Loan or any other loans made by NCDF to Borrower (whether under this Agreement or otherwise), any financial or other information, data or material in NCDF’s possession relating to Borrower, the Loan, the Loan Documents or the Collateral; provided that such disclosure is only made subject to an obligation by recipient not to disclose or use for any purpose other than to evaluate the transaction and the potential purchaser is informed that Borrower is not providing the information or involved in the transaction.  NCDF will indemnify Borrower for any claims or liabilities resulting from the sale or assignment of any participation, interests or the Units, except such transfer to the Unit Assignee.

7.13.           Relationships With Other NCDF Customers.  From time to time, NCDF may have business relationships with Borrower’s customers, suppliers, contractors, members, tenants, partners, shareholders, officers or directors, or with businesses offering products or services similar to those of Borrower, or with persons seeking to invest in, borrow from or lend to Borrower.  Borrower agrees that NCDF may extend credit to such parties and may take any action it may deem necessary to collect the credit, regardless of the effect that such extension or collection of credit may have on Borrower’s financial condition or operations.  Borrower further agrees that in no event is NCDF obligated to disclose to Borrower any information concerning any other NCDF customer.

7.14.           Restriction on Personal Property.  Borrower shall not sell, convey, or otherwise transfer or dispose of its interest in any personal property or stock portfolio in which NCDF has a security interest, or contract to do any of the foregoing, outside of the ordinary course of business, without the prior written consent of NCDF in each instance.

7.15.           Severability.  The invalidity or unenforceability of any one or more provisions of this Agreement shall in no way affect any other provision.  If any court of competent jurisdiction determines any provision of this Agreement or any of the other Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents.

7.16.           Interpretation.  Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender.  The captions of the sections of this Agreement are for convenience only and do not define or limit any terms or provisions.  The word “include(s)” means “include(s), without limitation,” and the word “including” means “including, but not limited to.” No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Agreement.

7.17.           Amendments.  This Agreement may not be modified or amended except by a written agreement signed by the Parties.

7.18.           Counterparts.  This Agreement and any attached consents or exhibits requiring signatures may be executed in counterparts, and all counterparts constitute one and the same document.

7.19.           Language of Agreement.  The language of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against any party.

7.20.           Survival.  The representations, warranties, acknowledgments and agreements set forth herein shall survive the date of this Agreement.

7.21.           Further Performance.  Borrower, whenever and as often as requested by NCDF, shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered such further instruments and documents and to do any and all things as may be reasonably requested in order to carry out the intent and purpose of this Agreement and the other Loan Documents.

7.22.           Time is of the Essence.  Time is of the essence in the performance of this Agreement and the other Loan Documents by Borrower, and each and every term thereof.

7.23.           Recitals; Exhibits.  The Recitals to this Agreement set forth above are true, complete, accurate and correct and such recitals are hereby incorporated by reference.  The exhibits to this Agreement are hereby incorporated by reference.

7.24.           Integration.  The Loan Documents (a) integrate all the terms and conditions mentioned in or incidental to this Agreement, (b) supersede all oral negotiations and prior writings with respect to their subject matter, including NCDF’s loan commitment to Borrower, and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties.  No representation, understanding, promise or condition shall be enforceable against any party unless it is contained in the Loan Documents.  If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including any other Loan Document, the terms, conditions and provisions of this Agreement shall prevail.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

IN WITNESS WHEREOF, Borrower and NCDF have executed this Agreement as of the date first above written.

BORROWER:
By:	/s/ Ralph Armijo
	Name:	Ralph Armijo
	Title:	Chief Executive Officer and President

NCDF
By:	/s/ John Vasquez
	Name:	John Vasquez
	Title:	Chairman and Majority Owner

GUARANTOR
By:	/s/ Ralph Armijo
	Ralph Armijo, Personally as Guarantor

EX-10.6

Exhibit 10.6

ESCROW DEPOSIT AGREEMENT

This ESCROW DEPOSIT AGREEMENT (this “Agreement”), dated as of this __ day of _____ 2015, by and among AEGIS IDENTITY SOFTWARE, INC., a [Delaware] corporation (the “Company”), having an address at 750 West Hampden Avenue, Suite 500, Englewood, Colorado 80110, BURNHAM SECURITIES INC. (the “Underwriter”), a Delaware corporation, having an address at 18500 Von Karman Ave., Suite 560, Irvine, California 92612, and SIGNATURE BANK (the “Escrow Agent”), a New York State chartered bank, having an office at 261 Madison Avenue, New York, New York 10016.  All capitalized terms not herein defined shall have the meaning ascribed to them in that certain Prospectus incorporated in the Registration Statement on Form S-1, originally filed with the U.S. Securities and Exchange Commission on ___________, 2015, in connection with the Company’s initial public offering of its shares of Common Stock, as amended or supplemented from time to time, including all exhibits thereto (the “Prospectus”).

W I T N E S S E T H:

WHEREAS, pursuant to the terms of the Prospectus, the Company desires to sell (the “Offering”) a minimum of $50,000,000 (the “Minimum Amount”) and a maximum of $100,000,000 (the “Maximum Amount”) of its shares of Common Stock (the “Shares”), plus up to an additional allotment of $15,000,000 of Shares, with each Share being sold at a price of $____ per Share;

WHEREAS, unless the Company sells the Minimum Amount and the Shares are listed for trading on the Nasdaq Capital Market on or before sixty (60) days after the date of the Prospectus (the “Termination Date”), the Offering shall terminate and all funds shall be returned to the subscribers in the Offering, and if the Minimum Amount and Nasdaq listing are satisfied, the Offering may continue until the Termination Date;

WHEREAS, the Company and Underwriter desire to establish an escrow account with the Escrow Agent into which the Company and Underwriter shall instruct subscribers introduced to the Company by Underwriter (the “Subscribers”) to deposit checks and other instruments for the payment of money made payable to the order of “Signature Bank as Escrow Agent for Aegis Identity Software, Inc.,” and the Escrow Agent is willing to accept said checks and other instruments for the payment of money in accordance with the terms hereinafter set forth;

WHEREAS, the Company, as issuer, and Underwriter, as the sole book-running manager, represent and warrant to the Escrow Agent that they will comply with all of their respective obligations under applicable federal and state securities laws and regulations with respect to sale of the Offering;

WHEREAS, the Company and Underwriter represent and warrant to the Escrow Agent that they have not stated to any individual or entity that the Escrow Agent’s duties will include anything other than those duties stated in this Agreement; and

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WHEREAS, the Companyand Underwriter warrant to the Escrow Agent that a copy of each document that has been delivered to Subscribers and third parties that includes the Escrow Agent’s name and duties has been attached hereto as Schedule I.

NOW, THEREFORE, IT IS AGREED as follows:

1.                 Delivery of Escrow Funds.

(a)           The Underwriter and the Company shall instruct Subscribers to deliver to the Escrow Agent checks made payable to the order of “Signature Bank, as Escrow Agent for Aegis Identity Software, Inc.,” or wire transfer to Signature Bank, ABA No. 026013576, 261 Madison Avenue, New York, New York 10016, for credit to Signature Bank, as Escrow Agent for Aegis Identity Software, Inc., Account No. _____________, in each case with the name and address of the individual or entity making payment.  In the event any Subscriber’s address is not provided to Escrow Agent by the Subscriber, then the Company agrees to promptly provide Escrow Agent with such information in writing.  The checks or wire transfers shall be deposited into a non-interest-bearing account at Signature Bank entitled “Aegis Identity Software, Inc., Signature Bank, as Escrow Agent” (the “Escrow Account”).

(b)           The collected funds deposited into the Escrow Account are referred to as the “Escrow Funds.”

(c)           The Escrow Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Escrow Account.  If, for any reason, any check deposited into the Escrow Account shall be returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be to return the check to the Subscriber and advise the Company and Underwriter promptly thereof.

2.                 Release of Escrow Funds.  The Escrow Funds shall be paid by the Escrow Agent in accordance with the following:

(a)           In the event that the Company and Underwriter advise the Escrow Agent in writing that the Offering has been terminated (the “Termination Notice”), the Escrow Agent shall promptly return the funds paid by each Subscriber to said Subscriber without interest or offset.

(b)           Provided that the Escrow Agent does not receive the Termination Notice in accordance with Section 2(a) and there is the Minimum Amount deposited into the Escrow Account and the Company satisfies the listing conditions to trade the Shares on the Nasdaq Capital Market on or prior to the Termination Date, the Escrow Agent shall, upon receipt of written instructions, in the form of Exhibit A attached hereto and made a part hereof, or in a form and substance satisfactory to the Escrow Agent, received from the Company and Underwriter, pay the Escrow Funds in accordance with such written instructions, which instructions shall be limited to the payment of the Underwriter’s fee and other offering expenses and the payment of the balance to the Company.  Such payment or payments shall be made by wire transfer within one (1) Business Day of receipt of such written instructions, which must be received by the Escrow Agent no later than 3:00 p.m., Eastern Time, on a Business Day for the Escrow Agent to process such instructions that Business Day.

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(c)           If by 3:00 p.m., Eastern time, on the Termination Date, the Escrow Agent has not received written instructions from the Company and Underwriter regarding the disbursement of the Escrow Funds and the total amount of the Escrow Funds is less than the Minimum Amount or the Nasdaq listing conditions have not been satisfied, then the Escrow Agent shall promptly return the Escrow Funds to the Subscribers without interest or offset.  The Escrow Funds returned to each Subscriber shall be free and clear of any and all claims of the Escrow Agent.

(d)           The Escrow Agent shall not be required to pay any uncollected funds or any funds that are not available for withdrawal.

(e)           If the Termination Date or any date that is a deadline under this Agreement for giving the Escrow Agent notice or instructions or for the Escrow Agent to take action is not a Business Day, then such date shall be the Business Day that immediately precedes that date.  A “Business Day” is any day other than a Saturday, Sunday or a Bank holiday.

3.                 Acceptance by Escrow Agent.  The Escrow Agent hereby accepts and agrees to perform its obligations hereunder, provided that:

(a)           The Escrow Agent may act in reliance upon any signature believed by it to be genuine, and may assume that any person who has been designated by Underwriter or the Company to give any written instructions, notice or receipt, or make any statements in connection with the provisions hereof has been duly authorized to do so.  Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instructions or any signatures on statements or instructions.  The names and true signatures of each individual authorized to act singly on behalf of the Company and Underwriter are stated in Schedule II, which is attached hereto and made a part hereof.  The Company and Underwriter may each remove or add one or more of its authorized signers stated on Schedule II by notifying the Escrow Agent of such change in accordance with this Agreement, which notice shall include the true signature for any new authorized signatories.

(b)           The Escrow Agent may act relative hereto in reliance upon advice of counsel in reference to any matter connected herewith.  The Escrow Agent shall not be liable for any mistake of fact or error of judgment or law, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.

(c)           The Underwriter and the Company agree to indemnify and hold the Escrow Agent harmless from and against any and all claims, losses, costs, liabilities, damages, suits, demands, judgments or expenses (including but not limited to reasonable attorney’s fees) claimed against or incurred by Escrow Agent arising out of or related, directly or indirectly, to this Escrow Agreement unless caused by the Escrow Agent’s gross negligence or willful misconduct.

(d)           In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking any action other than to keep safely the Escrow Funds until it shall be directed otherwise by a court of competent jurisdiction, or (ii) deliver the Escrow Funds to a court of competent jurisdiction.

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(e)           The Escrow Agent shall have no duty, responsibility or obligation to interpret or enforce the terms of any agreement other than Escrow Agent’s obligations hereunder, and the Escrow Agent shall not be required to make a request that any monies be delivered to the Escrow Account, it being agreed that the sole duties and responsibilities of the Escrow Agent shall be to the extent not prohibited by applicable law (i) to accept checks or other instruments for the payment of money and wire transfers delivered to the Escrow Agent for the Escrow Account and deposit said checks and wire transfers into the non-interest bearing Escrow Account, and (ii) to disburse or refrain from disbursing the Escrow Funds as stated above, provided that the checks received by the Escrow Agent have been collected and are available for withdrawal.

