10-Q

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

______________________

Form 10-Q

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

For the quarterly period ended October 31, 2014

OR

☐ 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    ☒ NO    ☐

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

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☒
		(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    ☐ NO    ☒

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 December 12, 2014.

DAEGIS INC.
FORM 10-Q

INDEX

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets as of October 31, 2014 and	3
	April 30, 2014
	Unaudited Condensed Consolidated Statements of Operations for the three and six	4
	months ended October 31, 2014 and 2013
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended	5
	October 31, 2014 and 2013
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of	14
	Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4.	Controls and Procedures	19
PART II.	OTHER INFORMATION	20
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosure	20
Item 5.	Other Information	20
Item 6.	Exhibits	22

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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

		October 31,			April 30,
		2014			2014
ASSETS
Current assets:
Cash	$	3,506		$	7,178
Accounts receivable, net of allowances of $118 and $211, respectively		4,982			6,657
Prepaid expenses		777			617
Other current assets		484			358
Total current assets		9,749			14,810
Property and equipment, net of accumulated depreciation of $5,257 and $4,921, respectively		1,002			1,053
Goodwill		11,706			11,706
Intangibles, net		4,856			5,614
Other assets		453			470
Total assets	$	27,766		$	33,653
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	601		$	308
Current portion of long-term debt		840			3,123
Accrued compensation and related expenses		987			1,185
Other accrued liabilities		817			971
Deferred revenue		6,101			8,590
Total current liabilities		9,346			14,177
Long-term debt, net of current portion		11,313			11,848
Deferred tax liabilities, net		1,015			1,032
Common stock warrant liability		215			276
Other long-term liabilities		823			1,095
Total liabilities		22,712			28,428
Commitments and contingencies
Stockholders’ equity:
Common stock		17			17
Additional paid-in capital		100,204			100,152
Accumulated other comprehensive income		280			280
Accumulated deficit		(95,447	)		(95,224	)
Total stockholders’ equity		5,054			5,225
Total liabilities and stockholders’ equity	$	27,766		$	33,653

Seeaccompanyingnotestounaudited condensed consolidatedfinancialstatements.

3

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

		Three Months Ended						Six Months Ended
		October 31,						October 31,
		2014			2013			2014			2013
Revenues:
Information Governance	$	3,854		$	4,741		$	7,958		$	10,157
Migration and Development Tools		2,798			2,995			5,357			5,543
Total revenues		6,652			7,736			13,315			15,700
Operating expenses:
Direct costs of Information Governance		1,582			2,066			3,139			4,266
Direct costs of Migration and Development Tools		525			445			1,028			863
Product development		1,217			1,618			2,390			3,288
Selling, general and administrative		2,959			3,641			6,331			7,341
Total operating expenses		6,283			7,770			12,888			15,758
Income (loss) from operations		369			(34	)		427			(58	)
Other income (expenses)
(Loss) gain from change in fair value of common stock warrant
liability		(34	)		210			61			112
Interest expense		(182	)		(311	)		(486	)		(727	)
Other, net		(141	)		34			(241	)		3
Total other (expense) income		(357	)		(67	)		(666	)		(612	)
Income (loss) before income taxes		12			(101	)		(239	)		(670	)
(Benefit) Provision for income taxes		(13	)		109			(16	)		173
Net Income (loss)	$	25		$	(210	)	$	(223	)	$	(843	)
Income (loss) per share:
Basic	$	0.00		$	(0.01	)	$	(0.01	)	$	(0.06	)
Diluted	$	0.00		$	(0.01	)	$	(0.01	)	$	(0.06	)
Weighted-average shares used in computing income (loss) per share:
Basic		16,384			16,384			16,384			15,841
Diluted		16,384			16,384			16,384			15,841

Seeaccompanyingnotestounaudited condensedconsolidatedfinancialstatements.

