10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________________

Form 10-Q

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended January 31, 2014

OR

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-11807

______________________

DAEGIS INC.
(Exact name of registrant as specified in its charter)

Delaware	94-2710559
(State or other jurisdiction of	(I.R.S. Employer Identification
incorporation or organization)	Number)

Address of principal executive offices: 600 E. Las Colinas Blvd., Suite 1500, Irving, Texas 75039

Registrant’s telephone number, including area code: (214) 584-6400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES    x NO    o

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

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if a smaller reporting company)

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

YES    o NO    x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 16,384,444 shares of common stock, $0.001 par value, as of March 3, 2014.

DAEGIS INC.
FORM 10-Q

INDEX

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets as of January 31, 2014 and	3
	April 30, 2013
	Unaudited Condensed Consolidated Statements of Operations for the three and nine	4
	months ended January 31, 2014 and 2013
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for	5
	the three and nine months ended January 31, 2014 and 2013
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months	6
	ended January 31, 2014 and 2013
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of	15
	Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosure	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
SIGNATURE		24
CERTIFICATIONS		25

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DAEGIS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

			January 31,			April 30,
			2014			2013
ASSETS
Current assets:
	Cash	$	4,013		$	5,459
	Accounts receivable, net of allowances of $407 and $278, respectively		8,863			10,594
	Prepaid expenses and other current assets		640			1,203
	Assets held for sale		-			926
	Total current assets		13,516			18,182
Property and equipment, net of accumulated depreciation of $4,714 and $5,526, respectively			1,244			1,934
Goodwill			11,706			11,706
Intangibles, net			5,998			7,152
Other assets			579			733
	Total assets	$	33,043		$	39,707
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$	438		$	243
	Current portion of long-term debt		1,350			2,519
	Accrued compensation and related expenses		1,635			2,697
	Common stock warrant liability		255			204
	Other accrued liabilities		1,003			863
	Deferred revenue		7,186			8,449
	Liabilities held for sale		-			526
	Total current liabilities		11,867			15,501
Long term debt, net of current portion			13,959			15,170
Deferred tax liabilities, net			983			923
Other long-term liabilities			1,207			1,429
	Total liabilities		28,016			33,023
Commitments and contingencies
Stockholders’ equity:
	Preferred stock		-			2
	Common stock		17			15
	Additional paid-in capital		100,117			100,053
	Accumulated other comprehensive income		280			280
	Accumulated deficit		(95,387	)		(93,666	)
	Total stockholders’ equity		5,027			6,684
	Total liabilities and stockholders’ equity	$	33,043		$	39,707

Seeaccompanyingnotestounaudited condensed consolidatedfinancialstatements.

3

DAEGIS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

		Three Months						Nine Months Ended
		January 31,						January 31,
		2014			2013			2014			2013
Revenues:
Archive and eDiscovery	$	4,779			6,902			14,936			19,528
Database and migration		3,109			3,538			8,652			10,895
Total revenues		7,888			10,440			23,588			30,423
Operating expenses:
Direct costs of archive and eDiscovery revenue		1,966			2,287			6,077			7,669
Direct costs of database and migration revenue		494			826			1,357			2,252
Product development		1,395			1,725			4,683			5,411
Selling, general and administrative		4,311			5,235			11,807			14,538
Sale of intangible trade name		-			-			-			(1,000	)
Total operating expenses		8,166			10,073			23,924			28,870
Income (loss) from operations		(278	)		367			(336	)		1,553
Other income (expenses)
Gain (loss) from change in fair value of common stock warrant liability		(163	)		31			(51	)		303
Interest expense		(312	)		(407	)		(1,039	)		(1,249	)
Other, net		(54	)		19			(51	)		(90	)
Total other income (expenses)		(529	)		(357	)		(1,141	)		(1,036	)
Income (loss) before income taxes		(807	)		10			(1,477	)		517
Provision for income taxes		71			75			244			173
Net income (loss)	$	(878	)	$	(65	)	$	(1,721	)	$	344
Income (loss) per share:
Basic	$	(0.05	)	$	(0.01	)	$	(0.11	)	$	0.00
Diluted	$	(0.05	)	$	(0.01	)	$	(0.11	)	$	0.00
Weighted-average shares used in computing income (loss) per share:
Basic		16,384			14,718			16,022			14,718
Diluted		16,384			14,718			16,022			14,726

Seeaccompanyingnotestounaudited condensedconsolidatedfinancialstatements.

4

DAEGIS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)

		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2014			2013			2014			2013
Net income (loss)	$	(878	)	$	(65	)	$	(1,721	)	$	344
Other comprehensive income (loss):
Foreign currency translation adjustments		-			10			-			(42	)
Comprehensive income (loss)	$	(878	)	$	(55	)	$	(1,721	)	$	302

Seeaccompanyingnotestounaudited condensed consolidatedfinancialstatements.

5

DAEGIS INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

		Nine Months Ended
		January 31,
		2014			2013
Cash flows from operating activities:
Net income (loss)	$	(1,721	)	$	344
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation		740			842
Amortization of intangible assets		1,154			1,154
Loss on disposal of equipment		199			71
Sale of intangible trade name		-			(1,000	)
Provision for doubtful accounts		129			(75	)
Stock based compensation expense		130			492
Deferred tax liability		60			101
(Gain) loss from change in fair value of common stock warrant liability		51			(303	)
Changes in operating assets and liabilities:
Accounts receivable		1,602			1,420
Prepaid expenses and other current assets		563			726
Other assets		154			162
Accounts payable		195			102
Accrued compensation and related expenses		(1,062	)		(69	)
Other accrued liabilities		140			159
Deferred revenue		(1,137	)		(1,907	)
Other long term liabilities		(348	)		(182	)
Net cash provided by operating activities		849			2,037
Cash flows from investing activities:
Proceeds from sale of intangible trade name		-			1,000
Proceeds from sale of property and equipment		4			-
Proceeds from assets held for sale		400			-
Purchases of property and equipment		(253	)		(209	)
Net cash provided by investing activities		151			791
Cash flows from financing activities:
Payment of preferred stock dividends		(66	)		(66	)
Principal payments under debt obligations		(2,253	)		(2,739	)
Principal payments on capital leases		(127	)		(298	)
Net cash used in financing activities		(2,446	)		(3,103	)
Effect of exchange rate changes on cash		-			(41	)
Net decrease in cash		(1,446	)		(316	)
Cash, beginning of year		5,459			4,752
Cash, end of period	$	4,013		$	4,436
Supplemental cash flow information:
Cash paid for interest	$	889		$	1,004
Cash paid for income taxes		151			209
Supplemental non-cash investing and financing activities:
Accrued preferred stock dividends	$	-		$	236

Seeaccompanyingnotestounaudited condensedconsolidatedfinancialstatements.

6

DAEGIS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2014

1. Basis of Presentation

The condensed consolidated financial statements prepared by Daegis Inc. (the “Company”, “we”, “us”, “our”) have been derived from our audited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations.

The accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries that we control due to ownership of a controlling interest. Intercompany transactions and balances have been eliminated. While the interim financial information contained in this filing is unaudited, such financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) which we consider necessary for a fair presentation. The results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2013, as filed with the SEC.

In the third quarter of fiscal year 2014, after the alignment of our Archive and eDiscovery operations, we determined that we have two reportable segments: (i) Archive and eDiscovery and (ii) database and migration. As a result, we have restated historical results to reflect those new reporting segments.

Certain prior period balances in our consolidated statements of operations have been reclassified between direct costs of eDiscovery revenue and selling, general and administrative expenses to conform with current presentation.

2. Stock Compensation Information

Stock-based compensation expense is determined from the estimated fair value of stock-based awards and is recognized over the vesting period of the awards, net of estimated forfeitures. For the three and nine months ended January 31, 2014 and 2013, stock-based compensation expense was comprised of the following (in thousands):

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Direct costs of revenue	$	3		9		12		27
Product development		5		21		24		70
Selling, general, and administrative		30		131		94		395
Total equity-based compensation	$	38	$	161	$	130	$	492

The following table shows remaining unrecognized compensation expense on a pre-tax basis related to all types of nonvested equity awards outstanding as of January 31, 2014. This table does not include an estimate for grants that may be issued in the future (in thousands).

Fiscal Year Ending April 30,	Amount
Remainder of 2014	$	35
2015		96
2016		72
2017		31
2018		5
Total	$	239

The cost above is expected to be recognized over a weighted-average period of 2.9 years.

7

We estimate the fair value of our stock-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions including expected term, interest rates and expected volatility. Changes in the assumptions can materially affect the fair value estimates and ultimately how much we recognize as stock-based compensation expense. The fair values of our stock options are estimated at the date of grant. The weighted-average input assumptions used and resulting fair values for the nine months ended January 31, 2014 and 2013, were as follows:

		Nine Months Ended
		January 31,
		2014			2013
Expected term (in years)		4.0			4.0
Risk-free interest rate		0.9	%		0.5	%
Volatility		51	%		77	%
Dividend yield		-			-
Weighted-average fair value of stock options granted during the period	$	0.47		$	1.01

We base our expected term assumption on our historical experience and on the terms and conditions of the stock awards we grant to employees. The risk-free interest rate is based upon United States Treasury interest rates appropriate for the expected term of the awards. The expected volatility is based on the historical volatility of our common stock over the most recent period commensurate with the estimated expected term of our stock options. We did not pay common stock cash dividends in fiscal 2013 or year to date in fiscal 2014, and do not anticipate paying any cash dividends on common stock in the foreseeable future. Accordingly, an expected dividend yield of zero is used in the Black-Scholes option pricing model.

We recognize expense only for the stock-based awards that are ultimately expected to vest. Therefore, we have developed an estimate of the number of awards expected to be forfeited prior to vesting (“forfeiture rate”). We use a forfeiture rate that is estimated based on historical forfeiture experience, and is applied to all stock-based awards. The forfeiture rate used for the nine months ending January 31, 2014 and 2013 is 20%. We recognize stock-based compensation cost as an expense ratably on a straight-line basis over the requisite service period.

A summary of our stock option activity for the nine months ended January 31, 2014 is as follows:

				Weighted-	Weighted-
				average	average remaining		Aggregate
				exercise	contractual		intrinsic
	Shares			price	term (in years)		value (1)
Outstanding at April 30, 2013	1,814,559		$	2.83	6.92	$	15,551
Granted	316,000			1.19
Exercised	-			-
Cancelled/expired	(725,200	)		2.69
Outstanding at January 31, 2014	1,405,359			2.53	6.82		31,412

(1) Aggregate intrinsic value is defined as the difference between the current market value and the exercise price and is estimated using the closing price of our common stock on the last trading day of the periods ended as of the dates indicated.