4.                 Escrow Account Statements and Information.The Escrow Agent agrees to send to the Company and/or the Underwriter a copy of the Escrow Account periodic statement, upon request in accordance with the Escrow Agent’s regular practices for providing account statements to its non-escrow clients and to also provide the Company and/or Underwriter, or their designee, upon request other deposit account information, including Escrow Account balances, by telephone or by computer communication, to the extent practicable.  The Company and Underwriter agree to complete and sign all forms or agreements required by the Escrow Agent for that purpose.  The Company and Underwriter each consent to the Escrow Agent’s release of such Escrow Account information to any of the individuals designated by Company or Underwriter, which designation has been signed in accordance with Section 3(a) by any of the persons in Schedule II.  Further, the Company and Underwriter have an option to receive e-mail notification of incoming and outgoing wire transfers.  If this e-mail notification service is requested and subsequently approved by the Escrow Agent, the Company and/or Underwriter agrees to provide a valid e-mail address and other information necessary to set-up this service and sign all forms and agreements required for such service.  The Company and Underwriter each consent to the Escrow Agent’s release of wire transfer information to the designated e-mail address(es).  The Escrow Agent’s liability for failure to comply with this section shall not exceed the cost of providing such information.

5.                 Resignation and Termination of the Escrow Agent.  The Escrow Agent may resign at any time by giving thirty (30) days’ prior written notice of such resignation to Underwriter and the Company.  Upon providing such notice, the Escrow Agent shall have no further obligation hereunder except to hold as depositary the Escrow Funds that it receives until the end of such thirty (30)-day period.  In such event, the Escrow Agent shall not take any action, other than receiving and depositing Subscribers checks and wire transfers in accordance with this Agreement, until the Company has designated a banking corporation, trust company, attorney or other person as successor.  Upon receipt of such written designation signed by Underwriter and the Company, the Escrow Agent shall promptly deliver the Escrow Funds to such successor and shall thereafter have no further obligations hereunder.  If such instructions are not received within thirty (30) days following the effective date of such resignation, then the Escrow Agent may deposit the Escrow Funds held by it pursuant to this Agreement with a clerk of a court of competent jurisdiction pending the appointment of a successor.  In either case provided for in this section, the Escrow Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Escrow Funds.

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6.                 Termination.  The Company and Underwriter may terminate the appointment of the Escrow Agent hereunder upon written notice specifying the date upon which such termination shall take effect, which date shall be at least thirty (30) days from the date of such notice.  In the event of such termination, the Company and Underwriter shall, within thirty (30) days of such notice, appoint a successor escrow agent and the Escrow Agent shall, upon receipt of written instructions signed by the Company and Underwriter, turn over to such successor escrow agent all of the Escrow Funds; provided, however, that if the Company and Underwriter fail to appoint a successor escrow agent within such thirty (30) day period, such termination notice shall be null and void and the Escrow Agent shall continue to be bound by all of the provisions hereof.  Upon receipt of the Escrow Funds, the successor escrow agent shall become the escrow agent hereunder and shall be bound by all of the provisions hereof and Escrow Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Escrow Funds and under this Agreement.

7.                 Investment.  All funds received by the Escrow Agent shall be held only in non-interest bearing bank accounts at Escrow Agent.

8.                 Compensation.  The Escrow Agent shall be entitled, for the duties to be performed by it hereunder, to a fee of $4,000, which fee shall be paid by the Company upon the signing of this Agreement.  In addition, the Company shall be obligated to reimburse Escrow Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Escrow Account, including reasonable attorney’s fees.  Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Escrow Agent shall affect the right of Escrow Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission.  To the extent the Escrow Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Escrow Agent shall advise the Company and the Company shall direct all such amounts to be paid directly at any such closing.

9.                 Notices.  All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by hand-delivery, by facsimile (followed by first-class mail), by nationally recognized overnight courier service or by prepaid registered or certified mail, return receipt requested, to the addresses set forth below:

If to Underwriter:

Burnham Securities Inc.

18500 Von Karman Ave., Suite 560

Irvine, California 92612

Attention: Mr. Daniel J. McClory, Managing Director

Fax: (949) 390-9579

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If to the Company:

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

Attention: Robert Lamvik, Chief Executive Officer

Fax: (303) 474-7892

If to Escrow Agent:

Signature Bank

261 Madison Avenue

New York, New York 10016

Attention: Mr. Cliff Broder, Group Director and Senior Vice President

Fax: (646) 822-1359

10.               General.

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be entirely performed within such State, without regard to choice of law principles and any action brought hereunder shall be brought in the courts of the State of New York, located in the County of New York.  Each party hereto irrevocably waives any objection on the grounds of venue, forum non­conveniens or any similar grounds and irrevocably consents to service of process by mail or in any manner permitted by applicable law and consents to the jurisdiction of said courts.  Each of the parties hereto hereby waives all right to trial by jury in any action, proceeding or counterclaim arising out of the transactions contemplated by this Agreement.

(b)           This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters contained herein and supersedes all prior agreements, arrangements and understandings relating thereto.

(c)           All of the terms and conditions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto, as well as their respective successors and assigns.

(d)           This Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same.  No waiver of any party of any condition, or of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement.  No party may assign any rights, duties or obligations hereunder unless all other parties have given their prior written consent.

(e)           If any provision included in this Agreement proves to be invalid or unenforceable, it shall not affect the validity of the remaining provisions.

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(f)           This Agreement and any modification or amendment of this Agreement may be executed in several counterparts or by separate instruments and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.

11.              Form of Signature.  The parties hereto agree to accept a facsimile transmission copy of their respective actual signatures as evidence of their actual signatures to this Agreement and any modification or amendment of this Agreement; provided, however, that each party who produces a facsimile signature agrees, by the express terms hereof, to place, promptly after transmission of his or her signature by fax, a true and correct original copy of his or her signature in overnight mail to the address of the other party.

12.              No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the parties and their respective successors and permitted assigns, and no other person has any right, benefit, priority, or interest under or because of the existence of this Agreement.

[Signature page follows]

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    IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.

AEGIS IDENTITY SOFTWARE, INC.

By:           ______________________________

                 Name:

                 Title:

BURNHAM SECURITIES INC.

By:           ______________________________

                 Name:

                 Title:

SIGNATURE BANK

By:           _____________________________

 Name:

Title:

By:           _____________________________

Name:

Title:

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Schedule I

OFFERING DOCUMENTS

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Schedule II

The Escrow Agent is authorized to accept instructions signed or believed by the Escrow Agent to be signed by any one of the following on behalf of the Company and Underwriter.

AEGIS IDENTITY SOFTWARE, INC.

Name	True Signature
________________________	________________________
________________________	________________________

BURNHAM SECURITIES INC.

Name	True Signature
________________________	________________________
________________________	________________________

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Exhibit A

FORM OF ESCROW RELEASE NOTICE

Date: ___________, 201__

Signature Bank

261 Madison Avenue

New York, New York 10016

Attention: Mr. Cliff Broder, Group Director and Senior Vice President

Dear Sirs:

In accordance with the terms of Section 2(b) of an Escrow Agreement dated as of ________ __, 2015 (the “Escrow Agreement”), by and between Aegis Identity Software, Inc. (the “Company”), Burnham Securities Inc. (the “Underwriter”), and Signature Bank (the “Escrow Agent”), the Company and Underwriter hereby notify the Escrow Agent that the ________ closing will be held on ___________ for gross proceeds of $_________.

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions attached):

Aegis Identity Software, Inc.:	$	_____________________________
Burnham Securities Inc.:	$	_____________________________

Very truly yours,

AEGIS IDENTITY SOFTWARE, INC.
By:	_____________________________
Name:	_____________________________
Title:	_____________________________

BURNHAM SECURITIES INC.
By:	_____________________________
Name:	_____________________________
Title:	_____________________________

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EX-10.7

Exhibit 10.7

AEGIS IDENTITY SOFTWARE, INC.

SUBSCRIPTION AGREEMENT

The undersigned (the “Investor”) hereby confirms its agreement with Aegis Identity Software, Inc., a [Delaware] corporation (the “Company”), as follows:

1.           This Subscription Agreement, including the Terms and Conditions for Purchase of Securities attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set forth below between the Company and the Investor.

2.           The Company has authorized the sale and issuance to certain investors of a minimum of __________ and up to a maximum of __________ authorized and unissued shares (the “Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”), at an initial public offering price of $____ per Share (the “Purchase Price”).

3.           The offering and sale of the Shares (the “Offering”) are being made pursuant to (1) an effective Registration Statement on Form S-1, File No. 333-_____ (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”), and by the Company with the U.S. Securities and Exchange Commission (the “Commission”) (including the preliminary prospectus contained therein (the “Preliminary Prospectus”)), and (2) if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405 under the Securities Act), that have been filed with the Commission and delivered to the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental information regarding the Shares, the terms of the Offering and the Company, and (3) a final prospectus (the “Prospectus”) that has been or will be filed with the Commission and delivered to the Investor (or made available to the Investor by the filing by the Company of an electronic version thereof with the Commission).

4.           The Company and the Investor agree that at the Closing (as defined in Section 3.1 of Annex I), the Investor will purchase from the Company and the Company will issue and sell to the Investor the Shares set forth below for the aggregate Purchase Price set forth below.  The Shares shall be purchased pursuant to the Terms and Conditions for Purchase of Securities attached hereto as Annex I and incorporated herein by this reference as if fully set forth herein.  The Investor acknowledges that the Offering is not being underwritten by the Underwriter (the “Underwriter”) named in the Prospectus.

5.           The manner of settlement of the Shares purchased by the Investor shall be determined by such Investor as follows (check one):

[   ]         A.      Delivery by crediting the account of the Investor’s prime broker (as specified by such Investor on Exhibit A annexed hereto) with the Depository Trust Company (“DTC”) through its Deposit/Withdrawal At Custodian (“DWAC”) system, whereby Investor’s prime broker shall initiate a DWAC transaction on the Closing Date using its DTC participant identification number, and released by DTC, the Company’s transfer agent (the “Transfer Agent”), at the Company’s direction.  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

(I) DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND

(II) REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

Bank Name: Signature Bank

ABA Number: _____________

A/C Name: Signature Bank, as Escrow Agent for

Aegis Identity Software, Inc.

A/C Number:  _____________

FBO: Investor Name: ______________________________

Social Security Number or

Employer Identification Number: ____________________

—OR—

[   ]         B.       Delivery versus payment (“DVP”) through DTC (i.e., on the Closing Date, the Company shall issue Shares registered in the Investor’s name and address as set forth below and released by the Transfer Agent directly to the account(s) at Burnham Securities Inc. (the “Underwriter”) identified by the Investor; upon receipt of such Shares, the Underwriter shall promptly electronically deliver such Shares to the Investor, provided, that not later than the date that is one (1) business day prior to the Closing Date, payment shall be made by the Underwriter by wire transfer to an Escrow Account).  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

(I) NOTIFY AGENT OF THE ACCOUNT OR ACCOUNTS AT THE UNDERWRITER TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND

(II) CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT THE UNDERWRITER TO BE CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR.

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC OR DVP IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER.

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6.           The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or an Associated Person (as such term is defined under the FINRA’s NASD Membership and Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of Investors (as identified in a public filing made with the Commission) of which the Investor is a part in connection with the Offering, acquired, or obtained the right to acquire, 20% or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the voting power of the Company on a post-transaction basis.  Exceptions:

(If no exceptions, write “none.”  If left blank, response will be deemed to be “none.”)

7.           The Investor represents that it has received (or otherwise had made available to it by the filing by the Company of an electronic version thereof with the Commission) the Preliminary Prospectus which is a part of the Company’s Registration Statement, the documents incorporated by reference therein and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in connection with the receipt of this Agreement.  The Investor acknowledges that, prior to the delivery of this Agreement to the Company, the Investor will receive certain additional information regarding the Offering, including pricing information (the “Offering Information”).  Such information may be provided to the Investor by any means permitted under the Securities Act, including the Prospectus, a free writing prospectus and oral communications.

8.           No offer by the Investor to buy Shares will be accepted and no part of the Purchase Price will be delivered to the Company until the Investor has received the Offering Information and the Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the Company (or Agent on behalf of the Company) sending (orally, in writing or by electronic mail) notice of its acceptance of such offer.  An indication of interest will involve no obligation or commitment of any kind until the Investor has been delivered the Offering Information and this Agreement is accepted and countersigned by or on behalf of the Company.