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

		Six Months Ended
		October 31,
		2014			2013
Cash flows from operating activities:
Net loss	$	(223	)	$	(843	)
Reconciliation of net loss to net cash provided by operating activities:
Depreciation		354			515
Amortization of intangible assets		758			769
Loss on disposal of equipment		-			75
Provision for doubtful accounts		(106	)		(244	)
Stock based compensation expense		52			92
Deferred tax liability		(17	)		(15	)
Gain from change in fair value of common stock warrant liability		(61	)		(112	)
Changes in operating assets and liabilities:
Accounts receivable		1,780			3,254
Prepaid expenses and other current assets		(285	)		544
Other assets		16			124
Accounts payable		294			414
Accrued compensation and related expenses		(197	)		(1,359	)
Other accrued liabilities		(155	)		(344	)
Deferred revenue		(2,721	)		(2,421	)
Other long term liabilities		(40	)		(79	)
Net cash (used in) provided by operating activities		(551	)		370
Cash flows from investing activities:
Proceeds from assets held for sale		-			400
Purchases of property and equipment		(303	)		(95	)
Net cash (used in) provided by investing activities		(303	)		305
Cash flows from financing activities:
Payment of preferred stock dividends		-			(66	)
Principal payments under debt obligations		(2,755	)		(1,947	)
Principal payments on capital leases		(63	)		(86	)
Net cash used in financing activities		(2,818	)		(2,099	)
Net change in cash		(3,672	)		(1,424	)
Cash, beginning of period		7,178			5,459
Cash, end of period	$	3,506		$	4,035
Supplemental cash flow information:
Cash paid for interest	$	308		$	613
Cash paid for income taxes		7			117

Seeaccompanyingnotestounaudited condensedconsolidatedfinancialstatements.

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DAEGIS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 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, 2014, 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. As a result, we have restated historical results to reflect those new reporting segments. In the second quarter of fiscal 2015 we announced the Company will move from selling products through business divisions to a holistic approach by product line featuring information governance and migration and development tools solutions. As a result we have renamed our Archive and eDiscovery segment to Information Governance and our Development, Database and Migration tools segment to Migration and Development Tools.

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. Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards update No. 2014-09 Revenue from Contracts with Customers (ASU 204-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP.

The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting periods with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017.

In August 2014, the FASB issued Accounting Standards update No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU requires management to assess each annual and interim period if there is substantial doubt about the entities ability to continue as a going concern; provides principals for considering the mitigating effect of management’s plans; requires certain disclosures when substantial doubt is alleviated as a result of management’s plans, and requires an express statement and other disclosures when substantial doubt is not alleviated. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early application permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements.

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3. Intangible Assets

Intangible asset balances by major asset class are as follows (in thousands):

		Gross					Net
		carrying		Accumulated			carrying
October 31, 2014		amount		amortization			amount
Customer-related	$	6,236	$	(4,742	)	$	1,494
Technology-based		2,638		(2,190	)		448
Trademarks		4,600		(1,686	)		2,914
Trade name		100		(100	)		-
Total	$	13,574	$	(8,718	)	$	4,856
		Gross					Net
		carrying		Accumulated			carrying
April 30, 2014		amount		amortization			amount
Customer-related	$	6,236	$	(4,403	)	$	1,833
Technology-based		2,638		(2,034	)		604
Trademarks		4,600		(1,423	)		3,177
Trade name		100		(100	)		-
Total	$	13,574	$	(7,960	)	$	5,614

Acquired finite-lived intangible assets are generally amortized on a straight-line basis over their estimated useful lives. The useful life of finite-lived intangible assets is the period over which the asset is expected to contribute directly or indirectly to future cash flows of the Company. Intangible asset amortization expense for the three months ended October 31, 2014 and 2013 was $0.4 million, respectively. Intangible asset amortization for the six months ended October 31, 2014 and 2013 was $0.8 million, respectively. The estimated future amortization expense related to intangible assets as of October 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	756
2016		1,096
2017		814
2018		774
2019		774
Thereafter		642
Total	$	4,856

4. 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 Information Governance (formerly Archive and eDiscovery) reportable segment.

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

								Deferred
				Lease		Asset		Rent			Other
		Severance		Abandonment		Impairment		Liability			Costs		Total
Amounts incurred and expected to be
incurred	$	420	$	933	$	127	$	(356	)	$	88	$	1,212

For the three months ended October 31, 2014 we had no cost associated with the restructuring. For the six months ended October 31, 2014 we incurred total cost of $171 thousand which included $150 thousand related to lease abandonment cost and $21 thousand of other cost.

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

					Lease
		Severance			Abandonment			Total
Accrued liability at April 30, 2014	$	96		$	464		$	560
Payments, net		(96	)		(170	)		(266	)
Adjustments		-			33			33
Accrued liability at October 31, 2014	$	-		$	327		$	327

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

5. Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, we use various valuation approaches and establish a hierarchy for inputs used in measuring fair value that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs 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.

We value our common stock warrant liability on a recurring basis based on open form option pricing models which, based on the relevant inputs, render the fair value estimate Level 3. Changes in the fair value of the warrants are reflected in the consolidated statements of operations as “Gain (loss) from change in fair value of common stock warrant.”