A summary of our non-vested stock option activity for the period ended January 31, 2014 is as follows:

			Weighted-
			average
			fair
	Shares		value
Non-vested at April 30, 2013	447,516		1.32
Granted	316,000		0.47
Vested	(148,718	)	1.37
Cancelled/expired	(158,875	)	1.14
Non-vested at January 31, 2014	455,923		0.67

8

There were no awards exercised during the nine months ended January 31, 2014 and 2013. The total fair value of awards vested during the nine months ended January 31, 2014 and 2013 was $0.2 million and $0.6 million, respectively. The total fair value of awards granted during the nine months ended January 31, 2014 and 2013 was $0.2 million and $0.4 million, respectively.

3.Sales of Assets

On May 22, 2013, we sold certain assets and liabilities, including existing tangible assets which comprised the Composer Mainframe product line to Composer Solutions, LLP (“Composer Solutions”) for consideration of $0.4 million. Composer Solutions is owned by former employees of the Company, including our former CEO. At April 30, 2013, assets held for sale and liabilities held for sale related to the Composer Mainframe product line was $0.9 million and $0.5 million, respectively.

4.Goodwill and Intangible Assets

The following tables present details of the Company’s goodwill and intangible assets as of January 31, 2014 and April 30, 2013 (in thousands).

		Gross					Net	Weighted-
		carrying		Accumulated			carrying	average
January 31, 2014		amount		amortization			amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-		$	11,706	-
Finite Lives:
Customer-related		6,236		(4,233	)		2,003	7 years
Technology-based		2,638		(1,956	)		682	5 years
Trademarks		4,600		(1,287	)		3,313	10 years
Trade name		100		(100	)		-	2 years
Total	$	25,280	$	(7,576	)	$	17,704
		Gross					Net	Weighted-
		carrying		Accumulated			carrying	average
April 30, 2013		amount		amortization			amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-		$	11,706	-
Finite Lives:
Customer-related		6,236		(3,723	)		2,513	7 years
Technology-based		2,638		(1,722	)		916	5 years
Trademarks		4,600		(877	)		3,723	10 years
Trade name		100		(100	)		-	2 years
Total	$	25,280	$	(6,422	)	$	18,858

9

Acquired finite-lived intangibles are generally amortized on a straight-line basis over their estimated useful lives. The useful life of finite-lived intangibles is the period over which the asset is expected to contribute directly or indirectly to future cash flows of the Company. Intangible assets amortization expense for the three months ended January 31, 2014 and 2013 was $0.4 million for each quarter. Intangible assets amortization expense for the nine months ended January 31, 2014 and 2013 was $1.2 million for each period. The estimated future amortization expense related to intangible assets as of January 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	384
2015		1,512
2016		1,096
2017		814
2018		774
Thereafter		1,418
Total	$	5,998

5. Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

We value our warrants based on open form option pricing models which, based on the relevant inputs, render the fair value estimate Level 3. We based our estimates of fair value for liabilities on the amount we would pay a third-party market participant to transfer the liability and incorporates inputs such as equity prices, historical and implied volatilities, dividend rates and prices of convertible securities issued by comparable companies maximizing the use of observable inputs when available. The fair value hierarchy for valuation inputs gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

• Level 1 – Quoted prices in active markets for identical assets and liabilities.
• Level 2 – Observable inputs other than those included in Level 1, such as quoted market prices for similar assets and liabilities in active markets or quoted prices for identical assets in inactive markets.
• Level 3 – Unobservable inputs are used when little or no market data is available and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair Value on a Recurring Basis

The following table summarizes the activity of Level 3 inputs measured on a recurring basis for the nine months ended January 31, 2014:

(in thousands)		Common stock warrants
Balance at April 30, 2013	$	204
Change in fair value of common stock warrant liability		51
Balance at January 31, 2014		255

10

6. Accrued Restructuring Charge

On December 3, 2013, we announced the completion of our organizational alignment in which the Archive and eDiscovery businesses were combined. The alignment included movement of our operations, workforce reductions, abandonment of excess facilities and other charges in the Archive and eDiscovery reportable segment.

To determine the loss on abandonment of the lease, which is the net present value of our future lease payments reduced by expected sublease income, certain estimates were made related to the (1) time period over which the relevant facility would remain vacant, (2) sublease terms, and (3) sublease rates, including common area charges. If market rates continue to decrease in these markets or if it takes longer than expected to sublease these facilities, the actual loss could exceed this estimate.

A summary of the restructuring and other costs recognized for the three months ended January 31, 2014 are as follows:

								Deferred
				Lease		Asset		Rent			Other
		Severance		Abandonment		Impairment		Liability			Costs		Total
Amounts expected to be incurred	$	428	$	482	$	127	$	(356	)	$	67	$	748
Amounts incurred for the three months
January 31, 2014	$	347	$	482	$	127	$	(356	)	$	67	$	667

At January 31, 2014, the accrued liability associated with the realignment consisted of the following:

					Lease
		Severance			Abandonment			Total
Charges	$	347		$	482		$	829
Payments		(170	)		(130	)		(300	)
Accrued liability at January 31, 2014	$	177		$	352		$	529

The remaining accrual as of January 31, 2014 consists of $0.3 million that is expected to be paid during the fourth quarter of fiscal 2014 and $0.2 million expected to be paid through various dates by May 2016.

The restructuring and other related charges are included in the selling, general administrative expense line item in the Consolidated Statements of Operations.

7. Long-Term Debt

In July 2013, we entered into an amendment to our Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (“Wells Fargo Credit Agreement”). Under the terms of the amendment, we are entitled to borrow up to $18.2 million. The total amount that can be borrowed under the credit agreement is based on a multiplier factor of the trailing twelve months of maintenance and recurring Software-As-A-Service revenue. The Wells Fargo Credit Agreement consists of two term notes and a revolving line of credit. Term Note A is for $12.2 million with quarterly principal payments of $306,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity, June 30, 2015. To the extent the Company makes annual principal payments based on free cash flow, the quarterly principal payments will be reduced. The Company incurs interest at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% at January 31, 2014). Term Note B is for $1.0 million payable in full at maturity, June 30, 2015. The Company incurs interest at the prevailing LIBOR rate plus 9.0-10.0% per annum with a minimum rate of 12.0% (12.0% at January 31, 2014). Under the terms of the revolving line of credit, the Company can borrow up to $5.0 million. The Company incurs interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% as of January 31, 2014). The revolver has a maturity date of June 30, 2015. As of January 31, 2014, there is $2.5 million outstanding on the revolving line of credit, none of which is current.

11

Our long-term debt consists of the following at January 31, 2014 and April 30, 2013 (in thousands):

		January 31,			April 30,
		2014			2013
Term Note A	$	11,630		$	7,883
Term Note B		1,000			4,000
Revolving line of credit		2,500			5,500
Capital leases		179			306
		15,309			17,689
Less current portion		(1,350	)		(2,519	)
Total long term debt, net	$	13,959		$	15,170

The Wells Fargo Credit Agreement requires ongoing compliance with certain affirmative and negative covenants. The affirmative covenants include, but are not limited to: (i) maintenance of existence and conduct of business; (ii) compliance with laws; (iii) use of proceeds; and (iv) books and records and inspection. The negative covenants set forth in the Wells Fargo Credit Agreement include, but are not limited to, restrictions on our ability (and on our subsidiaries): (i) with certain limited exceptions, to create, incur, assume or allow to exist indebtedness; (ii) with certain limited exceptions, to create, incur, assume or allow to exist liens on properties; (iii) with certain limited exceptions, to make certain payments, transfers of property, or investments; or (iv) with certain limited exceptions, to make acquisitions.

We are obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement also contains various information and financial reporting requirements.

The Wells Fargo Credit Agreement also contains customary events of default, including without limitation events of default based on payment obligations, repudiation of guaranty obligations, material inaccuracies of representations and warranties, covenant defaults, insolvency proceedings, monetary judgments in excess of certain amounts, change in control, certain ERISA events, and defaults under certain other obligations.

We are in compliance with all such covenants and requirements at January 31, 2014.

A summary of future principal payments on long-term debt obligations as of January 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	327
2015		1,350
2016		13,632
	$	15,309

The summary of future principal payments on long-term debt obligations does not account for the annual payments based on our free cash flow under Term Note A as noted above. The amount of these payments is not known; however, when they are determined it will accelerate the payment schedule outlined above.

8. Income Taxes

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

12

We are subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In general, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the fiscal years before 2008. We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Therefore, no reserves for uncertain income tax positions have been recorded.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of January 31, 2014 and April 30, 2013, we did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor did we record any interest expense associated with any unrecognized tax benefits in the nine months ended January 31, 2014 and 2013.

9. Preferred Stock

In June 2011, we issued, through a private placement, 1,666,667 shares of preferred stock to a group of related party institutional investors at a price of $2.40 per share for a total of $4.0 million. These shares of preferred stock were automatically converted on a 1-for-1 basis into shares of common stock on June 30, 2013. The preferred stock included an annual dividend of $0.24 per share payable in cash or stock at our option. In August 2013, we paid a final dividend of $66,000 on this preferred stock ($0.04 per preferred share).

10. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) less dividends payable on preferred stock by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.

(in thousands, except share amounts)		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2014			2013			2014			2013
Net income (loss)	$	(878	)	$	(65	)	$	(1,721	)	$	344
Dividends paid and payable on preferred stock		-			(101	)		(66	)		(302	)
Net income (loss) available to common stockholders	$	(878	)	$	(166	)	$	(1,787	)	$	42
Weighted-average shares of common stock outstanding, basic		16,384			14,718			16,022			14,718
Effect of dilutive securities		-			-			-			8
Weighted-average shares of common stock outstanding, diluted		16,384			14,718			16,022			14,726
Income (loss) per share of common stock:
Basic	$	(0.05	)	$	(0.01	)	$	(0.11	)	$	0.00
Diluted	$	(0.05	)	$	(0.01	)	$	(0.11	)	$	0.00
Antidilutive securities
Weighted average number of stock options		1,465,291			2,357,470			1,620,718			2,632,813
Weighted average number of warrants		909,042			909,042			909,042			909,042
Weighted average number of preferred stock		-			1,666,667			-			1,666,667

Potentially dilutive securities that are not included in the diluted net loss calculation are antidilutive because the exercise prices of these securities are greater than the average market price of the stock during the respective periods. As noted above, the 1,666,667 shares of preferred stock were converted into shares of common stock on a 1-for-1 basis.

13

11. Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. We have evaluated our approach for making operating decisions and assessing the performance of our business and, in the third quarter of fiscal year 2014 after the alignment of our Archive and eDiscovery operations, we determined that we have two reportable segments: (i) Archive and eDiscovery and (ii) database and migration. As a result, we have restated historical results to reflect those new reporting segments.

The accounting policies of the segments are the same as those described Note 1 of Part III, Item 15 of our Annual Report on Form 10-K for our fiscal year ended April 30, 2013. We evaluate performance based on income from operations (total revenues less operating costs). We do not allocate certain corporate costs to each segment and therefore disclose these amounts separately in our segment table.