Number of Shares:
Purchase Price per Share:	$
Aggregate Purchase Price:	$

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Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

Dated as of: __________ __, 2015

INVESTOR

By:

Print Name:

Title:

Address:

Agreed and Accepted

this ____ day of _________ 2015:

AEGIS IDENTITY SOFTWARE, INC.
By:
	Name:
	Title:

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ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES

1.           Authorization and Sale of the Shares.  Subject to the terms and conditions of this Agreement, the Company has authorized the sale of the Shares.

2.           Agreement to Sell and Purchase the Shares; Underwriter.

2.1           At the Closing (as defined in Section 3.1), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth herein, the number of Shares set forth on the last page of the Agreement to which these Terms and Conditions for Purchase of Securities are attached as Annex I (the “Signature Page”) for the aggregate purchase price therefor set forth on the Signature Page.

2.2           The Company proposes to enter into substantially this same form of Subscription Agreement with certain other investors (the “Other Investors”) and expects to complete sales of Shares to them.  The Investor and the Other Investors are hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors are hereinafter sometimes collectively referred to as the “Agreements.”

2.3           Investor acknowledges that the Company has agreed to pay Burnham Securities Inc. (the “Underwriter”) a fee (the “Underwriting Fee”) and to reimburse the Underwriter for certain expenses in respect of the sale of the Shares to the Investor, to make certain other payments to the Underwriter (the “Advisory Fee”) and to deliver certain warrants to the Underwriter (the “Underwriter’s Warrants”), all as set forth in the Preliminary Prospectus.

2.4           The Company has entered into an Underwriting Agreement, dated the date hereof (the “Underwriting Agreement”), with the Underwriter that contains certain representations, warranties, covenants and agreements of the Company that may be relied upon by the Investor, which shall be a third party beneficiary thereof.

3.           Closings and Delivery of the Securities and Funds.

3.1           Closing.  The completion of the purchase and sale of the Shares (the “Closing”) shall occur at a place and time (the “Closing Date”) to be specified by the Company and the Underwriter, and of which the Investors will be notified in advance by the Underwriter, in accordance with Rule 15c6-l promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  At the Closing, (a) the Company shall cause Depository Trust Company, the Company’s “Transfer Agent,” to deliver to the Investor the number of Shares purchased by the Investor as set forth on the Signature Page registered in the name of the Investor or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A, in the name of a nominee designated by the Investor, and (b) the aggregate purchase price for the Shares being purchased by the Investor will be delivered by or on behalf of the Investor to the Company.

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3.2           Conditions to the Obligations of the Parties.

(a)          Conditions to the Company’s Obligations.  The Company’s obligation to issue and sell the Shares to the Investor shall be subject to: (i) the receipt by the Company of the purchase price for the Shares being purchased hereunder as set forth on the Signature Page and (ii) the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing Date, all as set forth in this Annex I and in the Subscription Agreement to which it is attached.

(b)          Conditions to the Investor’s Obligations.  The Investor’s obligation to purchase the Shares will be subject to the accuracy of the representations and warranties made by the Company and the fulfillment of those undertakings of the Company to be fulfilled prior to the Closing Date, including without limitation, those contained in the Underwriting Agreement, and to the condition that the Underwriter shall not have: (a) terminated the Underwriting Agreement pursuant to the terms thereof or (b) determined that the conditions to the closing in the Underwriting Agreement have not been satisfied.  The Investor’s obligations are expressly not conditioned on the purchase by any Other Investor of the Shares that such Other Investor has agreed to purchase from the Company, but are explicitly conditioned on the purchase by Investors and sale by the Company of not less than _________ Shares in the offering.  The Investor understands and agrees that, in the event that the Underwriter in its sole discretion determines that the conditions to closing in the Underwriting Agreement have not been satisfied or if the Underwriting Agreement may be terminated for any other reason permitted by such Underwriting Agreement, then the Underwriter may, but shall not be obligated to, terminate such Agreement, which shall have the effect of terminating this Subscription Agreement pursuant to Section 13 below.

3.3           Delivery of Funds.

(a)          DWAC Delivery.  If the Investor elects to settle the Shares purchased by such Investor through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) delivery system, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall remit by wire transfer the amount of funds equal to the aggregate purchase price for the Shares being purchased by the Investor to the following Escrow Account designated by the Company:

Bank Name:

ABA Number:

A/C Name:

A/C Number:

FBO: Investor Name: ______________________________

Social Security Number or

Employer Identification Number: ____________________

(b)          Delivery Versus Payment through The Depository Trust Company.  If the Investor elects to settle the Shares purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall confirm that the account or accounts at the Underwriter to be credited with the Shares being purchased by the Investor have a minimum balance equal to the aggregate purchase price for the Shares being purchased by the Investor.

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3.4           Delivery of Shares.

(a)          DWAC Delivery.  If the Investor elects to settle the Shares purchased by such Investor through DTC’s DWAC delivery system, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall direct the broker-dealer at which the account or accounts to be credited with the Shares being purchased by such Investor are maintained, which broker/dealer shall be a DTC participant, to set up a DWAC instructing the Transfer Agent to credit such account or accounts with the Shares.  Such DWAC instruction shall indicate the settlement date for the deposit of the Shares, which date shall be provided to the Investor by the Underwriter.  Upon the closing of the Offering, the Company shall direct the Transfer Agent to credit the Investor’s account or accounts with the Shares pursuant to the information contained in the DWAC.

(b)          Delivery Versus Payment through The Depository Trust Company.  If the Investor elects to settle the Shares purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall notify the Underwriter of the account or accounts at the Underwriter to be credited with the Shares being purchased by such Investor.  On the Closing Date, the Company shall deliver the Shares to the Investor through DTC directly to the account(s) at the Underwriter identified by Investor.  Upon receipt of such Shares, the Underwriter shall promptly electronically deliver such Shares to the Investor, and simultaneously therewith payment shall be made by the Underwriter by wire transfer to the Company.

4.           Representations, Warranties and Covenants of the Investor.

The Investor acknowledges, represents and warrants to, and agrees with, the Company and the Underwriter that:

4.1           The Investor (a) has answered all questions in this Subscription Agreement, including this Annex I and the Investor Questionnaire in Exhibit A, and the answers thereto are true and correct as of the date hereof and will be true and correct as of the Closing Date and (b) in connection with its decision to purchase the Shares set forth in the Subscription Agreement, has received and is relying only upon the Disclosure Package and the documents incorporated by reference therein and the Offering Information.

4.2           (a) No action has been or will be taken in any jurisdiction outside the United States by the Company or the Underwriter that would permit an offering of the Shares, or possession or distribution of offering materials in connection with the issue of the Shares in any jurisdiction outside the United States where action for that purpose is required, (b) if the Investor is outside the United States, it will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or distributes any offering material, in all cases at its own expense and (c) the Underwriter is not authorized to make and has not made any representation, disclosure or use of any information in connection with the issue, placement, purchase and sale of the Shares, except as set forth or incorporated by reference in the Preliminary Prospectus, the Prospectus or any free writing prospectus.

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4.3           (a) The Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as to the enforceability of any rights to indemnification or contribution that may violate the public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation).

4.4           The Investor understands that nothing in this Agreement, the Preliminary Prospectus, the Disclosure Package, the Offering Information, the Prospectus or any other materials presented to the Investor in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax and investment advisors and made such investigation as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares.

5.           Survival of Representations, Warranties and Agreements; Third Party Beneficiary.  Notwithstanding any investigation made by any party to this Agreement or by the Underwriter, all covenants, agreements, representations and warranties made by the Company and the Investor herein will survive the execution of this Agreement, the delivery to the Investor of the Shares and the payment therefor.  The Underwriter shall be a third party beneficiary with respect to the representations, warranties and agreements of the Investor in Section 4 hereof.

6.           Notices.  All notices, requests, consents and other communications hereunder will be in writing, will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International Federal Express or facsimile, and will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, and (iv) if delivered by facsimile, upon electronic confirmation of receipt and will be delivered and addressed as follows:

(a)           if to the Company, to:

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

Facsimile:  (303) 474-7892

Attention:  Mr. Robert Lamvik, Chief Executive Officer

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with a copy (which shall not constitute notice) to each of:

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Facsimile:  (212) 451-2222

Attention:  Spencer G. Feldman, Esq.

Burnham Securities Inc.

18500 Von Karman Avenue, Suite 560

Irvine, CA 92162

Facsimile: (949) 390-9579

Attention:  Mr. Daniel J. McClory, Managing Director, Investment Banking

(b)           if to the Investor, at its address on the Signature Page hereto, or at such other address or addresses as may have been furnished to the Company in writing.

7.           Changes.  This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor.

8.           Headings.  The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement.

9.           Severability.  In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.

10.           Governing Law.  This Agreement will be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of law that would require the application of the laws of any other jurisdiction.

11.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which will constitute an original, but all of which, when taken together, will constitute but one instrument, and will become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.  The Company and the Investor acknowledge and agree that the Company shall deliver its counterpart to the Investor along with the Prospectus (or the filing by the Company of an electronic version thereof with the Commission).

12.           Confirmation of Sale.  The Investor acknowledges and agrees that such Investor’s receipt of the Company’s signed counterpart to this Agreement, together with the Prospectus (or the filing by the Company of an electronic version thereof with the Commission), shall constitute written confirmation of the Company’s sale of the Shares to such Investor.

13.           Termination.  In the event that the Underwriting Agreement is terminated by the Underwriter pursuant to the terms thereof, this Agreement shall terminate without any further action on the part of the parties hereto.

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EXHIBIT A

AEGIS IDENTITY SOFTWARE, INC.

INVESTOR QUESTIONNAIRE

Pursuant to Section 3 of Annex I to the Agreement, please provide us with the following information:

1.	The exact name that your Shares are to be registered in.  You may use a nominee name if appropriate:
2.	The relationship between the Investor and the registered holder listed in response to item 1 above:
3.	The mailing address of the registered holder listed in response to item 1 above:
4.	The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above:
5.	Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Shares are maintained):
6.	DTC Participant Number:
7.	Name of Account at DTC Participant being credited with the Shares:
8.	Account Number at DTC Participant being credited with the Shares:

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EX-10.8

Exhibit 10.8

TridentHE Identity Manager

Software License Agreement

PLEASE READ THE TERMS OF THIS LICENSE AGREEMENT AND ANY SUPPLEMENTAL LICENSE TERMS PROVIDED SEPARATELY (COLLECTIVELY THE “AGREEMENT”) CAREFULLY BEFORE DOWNLOADING, INSTALLING OR OTHERWISE USING THE SOFTWARE.  BY DOWNLOADING OR INSTALLING THE SOFTWARE, YOU AGREE TO THE TERMS OF THIS AGREEMENT AND ACKNOWLEDGE THIS AGREEMENT APPLIES NOTWITHSTANDING ANY CONFLICTING, CONTRARY OR ADDITIONAL TERMS AND CONDITIONS IN ANY PURCHASE ORDER OR OTHER DOCUMENT OR COMMUNICATION FROM YOU.  IF YOU DO NOT AGREE WITH ALL OF THESE TERMS, DO NOT DOWNLOAD, INSTALL OR USE THE SOFTWARE.