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Fair Value on a Recurring Basis

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

(in thousands)		Common stock warrants
Balance at April 30, 2014	$	276
Change in fair value of common stock warrant liability		(61	)
Balance at October 31, 2014	$	215

6. Long-Term Debt

Effective July 31, 2014, the Company entered into an amendment to its Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (the “Credit Agreement”). In order to secure its obligations under the Credit Agreement, the Company has granted the lender a first priority security interest in substantially all of our assets. 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.

The Credit Agreement consisted of two term notes and a revolving credit note agreement. The amendment extended the term of the Credit Agreement through June 30, 2017, reduced the interest rate and modified certain financial covenants. This amendment, in conjunction with a prepayment made on July 31, 2014 under the Credit Agreement, reduced the outstanding principal balance on the Term A Loan to $10.1 million, and the Term B Loan, which incurred a minimum interest rate of 12.0%, has now been fully repaid. The Term Note A requires quarterly principal payments of $252,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity. 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 3.5 - 4.0% per annum with a minimum rate of 5.0%.

Our long-term debt consists of the following (in thousands):

		October 31,			April 30,
		2014			2014
Term Note A	$	9,568		$	11,324
Term Note B		-			1,000
Revolving line of credit		2,500			2,500
Capital leases		85			147
		12,153			14,971
Less current portion		(840	)		(3,123	)
Total long term debt, net	$	11,313		$	11,848

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 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 October 31, 2014.

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A summary of expected future principal payments, excluding any annual principal payments based on free cash flow, on long-term debt obligations as of October 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	304
2016		1,039
2017		1,007
2018		9,803
	$	12,153

7. Stock Compensation Information

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

		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Direct costs of revenue	$	4	$	4	$	6	$	9
Product development		2		6		5		19
Selling, general, and administrative		19		29		41		64
Total equity-based compensation	$	25	$	39	$	52	$	92

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 weighted-average input assumptions used and resulting fair values were as follows:

		Six Months Ended
		October 31,
		2014			2013
Expected term (in years)		4.0			4.0
Risk-free interest rate		1.3	%		0.9	%
Volatility		74	%		52	%
Dividend yield		-			-
Weighted-average fair value of stock options granted during the period	$	0.68		$	0.49

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 cash dividends to common stockholders in fiscal 2014 or year to date in fiscal 2015, 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.

At October 31, 2014, there was approximately $0.2 million of unrecognized compensation expense related to unvested stock-based awards granted. The unrecognized expense is expected to be recognized over a weighted-average period of 3.24 years.

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A summary of our stock option activity for the six months ended October 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, 2014	1,254,629		$	2.38	6.82	$	41,972
Granted	201,922
Exercised	-
Cancelled/expired	(307,255	)
Outstanding at October 31, 2014	1,149,296			2.32	6.68		-
Exercisable at October 31, 2014	769,779		$	2.86	5.48	$	-

(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.

There were no awards exercised during the six months ended October 31, 2014 and 2013. The total fair value of awards vested during the six months ended October 31, 2014 and 2013 was $0.05 million and $0.1 million, respectively. The total fair value of awards granted during the six months ended October 31, 2014 and 2013 was $0.1 million, respectively.

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, we are 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 October 31, 2014 and April 30, 2014, 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 six months ended October 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).

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10. Income (Loss) Per Share

Basic income (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 income (loss) per share is computed similar to basic 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 per share amounts)	Three Months Ended						Six Months Ended
	October 31,						October 31,
		2014		2013			2014			2013
Net income (loss)	$	25	$	(210	)	$	(223	)	$	(843	)
Dividends paid and payable on preferred stock		-		-			-			(66	)
Net income (loss) available to common stockholders	$	25	$	(210	)	$	(223	)	$	(909	)
Weighted-average shares of common stock outstanding, basic	16,384			16,384			16,384			15,841
Effect of dilutive securities		-		-			-			-
Weighted-average shares of common stock outstanding, diluted		16,384		16,384			16,384			15,841
Income (loss) per share of common stock:
Basic	$	0.00	$	(0.01	)	$	(0.01	)	$	(0.06	)
Diluted	$	0.00	$	(0.01	)	$	(0.01	)	$	(0.06	)
Antidilutive securities
Number of stock options	1,149			1,521			1,149			1,521
Number of warrants	719			909			719			909

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.

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. As a result, we have adjusted historical results to reflect those new reporting segments. In the second quarter of fiscal 2015 we announced the Company will move from selling products through business divisions to a holistic approach by product line featuring information governance, migration and development tools solutions. As a result we have renamed our Archive and eDiscovery segment to Information Governance and our Development, Database and Migration tools segment to Migration and Development Tools.