For the three months ended January 31, 2014 and 2013, total revenue from the United States was $5.4 million and $6.9 million, respectively. Total revenue from all other countries for the three months ended January 31, 2014 and 2013 was $2.5 million and $3.5 million, respectively. For the nine months ended January 31, 2014 and 2013, total revenue from the United States was $15.9 million and $20.4 million, respectively. Total revenue from all other countries for the nine months ended January 31, 2014 and 2013 was $7.8 million and $10 million, respectively. Total long-lived assets as of January 31, 2014 and April 30, 2013, for the United States, were $19.5 million and $21.5 million, respectively. Total long-lived assets in all other countries were $0 as of January 31, 2014 and $1,000 as of April 30, 2013.

(in thousands)		Three Months Ended						Nine Months Ended
		January 31,						January 31,
		2014			2013			2014			2013
Total revenues:
Archive and eDiscovery	$	4,779		$	6,902			14,936			19,528
Database and migration		3,109			3,538			8,652			10,895
Total revenues	$	7,888		$	10,440		$	23,588		$	30,423
Operating expenses:
Archive and eDiscovery	$	4,438		$	5,612			13,423			18,075
Database and migration		1,619			2,221			4,842			6,197
Unallocated corporate expenses		2,109			2,240			5,659			4,598
Total operating expenses	$	8,166		$	10,073		$	23,924		$	28,870
Income (loss) from operations:
Archive and eDiscovery	$	341		$	1,290		$	1,513		$	1,453
Database and migration		1,490			1,317			3,810			4,698
Unallocated corporate expenses		(2,109	)		(2,240	)		(5,659	)		(4,598	)
Total income (loss) from operations	$	(278	)	$	367		$	(336	)	$	1,553
		January 31,			April 30,
		2014			2013
Total assets:
Archive and eDiscovery	$	29,181		$	33,108
Database and migration		3,862			6,599
Total assets	$	33,043		$	39,707

14

DAEGIS INC.

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

The discussion in this Quarterly Report on Form 10-Q contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about the software and eDiscovery industries and certain assumptions made by the Company’s management. Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, statements that refer to the anticipated impacts of acquisitions, statements made on goodwill, intangible assets, and impairment, statements about the ability to utilize deferred tax assets, and statements about other characterizations of future events or circumstances are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Such risks and uncertainties include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K under “Business – Risk Factors” and in the Company’s other filings with the Securities and Exchange Commission (“SEC”). Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, readers should carefully review the risk factors set forth in other reports or documents the Company files from time to time with the SEC, particularly the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and Notes thereto in Part I, Item 1 of this Quarterly Report on Form 10-Q and with the audited Consolidated Financial Statements and Notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2013, as filed with the SEC.

Overview

Daegis Inc. (the “Company”, “we”, “us” or “our”) is a global archiving, eDiscovery and software development tools company. The Company sells its solutions through two segments. The segments are the Archive and eDiscovery segment and the Database and Migration segment.

On December 3, 2013, we announced the completion of our organizational alignment. As a result of this alignment, we have combined our Archive and eDiscovery operations into one reporting segment, and our Database and Migration tools operations will be reported as a separate segment. We have restated historical results to reflect these new reporting segments.

Our clients include corporate legal departments, law firms, information technology (“IT”) departments, software value-added resellers (“VARs”), solutions integrators (“SIs”) and independent software vendors (“ISVs”) from a variety of industries. We are headquartered in a Dallas suburb, Irving, Texas, with offices in Roseville, California, Rutherford, New Jersey, Canada, Australia, France, Germany, and the United Kingdom (“UK”). We market and sell our solutions directly in the United States, Europe, Canada, Japan, Singapore and Australia and indirectly through global distributors and resellers on a worldwide basis.

Our Archive and eDiscovery solutions include software and services that address the full spectrum of archiving, information governance and eDiscovery for corporations and law firms. We deliver leading-edge archive and eDiscovery software through Daegis Edge, an end-to-end platform for managing the eDiscovery life cycle, Daegis Acumen technology assisted review and Daegis AXS-One enterprise information archiving. Daegis also offers specialized services including data collection, analytics consulting, project management and managed document review.

Our Database and Migration business includes software for mobile and Web application development, data management and application modernization. Our application development and data management software products include TD Mobile, Team Developer, SQLBase, NXJ, DataServer, VISION and ACCELL. Our application modernization solutions include Composer Notes, Composer Sabertooth and Composer CipherSoft.

As a result of the organizational alignment discussed above, we recorded restructuring charges related to the movement of our operations, workforce reductions, lease abandonment and other related charges. During the three months ended January 31, 2014, we recorded a restructuring charge of $0.7 million. As of January 31, 2014, our accrued liability for unpaid restructuring charges was $0.5 million. The remaining accrual as of January 31, 2014 consists of $0.3 million that is expected to be paid during the fourth quarter of fiscal 2014 and $0.2 million expected to be paid through various dates by May 2016.

15

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification (Codification) and consider the various staff accounting bulletins and other applicable guidance issued by the SEC. GAAP, as set forth within the Codification, requires us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

• Revenue Recognition
• Goodwill and Intangible Assets
• Deferred Tax Asset Valuation Allowance
• Accounts Receivable and Allowances for Doubtful Accounts
• Accounting for Stock-based Compensation
• Fair Value of Common Stock Warrant Liability

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. Our senior management has reviewed these critical accounting policies and related disclosures with the Audit Committee of the Board of Directors.

During the third quarter of fiscal 2014, there were no significant changes to our critical accounting policies and estimates. Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended April 30, 2013 provides a more complete discussion of our critical accounting policies and estimates.

Results of Operations

The following table sets forth our consolidated statement of operations expressed as a percentage of total revenues for the periods indicated:

	Three Months						Nine Months
	January 31,						January 31,
	2014			2013			2014			2013
Revenues:
Archive and eDiscovery	60.6		%	66.1		%	63.3		%	64.2		%
Database and migration	39.4			33.9			36.7			35.8
Total revenues	100.0			100.0			100.0			100.0
Operating expenses:
Direct costs of archive and eDiscovery revenue	24.9			21.9			25.8			25.2
Direct costs of database and migration revenue	6.3			8.0			5.7			7.4
Product development	17.7			16.5			19.8			17.8
Selling, general and administrative	54.6			50.1			50.2			47.8
Sale of intangible trade name	-			-			-			(3.3	)
Total operating expenses	103.5			96.5			101.5			94.9
Income (loss) from operations	(3.5	)		3.5			(1.5	)		5.1
Other income (expenses)
Gain (loss) from change in fair value of common stock warrant liability	(2.0	)		0.3			(0.2	)		1.0
Interest expense	(4.0	)		(3.9	)		(4.4	)		(4.1	)
Other, net	(0.7	)		0.2			(0.2	)		(0.3	)
Total other (income) expenses	(6.7	)		(3.4	)		(4.8	)		(3.4	)
Income (loss) before income taxes	(10.2	)		0.1			(6.3	)		1.7
Provision for income taxes	0.9			0.7			1.0			0.6
Net income (loss)	(11.1	)		(0.6	)		(7.3	)		1.1

16

Total Revenues

We generate revenue from archive and eDiscovery software and services, and database and migration software and services. All of our archive and eDiscovery software and services sales are sold by our direct sales force. The Company also generates database and migration revenue from software license sales and related services, including maintenance, support and consulting services. We sell our database and migration solutions through our direct sales force in the United States and Europe, and through indirect channels comprised of distributors, ISVs, VARs, and other partners worldwide.

Total revenues in the third quarter of fiscal 2014 were $7.9 million, a decrease of $2.6 million from the third quarter of fiscal 2013, or 24%. Total revenues for the nine months ended January 31, 2014 were $23.6 million, a decrease of $6.8 million from the same period last year, or 22%.

Total Archive and eDiscovery revenues in the third quarter of fiscal 2014 were $4.8 million, a decrease of $2.1 million from the third quarter of fiscal 2013, or 31%. Total Archive and eDiscovery revenues for the nine months ended January 31, 2014 were $14.9 million, a decrease of $4.6 million from the same period last year, or 24%. The revenue from Archive and eDiscovery fluctuates depending on the activity of our clients’ legal matters. Accordingly, the decrease in Archive and eDiscovery revenue as compared to the prior year period is primarily related to the reduction in services to our largest client as the particular matter is expected to be substantially complete by the end of fiscal year 2014. This client, which represented 21% of our consolidated revenue during fiscal year 2013, has declined to 15% of consolidated revenue during the third quarter of fiscal year 2014. In addition, we have begun transitioning our business model to bring to market a single solution for information governance, compliance and litigation readiness. This transition is negatively impacting our revenues during the third quarter and nine months ended January 31, 2014 due to longer sales cycles.

Database and Migration revenues in the third quarter of fiscal year 2014 were $3.1 million compared to $3.5 million in the prior year period. For the nine months ended January 31, 2014, revenues were $8.7 million compared to $10.9 million in the prior year period. The decline in revenue is primarily related to the sale of the Mainframe Composer product line in the first quarter of fiscal year 2014. Excluding this revenue, total database and migration revenue decreased $0.1 million in the third quarter of fiscal 2014 and $1.3 million for the nine months ended January 31, 2014. This decrease is due a decline in maintenance revenue of $0.2 million for the third quarter and $1.3 million for the nine month period. Maintenance revenue declined primarily as a result of the expected non-renewal of a large maintenance contract which resulted in $0.1 million and $0.8 million in the third quarter FY 13 and nine months ended January 31, 2013, respectively.

Operating Expenses

Direct Costs of Archive and eDiscovery Revenue. Direct costs of Archive and eDiscovery revenue consist primarily of expenses related to employees, facilities, third party contractors and royalty payments that were directly related to the generation of archive and eDiscovery revenue. The majority of these costs are fixed in nature and generally do not fluctuate with changes in revenue. Direct costs of Archive and eDiscovery revenue were $2.0 million for the third quarter of fiscal 2014 compared to $2.3 million in the same period of fiscal 2013. The decrease in direct costs of Archive and eDiscovery revenue for the third quarter is primarily due to cost reductions related to the organizational alignment during the third quarter of fiscal 2014. Direct costs of Archive and eDiscovery revenue were $6.1 million for the nine months ended January 31, 2014 compared to $7.7 million in the same period of fiscal 2013. The decrease in direct costs of Archive and eDiscovery revenue for the year to date period is primarily due to a reduction in workforce during fiscal 2013 as well as cost reductions related to the organizational alignment in the third quarter of fiscal 2014.

17

Direct Costs of Database, and Migration Revenue. Direct costs of database and migration revenue consist primarily of expenses related to employees, facilities, third party contractors, and royalty payments that were directly related to the generation of database and migration revenue. Direct costs of database and migration revenue were $0.5 million and $0.8 million for the third quarter of fiscal 2014 and fiscal 2013, respectively. Direct costs of database and migration revenue were $1.4 million for the nine months ended January 31, 2014 compared to $2.3 million in the same period of fiscal 2013. The decrease in direct costs of database and migration revenue is primarily due to the sale of the Mainframe Composer product line which had costs of $0.3 million and $0.8 million during the third quarter and first nine months of fiscal year 2013, respectively.