1.      License to Use.  Subject to the provisions of this Agreement and the payment of the License Fee, Aegis Identity Software, Inc. (“Aegis Identity”) grants to you (“Licensee”) for the License Term and Licensee hereby accepts a limited, personal, non-exclusive, nontransferable and non-assignable license for internal use only of the commercially available version of TridentHE Identity Manager Software (“TridentHE”) including, without limitation, any documentation such as user manuals, instructions, functional specifications and other material relating to Licensee’s Use of TridentHE (collectively, “Documentation”) in object code for its licensed purpose and only at the location(s) listed on Aegis Identity’s sales quote #________________, if applicable.  Licensee acknowledges that the continued integrity of TridentHE and Aegis Identity’s obligations under this Agreement are dependent on the proper storing, loading, installing, executing or displaying of TridentHE in Licensee’s normal internal operations (“Use”) in accordance with the Documentation.  Except as permitted in Section 5 of this Agreement, any updates, upgrade or error corrections are specifically excluded from the scope of this Agreement but may be purchased separately from Aegis Identity.   In the event maintenance is purchased the terms and conditions of this Agreement govern any updates, upgrades, error corrections or other software program or code provided thereunder.   2.      Release Candidates.  This Section 2 is applicable if and only so long as Licensee has engaged Aegis Identity to provide maintenance under the Maintenance and Support Terms. (a)           License to Use.  Subject to the provisions of this Agreement, Aegis Identity grants to Licensee and Licensee hereby accepts a limited, personal, non-exclusive, nontransferable, non-assignable license to use a copy of TridentHE currently in development prior to its commercial release which contains pre-release features, enhancements and upgrades that are not in the commercially available version (the “RC”) and any related Documentation solely for evaluation and testing purposes either installed locally in a development or test environment or on a hosted system in object code only for the sole purpose of pre-release evaluation and testing internally in a non-production environment.  Licensee will not use any RC in a production environment.  Licensee acknowledges that if an RC is made available commercially by Aegis Identity, the final product features will be determined exclusively by Aegis Identity. (b)      Licensee Feedback.  Licensee agrees to provide Aegis Identity with feedback regarding RCs (“Feedback”), including bugs, errors and feature requests.  Aegis Identity owns all right, title and interest in and to all Feedback. (c)      Disclaimer of Warranties.  LICENSEE UNDERSTANDS RCs ARE PRE-RELEASE AND THAT AEGIS IDENTITY DOES NOT PROVIDE ANY WARRANTIES FOR RCs, AND PURSAUNT TO SECTION 13 HEREOF AEGIS IDENTITY HEREBY DISCLAIMS ALL WARRANTIES WITH RESPECT OF ANY RC.  RCs ARE PROVIDED "AS IS" FOR TESTING AND EVALUATION PURPOSES ONLY. (d)      Support.  Aegis Identity may, at its sole discretion, provide updates to and/or support for any RC to Licensee.  Any updates provided are subject to all of the terms and conditions in this Agreement.   3.           Restrictions.  Licensee agrees that it will not (a) adapt, alter, modify, enhance, translate, reverse-engineer, decompile, disassemble, create derivative works of or otherwise attempt to reconstruct the source code of TridentHE, any RC or the Documentation, (b) license or sublicense any component of TridentHE or RC or Licensee’s right to Use TridentHE or any RC, (c) export, rent, assign, lease, grant a security interest in, or otherwise transfer or convey any component of TridentHE or RC or Licensee’s rights to Use TridentHE or any RC to any third party without the prior written consent of Aegis Identity, (d) remove, modify or obscure any proprietary notices, tags or labels that appear on TridentHE, any RC or Documentation, (e) Use TridentHE, any RC or the Documentation to produce, market or supportits own or any other products (other than for internal use as permitted herein), (f) copy or duplicate TridentHE, any RC or Documentation except for one copy to be used for archival purposes, (g) use an RC in a production environment, (h) disclose results of any program benchmark tests without Aegis Identity’s prior written consent, or (i) make TridentHE or any RC available to anyone other than its employees who have a reason to access the software and have agreed to employ the same protections used to protect Licensee’s similar highly sensitive information.

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4.      Audit Rights.  During the License Term and for one (1) year following any termination of this Agreement, Licensee grants Aegis Identity the right, upon reasonable notice, to periodically access, examine and audit the records, the systems and facilities they are stored in and all processes and controls related to Licensee’s Use of TridentHE and any RC in order to verify compliance with the terms and conditions of this Agreement.  During the audit, Licensee agrees to cooperate with Aegis Identity or an auditor selected by Aegis Identity in a timely manner and make employees, managers and facilities available to provide reasonable assistance as requested.  Aegis Identity will keep the details of the business affairs of Licensee and the results of the audit confidential, except Aegis Identity may disclose any records or information received in the audit to enforce this Agreement or comply with legal obligations or any governmental investigation.  Any such audit will be performed at Aegis Identity’s expense, provided that Licensee shall promptly reimburse Aegis Identity for the cost of such audit if any non-compliance is identified.   5.      Ownership and Title.  Aegis Identity and/or its licensors retain exclusive ownership, title and all rights, whether or not specifically recognized or perfected under the laws of any applicable jurisdiction, in and to TridentHE, all RCs, Feedback, the Documentation and any copies, modifications and all derivative works, and all proprietary rights thereto.  Licensee acquires only a license to Use TridentHE and any RC.  No other right, title or interest in or to any patent rights, copyrights, trademarks, service mark, logo or trade name of Aegis Identity or any other proprietary rights in such items are granted under this Agreement.   6.           Limited Warranty.  For a period of ninety (90) days from the commencement of the License Term (the "Warranty Period"), Aegis Identity warrants that TridentHE will perform in all material respects according to TridentHE's documented specifications when Used with an operating environment approved by Aegis Identity.   The RCs are specifically excluded from the limited warranty provided in this Section 6.  Licensee’s remedy and Aegis Identity’s liability under this Section 6 are contingent upon (a) Licensee notifying Aegis Identity of the claim within the Warranty Period and furnishing Aegis Identity with adequate supporting documentation to substantiate the claim and assist Aegis Identity in identifying and detecting of the cause of the problem, and (b) the problem being capable of reproduction by Aegis Identity within a reasonable period of time on properly functioning equipment.  Licensee’s sole remedy for breach of the limited warranty is that if, on the basis of the documentation submitted to Aegis Identity during the Warranty Period, it is shown that TridentHE is non-conforming, Aegis Identity shall make reasonable efforts to resolve the non-conformity in TridentHE in a manner determined by Aegis Identity.  If it is determined that (i) no such non-conformity exists, (ii) the non-conformity is resulting from unauthorized modifications made by Licensee or a third party vendor, (iii) improper Use or Use on an operating environment not approved by Aegis Identity, Licensee agrees to compensate Aegis Identity for its services and expenses at Aegis Identity’s then-current rates.   7.      License Fee and Taxes.  As consideration for the grant of this License, Licensee agrees to pay Aegis Identity a license fee in the amount of and on the terms of payment set forth on Aegis Identity sales quote #___________ including the payment of any sales, excise or other taxes applicable to the sale other than taxes on Aegis Identity’s income (the “License Fee”).  Licensee acknowledges that its payment obligation is non-cancellable once Licensee submits its order to Aegis Identity and the License Fee is non-refundable and fully earned by Aegis Identity upon deliveryof TridentHE without any further performance by Aegis Identity.   8.           Confidential Treatment and Nondisclosure.   Licensee shall maintain the confidentiality of Aegis Identity’s Confidential Information (as described below) using at least the same efforts as it uses to maintain the confidentiality of its own Confidential Information, but with no less than a reasonable degree of care.  Licensee agrees not to disclose or otherwise make Confidential Information available to any third party, and agrees that such Confidential Information shall be used by it only in connection with its performance of (or exercise of rights under) this Agreement.  Licensee shall immediately notify the disclosing party of any actual or suspected unauthorized disclosure, access or use of Confidential Information and cooperate with Aegis Identity with respect to terminating, investigating and mitigating the results of any such unauthorized disclosure, access or use.  The obligations under this Section 8 shall remain in effect indefinitely for TridentHE, all RCs or any other proprietary software, computer programs or processes related thereto. (a)           Definition of Confidential Information.  The term “Confidential Information” shall include any non-public information, whether in written, oral, graphic, electronic or any other form, including without limitation, TridentHE, all RCs, Feedback, the Documentation and any other software or computer programs or processes, methodologies, test results, error data or other reports prepared by Aegis Identity pursuant to this Agreement, whether or not specifically marked as confidential by Aegis Identity or which would be deemed by a reasonable person to be confidential or proprietary in nature.  Confidential Information shall not include information that (a) is in or enters the public domain without breach of this Agreement, (b) Licensee receives from a third party who is entitled to disclose such information without restriction on

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disclosure, or (c) Licensee knew prior to receiving such information from Aegis Identity or develops independently without reference to Aegis Identity’s Confidential Information which knowledge or development is reasonably documented.  Licensee may disclose Confidential Information in accordance with a judicial or other governmental order, provided that Licensee shall give Aegis Identity reasonable notice prior to such disclosure and shall comply with any applicable protective order or equivalent.   9.      Infringement Indemnification.    Notwithstanding any provision herein to the contrary except for Sections 9(a) and 9(b) of this Agreement, Aegis Identity will indemnify Licensee for any actual damages awarded by a court of competent jurisdiction against Licensee in connection with any infringement by TridentHE of any third party’s intellectual property rights based on U.S. law; provided however, Aegis Identity shall have no duty to indemnify Licensee for any claims in the event that (a) TridentHE is altered or modified by Licensee or a third party, (b) Licensee fails to install a release that is provided by Aegis Identity to cure an infringement issue, (c) TridentHE is not Used for its intended purpose, or (d) for any RC. (a)      Limitations.  Aegis Identity will only be liable for providing indemnification under this License if Licensee (a) notifies Aegis Identity in writing within seven (7) calendar days of learning of any threatened or actual claim giving rise to indemnity obligations, (b) permits Aegis Identity the sole and exclusive right to control the defense, compromise or settlement of such claims, and (c) provides all reasonably available information, assistance and authority in defense or settlement of such claims, at Aegis Identity’s reasonable expense.  Licensee agrees that it will not settle any claim in a manner which would impose any obligation on Aegis Identity or restrict Aegis Identity’s right, title or interest in TridentHE without Aegis Identity’s prior written consent. (b)      Other Remedies.  Licensee agrees to permit Aegis Identity, solely at Aegis Identity’s option and expense, to remedy any alleged infringement by (a) replacing TridentHE with a functionally compatible product, (b) modifying TridentHE so that it is non-infringing, (c) obtaining a license for Licensee, or (d) terminating this Agreement. (c)      THIS SECTION 9 SETS FORTH AEGIS IDENTITY’S SOLE AND EXCLUSIVE OBLIGATIONS AND LIABILITY, AND LICENSEE’S SOLE AND EXCLUSIVE REMEDIES, WITH RESPECT TO INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND.   10.      License Term. (a)           TridentHE.  The License granted hereunder shall commence on the date Aegis Identity electronically delivers the link for downloading the software to Licensee and continue in perpetuity or until terminated in accordance with the provisions in Section 11 (the “License Term”). (b)      RC.  Licensee’s right to use an RC will commence on the date the RC is electronically made available for Licensee and will terminate on the earlier of (i) termination of this Agreement, or (ii) when the RC becomes commercially available.  Aegis Identity may terminate Licensee’s right to use an RC at any time for any reason by providing written notice with or without cause to Licensee.  Licensee may use the commercial version of the RC if released only pursuant to the Maintenance and Support Terms.   11.      Termination.  Aegis Identity may terminate this License, effective immediately, if Licensee fails to pay the License Fee when due or commits a material breach of this Agreement, including, but not limited to any breach of the provisions of Sections 1, 3, 4, 5, 8, 12, 13 and 17(g) hereunder which adversely affects Aegis Identity’s rights.   Upon termination, Licensee shall: (a) delete TridentHE and any RC from its environment and destroy any copies of TridentHE and any RC including Documentation within (10) days of such termination; (b) pay in full within thirty (30) days of such termination, all amounts owed to Aegis Identity; (c) promptly return any Confidential Information and all copies thereof to Aegis Identity; and (d) certify in writing to Aegis Identity no later than thirty (30) days after termination that Licensee has either returned or destroyed all copies of any Confidential Information and deleted TridentHE and any RC from its environment.   12.      Limitation of Liability.  AEGIS IDENTITY AND ITS LICENSORS SHALL NOT BE RESPONSIBLE FOR, AND SHALL NOT PAY, ANY AMOUNT OF INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES, OR ANY DAMAGES RELATED TO THE LOSS OF DATA, BUSINESS, PROFITS, GOODWILL, WORK STOPPAGE OR ANY AND ALL OTHER COMMERCIAL DAMAGES OR LOSSES, REGARDLESS OF WHETHER AEGIS IDENTITY WAS ADVISED OF THE POSSIBILITY OF SUCH LOSSES IN ADVANCE.  THE INFRINGEMENT INDEMNITY IN SECTION 9 IS IN LIEU OF ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OF AEGIS IDENTITY FOR DAMAGES.  IN NO EVENT SHALL AEGIS IDENTITY'S LIABILITY HEREUNDER EXCEED THE AMOUNT OF LICENSE FEE PAID BY LICENSEE, REGARDLESS OF WHETHER LICENSEE'S CLAIM IS BASED ON CONTRACT, TORT, STRICT LIABILITY, PRODUCT LIABILITY OR OTHERWISE.  THE PARTIES ACKNOWLEDGE THAT THE LIMITATIONS SET FORTH IN THIS SECTION HAVE BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT, AND SUCH LIMITATIONS DESCRIBED HEREIN WILL APPLY EVEN IF SUCH LIMITATIONS ARE FOUND TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE. 13.           Disclaimer of Warranties.  WITH THE EXCEPTION OF THE LIMITED WARRANTY MADE BY AEGIS IDENTITY IN