Product Development. Product development expenses consist primarily of employee and facilities costs incurred in the development and testing of new products and in the porting of new and existing products to additional hardware platforms and operating systems. Product development costs in the third quarter of fiscal 2014 were $1.4 million compared to $1.7 million in the same period of fiscal 2013. Product development costs were $4.7 million for the nine months ended January 31, 2014 compared to $5.4 million in the same period of fiscal 2013. The decrease in product development expenses is primarily due to a reduction in workforce during fiscal 2013.

Selling, General and Administrative.Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and benefits, marketing programs, travel expenses, professional services, amortization of intangible assets, and bad debt expense. SG&A expenses were $4.3 million in the third quarter of fiscal 2014 and $5.3 million for the third quarter of fiscal 2013. SG&A expenses were $11.8 million for the nine months ended January 31, 2014 compared to $14.6 million in the same period of fiscal 2013. The decrease in SG&A expense is primarily due to reduction in salary and related costs of $2.5 million from our reduction in work force during fiscal 2013, severance and other costs related to the resignation of our CEO and CFO of $0.6 million in the third quarter of FY 13 and a reduction in facility related costs from the closure of one of our offices of $0.4 million, offset somewhat by charges related to our organizational alignment of $0.7 million in the third quarter of fiscal year 2014.

Sale of Intangible Trade Name. We sold our Unify trade name for $1.0 million in the first quarter of fiscal 2013.

Gain/(loss) from Change in Fair Value of Common Stock Warrant Liability.The change in fair value of common stock warrant liability for the three months ended January 31, 2014 resulted in a loss of $0.2 million, compared to a gain of $31,000 in same period last year. The change in fair value of common stock warrant liability for the nine months ended January 31, 2014 resulted in a loss of $51,000 compared to a gain of $0.3 million in the same period last year. The changes in fair value of the common stock warrant liability are primarily the result of changes in the price of our common stock during the period. Increases in our stock price result in a higher warrant liability and a corresponding loss. A decrease in our stock price will reduce the warrant liability with a corresponding gain.

Interest Expense. Interest expense for the third quarter of fiscal year 2014 was $0.3 million compared to $0.4 million for the same period last year. Interest expense for the nine months ended January 31, 2014 was $1.0 million compared to $1.2 million for the same period last year. The decline in interest expense is the result of more favorable interest rates from the amendment in July 2013 of our Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance.

Provision for Income Taxes. Our tax expense in the third quarter of fiscal year 2014 was $71,000 compared to $75,000 for the same period last year. Income tax expense for the nine months ended January 31, 2014 was $244,000 compared to $173,000 in the same period last year. Our tax expense was primarily related to our state and foreign income taxes, as well as deferred income tax expense arising from an indefinite-lived asset.

Liquidity and Capital Resources

At January 31, 2014, the Company had cash of $4.0 million compared to $5.5 million at April 30, 2013. Cash declined primarily as a result of our excess cash flow debt payments of $1.6 million as well as lower revenue during the period, offset by operating expense reductions and proceeds from the sale of the Mainframe Composer product line $0.4 million. The Company had net accounts receivable of $8.9 million as of January 31, 2014 compared to $10.6 million as of April 30, 2013. The decline in accounts receivable is primarily the result of collection activities as well as lower revenue during the period.

In July 2013, the Company entered into an amendment to its Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (the “Credit Agreement”). Under the terms of the amendment, the Company is entitled to borrow up to $18.2 million. The total amount that can be borrowed under the Credit Agreement is based on a multiplier factor of the trailing twelve months of maintenance and Software-as-a-Service revenue. As of January 31, 2014, the Company was eligible to borrow an additional $1.1 million.

18

The Credit Agreement consists of two term notes and a revolving credit note agreement. Term Note A is for $12.2 million with principal payments of $306,000 quarterly plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity, June 30, 2015. To the extent the company makes annual principal payments based on free cash flow, the quarterly principal payments will be reduced. The Company incurs interest at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.50% (6.50% at January 31, 2014).

Term Note B is for $1.0 million payable in full at maturity, June 30, 2015. The Company incurs interest at the prevailing LIBOR rate plus 9-10% per annum with a minimum rate of 12.0% (12.0% at January 31, 2014).

As of January 31, 2014 there is $12.6 million outstanding on the term notes of which $1.2 million is current.

Under the terms of the revolving line of credit, the Company can borrow up to $5.0 million. The Company incurs interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.50% (6.50% at January 31, 2014). The revolver has a maturity date of June 30, 2015. As of January 31, 2014 there is $2.5 million borrowed on the revolving line of credit, none of which is current.

The Company is obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Credit Agreement. The Credit Agreement also contains various information and financial reporting requirements. The Company is in compliance with all such covenants and requirements at January 31, 2014.

In June 2011, the Company issued through a private placement 1,666,667 shares of preferred stock to a group of related party institutional investors at a price of $2.40 per share for a total of $4.0 million. The preferred stock automatically converted on a 1-for-1 basis into shares of common stock of the Company on June 30, 2013. The preferred stock included an annual dividend of $0.24 per share, payable in cash or stock at the Company’s option. In August 2013, we paid a final $66,000 preferred stock dividend through the period through conversion.

Operating Cash Flows. For the nine months ended January 31, 2014 cash provided by operations was $0.8 million compared to $2.0 million for the same period last year. The reduction in operating cash flows was primarily the result the reduction in revenue, offset somewhat by lower costs.

Investing Cash Flows. Net cash provided by investing activities was $0.2 million for the nine months ended January 31, 2014 and was primarily the result of proceeds from the sale of the Mainframe Composer product line, offset by capital expenditures. Net cash provided by investing activities was $0.8 million for the nine months ended January 31, 2013 and was the result of proceeds from the sale of our Unify trade name, offset by capital expenditures.

Financing Cash Flows. Net cash used in financing activities for the nine months ended January 31, 2014 was $2.4 million compared to $3.1 million for the same period last year. The decline in financing cash outflows was primarily due to lower principal payments on the Credit Agreement. The principal payment in the first quarter of each year includes an additional variable payment based on the Company’s excess cash flow for the year.

We believe that funds generated from operations, plus our existing cash resources and amounts available under our credit agreement, will be sufficient to meet our anticipated working capital and other needs.

A summary of certain contractual obligations is as follows (in thousands):

as of January 31, 2014 (in thousands)		Payments Due by Period
				1 year						After
Contractual Obligations		Total		or less		2-3 years		4-5 years		5 years
Debt financing	$	15,130	$	1,224	$	13,906	$	-	$	-
Estimated interest expense		1,386		995		391		-		-
Other liabilities		362		221		-		-		141
Capital lease obligations		179		126		53		-		-
Operating leases		3,976		1,377		2,502		97		-
Total contractual cash obligations	$	21,033	$	3,943	$	16,852	$	97	$	141

Other liabilities primarily include mandatory severance costs associated with a French statutory government regulated plan covering all France employees, and severance costs related to the alignment of our Archive and eDiscovery operations.

19

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk. The Company’s exposure to market rate risk for changes in interest rates relates primarily to its investment portfolio, which consists of cash, and its long term debt, which contains notes with variable interest rates.

We do not believe our exposure to interest rate risk is material to cash, which totaled $4.0 million as of January 31, 2014.

The Wells Fargo Credit Agreement consists of outstanding balances of a $11.6 million Term Note A, a $1.0 million Term Note B, and a revolving credit note agreement of $2.5 million. The Term Note A, Term Note B, and revolving line of credit have interest rate of LIBOR plus 4.50-5.00%, 9-10.00% and 4.50-5.00%, respectively. The minimum LIBOR used in the interest rate is 1.50% for Term Note A and the revolving line of credit and 2.00% for Term Note B. LIBOR at January 31, 2014 is approximately 0.17%. A hypothetical 1% increase in the LIBOR rate would have no impact on our interest expense for the three months ended January 31, 2014 as the minimum LIBOR rate under the credit agreement was more than the current LIBOR rate plus 1%.

Foreign Currency Exchange Rate Risk. As a global concern, we face exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and could have an adverse impact on the Company’s business, operating results and financial position. Due to the substantial volatility of currency exchange rates, among other factors, we cannot predict the effect of exchange rate fluctuations on its future operating results. A hypothetical 1% change in foreign currency rates would not have a significant impact on the Company’s business, operating results and financial position.

20

Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of January 31, 2014. The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective. Management recognizes that any disclosure controls and procedures no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in Internal Controls. There have been no changes in our internal control over financial reporting that occurred during that period that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

21

DAEGIS INC.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Litigation

The Company is subject to legal proceedings and claims arising in the ordinary course of business. If such matters arise, the Company cannot assure that it would prevail in such matters, nor can it assure that any remedy could be reached on mutually agreeable terms, if at all. Due to the inherent uncertainties of litigation, were there any such matters, the Company would not be able to accurately predict their ultimate outcome. As of January 31, 2014, there were no current proceedings or litigation involving the Company that management believes would have a material adverse impact on its financial position, results of operations, or cash flows.

Item 1A. Risk Factors

A description of the risks associated with our business, financial condition, and results of operations is set forth in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended April 30, 2013. There have been no material changes in our risks from such descriptions.

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosure

Not applicable

Item 5. Other Information

None

22

Item 6. Exhibits

	Exhibits
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer under 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer under 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.

23

DAEGIS INC.
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 3, 2014	Daegis Inc.
	(Registrant)
	By:
	/s/ SUSAN K. CONNER
	Susan K. Conner
	Chief Financial Officer
	(Principal Financial Officer)

24

EX-31.1

Exhibit 31.1

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER

I, Timothy P. Bacci, certify that:

     1.I have reviewed this quarterly report on Form 10-Q of Daegis Inc.;

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

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

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

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

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

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

/s/ TIMOTHY P. BACCI

Timothy P. Bacci

Interim Chief Executive Officer

(Principal Executive Officer)

Dated: March 3, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION OF
CHIEF FINANCIAL OFFICER

I, Susan K. Conner, certify that:

     1.I have reviewed this quarterly report on Form 10-Q of Daegis Inc.;

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

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

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

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

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

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

/s/ SUSAN K. CONNER

Susan K. Conner

Chief Financial Officer

(Principal Financial Officer)

Dated: March 3, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Daegis Inc. (the “Registrant”) on Form 10-Q for the quarter ended January 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy P. Bacci, Interim Chief Executive Officer of the Registrant, do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

     (1) the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: March 3, 2014	/s/ TIMOTHY P. BACCI
	Timothy P. Bacci
	Interim Chief Executive Officer

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

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Daegis Inc. (the “Registrant”) on Form 10-Q for the quarter ended January 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Susan K. Conner, Chief Financial Officer of the Registrant, do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

     (1) the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: March 3, 2014	/s/ SUSAN K. CONNER
	Susan K. Conner
	Chief Financial Officer

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

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Accrued Restructuring Charges (Schedule Of Accrued Liability Associated With Realignment) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2014
Restructuring Cost and Reserve [Line Items]
Charges	$ 829
Payments	(300)
Accrued liability at January 31, 2014	529
Severance [Member]
Restructuring Cost and Reserve [Line Items]
Charges	347
Payments	(170)
Accrued liability at January 31, 2014	177
Lease Abandonment [Member]
Restructuring Cost and Reserve [Line Items]
Charges	482
Payments	(130)
Accrued liability at January 31, 2014	$ 352