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SECTION 6, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AEGIS IDENTITY DISCLAIMS ALL WARRANTIES WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE, NONINFRINGMENT, AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.   14.      Loss of Data.  In no event shall Aegis Identity be liable for loss of data or records of Licensee, it being understood that Licensee shall be responsible for assuring proper and adequate back-up and storage procedures.   15.      Force Majeure.  Neither party shall be liable for, nor shall it be considered in breach of this Agreement due to, any failure to perform its obligations under this Agreement as a result of a cause beyond its control, including any act of God or public enemy, act of any military, civil or regulatory authority, terrorism or threat thereof, change in any law or regulation, fire, flood, earthquake, storm or other like event, disruption or outage of communications, power or other utility, labor problem, unavailability of supplies, or any other cause, whether similar or dissimilar to any of the foregoing, which could not have been prevented by the party with reasonable care.  This provision shall not apply to Licensee’s obligation to pay any sums due under this Agreement.   16.      Open Source Technology and Licensing.  Third party technology may be necessary for use with TridentHE and is specified in the program documentation; specific files (which are identified in the program documentation) of such third party technology (collectively the “Open Source Technology”) may be included as part of the download of TridentHE, but is licensed under the Mozilla Public License, Common Public License, GNU Lesser General Public License, Netscape Public License or similar royalty-free/open source license (collectively, the “Open Source Licenses”).  This Agreement does not modify or abridge any rights or obligations Licensee may have in Open Source Technology under applicable Open Source Licenses; however, to the extent that Open Source Technology is incorporated into TridentHE, Licensee’s rights and remedies under this Agreement with respect to such Open Source Technology shall apply, but only for Licensee’s use of TridentHE in compliance with the terms of this Agreement and with the terms of any relevant Open Source License.  Any use of Open Source Technology outside of Licensee’s Use of TridentHE is subject to the rights and obligations under such third party technology’s Open Source License.   17.      General Provisions. (a)           Specific Performance.  Upon the occurrence or the threatened or likely occurrence of any breach of Section 1, 2, 3, 5, 8 or 17(g) of this Agreement, Aegis Identity shall be entitled to temporary and permanent equitable and injunctive relief, it being expressly stipulated that any breach of those Sections of this Agreement by Licensee shall cause irreparable harm to Aegis Identity and that Aegis Identity shall not in such event have an adequate remedy at law.  Licensee agrees that if there is any unauthorized Use or disclosure of TridentHE, any RC or Documentation by any of Licensee’s employees or any third party with access to such items through Licensee, Licensee will enforce for Aegis Identity’s benefit, through litigation if necessary, all rights provided under law to seek damages and protection from additional disclosure.  The foregoing remedies are cumulative and in addition to any and all other remedies available at law or in equity. (b)           Export.  Licensee acknowledges that TridentHE may be subject to export controls of the U.S. and import controls of the territory in which TridentHE may be used.  Licensee agrees that TridentHE will be exported or re-exported only in compliance with such laws. (c)           Restricted Rights.  If Licensee is acquiring this Agreement under a U.S. government contract, Licensee agrees that it will include all necessary and applicable restricted rights legends on TridentHE, any RC and Documentation to protect Aegis Identity’s proprietary rights under the Federal Acquisition Regulations or other similar regulations of other federal agencies. (d)           Restriction. TRIDENTHE IS NOT DESIGNED, MANUFACTURED OR INTENDED FOR USE OR DISTRIBUTION WITH ONLINE CONTROL EQUIPMENT IN HAZARDOUS ENVIRONMENTS REQUIRING FAIL-SAFE PERFORMANCE, SUCH AS IN THE OPERATION OF NUCLEAR FACILITIES, AIRCRAFT NAVIGATION, COMMUNICATION, OR CONTROL SYSTEMS, DIRECT LIFE SUPPORT MACHINES, WEAPONS SYSTEMS, OR OTHER USES IN WHICH FAILURE OF THE SOFTWARE COULD LEAD DIRECTLY TO DEATH, PERSONAL INJURY, OR SEVERE PHYSICAL OR ENVIRONMENTAL DAMAGE. (e)           Notice.  Any notice or other communication required or permitted hereunder shall be in writing, shall reference this Agreement and shall be deemed to be properly given: (a) when delivered personally; (b) when sent by pdf transmission via electronic mail; (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two (2) business days after deposit with a private industry express courier, with written confirmation of receipt.  All notices to Aegis Identity shall be sent to its corporate headquarters located at 750 W. Hampden Ave., Suite 500, Englewood, CO, 80110-2165, Attn: Legal Department, Email: Legal@aegisidentity.com, Facsimile: 303-474-7892 and all notices to Licensee shall be sent to the address and contact person listed in Licensee’s purchase order.  Either party shall provide timely written notice of any change of address or contact person. (f)           Governing Law; Venue.  This Agreement shall be construed and enforced in accordance with the laws of the State of Colorado without regard to conflicts of laws principles.  The parties consent to the personal jurisdiction of, and venue in, the state and federal courts of Arapahoe

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County, in the State of Colorado and agree that such court is not an inconvenient forum. (g)           No Assignment.  Licensee shall not assign, sublicense or transfer TridentHE or any RC or otherwise assign its rights or obligations hereunder without the prior written consent of Aegis Identity.  Any such attempted assignment will be void. (h)           Entire Agreement; Modification.  This Agreement terminates and supersedes all prior understandings or agreements on the subject matter hereof.  This Agreement may be modified only by a further writing that is duly executed by both parties. (i)           Severability.  If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included. (j)           Waiver.  Either party’s failure to require performance of any provision of this Agreement shall in no way affect such party’s right at a later time to enforce the same.  No waiver by a party of a breach of a term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of such breach of any other term of this Agreement.(k)Survival.  Sections 3, 4, 5, 7, 8, 11, 12, 13, 14, 16, 17(a), 17(c), 17(e), 17(f), 17(k) and 17(l) shall survive expiration or termination of this Agreement. (l)      Fees.  If Aegis Identity seeks to enforce any of its rights and obligations hereunder by legal proceedings and prevails, Aegis Identity shall be entitled to recover from Licensee any and all costs and expenses incurred by Aegis Identity to enforce such rights, including, but not limited to all attorneys’ fees, court costs, and expert fees. (m)                 Headings.  Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent.   *******  

 

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EX-10.9

Exhibit 10.9

TridentHE Identity Software

Support Services and Maintenance

THESE TERMS AND CONDITIONS (the “Support Terms”) GOVERN THE SUPPORT SERVICES AND MAINTENANCE PROVIDED BY AEGIS IDENTITY SOFTWARE, INC. FOR THE TRIDENTHE IDENTITY MANAGER SOFTWARE AND APPLY NOTWITHSTANDING ANY CONFLICTING, CONTRARY OR ADDITIONAL TERMS AND CONDITIONS IN ANY PURCHASE ORDER OR OTHER DOCUMENT OR COMMUNICATION FROM CUSTOMER.

1.       Definitions.  As used herein, the terms below shall have the following meanings: “Aegis Identity” means Aegis Identity Software, Inc., a Colorado corporation. “Aegis Identity IP” shall have the meaning set forth in Section 5. “Customer” means the end user customer. “Error” means a reproducible failure of the Supported Software to substantially perform in conformity with the functions described in the documentation. “Error Correction” means either a software modification that corrects the Error when it is made or added to the Supported Software or a procedure or routine that eliminates the practical adverse effect of the Error when implemented in the regular operation of the Supported Software which does not affect the functionality of the Supported Software. “Support” shall have the meaning set forth in Section 2.1(a). “Support Terms” shall have the meaning set forth above. “Supported Software” means the TridentHE Identity Manager Software.  “System Manager” shall have the meaning set forth in Section 2.4(c). “Term” shall have the meaning set forth in Section 6(a). “Updates” means (a) subsequent versions of the Supported Software that Aegis Identity, in its sole discretion, designates as an Update that (i) add new features, functionality, and/or improved performance, (ii) operate on new or other databases, operating systems, or client or server platforms; or (b) Error Corrections, bug fixes, patches and maintenance releases. “Upgrade” means a release of the Supported Software that incorporates additional or improved features, functionality or capability and that Aegis Identity expressly designates as an Upgrade or as a new or separate product which Aegis Identity offers only for an additional fee to its customers generally, including those customers purchasing maintenance. 2.      Scope of Services 2.1   Support Services. (a) Scope.  Aegis Identity agrees to provide Support for the Supported Software based on the terms and conditions set forth herein.  Support consists of responses to questions from the designated System Managers related to the use of the Supported Software, identifying causes of suspected Errors in the Supported Software, or providing Error Corrections for identified Errors (“Support”).        (b) Hours. Support tickets may be submitted 24 hours per day/7 days per week depending upon the designated severity level assigned to the trouble ticket. (c) No Maximum. There is no limitation on the number of support hours Customer may request during the Term. 2.2   Severity Levels. Customer will assign all trouble tickets submitted to Aegis Identity one of the following severity levels (subject to review and confirmation by Aegis Identity): (a) Severity Level 1. Any Error that results in the Supported Software being totally or substantially inoperative, including, but not limited to, total system failure, data loss, data corruption, or a processing of functions and processes so slow as to render the system unusable, or any Severity 2 Error where a reasonable alternative work process cannot be established. (b) Severity Level 2.  Any Error that results in the usability of the Supported Software being restricted and for which a reasonable alternative work process can be established. (c) Severity Level 3. Any Error wherein one or more functions do not operate in substantial conformity with the description in the documentation of the Supported Software but where the impact on functionality and/or usability is agreed by Customer and Aegis Identity to be minor and result in a mutually acceptable disruption to Customer’s workflow processes. (d) Severity Level 4. Any Error that cannot be categorized as belonging to any higher severity level, including, but not limited to, a cosmetic or documentation error. 2.3   Response Times.  Aegis Identity will use commercially reasonable efforts to resolve any trouble tickets as follows: (a) Severity Level 1. Aegis Identity will use commercially reasonable efforts to provide an Error Correction for Severity Level 1 Errors within eight (8) business hours of receipt of a trouble ticket from Customer detailing the Error. (b) Severity Level 2. Aegis Identity will use commercially reasonable efforts to provide an Error Correction for Severity Level 2 Errors in the next scheduled Update or within 120 calendar days from the date on which the Error was reported to Aegis Identity via the online ticketing system, whichever occurs first. (c) Severity Levels 3 and 4. Aegis Identity will attempt to include as many fixes as possible for Severity Level 3 and 4 Errors in the next scheduled Upgrade of the