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Segment Information (Schedule Of Segment Reporting Information By Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2013
Segment Reporting Information [Line Items]
Revenues	$ 7,888	$ 10,440	$ 23,588	$ 30,423
Operating Expenses	8,166	10,073	23,924	28,870
Operating Income (Loss)	(278)	367	(336)	1,553
Assets	33,043		33,043		39,707
Archive And eDiscovery [Member]
Segment Reporting Information [Line Items]
Revenues	4,779	6,902	14,936	19,528
Operating Expenses	4,438	5,612	13,423	18,075
Operating Income (Loss)	341	1,290	1,513	1,453
Assets	29,181		29,181		33,108
Database And Migration [Member]
Segment Reporting Information [Line Items]
Revenues	3,109	3,538	8,652	10,895
Operating Expenses	1,619	2,221	4,842	6,197
Operating Income (Loss)	1,490	1,317	3,810	4,698
Assets	3,862		3,862		6,599
Unallocated Corporate Expenses [Member]
Segment Reporting Information [Line Items]
Operating Expenses	2,109	2,240	5,659	4,598
Operating Income (Loss)	$ (2,109)	$ (2,240)	$ (5,659)	$ (4,598)

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Earnings (Loss) Per Share (Schedule Of Earnings (Loss) Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ (878)	$ (65)	$ (1,721)	$ 344
Dividends paid and payable on preferred stock		(101)	(66)	(302)
Net income (loss) available to common stockholders	$ (878)	$ (166)	$ (1,787)	$ 42
Weighted-average shares of common stock outstanding, basic	16,384,000	14,718,000	16,022,000	14,718,000
Effect of dilutive securities				8,000
Weighted-average shares of common stock outstanding, diluted	16,384,000	14,718,000	16,022,000	14,726,000
Basic	$ (0.05)	$ (0.01)	$ (0.11)	$ 0.00
Diluted	$ (0.05)	$ (0.01)	$ (0.11)	$ 0.00
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of antidilutive securities	1,465,291	2,357,470	1,620,718	2,632,813
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of antidilutive securities	909,042	909,042	909,042	909,042
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of antidilutive securities		1,666,667		1,666,667

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Goodwill And Intangible Assets (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Goodwill And Intangible Assets [Abstract]
Intangible assets amortization expense	$ 400	$ 400	$ 1,154	$ 1,154

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Basis Of Presentation (Details)	3 Months Ended
	Jan. 31, 2014 segment
Basis Of Presentation [Abstract]
Number of reportable segments	2

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Long-Term Debt (Schedule Of Maturities Of Long-term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014	Apr. 30, 2013
Long-Term Debt [Abstract]
Remainder of 2014	$ 327
2015	1,350
2016	13,632
Total debt	$ 15,309	$ 17,689

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Accrued Restructuring Charges (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014
Restructuring Cost and Reserve [Line Items]
Accrued liability	$ 529
Expected To Be Paid During Fourth Quarter Fiscal 2014 [Member]
Restructuring Cost and Reserve [Line Items]
Accrued liability	300
Expected To Be Paid Through Various Dates By May 2016 [Member]
Restructuring Cost and Reserve [Line Items]
Accrued liability	$ 200

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Segment Information (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments	2
Revenues	$ 7,888,000	$ 10,440,000	$ 23,588,000	$ 30,423,000
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	5,400,000	6,900,000	15,900,000	20,400,000
Long-Lived Assets	19,500,000		19,500,000		21,500,000
All Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	2,500,000	3,500,000	7,800,000	10,000,000
Long-Lived Assets	$ 0		$ 0		$ 1,000

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Sale Of Assets

9 Months Ended

Jan. 31, 2014

Sale Of Assets [Abstract]

Sale Of Assets

3.Sales of Assets    

On May 22, 2013, we sold certain assets and liabilities, including existing tangible assets which comprised the Composer Mainframe product line to Composer Solutions, LLP (“Composer Solutions”) for consideration of $0.4 million. Composer Solutions is owned by former employees of the Company, including our former CEO. At April 30, 2013, assets held for sale and liabilities held for sale related to the Composer Mainframe product line was $0.9 million and $0.5 million, respectively.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2013
Income Taxes [Abstract]
Reserve for uncertain tax positions	$ 0
Unrecognized tax benefits, accrued interest or penalties	0		0
Unrecognized tax benefits, interest expense	$ 0	$ 0

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Stock Compensation Information (Summary Of Fair Value Assumptions) (Details) (USD $)	9 Months Ended		12 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2013
Stock Compensation Information [Abstract]
Expected term (in years)	4 years	4 years
Risk-free interest rate	0.90%	0.50%
Volatility	51.00%	77.00%
Dividend yield	0.00%	0.00%	0.00%
Weighted-average fair value of stock options granted during the year	$ 0.47	$ 1.01

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Stock Compensation Information (Summary Of Remaining Unrecognized Compensation Expense) (Details) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	$ 239
Remainder Of 2014 [Member]
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	35
2015 [Member]
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	96
2016 [Member]
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	72
2017 [Member]
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	31
2018 [Member]
Schedule Of Employee Service Share-Based Compensation, Allocation Of Not Yet Recognized Period Costs [Line Items]
Nonvested equity awards outstanding, unrecognized compensation expense	$ 5

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Preferred Stock (Details) (Convertible Preferred Stock [Member], USD $)	1 Months Ended
	Aug. 31, 2013	Jun. 30, 2013	Jun. 30, 2011
Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Stock issued during period, shares, new issues			1,666,667
Stock issued during period, per share, new issues			$ 2.40
Stock issued during period, value, new issues			$ 4,000,000
Convertible preferred stock, shares of common stock issued upon conversion		1
Preferred stock annual dividend, per share		$ 0.24
Dividends, preferred stock	$ 66,000
Preferred stock cash dividend paid	$ 0.04

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Stock Compensation Information (Summary Of Stock Option Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		12 Months Ended
	Jan. 31, 2014		Apr. 30, 2013
Stock Compensation Information [Abstract]
Shares, Outstanding at April 30, 2013	1,814,559
Shares, Granted	316,000
Shares, Exercised
Shares, Cancelled/expired	(725,200)
Shares, Outstanding at January 31, 2014	1,405,359		1,814,559
Weighted average exercise price, Outstanding at April 30, 2013	$ 2.83
Weighted average exercise price, Granted	$ 1.19
Weighted average exercise price, Exercised
Weighted average exercise price, Canceled/expired	$ 2.69
Weighted average exercise price, Outstanding at January 31, 2014	$ 2.53		$ 2.83
Weighted average remaining contractual term (in years), Outstanding at January 31, 2014	6 years 9 months 26 days		6 years 11 months 1 day
Aggregate intrinsic value, Outstanding at April 30, 2013	$ 15,551	[1]
Aggregate intrinsic value, Outstanding at January 31, 2014	$ 31,412	[1]	$ 15,551	[1]

[1] Aggregate intrinsic value is defined as the difference between the current market value and the exercise price and is estimated using the closing price of our common stock on the last trading day of the periods ended as of the dates indicated.

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Stock Compensation Information (Summary Of Non-Vested Stock Option Activity) (Details) (USD $)	9 Months Ended
	Jan. 31, 2014
Stock Compensation Information [Abstract]
Shares, Non-vested at April 30, 2013	447,516
Shares, Granted	316,000
Shares, Vested	(148,718)
Shares, Cancelled/expired	(158,875)
Shares, Non-vested at January 31, 2014	455,923
Weighted average grant date fair value, Non-vested at April 30, 2013	$ 1.32
Weighted average grant date fair value, Granted	$ 0.47
Weighted average grant date fair value, Vested	$ 1.37
Weighted average grant date fair value, Cancelled/expired	$ 1.14
Weighted average grant date fair value, Non-vested at January 31, 2014	$ 0.67

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Stock Compensation Information

9 Months Ended

Jan. 31, 2014

Stock Compensation Information [Abstract]

Stock Compensation Information

2.Stock Compensation Information

Stock-based compensation expense is determined from the estimated fair value of stock-based awards and is recognized over the vesting period of the awards, net of estimated forfeitures.  For the three and nine months ended January 31, 2014 and 2013, stock-based compensation expense was comprised of the following (in thousands):     

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Direct costs of revenue	$	3		9		12		27
Product development		5		21		24		70
Selling, general, and administrative		30		131		94		395
Total equity-based compensation	$	38	$	161	$	130	$	492

The following table shows remaining unrecognized compensation expense on a pre-tax basis related to all types of nonvested equity awards outstanding as of January 31, 2014. This table does not include an estimate for grants that may be issued in the future (in thousands).

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	35
2015		96
2016		72
2017		31
2018		5
Total	$	239

The cost above is expected to be recognized over a weighted-average period of 2.9years.     

We estimate the fair value of our stock-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions including expected term, interest rates and expected volatility. Changes in the assumptions can materially affect the fair value estimates and ultimately how much we recognize as stock-based compensation expense. The fair values of our stock options are estimated at the date of grant. The weighted-average input assumptions used and resulting fair values for the nine months ended January 31, 2014and 2013, were as follows:     

		Nine Months Ended
		January 31,
		2014		2013
Expected term (in years)		4.0		4.0
Risk-free interest rate		0.9	%	0.5	%
Volatility		51	%	77	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	0.47	$	1.01

We base our expected term assumption on our historical experience and on the terms and conditions of the stock awards we grant to employees. The risk-free interest rate is based upon United States Treasury interest rates appropriate for the expected term of the awards. The expected volatility is based on the historical volatility of our common stock over the most recent period commensurate with the estimated expected term of our stock options. We did not pay common stock cash dividends in fiscal 2013 or year to date in fiscal 2014, and do not anticipate paying any cash dividends on common stock in the foreseeable future. Accordingly, an expected dividend yield of zero is used in the Black-Scholes option pricing model.     

We recognize expense only for the stock-based awards that are ultimately expected to vest. Therefore, we have developed an estimate of the number of awards expected to be forfeited prior to vesting (“forfeiture rate”). We use a forfeiture rate that is estimated based on historical forfeiture experience, and is applied to all stock-based awards. The forfeiture rate used for the nine months ending January 31, 2014and 2013 is 20%.  We recognize stock-based compensation cost as an expense ratably on a straight-line basis over the requisite service period.    

A summary of our stock option activity for the nine months ended January 31, 2014 is as follows:    

			Weighted-	Weighted-
			average	average remaining		Aggregate
			exercise	contractual		intrinsic
	Shares		price	term (in years)		value (1)
Outstanding at April 30, 2013	1,814,559	$	2.83	6.92	$	15,551
Granted	316,000		1.19
Exercised	-		-
Cancelled/expired	(725,200)		2.69
Outstanding at January 31, 2014	1,405,359		2.53	6.82		31,412

(1) Aggregate intrinsic value is defined as the difference between the current market value and the exercise price and is estimated using the closing price of our common stock on the last trading day of the periods ended as of the dates indicated.