Supported Software, but is not contractually obligated to do so. 2.4    Customer Responsibilities. (a) Submission Procedure. All requests for Support shall be submitted to Aegis Identity in a standard format on Aegis Identity’s online trouble ticketing system.  Customer’s request to Aegis Identity must contain all pertinent information, in English.  Customer is responsible for designating the severity level of the support requested on the trouble ticket submitted to Aegis Identity; provided that trouble tickets designated as Severity Level 1 may be downgraded by Aegis Identity, in its sole discretion. (b) Information; Testing.  Customer must verify the existence of an Error and provide the conditions in which the Error may be recreated.  Customer agrees to provide Aegis Identity with remote access to its systems related to the Supported Software as reasonably necessary in order for Aegis Identity to resolve the reported Error.  Upon issuance of an Error Correction Customer will undertake to immediately test the same to verify resolution of the reported Error and notify Aegis Identity of such resolution. (c) Customer Contact.  Customer will designate up to two (2) System Managers (each a “System Manager”) familiar with the Supported Software and Customer’s operating environment from whom Aegis Identity will accept trouble tickets.  Aegis Identity will only accept and respond to trouble tickets from a designated System Manager. A System Manager will be available to assist Aegis Identity in remedying an Error with the Supported Software pursuant to this Section 2.  Customer agrees to notify Aegis Identity of any change of Customer’s System Manager in writing within a reasonable period of time. 2.5      Resolution of a Trouble Ticket; Acceptance.  A trouble ticket is completed or resolved upon one of the following: (a) Customer verifies the Error Correction has resolved the reported Error; (b) Customer is unable to recreate the Error within thirty (30) business days of its original submission to Aegis Identity; (c) The Error is determined to be a product defect or deficiency with Customer’s operating system software and not the Supported Software.  In this case, it will be Customer’s responsibility to resolve the issue internally or by opening a support ticket with the applicable third party vendor; or (d) It is determined that the issue is caused by an element of Customer’s operational environment such as the application servers, database server, web servers, managed resources and underlying operating systems. 2.6           Barriers to Completion.  Aegis Identity will use commercially reasonable efforts to resolve trouble tickets as quickly as possible.  It may take additional time to resolve a trouble ticket if a barrier to completion exists.  A barrier to completion is any situation created by Customer that makes resolution of an issue difficult to complete including, but not limited to, the following: (i) failing to provide necessary information; (ii) Customer staff changes; (iii) requiring indefinite or contradictory logic; (iv) failure to recreate the issue; or (v) failure by Customer to properly maintain the identity management operational environment, including application servers, database servers and the underlying operating systems. 2.7      Service Limitations. (a)    Aegis Identity will not be obligated to provide Support with respect to problems arising as a result of any of the following: (i) abuse, misuse, accident or neglect by Customer; (ii) repairs, alterations, and/or modifications that are not permitted under the applicable license agreement or that are performed by anyone other than Aegis Identity or its authorized agents; (iii) use of the Supported Software not in accordance with its documentation or inconsistent with the restrictions set forth in the license agreement; (iv) the hardware, computer operating system, other software, electricity supplies or consumable items of Customer; (v) use of custom code other than in accordance with Aegis Identity’s instruction; (vi) provision of inaccurate system configuration or specifications to Aegis Identity by Customer; (vii) failure by Customer to provide an adequate training or knowledge base for any System Managers or other users of the Supported Software; (viii) the failure to install Updates or to implement Error Corrections within thirty (30) days following release of the Update; (ix) use by Customer of the preceding version of the Supported Software after Aegis Identity has provided the most recent Update; (x) Customer’s failure to comply with these Support Terms; and (xi) Customer’s negligence or any cause within Customer’s control. (b) On-site services are not covered by these Support Terms, but are available to Customer under a separate agreement. 3.      Fees and Billing (a)      Billing.  The support fee is that amount set forth on the applicable Sales Quote and will be paid on an annual basis. (b)      Late Payments.  In addition to any other remedies available to Aegis Identity, if payment of the support fee is not made within fifteen (15) days of when due Aegis Identity has the right to suspend Support until such time as all fees are paid in full. 4.      Maintenance.  Subject to Customer’s payment of the support fee, during the Term, Aegis Identity will provide Customer the following maintenance services: (a)       Aegis Identity will provide Customer with Updates of the Supported Software that are made generally available by Aegis Identity to those customers purchasing maintenance for Supported Software.  If there is any question or dispute as to whether a particular release is an Update, Upgrade or a new product, the

categorization of the release as determined by Aegis Identity, in its sole discretion, will be final.  Updates and Upgrades, if made available to Customer hereunder, will be subject to the same license terms and conditions as the Supported Software. (b)  Aegis Identity has no obligation to develop or supply Upgrades or Updates.  Customer is required to download, install and/or implement any and all Updates provided by Aegis Identity under these Support Terms within thirty (30) days after the release of such Update or immediately with respect to an Update that Aegis Identity determines is responsive to a reported Error or potential infringement. (c) Subsequent versions of the Supported Software that Aegis Identity, in its sole discretion, designates as an Upgrade, are specifically excluded from maintenance services and may be obtained for an additional fee. 5.      Intellectual Property.  Aegis Identity retains exclusive ownership and all rights, title and interests in and to the Supported Software and any and all software and computer programs, Error Corrections, diagnostic routines, and all other intellectual property and proprietary rights related thereto (“Aegis Identity IP”), which are supplied or utilized by Aegis Identity for the purposes of providing Support and maintenance under these Support Terms.  Any Error Corrections, Updates and Upgrades, if made available to Customer hereunder is Aegis Identity IP and will be subject to the same license terms and conditions as the Supported Software.  Nothing in these Support Terms conveys to Customer any rights, title or interests, patent rights, copyrights, or any other proprietary interest in or to Aegis Identity IP. 6.      Term and Termination  (a) Term.  These Support Terms will commence on the date set forth in Aegis Identity’s written confirmation to Customer and continue for a period of twelve (12) months unless terminated in accordance with the provisions in this Section 6 or provided otherwise in the applicable Sales Quote (the “Term”).  Aegis Identity reserves the right to modify the Support Terms, including pricing, at any renewal period, unless otherwise set forth in the applicable Sales Quote.  (b) Termination by Either Party.  Either party may terminate these Support Terms, by providing written notice to the other party, in the event the other party (a) commits a material breach of these Support Terms or the applicable license agreement, (b) makes an assignment on the behalf of creditors, (c) admits in writing an inability to pay debts as they mature, or (d) institutes or has instituted against it a proceeding under any applicable bankruptcy protection laws. 7.      Limitations of Liability; Disclaimer (a) General.  AEGIS IDENTITY SHALL NOT BE RESPONSIBLE FOR, AND SHALL NOT PAY, ANY AMOUNT OF INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES, OR ANY DAMAGES RELATED TO THE LOSS OF DATA, BUSINESS, PROFITS, GOODWILL, WORK STOPPAGE OR ANY AND ALL OTHER COMMERICAL DAMAGES OR LOSSES, REGARDLESS OF WHETHER AEGIS IDENTITY WAS ADVISED OF THE POSSIBILITY OF SUCH LOSSES IN ADVANCE.  IN NO EVENT SHALL AEGIS IDENTITY’S LIABILITY HEREUNDER EXCEED THE AMOUNT OF THE LICENSE FEE PAID BY CUSTOMER FOR THE SUPPORTED SOFTWARE, REGARDLESS OF WHETHER CUSTOMER'S CLAIM IS BASED ON CONTRACT, TORT, STRICT LIABILITY, PRODUCT LIABILITY OR OTHERWISE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. (b) Disclaimer of Warranties. TO THE MAXIMUM EXTENT PERMITTED BY LAW, AEGIS IDENTITY DISCLAIMS ALL WARRANTIES WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE, NONINFRINGMENT, AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. (c) Loss of Data. In no event shall Aegis Identity be liable for loss of data or records of Customer, it being understood that Customer shall be responsible for assuring proper and adequate back-up and storage procedures. (d) Force Majeure. Neither party shall be liable for, nor shall it be considered in breach of these Support Terms due to, any failure to perform its obligations under these Support Terms as a result of a cause beyond its control, including any act of God or public enemy, act of any military, civil or regulatory authority, terrorism or threat thereof, change in any law or regulation, fire, flood, earthquake, storm or other like event, disruption or outage of communications, power or other utility, labor problem, unavailability of supplies, or any other cause, which could not have been prevented by the party with reasonable care. 8.      Miscellaneous Provisions (a) Governing Law; Venue.  These Support Terms shall be construed in accordance with the laws of the State of Colorado without regard to conflicts of laws principles.  The parties consent to the personal jurisdiction of, and venue in, the state and federal courts of Arapahoe County, in the State of Colorado and agree that such court is not an inconvenient forum. (b) Notice.  Any communication required or permitted hereunder shall be in writing, shall reference these Support Terms and shall be properly given: (a) when delivered personally; (b) when sent by facsimile or transmission of a scanned PDF file by electronic mail, with written confirmation; (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two (2) business days after deposit with a private industry express courier, with

written confirmation of receipt.  All notices to Aegis Identity shall be sent to its corporate headquarters located at 750 W. Hampden Ave., Suite 500, Englewood, CO, 80110-2165, Attn: Legal Department, Email: Legal@aegisidentity.com, Facsimile: 303-474-7892 and all notices to Licensee shall be sent to the address and contact person listed in Licensee’s purchase order.  Either party shall provide timely written notice of any change of address or contact person.

(c) No Assignment. Neither party will assign or otherwise transfer its rights or obligations under these Support Terms without the prior written consent of the other party.

(d) Entire Agreement; Modification.  These Support Terms terminate and supersedes all prior understandings or agreements on the subject matter hereof.  These Support Terms may be modified in writing executed by both parties.

(e) Severability.  If any term of these Support Terms is held by a court of competent jurisdiction to be unenforceable, then the remaining provisions of these Support Terms will remain in full force and effect as if such term had never been included.

(f) Waiver.  Any delay or failure of either party to exercise a right or remedy will not result in a waiver of that, or any other right or remedy.

(g) Survival.  Sections 1, 3, 5, 7, 8(a), 8(b) and 8(g) shall survive expiration or termination of these Support Terms.

(h) Headings.  Headings used in these Support Terms are provided for convenience only.

*************

EX-10.10

Exhibit 10.10

PROFESSIONAL SERVICES AGREEMENT

PSA No. University InitialsIMPSVCSDate__________________

THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement"), dated as of this _____day of _______________, 2015 (“Effective Date”), by and between Aegis Identity Software, Inc., a Colorado corporation (“Aegis Identity”), and ______________________("Customer”) (each referred to herein as a “Party” and collectively as the “Parties”).  For valuable consideration, the receipt of which is acknowledged, the Parties covenant and agree as follows:

1.  Scope of Services.  Aegis Identity agrees to perform for Customer the services set forth on the statement of work attached as Attachment A to this Agreement (the “Services”).  While working on Customer’s premises, Aegis Identity and its employees agree to observe the working hours, working rules and internal policies of Customer.  The Parties agree that this Agreement does not create an exclusive relationship between the Parties and nothing herein is intended to preclude Aegis Identity from providing similar Services for its other customers. 2.  Service Fees; Payment.Customer will compensate Aegis Identity in accordance with the terms set forth on Attachment A.  Customer shall submit payment in full within thirty (30) business days following receipt of an invoice.  Any balance that is not paid when due will be subject to finance charges equivalent to the lower of eighteen (18) percent per annum interest rate or the highest rate allowed by law.  3.  Expenses.  Customer will reimburse Aegis Identity for reasonable business and travel expenses incurred in connection with the performance of the Services as set forth on Attachment A. 4.  Term; Termination.  This Agreement shall commence on the Effective Date and shall terminate upon completion of the Services unless sooner terminated by either Party providing ten (10) days prior written notice to the other Party.  The Parties may agree to extend the term of this Agreement in writing.  In the event of termination, Customer will pay Aegis Identity for all Services and reimbursable expenses performed and approved as of the termination date.  5.  Confidentiality.  Each Party agrees to hold in the strictest confidence and not disclose to third parties or use, except to the extent necessary to perform the Services, the other Party’s proprietary or confidential information including technical, business, financial or other information or trade secrets, whether or not specifically marked as confidential, or information which would be deemed by a reasonable person to be confidential or proprietary in nature (“Confidential Information”).  Confidential Information shall not include information that (a) is in or enters the public domain without breach of this Agreement, (b) is received from a third party who is entitled to disclose such information without restriction on disclosure and without breach of a nondisclosure obligation, (c) the Party knew prior to receiving such information or develops independently without reference to the other Party’s Confidential Information, or (d) is disclosed pursuant to a judicial or other governmental order, provided that the Party shall give the other party reasonable notice prior to such disclosure and comply with any applicable protective order or equivalent.  Each Party agrees, upon the request of the other Party, to promptly deliver to the other Party (or, with the other Party’s consent, destroy) the originals and all copies of any Confidential Information then in its possession or control.  The Parties agree that the rights being protected by this Section 5 are of a special and unique character, which gives them a particular value, and that the breach of this Section 5 will result in irreparable injury and damage.  In such event, the non-breaching party shall be entitled to require specific performance, obtain injunctive and other equitable relief in any court of competent jurisdiction to prevent the violation or threatened violation of this Section 5.  6.  Use of Work Product.  Customer shall have all right, title and interest, in and to, and shall be free to use all materials created by Aegis Identity as a result of performing Services under this Agreement.  Aegis Identity retains exclusive ownership, and all rights, title and interest, whether or not specifically recognized or perfected under the laws of any applicable jurisdiction, in and to (a) all materials created, authored or developed by Aegis Identity prior to performing Services under this Agreement including, without limitation, proprietary software and connectors, computer programs, hardware design and/or specifications, the intellectual property rights thereto and any copies, modifications, derivative works, related documentation, updates, versions, and code corrections, and (b) concepts, techniques, know-how, best practices, methodologies, refinements to methodologies, processes and/or procedures used or developed under this Agreement (collectively, “Aegis IP”).  Nothing in this Agreement conveys to Customer any ownership, rights, title or any other proprietary interest in the Aegis IP.