A summary of our non-vested stock option activity for the period ended January 31, 2014 is as follows:    

		Weighted-
		average
		fair
	Shares	value
Non-vested at April 30, 2013	447,516	1.32
Granted	316,000	0.47
Vested	(148,718)	1.37
Cancelled/expired	(158,875)	1.14
Non-vested at January 31, 2014	455,923	0.67

There were no awards exercised during the nine months ended January 31, 2014and 2013. The total fair value of awards vested during the nine months ended January 31, 2014and 2013 was $0.2 million and $0.6 million, respectively.  The total fair value of awards granted during the nine months ended January 31, 2014and 2013 was $0.2 million and $0.4 million, respectively. 

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Sale Of Assets (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	9 Months Ended
	May 22, 2013	Jan. 31, 2014	Apr. 30, 2013
Sale Of Assets [Abstract]
Proceeds from assets held for sale	$ 400	$ 400
Assets held for sale			926
Liabilities held for sale			$ 526

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Long-Term Debt (Narrative) (Details) (USD $)	9 Months Ended
	Jan. 31, 2014	Apr. 30, 2013
Wells Fargo Credit Agreement [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 18,200,000
Number of term loans	2
Number of revolving lines of credit	1
Term Note A [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	12,200,000
Term loan amount	11,630,000	7,883,000
Quarterly principal payment	306,000
Note payable maturity date	Jun. 30, 2015
Reference rate	LIBOR
Stated interest rate, minimum	6.50%
Effective interest rate at period end	6.50%
Term Note B [Member]
Debt Instrument [Line Items]
Term loan amount	1,000,000	4,000,000
Note payable maturity date	Jun. 30, 2015
Reference rate	LIBOR
Stated interest rate, minimum	12.00%
Effective interest rate at period end	12.00%
Wells Fargo Revolving Line Of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	5,000,000
Term loan amount	$ 2,500,000	$ 5,500,000
Note payable maturity date	Jun. 30, 2015
Reference rate	LIBOR
Stated interest rate, minimum	6.50%
Effective interest rate at period end	6.50%
Minimum [Member] | Term Note A [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	4.50%
Minimum [Member] | Term Note B [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	9.00%
Minimum [Member] | Wells Fargo Revolving Line Of Credit [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	4.50%
Maximum [Member] | Term Note A [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	5.00%
Maximum [Member] | Term Note B [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	10.00%
Maximum [Member] | Wells Fargo Revolving Line Of Credit [Member]
Debt Instrument [Line Items]
Basis spread on variable reference rate	5.00%

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014	Apr. 30, 2013
Current assets:
Cash	$ 4,013	$ 5,459
Accounts receivable, net of allowances of $407 and $278, respectively	8,863	10,594
Prepaid expenses and other current assets	640	1,203
Assets held for sale		926
Total current assets	13,516	18,182
Property and equipment, net of accumulated depreciation of $4,714 and $5,526, respectively	1,244	1,934
Goodwill	11,706	11,706
Intangibles, net	5,998	7,152
Other assets	579	733
Total assets	33,043	39,707
Current liabilities:
Accounts payable	438	243
Current portion of long term debt	1,350	2,519
Accrued compensation and related expenses	1,635	2,697
Common stock warrant liability	255	204
Other accrued liabilities	1,003	863
Deferred revenue	7,186	8,449
Liabilities held for sale		526
Total current liabilities	11,867	15,501
Long term debt, net of current portion	13,959	15,170
Deferred tax liabilities, net	983	923
Other long term liabilities	1,207	1,429
Total liabilities	28,016	33,023
Commitments and contingencies
Stockholders' equity:
Preferred stock		2
Common stock	17	15
Additional paid-in capital	100,117	100,053
Accumulated other comprehensive income	280	280
Accumulated deficit	(95,387)	(93,666)
Total stockholders' equity	5,027	6,684
Total liabilities and stockholders' equity	$ 33,043	$ 39,707

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Earnings (Loss) Per Share (Narrative) (Details) (Convertible Debt Securities [Member])	9 Months Ended
	Jan. 31, 2014	Jun. 30, 2013
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities that are not included in the diluted net loss calculation	1,666,667
Convertible preferred stock, shares of common stock issued upon conversion		1

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013
Cash flows from operating activities:
Net income (loss)	$ (1,721)	$ 344
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation	740	842
Amortization of intangible assets	1,154	1,154
Loss on disposal of equipment	199	71
Sale of intangible trade name		(1,000)
Provision for doubtful accounts	129	(75)
Stock based compensation expense	130	492
Deferred tax liability	60	101
(Gain) loss from change in fair value of common stock warrant liability	51	(303)
Changes in operating assets and liabilities:
Accounts receivable	1,602	1,420
Prepaid expenses and other current assets	563	726
Other assets	154	162
Accounts payable	195	102
Accrued compensation and related expenses	(1,062)	(69)
Other accrued liabilities	140	159
Deferred revenue	(1,137)	(1,907)
Other long term liabilities	(348)	(182)
Net cash provided by operating activities	849	2,037
Cash flows from investing activities:
Proceeds from sale of intangible trade name		1,000
Proceeds from sale of property and equipment	4
Proceeds from assets held for sale	400
Purchases of property and equipment	(253)	(209)
Net cash provided by investing activities	151	791
Cash flows from financing activities:
Payment of preferred stock dividends	(66)	(66)
Principal payments under debt obligations	(2,253)	(2,739)
Principal payments on capital leases	(127)	(298)
Net cash used in financing activities	(2,446)	(3,103)
Effect of exchange rate changes on cash		(41)
Net decrease in cash	(1,446)	(316)
Cash, beginning of year	5,459	4,752
Cash, end of period	4,013	4,436
Supplemental cash flow information:
Cash paid for interest	889	1,004
Cash paid for income taxes	151	209
Supplemental non-cash investing and financing activities:
Accrued preferred stock dividends		$ 236

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Goodwill And Intangible Assets (Estimated Amortization Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014
Goodwill And Intangible Assets [Abstract]
Remainder of 2014	$ 384
2015	1,512
2016	1,096
2017	814
2018	774
Therafter	1,418
Finite-lived intangible assets, Net carrying amount	$ 5,998

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Long-Term Debt (Tables)

9 Months Ended

Jan. 31, 2014

Long-Term Debt [Abstract]

Schedule Of Long-Term Debt

		January 31,		April 30,
		2014		2013
Term Note A	$	11,630	$	7,883
Term Note B		1,000		4,000
Revolving line of credit		2,500		5,500
Capital leases		179		306
		15,309		17,689
Less current portion		(1,350)		(2,519)
Total long term debt, net	$	13,959	$	15,170

Schedule Of Maturities Of Long-term Debt

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	327
2015		1,350
2016		13,632
	$	15,309

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Fair Value Of Financial Instruments (Summary Of Activity Of Level 3 Inputs Measured On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jan. 31, 2014
Fair Value Of Financial Instruments [Abstract]
Balance at April 30, 2013	$ 204
Change in fair value of common stock warrant liability	51
Balance at January 31, 2014	$ 255

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Segment Information (Tables)

9 Months Ended

Jan. 31, 2014

Segment Information [Abstract]

Schedule Of Segment Reporting Information, By Segment

(in thousands)		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Total revenues:
Archive and eDiscovery	$	4,779	$	6,902		14,936		19,528
Database and migration		3,109		3,538		8,652		10,895
Total revenues	$	7,888	$	10,440	$	23,588	$	30,423
Operating expenses:
Archive and eDiscovery	$	4,438	$	5,612		13,423		18,075
Database and migration		1,619		2,221		4,842		6,197
Unallocated corporate expenses		2,109		2,240		5,659		4,598
Total operating expenses	$	8,166	$	10,073	$	23,924	$	28,870
Income (loss) from operations:
Archive and eDiscovery	$	341	$	1,290	$	1,513	$	1,453
Database and migration		1,490		1,317		3,810		4,698
Unallocated corporate expenses		(2,109)		(2,240)		(5,659)		(4,598)
Total income (loss) from operations	$	(278)	$	367	$	(336)	$	1,553
		January  31,		April 30,
		2014		2013
Total assets:
Archive and eDiscovery	$	29,181	$	33,108
Database and migration		3,862		6,599
Total assets	$	33,043	$	39,707

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Basis Of Presentation

9 Months Ended

Jan. 31, 2014

Basis Of Presentation [Abstract]

Basis Of Presentation

1.Basis of Presentation

The condensed consolidated financial statements prepared by Daegis Inc. (the “Company”, “we”, “us”, “our”) have been derived from our audited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations.

The accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries that we control due to ownership of a controlling interest. Intercompany transactions and balances have been eliminated. While the interim financial information contained in this filing is unaudited, such financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) which we consider necessary for a fair presentation. The results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the Company’s Annual Report on Form10-K for the fiscal year ended April 30, 2013, as filed with the SEC.

In the third quarter of fiscal year 2014, after the alignment of our Archive and eDiscovery operations, we determined that we have two reportable segments: (i) Archive and eDiscovery and (ii) database and migration.  As a result, we have restated historical results to reflect those new reporting segments.

Certain prior period balances in our consolidated statements of operations have been reclassified between direct costs of eDiscovery revenue and selling, general and administrative expenses to conform with current presentation.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014	Apr. 30, 2013
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance	$ 407	$ 278
Property and equipment, accumulated depreciation	$ 4,714	$ 5,526

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Segment Information

9 Months Ended

Jan. 31, 2014

Segment Information [Abstract]

Segment Information

11.   Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. We have evaluated our approach for making operating decisions and assessing the performance of our business and, in the third quarter of fiscal year 2014 after the alignment of our Archive and eDiscovery operations, we determined that we have two reportable segments: (i) Archive and eDiscovery and (ii) database and migration.  As a result, we have restated historical results to reflect those new reporting segments.

The accounting policies of the segments are the same as those described Note 1 of Part III, Item 15 of our Annual Report on Form 10-K for our fiscal year ended April 30, 2013.  We evaluate performance based on income from operations (total revenues less operating costs).  We do not allocate certain corporate costs to each segment and therefore disclose these amounts separately in our segment table.

For the three months ended January 31, 2014 and 2013, total revenue from the United States was $5.4 million and $6.9 million, respectively.Total revenue from all other countries for the three months ended January 31, 2014 and 2013 was $2.5 million and $3.5 million, respectively.  For the nine months ended January 31, 2014 and 2013, total revenue from the United States was $15.9 million and $20.4 million, respectively. Total revenue from all other countries for the nine months ended January 31, 2014 and 2013 was $7.8million and $10 million, respectively. Total long-lived assets as of January 31, 2014 and April 30, 2013, for the United States, were $19.5 million and $21.5 million, respectively. Total long-lived assets in all other countries were $0 as of January 31, 2014 and $1,000 as of April 30, 2013.

(in thousands)		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Total revenues:
Archive and eDiscovery	$	4,779	$	6,902		14,936		19,528
Database and migration		3,109		3,538		8,652		10,895
Total revenues	$	7,888	$	10,440	$	23,588	$	30,423
Operating expenses:
Archive and eDiscovery	$	4,438	$	5,612		13,423		18,075
Database and migration		1,619		2,221		4,842		6,197
Unallocated corporate expenses		2,109		2,240		5,659		4,598
Total operating expenses	$	8,166	$	10,073	$	23,924	$	28,870
Income (loss) from operations:
Archive and eDiscovery	$	341	$	1,290	$	1,513	$	1,453
Database and migration		1,490		1,317		3,810		4,698
Unallocated corporate expenses		(2,109)		(2,240)		(5,659)		(4,598)
Total income (loss) from operations	$	(278)	$	367	$	(336)	$	1,553
		January  31,		April 30,
		2014		2013
Total assets:
Archive and eDiscovery	$	29,181	$	33,108
Database and migration		3,862		6,599
Total assets	$	33,043	$	39,707

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Document And Entity Information	9 Months Ended
	Jan. 31, 2014	Mar. 03, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2014
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014
Entity Registrant Name	DAEGIS INC.
Entity Central Index Key	0000880562
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,384,444

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Stock Compensation Information (Tables)

9 Months Ended

Jan. 31, 2014

Stock Compensation Information [Abstract]

Schedule Of Equity-Based Compensation Expense From Operations

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Direct costs of revenue	$	3		9		12		27
Product development		5		21		24		70
Selling, general, and administrative		30		131		94		395
Total equity-based compensation	$	38	$	161	$	130	$	492

Summary Of Remaining Unrecognized Compensation Expense

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	35
2015		96
2016		72
2017		31
2018		5
Total	$	239

Summary Of Fair Value Assumptions

		Nine Months Ended
		January 31,
		2014		2013
Expected term (in years)		4.0		4.0
Risk-free interest rate		0.9	%	0.5	%
Volatility		51	%	77	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	0.47	$	1.01

Summary Of Stock Option Activity

			Weighted-	Weighted-
			average	average remaining		Aggregate
			exercise	contractual		intrinsic
	Shares		price	term (in years)		value (1)
Outstanding at April 30, 2013	1,814,559	$	2.83	6.92	$	15,551
Granted	316,000		1.19
Exercised	-		-
Cancelled/expired	(725,200)		2.69
Outstanding at January 31, 2014	1,405,359		2.53	6.82		31,412

(1) Aggregate intrinsic value is defined as the difference between the current market value and the exercise price and is estimated using the closing price of our common stock on the last trading day of the periods ended as of the dates indicated

Summary Of Non-Vested Stock Option Activity

		Weighted-
		average
		fair
	Shares	value
Non-vested at April 30, 2013	447,516	1.32
Granted	316,000	0.47
Vested	(148,718)	1.37
Cancelled/expired	(158,875)	1.14
Non-vested at January 31, 2014	455,923	0.67

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Condensed Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Revenues:
Archive and eDiscovery	$ 4,779	$ 6,902	$ 14,936	$ 19,528
Database and migration	3,109	3,538	8,652	10,895
Total revenues	7,888	10,440	23,588	30,423
Operating expenses:
Direct costs of archive and eDiscovery revenue	1,966	2,287	6,077	7,669
Direct costs of database and migration revenue	494	826	1,357	2,252
Product development	1,395	1,725	4,683	5,411
Selling, general and administrative	4,311	5,235	11,807	14,538
Sale of intangible trade name				(1,000)
Total operating expenses	8,166	10,073	23,924	28,870
Income (loss) from operations	(278)	367	(336)	1,553
Other income (expenses)
Gain (loss) from change in fair value of common stock warrant liability	(163)	31	(51)	303
Interest expense	(312)	(407)	(1,039)	(1,249)
Other, net	(54)	19	(51)	(90)
Total other income (expenses)	(529)	(357)	(1,141)	(1,036)
Income (loss) before income taxes	(807)	10	(1,477)	517
Provision for income taxes	71	75	244	173
Net income (loss)	$ (878)	$ (65)	$ (1,721)	$ 344
Income (loss) per share:
Basic	$ (0.05)	$ (0.01)	$ (0.11)	$ 0.00
Diluted	$ (0.05)	$ (0.01)	$ (0.11)	$ 0.00
Weighted-average shares used in computing income (loss) per share:
Basic	16,384	14,718	16,022	14,718
Diluted	16,384	14,718	16,022	14,726

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Accrued Restructuring Charges

9 Months Ended

Jan. 31, 2014

Accrued Restructuring Charges [Abstract]

Accrued Restructuring Charges

6.   Accrued Restructuring Charge

On December 3, 2013, we announced the completion of our organizational alignment in which the Archive and eDiscovery businesses were combined.  The alignment included movement of our operations, workforce reductions, abandonment of excess facilities and other charges in the Archive and eDiscovery reportable segment. 

To determine the loss on abandonment of the lease, which is the net present value of our future lease payments reduced by expected sublease income, certain estimates were made related to the (1) time period over which the relevant facility would remain vacant, (2) sublease terms, and (3) sublease rates, including common area charges.  If market rates continue to decrease in these markets or if it takes longer than expected to sublease these facilities, the actual loss could exceed this estimate. 

A summary of the restructuring and other costs recognized for the three months ended January 31, 2014 are as follows:. 

								Deferred
				Lease		Asset		Rent		Other
		Severance		Abandonment		Impairment		Liability		Costs		Total
Amounts expected to be incurred	$	428	$	482	$	127	$	(356)	$	67	$	748
Amounts incurred for the three months ended
January 31, 2014	$	347	$	482	$	127	$	(356)	$	67	$	667

At January 31, 2014, the accrued liability associated with the realignment consisted of the following:

				Lease
		Severance		Abandonment		Total
Charges	$	347	$	482	$	829
Payments		(170)		(130)		(300)
Accrued liability at January 31, 2014	$	177	$	352	$	529

The remaining accrual as of January 31, 2014 consists of $0.3 million that is expected to be paid during the fourth quarter of fiscal 2014 and $0.2 million expected to be paid through various dates by May 2016.

The restructuring and other related charges are included in the selling, general administrative expense line item in the Consolidated Statements of Operations.

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Fair Value Of Financial Instruments

9 Months Ended

Jan. 31, 2014

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

5.  Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

We value our warrants based on open form option pricing models which, based on the relevant inputs, render the fair value estimate Level 3. We based our estimates of fair value for liabilities on the amount we would pay a third-party market participant to transfer the liability and incorporates inputs such as equity prices, historical and implied volatilities, dividend rates and prices of convertible securities issued by comparable companies maximizing the use of observable inputs when available. The fair value hierarchy for valuation inputs gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

• Level 1 – Quoted prices in active markets for identical assets and liabilities.

• Level 2 – Observable inputs other than those included in Level 1, such as quoted market prices for similar assets and liabilities in active markets or quoted prices for identical assets in inactive markets.  

• Level 3 – Unobservable inputs are used when little or no market data is available and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair Value on a Recurring Basis

The following table summarizes the activity of Level 3 inputs measured on a recurring basis for the nine months ended January 31, 2014:   

(in thousands)	Common stock warrants
Balance at April 30, 2013	$	204
Change in fair value of common stock warrant liability		51
Balance at January 31, 2014		255

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Jan. 31, 2014

Earnings (Loss) Per Share [Abstract]

Schedule Of Earnings Per Share, Basic And Diluted

(in thousands, except share amounts)		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Net income (loss)	$	(878)	$	(65)	$	(1,721)	$	344
Dividends paid and payable on preferred stock		-		(101)		(66)		(302)
Net income (loss) available to common stockholders	$	(878)	$	(166)	$	(1,787)	$	42
Weighted-average shares of common stock outstanding, basic		16,384		14,718		16,022		14,718
Effect of dilutive securities		-		-		-		8
Weighted-average shares of common stock outstanding, diluted		16,384		14,718		16,022		14,726
Income (loss) per share of common stock:
Basic	$	(0.05)	$	(0.01)	$	(0.11)	$	0.00
Diluted	$	(0.05)	$	(0.01)	$	(0.11)	$	0.00
Antidilutive securities
Weighted average number of stock options		1,465,291		2,357,470		1,620,718		2,632,813
Weighted average number of warrants		909,042		909,042		909,042		909,042
Weighted average number of preferred stock		-		1,666,667		-		1,666,667

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Goodwill And Intangible Assets (Tables)

9 Months Ended

Jan. 31, 2014

Goodwill And Intangible Assets [Abstract]

Schedule Of Intangible Assets And Goodwill

		Gross				Net	Weighted-
		carrying		Accumulated		carrying	average
January 31, 2014		amount		amortization		amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-	$	11,706	-
Finite Lives:
Customer-related		6,236		(4,233)		2,003	7 years
Technology-based		2,638		(1,956)		682	5 years
Trademarks		4,600		(1,287)		3,313	10 years
Trade name		100		(100)		-	2 years
Total	$	25,280	$	(7,576)	$	17,704
		Gross				Net	Weighted-
		carrying		Accumulated		carrying	average
April 30, 2013		amount		amortization		amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-	$	11,706	-
Finite Lives:
Customer-related		6,236		(3,723)		2,513	7 years
Technology-based		2,638		(1,722)		916	5 years
Trademarks		4,600		(877)		3,723	10 years
Trade name		100		(100)		-	2 years
Total	$	25,280	$	(6,422)	$	18,858

Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	384
2015		1,512
2016		1,096
2017		814
2018		774
Thereafter		1,418
Total	$	5,998

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Preferred Stock

9 Months Ended

Jan. 31, 2014

Preferred Stock [Abstract]

Preferred Stock

9.   Preferred Stock    

In June 2011, we issued, through a private placement,1,666,667 shares of preferred stock to a group of related party institutional investors at a price of $2.40 per share for a total of $4.0 million.  These shares of preferred stock were automatically converted on a 1-for-1 basis into shares of common stock on June 30, 2013. The preferred stock included an annual dividend of $0.24 per share payable in cash or stock at our option. In August 2013, we paid a final dividend of  $66,000on this preferred stock ($0.04 per preferred share).

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Long-Term Debt

9 Months Ended

Jan. 31, 2014

Long-Term Debt [Abstract]

Long-Term Debt

7.   Long-Term Debt

In July 2013, we entered into an amendment to our Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (“Wells Fargo Credit Agreement”). Under the terms of the amendment, we are entitled to borrow up to $18.2 million. The total amount that can be borrowed under the credit agreement is based on a multiplier factor of the trailing twelve months of maintenance and recurring Software-As-A-Service revenue.  The Wells Fargo Credit Agreement consists of two term notes and a revolving line of credit.  Term Note A is for $12.2 million with quarterly principal payments of $306,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity, June 30, 2015.  To the extent the Company makes annual principal payments based on free cash flow, the quarterly principal payments will be reduced.  The Company incurs interest at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5%(6.5% at January 31, 2014).  Term Note B is for $1.0 million payable in full at maturity, June 30, 2015.  The Company incurs interest at the prevailing LIBOR rate plus 9.0-10.0% per annum with a minimum rate of 12.0%(12.0% at January 31, 2014).  Under the terms of the revolving line of credit, the Company can borrow up to $5.0 million.  The Company incurs interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% as of January 31, 2014).  The revolver has a maturity date of June 30, 2015.  As of January 31, 2014, there is $2.5 million outstanding on the revolving line of credit, none of which is current.