7.  Insurance.   Aegis Identity shall maintain the following insurance coverage in effect at all times during the performance of this Agreement: (a) commercial general liability insurance with at least $1,000,000 combined single limit bodily injury and property damage; (b) full statutory coverage for workers' compensation; (c) errors and omissions or professional liability coverage with a limit of at least $1,000,000 for each and every claim.  Aegis Identity agrees to furnish certificates evidencing such coverage upon Customer’s written request. 8.  Limitation of Liability.  IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL OR INCIDENTAL DAMAGES, OR ANY LOSS OF PROFITS, LOSS OF GOODWILL OR LOSS OF SAVINGS, EVEN IF THE OTHER PARTY IS ADVISED OF THE POSSIBILITY OF SUCH LOSS, DAMAGES, OR COST.  IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY AMOUNTS IN EXCESS OF THE AMOUNTS PAID HEREUNDER.  THE PARTIES ACKNOWLEDGE THAT THE LIMITATIONS SET FORTH IN THIS SECTION HAVE BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT, AND SUCH LIMITATIONS DESCRIBED HEREIN WILL APPLY EVEN IF SUCH LIMITATIONS ARE FOUND TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE.  9.  Limited Warranty.  Aegis Identity warrants that the Services will be performed in a professional manner consistent with the level of care, skill, practice and judgment exercised by other professionals in performing services of a similar nature under similar circumstances.  In no event shall Aegis Identity be liable for loss of data or records of Customer, it being understood that Customer shall be responsible for assuring proper and adequate back-up and storage procedures.  THE PRECEDING IS AEGIS IDENTITY’S ONLY WARRANTY CONCERNING THE SERVICES, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF TITLE, NONINFRINGMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE. 10.   Independent Contractor. Aegis Identity will be performing the Services solely as an independent contractor.  Aegis Identity shall not be considered an affiliate or subsidiary of Customer and it is expressly understood by the Parties that this undertaking is not a joint venture. Aegis Identity shall have the right to determine the methods, details and means of performing the Services.  As an independent contractor Aegis Identity bears the sole responsibility for compensating its employees.  Aegis Identity and its employees shall not be considered employees of Customer and are not entitled to any employee benefits from Customer. 11.  Non-Solicitation.   Customeragrees that, if it hires any employee or contractor who has been utilized by Aegis Identity in connection with performance of the Services, during the term and for a period of one (1) year following the termination of this Agreement, then it will pay Aegis Identity a fee equal to twenty percent (20%) of that person’s annual base compensation immediately prior to the hiring or employment by Customer.  12.  Governing Law; Venue.This Agreement shall be governed by the laws of the State of Colorado, without regard to its conflicts of laws provisions.  The Parties expressly agree that any and all disputes, claims or litigation arising from or related in any way to this Agreement shall be resolved exclusively by the courts of the State of Colorado.  The Parties hereby waive any objections against and expressly agree to submit to the personal jurisdiction of the Municipal and/or Superior Courts of the State of Colorado, County of Arapahoe, and the U.S. District Court for Colorado. 13.  Entire Agreement; Amendment.This Agreement, together with any attachments, exclusively and completely states the rights, duties and obligations of the Parties and supersedes all prior and contemporaneous representations, letters, proposals, discussions and understandings by or between the Parties.  This Agreement may only be amended by a written document that is signed by both Parties; provided that changes to Attachment A shall be made in a written change order signed by both Parties.   14.  Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall continue in full force without being invalidated in any way. 15.  Force Majeure.  Aegis Identity shall not be liable for any delay or failure to perform its obligations due to causes beyond its reasonable control, including, without limitation, any act of God, change in any law or regulation, disruption of communications, power or other utility, unavailability or shortage of supplies, or failure of Customer to reasonably cooperate with Aegis Identity. 16.  Legal Fees.  If either Party seeks to enforce any of its rights and obligations hereunder by legal proceedings and prevails, the other Party shall be entitled to recover any and all costs and expenses incurred by such Party to enforce its rights, including,

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but not limited to all attorneys’ fees, court costs, and expert fees. 17.  No Waiver.   Any express waiver or failure to promptly exercise any right under this Agreement will not create a continuing waiver or any expectation of non-enforcement. 18.  Notices.  Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to be properly given: (a) when delivered personally; (b) when sent by facsimile or by a scanned PDF transmission via email, with written confirmation of receipt; (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two (2) business days after deposit with a private industry express courier, with written confirmation of receipt.  All notices shall be sent to the following addresses (or to such other address or person as may be designated by a Party) If to Aegis Identity: Aegis Identity Software, Inc. 750 W. Hampden Ave, Suite 500 Englewood, CO 80110-2165 Attn: Legal Department Facsimile: 303-474-7892 Email: legal@aegisidentity.com If to Customer:                    ____________________________                    ____________________________ ____________________________ Attn:________________________    Facsimile: _________________    Email:______________________ 19.  Publicity.  Aegis Identity may use Customer’s name in promotional materials regarding its services. These permissions are free of charge for worldwide use in any medium.  Aegis Identity will obtain Customer’s prior approval for publicity that contains claims, quotes, endorsements or attributions by Customer. 20.  Survival.  Rights and obligations under this Agreement which by their nature should survive, including Section 5 (Confidentiality), Section 6 (Use of Work Product), Section 8 (Limitation of Liability), Section 11 (Non-solicitation),  Section 12 (Governing Law; Venue), Section 16 (Legal Fees), Section 19 (Publicity) and this Section 20 will remain in effect after termination of this Agreement. 21.  Authority.  Each Party has the full power and authority to enter into and perform this Agreement and acknowledge they have read this Agreement, understand it, and agree to be bound by its terms and conditions. 22.  Headings.  Headings used in this Agreement are for convenience only and shall not be deemed a part of this Agreement. 23.  Counterparts; Electronic Transmission. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute the same agreement.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission or by a scanned PDF transmission via email shall be as effective as delivery of a manually executed counterpart of this Agreement. **********

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by duly authorized representatives on the date and year first written above.

AEGIS IDENTITY SOFTWARE, INC. [_______________________________________]

By:	By:
Name:	Name:
Title:	Title:

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Attachment A

Statement of Work

Milestone No.	Description of Deliverables/Tasks	Estimated Milestone Completion Date	Milestone Payments
	Services Total
	Approved Expenses
	Total Fee and Expenses

1.  Scope of Services; Fees and Expenses.   The only tasks or deliverables Aegis Identity will undertake or deliver in providing the Services are those specifically set forth above.  Any additional tasks or deliverables are not considered in the scope of the Agreement and may require the Parties to execute a change order.  Aegis Identity will be compensated at the rates set forth above. 2.  Milestone Process.Milestones exist for the Parties to review adherence to this Attachment A for performance of responsibilities, satisfaction of dependencies, and whether deliverable(s) and/or tasks are accomplished according to the estimated timeline.  Acceptance of certain milestones or delays in completion of milestones as set forth in Section 4 may trigger invoicing by Aegis Identity of the milestones payments.     (a)Acceptance Procedure.Aegis Identity will present Customer with an Acceptance Form upon the satisfaction of each milestone.  Customer will execute the Acceptance Form acknowledging acceptance and conformity of the Services constituting the milestone and return the Acceptance Form to Aegis Identity within five (5) business days from the date the Acceptance Form is delivered to Customer.     (b)Failure of a Milestone.If Customer reasonably believes the Services were not in substantial conformance with the milestone requirements set forth in this Attachment A, Customer will notify Aegis Identity in writing specifying the reasons for noncompliance within five (5) business days from delivery of the Acceptance Form to Customer.  Aegis Identity will address Customer’s issues and then will re-present the Acceptance Form.  Any disputes or concerns relating to the acceptance or failure of a milestone will be handled according to the escalation process set forth in Section 7.     (c)  Affirmative Milestone Acceptance.If Aegis Identity does not receive the signed Acceptance Form or a written notification of rejection from Customer within five (5) business days from the date the Acceptance Form is delivered to Customer, the absence of Customer’s response will constitute the Customer’s affirmative acceptance of the Services, and a waiver of any Customer right of rejection.  Affirmative acceptance will trigger any related invoicing and payment obligations pursuant to Section 3. 3.  Invoice and Milestone Billing.  Aegis Identity will submit detailed invoices to Customer in accordance with the schedule agreed upon by the parties as set forth in this Attachment A and based on completion or affirmative acceptance of the milestones as indicated above; provided, that Customer acknowledges it has an obligation to pay pursuant to Section 4 of this Attachment A even if a milestone has not been completed.

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4.  Delays.  Customer acknowledges that the schedule of the Services set forth in this Attachment A has been mutually determined and any delays will cause a disruption in Aegis Identity’s business.  In the event there is a delay in the schedule due to no fault of Aegis Identity, then Aegis Identity may continue to invoice milestone payments in accordance with the schedule and Customer agrees to pay the invoice(s) in accordance with the terms hereof. 5.  General  Assumption and Responsibilities.  Aegis Identity is relying on the following assumptions and responsibilities in performing the Services.  Should any of these assumptions prove incorrect or incomplete, or should Customer fail to comply with any of the Customer responsibilities, the Parties may need to modify the price or the scope of the Services.     (a)  Assumptions.  The following assumptions apply to the performance of the Services: ·      Services are to be performed primarily at the offices of Aegis Identity in Denver, Colorado, during standard business hours excluding weekends and Federal holidays. ·      Customer has full and sufficient right and authority to use in the manner contemplated by this Attachment A, any programming, materials or data furnished by Customer to Aegis Identity in connection with the Services hereunder. ·      This applies to consulting services only.  Any hardware or software needed by Customer in relation to the Services must be purchased separately. ·      Any concerns, disputes, delays, or other issues will be handled according to the escalation process set forth in Section 5 of this Attachment A. ·      Customer will assign staff to support Aegis Identity who are properly trained in their area of responsibility. ·      Aegis Identity reserves the right to use subcontractors as it deems appropriate. ·      Customer shall provide a test environment, which closely mimics the existing production system including any systems the enhancements included in the Services must interface with.   (b)  Responsibilities      (i)  General Customer Responsibilities.  Completion of the Services is contingent upon Customer fulfilling the following responsibilities: ·           Customer will designate qualified personnel to assist Aegis Identity who are properly trained and have the requisite knowledge of Customer’s environment and identity related processes. ·      Provide information and resources in a timely manner as needed by Aegis Identity to complete the Services.  Lack or inability to engage this assistance may result in a material change of project schedule, invoicing and/or pricing. ·      Complete Customer responsibilities and tasks on the dates agreed upon by the parties. ·      Be readily available to answer questions when required by Aegis Identity. ·      Provide needed approvals in a timely manner. ·      Provide remote access to any facilities and systems necessary for completion of the Services.     ·      Customer will designate qualified personnel to maintain the identity management solution provided by Aegis Identity.      (ii)  General Aegis Identity Responsibilities.Performance of the Services includes Aegis Identity’s undertaking of the following responsibilities: ·      Aegis Identity will use commercially reasonable efforts to complete the Services in a timely manner. ·      Aegis Identity will not be responsible for any support services.  A maintenance and support contract may be purchased separately.      (c)  Project Responsibilities [to be determined]
  6.  Escalation Procedure.  Customer and Aegis Identity each agree to designate a project sponsor and provide the other party with the name and contact information of its project sponsor in writing within five (5) days following execution of the Agreement.  The project sponsors will use commercially reasonable efforts to resolve any project delays, performance or technical concerns, disputes or issues related to this Attachment A in a timely manner.  In the event the Parties are not able to resolve escalations in a timely manner, using commercially reasonable efforts, Aegis Identity shall be entitled to cancel this Agreement upon written notice to Customer and neither party shall have further liability or obligation to the other under this Agreement, except for payment for any Services rendered through the date of such termination and any surviving obligations set forth in the Agreement.

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EX-14.1

Exhibit 14.1

Aegis Identity Software, Inc. (the “Company”)

CODE OF ETHICS AND BUSINESS CONDUCT

Introduction

This Code of Ethics and Business Conduct (this “Code”) covers a wide range of business practices and procedures.  It does not cover every issue that may arise, but it sets out basic principles to guide the directors, officers, and employees of the Company.  All Company directors, officers, and employees should conduct themselves accordingly and seek to avoid even the appearance of improper behavior in any way relating to the Company.  In appropriate circumstances, this Code should also be provided to and followed by the Company’s agents and representatives, including consultants.

Any director or officer who has any questions about this Code should consult with the Chief Executive Officer, the Chief Financial Officer, or legal counsel as appropriate in the circumstances.  If an employee has any questions about this Code, the employee should ask his or her supervisor how to handle the situation.

1. Scope of Code.

This Code is intended to deter wrongdoing and to promote the following:

· honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

· full, fair, accurate, timely, and understandable disclosure in reports and documents the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other communications made by the Company;

· compliance with applicable governmental laws, rules, and regulations;

· the prompt internal reporting of violations of this Code to the appropriate person or persons identified in this Code;

· accountability for adherence to this Code; and

· adherence to a high standard of business ethics.

2. Compliance with Laws, Rules, and Regulations

Obeying the law, both in letter and in spirit, is the foundation on which the Company’s ethical standards are built.  All directors, officers, and employees should respect and obey all laws, rules, and regulations applicable to the business and operations of the Company.  Although directors, officers, and employees are not expected to know all of the details of these laws, rules, and regulations, it is important to know enough to determine when to seek advice from supervisors, managers, officers or other appropriate Company personnel.

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3. Conflicts of Interest

A “conflict of interest” exists when an individual’s private interest interferes in any way – or even appears to conflict – with the interests of the Company.  A conflict of interest situation can arise when a director, officer, or employee takes actions or has interests that may make it difficult to perform his or her work on behalf of the Company in an objective and effective manner.  Conflicts of interest may also arise when a director, officer, or employee, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company.  Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.

Service to the Company should never be subordinated to personal gain or advantage.  Conflicts of interest, whenever possible, should be avoided.  In particular, clear conflict of interest situations involving directors, officers, and employees who occupy supervisory positions or who have discretionary authority in dealing with any third party may include the following:

· any significant ownership interest in any supplier or customer;

· any consulting or employment relationship with any customer, supplier, or competitor;

· any outside business activity that detracts from an individual’s ability to devote appropriate time and attention to his or her responsibilities to the Company;

· the receipt of non-nominal gifts or excessive entertainment from any organization with which the Company has current or prospective business dealings;

· being in the position of supervising, reviewing, or having any influence on the job evaluation, pay, or benefit of any family member; and

· selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable directors, officers, or employees are permitted to so purchase or sell.

It is almost always a conflict of interest for a Company officer or employee to work simultaneously for a competitor, customer, or supplier.  No officer or employee may work for a competitor as a consultant or board member.  The best policy is to avoid any direct or indirect business connection with the Company’s customers, suppliers, and competitors, except on the Company’s behalf.

Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors.  Conflicts of interest may not always be clear-cut and further review and discussions may be appropriate.  Any director or officer who becomes aware of a conflict or potential conflict should bring it to the attention of the Chief Executive Officer, the Chief Financial Officer, or legal counsel as appropriate in the circumstances.  Any employee who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager, or other appropriate personnel.

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4. Insider Trading

Directors, officers, and employees who have access to confidential information relating to the Company are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company’s business.  All non-public information about the Company should be considered confidential information.  To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical and against Company policy but is also illegal.  Directors, officers, and employees also should comply with insider trading standards and procedures adopted by the Company.  If a question arises, the director, officer, or employee should consult with the Company’s Chief Financial Officer.

5. Corporate Opportunities

Directors, officers, and employees are prohibited from taking for themselves personally or directing to a third party any opportunity that is discovered through the use of corporate property, information, or position without the consent of the Board of Directors.  No director, officer, or employee may use corporate property, information, or position for improper personal gain, and no director, officer, or employee may compete with the Company directly or indirectly.  Directors, officers, and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

6. Competition and Fair Dealing

The Company seeks to compete in a fair and honest manner.  The Company seeks competitive advantages through superior performance rather than through unethical or illegal business practices.  Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited.  Each director, officer, and employee should endeavor to respect the rights of and deal fairly with the Company’s customers, suppliers, service providers, competitors, and employees.  No director, officer, or employee should take unfair advantage of anyone relating to the Company’s business or operations through manipulation, concealment, or abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice.

To maintain the Company’s valuable reputation, compliance with the Company’s quality processes and safety requirements is essential.  In the context of ethics, quality requires that the Company’s products and services meet reasonable customer expectations.  All inspection and testing documents must be handled in accordance with all applicable regulations.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers.  No gift or entertainment should ever be offered, given, provided, or accepted by a director, officer, or employee, family member of a director, officer, or employee, or agent relating to the individual’s position with the Company unless it (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff, and (5) does not violate any laws or regulations.  A director or officer should discuss with the Chief Executive Officer or Chief Financial Officer, and an employee should discuss with his or her supervisor, any gifts or proposed gifts that the individual is not certain are appropriate.

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7. Discrimination and Harassment

The diversity of the Company’s employees is a tremendous asset.  The Company is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment or any kind.  Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

8. Health and Safety

The Company strives to provide each employee with a safe and healthful work environment.  Each officer and employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries, and unsafe equipment, practices, or conditions.

Violence and threatening behavior are not permitted.  Officers and employees should report to work in a condition to perform their duties, free from the influence of illegal drugs or alcohol.  The use of illegal drugs in the workplace will not be tolerated.

9. Record-Keeping

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

Many officers and employees regularly use business expense accounts, which must be documented and recorded accurately.  If an officer or employee is not sure whether a certain expense is legitimate, the employee should ask his or her supervisor or the Company’s controller.  Rules and guidelines are available from the Accounting Department.

All of the Company’s books, records, accounts, and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions, and must conform both to applicable legal requirements and to the Company’s system of internal controls.  Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation.

Business records and communications often become public, and the Company and its officers and employees in their capacity with the Company should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood.  This applies equally to e-mail, internal memos, and formal reports.  The Company’s records should always be retained or destroyed according to the Company’s record retention policies.  In accordance with those policies, in the event of litigation or governmental investigation, directors, officers, and employees should consult with the Company’s Chief Financial Officer or legal counsel before taking any action because it is critical that any impropriety or possible appearance of impropriety be avoided.

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10. Confidentiality

Directors, officers, and employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, suppliers, joint venture partners, or others with whom the Company is considering a business or other transaction except when disclosure is authorized by an executive officer or required or mandated by laws or regulations.  Confidential information includes all non-public information that might be useful or helpful to competitors or harmful to the Company or its customers and suppliers, if disclosed.  It also includes information that suppliers and customers have entrusted to the Company.  The obligation to preserve confidential information continues even after employment ends.

11. Protection and Proper Use of Company Assets

All directors, officers, and employees should endeavor to protect the Company’s assets and ensure their efficient use.  Theft, carelessness, and waste have a direct impact on the Company’s profitability.  Any suspected incident of fraud or theft should be immediately reported for investigation.  Company assets should be used for legitimate business purposes and should not be used for non-Company business.

The obligation to protect the Company’s assets includes its proprietary information.  Proprietary information includes intellectual property, such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information, and any unpublished financial data and reports.  Unauthorized use or distribution of this information would violate Company policy.  It could also be illegal and result in civil or even criminal penalties.

12. Payments to Government Personnel

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business.  It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel.  The promise, offer, or delivery to an official or employee of the U.S. government of a gift, favor, or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense.  State and local governments, as well as foreign governments, may have similar rules.

13. Corporate Disclosures

All directors, officers, and employees should support the Company’s goal to have full, fair, accurate, timely, and understandable disclosure in the periodic reports required to be filed by the Company with the SEC.  Although most employees hold positions that are far removed from the Company’s required filings with the SEC, each director, officer, and employee should promptly bring to the attention of the Chief Executive Officer, the Chief Financial Officer, the Company’s Disclosure Committee, or the Audit Committee, as appropriate in the circumstances, any of the following:

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· Any material information to which such individual may become aware that affects the disclosures made by the Company in its public filings or would otherwise assist the Chief Executive Officer, the Chief Financial Officer, the Disclosure Committee, and the Audit Committee in fulfilling their responsibilities with respect to such public filings.

· Any information the individual may have concerning (a) significant deficiencies in the design or operation of internal controls that could adversely affect the Company’s ability to record, process, summarize, and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.

· Any information the individual may have concerning any violation of this Code, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.

· Any information the individual may have concerning evidence of a material violation of the securities or other laws, rules, or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of this Code.

14. Waivers of the Code of Conduct

Any waiver of this Code for directors or executive officers may be made only by the Board of Directors or a committee of the Board and will be promptly disclosed to stockholders as required by applicable laws, rules, and regulations, including the rules of the SEC and Nasdaq.  Any such waiver also must be disclosed in a Form 8-K to the extent required by securities rules.

15. Publicly Available

This Code shall be posted on the Company’s website.

16. Reporting any Illegal or Unethical Behavior

Directors and officers are encouraged to talk to the Chief Executive Officer, the Chief Financial Officer, or legal counsel, and employees are encouraged to talk to supervisors, managers, or other appropriate personnel, when in doubt about the best course of action in a particular situation.  Directors, officers, and employees should report any observed illegal or unethical behavior and any perceived violations of laws, rules, regulations, or this Code to appropriate personnel.  It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith.  Directors, officers, and employees are expected to cooperate in internal investigations of misconduct.

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The Company maintains a Whistleblower Policy, for (1) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and (2) the confidential, anonymous submission by the Company’s employees of concerns regarding questionable accounting or auditing matters.

17. Enforcement

The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of this Code.  Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code and to these additional procedures, and may include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or re-assignment of the individual involved, suspension with or without pay or benefits (as determined by the Board), and termination of the individual’s employment or position.  In determining the appropriate action in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action, and whether or not the individual in question had committed other violations in the past.

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EX-14.2

Exhibit 14.2

Aegis Identity Software, Inc. (the “Company”)

CODE OF ETHICS FOR THE CEO AND SENIOR FINANCIAL OFFICERS

The Company has a Code of Business Conduct and Ethics applicable to all directors and employees of the company.  The Chief Executive Officer and all senior financial officers, including the Chief Financial Officer and principal accounting officer, are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest, and compliance with law.  In addition to the Code of Business Conduct and Ethics, the Chief Executive Officer and senior financial officers are subject to the following additional specific policies:

1. The Chief Executive Officer and all senior financial officers are responsible for full, fair, accurate, timely, and understandable disclosure in the periodic reports required to be filed by the Company with the SEC.  Accordingly, it is the responsibility of the Chief Executive Officer and each senior financial officer promptly to bring to the attention of the Disclosure Committee, if applicable, and to the Audit Committee any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise assist the Disclosure Committee, if applicable, and the Audit Committee in fulfilling their responsibilities.

2. The Chief Executive Officer and each senior financial officer shall promptly bring to the attention of the Disclosure Committee, if applicable, and the Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls that could adversely affect the Company’s ability to record, process, summarize, and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.

3. The Chief Executive Officer and each senior financial officer shall promptly bring to the attention of the Audit Committee any information he or she may have concerning any violation of this Code or the Company’s Code of Business Conduct and Ethics, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company’s financial reporting, disclosures, or internal controls.

4. The Chief Executive Officer and each senior financial officer shall promptly bring to the attention of the Disclosure Committee, if applicable, and the Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules, or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Code of Business Conduct and Ethics or of these additional procedures.

5. The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of the Code of Business Conduct and Ethics or of these additional procedures by the Chief Executive Officer and the Company’s senior financial officers.  Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to the Code of Business Conduct and Ethics and to these additional procedures, and may include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or re-assignment of the individual involved, suspension with or without pay or benefits (as determined by the Board), and termination of the individual’s employment.  In determining the appropriate action in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action, and whether or not the individual in question had committed other violations in the past.

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EX-21.1

Exhibit 21.1

SUBSIDIARIES OF REGISTRANT

None.