Our long-term debt consists of the following at January 31, 2014 and April 30, 2013 (in thousands):    

		January 31,		April 30,
		2014		2013
Term Note A	$	11,630	$	7,883
Term Note B		1,000		4,000
Revolving line of credit		2,500		5,500
Capital leases		179		306
		15,309		17,689
Less current portion		(1,350)		(2,519)
Total long term debt, net	$	13,959	$	15,170

The Wells Fargo Credit Agreement requires ongoing compliance with certain affirmative and negative covenants. The affirmative covenants include, but are not limited to: (i) maintenance of existence and conduct of business; (ii) compliance with laws; (iii) use of proceeds; and (iv) books and records and inspection. The negative covenants set forth in the Wells Fargo Credit Agreement include, but are not limited to, restrictions on our ability (and on our subsidiaries): (i) with certain limited exceptions, to create, incur, assume or allow to exist indebtedness; (ii) with certain limited exceptions, to create, incur, assume or allow to exist liens on properties; (iii) with certain limited exceptions, to make certain payments, transfers of property, or investments; or (iv) with certain limited exceptions, to make acquisitions.

We are obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement also contains various information and financial reporting requirements. 

The Wells Fargo Credit Agreement also contains customary events of default, including without limitation events of default based on payment obligations, repudiation of guaranty obligations, material inaccuracies of representations and warranties, covenant defaults, insolvency proceedings, monetary judgments in excess of certain amounts, change in control, certain ERISA events, and defaults under certain other obligations.

We are in compliance with all such covenants and requirements at January 31, 2014.

A summary of future principal payments on long-term debt obligations as of January 31, 2014is as follows (in thousands):    

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	327
2015		1,350
2016		13,632
	$	15,309

The summaryof future principal payments on long-term debt obligations does not account for the annual payments based on our free cash flow under Term Note A as noted above. The amount of these payments is not known; however, when they are determined it will accelerate the payment schedule outlined above.

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Income Taxes

9 Months Ended

Jan. 31, 2014

Income Taxes [Abstract]

Income Taxes

8.   Income Taxes

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.   

We are subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In general, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the fiscal years before 2008. We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Therefore, no reserves for uncertain income tax positions have been recorded.   

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of January 31, 2014and April 30, 2013, we did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor did we record any interest expense associated with any unrecognized tax benefits in the nine months ended January 31, 2014 and 2013.

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Earnings (Loss) Per Share

9 Months Ended

Jan. 31, 2014

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

10.   Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) less dividends payable on preferred stock by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.   

(in thousands, except share amounts)		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Net income (loss)	$	(878)	$	(65)	$	(1,721)	$	344
Dividends paid and payable on preferred stock		-		(101)		(66)		(302)
Net income (loss) available to common stockholders	$	(878)	$	(166)	$	(1,787)	$	42
Weighted-average shares of common stock outstanding, basic		16,384		14,718		16,022		14,718
Effect of dilutive securities		-		-		-		8
Weighted-average shares of common stock outstanding, diluted		16,384		14,718		16,022		14,726
Income (loss) per share of common stock:
Basic	$	(0.05)	$	(0.01)	$	(0.11)	$	0.00
Diluted	$	(0.05)	$	(0.01)	$	(0.11)	$	0.00
Antidilutive securities
Weighted average number of stock options		1,465,291		2,357,470		1,620,718		2,632,813
Weighted average number of warrants		909,042		909,042		909,042		909,042
Weighted average number of preferred stock		-		1,666,667		-		1,666,667

Potentially dilutive securities that are not included in the diluted net loss calculation are antidilutive because the exercise prices of these securities are greater than the average market price of the stock during the respective periods.  As noted above, the 1,666,667 shares of preferred stock were converted into shares of common stock on a 1-for-1 basis.

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Goodwill And Intangible Assets (Schedule Of Inangible Assets And Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Jan. 31, 2014	Apr. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Goodwill, Gross carrying amount	$ 11,706	$ 11,706
Goodwill, Net carrying amount	11,706	11,706
Finite-lived intangible assets, Accumulated amortization	(7,576)	(6,422)
Finite-lived intangible assets, Net carrying amount	5,998
Intangible assets, Gross carrying amount	25,280	25,280
Intangible assets, Net carrying amount	17,704	18,858
Customer-Related [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross carrying amount	6,236	6,236
Finite-lived intangible assets, Accumulated amortization	(4,233)	(3,723)
Finite-lived intangible assets, Net carrying amount	2,003	2,513
Finite-lived intangible assets, Weighted-average useful life	7 years	7 years
Technology-Based [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross carrying amount	2,638	2,638
Finite-lived intangible assets, Accumulated amortization	(1,956)	(1,722)
Finite-lived intangible assets, Net carrying amount	682	916
Finite-lived intangible assets, Weighted-average useful life	5 years	5 years
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross carrying amount	4,600	4,600
Finite-lived intangible assets, Accumulated amortization	(1,287)	(877)
Finite-lived intangible assets, Net carrying amount	3,313	3,723
Finite-lived intangible assets, Weighted-average useful life	10 years	10 years
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross carrying amount	100	100
Finite-lived intangible assets, Accumulated amortization	$ (100)	$ (100)
Finite-lived intangible assets, Weighted-average useful life	2 years	2 years

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Accrued Restructuring Charges (Tables)

9 Months Ended

Jan. 31, 2014

Accrued Restructuring Charges [Abstract]

Summary Of Restructuring And Other Costs

								Deferred
				Lease		Asset		Rent		Other
		Severance		Abandonment		Impairment		Liability		Costs		Total
Amounts expected to be incurred	$	428	$	482	$	127	$	(356)	$	67	$	748
Amounts incurred for the three months ended
January 31, 2014	$	347	$	482	$	127	$	(356)	$	67	$	667

Schedule Of Accrued Liability Associated With Realignment

				Lease
		Severance		Abandonment		Total
Charges	$	347	$	482	$	829
Payments		(170)		(130)		(300)
Accrued liability at January 31, 2014	$	177	$	352	$	529

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Stock Compensation Information (Narrative) (Details) (USD $)	9 Months Ended		12 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Apr. 30, 2013
Stock Compensation Information [Abstract]
Cost recognition, weighted-average period, years	2 years 10 months 24 days
Dividend payments	$ 0		$ 0
Dividend yield	0.00%	0.00%	0.00%
Forfeiture rate	20.00%	20.00%
Awards exercised during the period
Fair value of awards vested	200,000	600,000
Fair value of awards granted	$ 200,000	$ 400,000

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Long-Term Debt (Schedule Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Jan. 31, 2014	Apr. 30, 2013
Debt Instrument [Line Items]
Capital leases	$ 179	$ 306
Total debt	15,309	17,689
Less current portion	(1,350)	(2,519)
Total long term debt, net	13,959	15,170
Term Note A [Member]
Debt Instrument [Line Items]
Term loan amount	11,630	7,883
Term Note B [Member]
Debt Instrument [Line Items]
Term loan amount	1,000	4,000
Wells Fargo Revolving Line Of Credit [Member]
Debt Instrument [Line Items]
Term loan amount	$ 2,500	$ 5,500

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Condensed Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ (878)	$ (65)	$ (1,721)	$ 344
Other comprehensive income (loss):
Foreign currency translation adjustments		10		(42)
Comprehensive income (loss)	$ (878)	$ (55)	$ (1,721)	$ 302

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Goodwill And Intangible Assets

9 Months Ended

Jan. 31, 2014

Goodwill And Intangible Assets [Abstract]

Goodwill And Intangible Assets

4.Goodwill and Intangible Assets    

The following tables present details of the Company’s goodwill and intangible assets as of January 31, 2014 and April 30, 2013 (in thousands).     

		Gross				Net	Weighted-
		carrying		Accumulated		carrying	average
January 31, 2014		amount		amortization		amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-	$	11,706	-
Finite Lives:
Customer-related		6,236		(4,233)		2,003	7 years
Technology-based		2,638		(1,956)		682	5 years
Trademarks		4,600		(1,287)		3,313	10 years
Trade name		100		(100)		-	2 years
Total	$	25,280	$	(7,576)	$	17,704
		Gross				Net	Weighted-
		carrying		Accumulated		carrying	average
April 30, 2013		amount		amortization		amount	useful life
Indefinite Lives:
Goodwill	$	11,706	$	-	$	11,706	-
Finite Lives:
Customer-related		6,236		(3,723)		2,513	7 years
Technology-based		2,638		(1,722)		916	5 years
Trademarks		4,600		(877)		3,723	10 years
Trade name		100		(100)		-	2 years
Total	$	25,280	$	(6,422)	$	18,858

Acquired finite-lived intangibles are generally amortized on a straight-line basis over their estimated useful lives. The useful life of finite-lived intangibles is the period over which the asset is expected to contribute directly or indirectly to future cash flows of the Company.  Intangible assets amortization expense for the three months ended January31, 2014 and 2013 was $0.4 million for each quarter.Intangible assets amortization expense for the nine months ended January31, 2014 and 2013 was $1.2 million for each period.  The estimated future amortization expense related to intangible assets as of January 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	384
2015		1,512
2016		1,096
2017		814
2018		774
Thereafter		1,418
Total	$	5,998

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Stock Compensation Information (Summary Of Equity-Based Compensation Expense From Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jan. 31, 2014	Jan. 31, 2013	Jan. 31, 2014	Jan. 31, 2013
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	$ 38	$ 161	$ 130	$ 492
Direct Costs Of Revenue [Member]
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	3	9	12	27
Product Development [Member]
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	5	21	24	70
Selling, General, And Administrative [Member]
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	$ 30	$ 131	$ 94	$ 395

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Accrued Restructuring Charges (Summary Of Restructuring And Other Costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 31, 2014
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	$ 748
Amounts incurred	667
Severance [Member]
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	428
Amounts incurred	347
Lease Abandonment [Member]
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	482
Amounts incurred	482
Asset Impairment [Member]
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	127
Amounts incurred	127
Deferred Rent Liability [Member]
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	(356)
Amounts incurred	(356)
Other Costs [Member]
Restructuring Cost and Reserve [Line Items]
Amounts expected to be incurred	67
Amounts incurred	$ 67

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Fair Value Of Financial Instruments (Tables)

9 Months Ended

Jan. 31, 2014

Fair Value Of Financial Instruments [Abstract]

Summary Of Activity Of Level 3 Inputs Measured On A Recurring Basis

(in thousands)	Common stock warrants
Balance at April 30, 2013	$	204
Change in fair value of common stock warrant liability		51
Balance at January 31, 2014		255