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, 2014. 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.

12

For the three months ended October 31, 2014 and 2013, total revenue from the United States was $3.9 million and $5.0 million, respectively. Total revenue from all other countries for the three months ended October 31, 2014 and 2013 was $2.8 million and $2.7 million, respectively. For the six months ended October 31, 2014 and 2013, total revenue from the United States was $8.1 million and $10.5 million, respectively. Total revenue from all other countries for the six months ended October 31, 2014 and 2013 was $5.2 million, respectively. Total long-lived assets as of October 31, 2014 and April 30, 2014, for the United States, were $18.0 million and $18.8 million, respectively. There were no long-lived assets in other countries as of October 31, 2014 and April 30, 2014.

(in thousands)		Three Months Ended						Six Months Ended
		October 31,						October 31,
		2014			2013			2014			2013
Total revenues:
Information Governance	$	3,854		$	4,741		$	7,958		$	10,157
Migration and Development Tools		2,798			2,995			5,357			5,543
Total revenues	$	6,652		$	7,736		$	13,315		$	15,700
Operating expenses:
Information Governance	$	3,393		$	4,327		$	6,652		$	8,985
Migration and Development Tools		1,676			1,699			3,349			3,223
Unallocated corporate expenses		1,214			1,744			2,887			3,550
Total operating expenses	$	6,283		$	7,770		$	12,888		$	15,758
Income (loss) from operations:
Information Governance	$	461		$	414		$	1,306		$	1,172
Migration and Development Tools		1,122			1,296			2,008			2,320
Unallocated corporate expenses		(1,214	)		(1,744	)		(2,887	)		(3,550	)
Total income (loss) from operations	$	369		$	(34	)	$	427		$	(58	)
		October 31,			April 30,
		2014			2014
Total assets:
Information Governance	$	25,326		$	28,242
Migration and Development Tools		2,440			5,411
Total assets	$	27,766		$	33,653

13

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, 2014, as filed with the SEC.

Overview

Daegis Inc. (the “Company”, “we”, “us” or “our”) is a global software company that delivers leading-edge Information Governance, Application Migration, Data Management and Application Development tools. Our Information Governance solution simplifies and reduces the cost of archiving and eDiscovery, while mitigating risk by improving data management. Our Application Development and Application Migration software solutions complement our other products by providing tools to rapidly develop new applications on enterprise and cross-channel mobile platforms and to migrate legacy applications to state-of-the-art technologies. We offer specialized services, including data collection, professional services project management and managed document review to complement our software solutions.

In fiscal 2014, we completed the restructuring and realignment of our Company to meet customer and market needs and to operate with a more effective cost structure. We combined our Archive and eDiscovery businesses to offer a complete, cohesive information governance and eDiscovery solution that provides end-to-end data preservation and litigation readiness for our customers. Accordingly, today we sell our solutions through two segments. In the second quarter of fiscal 2015 we announced the Company will move from selling products through business divisions to a holistic approach by product line featuring information governance, migration and development tools solutions. As a result we have renamed our Archive and eDiscovery segment to Information Governance and our Development, Database and Migration tools segment to Migration and Development Tools.

Our information governance solutions simplify and reduce the cost of archive and eDiscovery while mitigating risk by improving data management. Our software includes Daegis AXS-One archiving for managing the preservation, collection, review and disposal of structured and unstructured data; Daegis Edge, our hosted, end-to-end eDiscovery software for processing, search, review and production of data; and Daegis Acumen technology-assisted review. Our services include managed document review, project management, search analytics consulting, collection and hosting of data.

Our migration and development tool solutions, Gupta Technologies (“Gupta”), includes mobile, Web and .NET application development, data management and application modernization software. Gupta Technologies delivers highly productive application development software for developers of all skill levels. Gupta’s data management solutions are highly scalable and high performance. Gupta’s Composer Technologies product line offers automated software and services for migrating Lotus Notes and Oracle Forms applications. Our products include TD Mobile, Team Developer, SQLBase, Report Builder, NXJ, DataServer, VISION, ACCELL, Composer Notes and Composer CipherSoft.

14

We market and sell our products and services through a direct sales strategy, and a regional and global channel sales strategy to corporate customers including corporate legal and information technology departments. We are headquartered in Irving, Texas, with offices in Roseville, California and Rutherford, New Jersey and international offices in Australia, Canada, France, Germany, and the United Kingdom (“UK”). We market and sell our software directly in the United States, Europe, Canada, Japan, Singapore and Australia and indirectly through global distributors and resellers on a worldwide basis.

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

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 second quarter of fiscal 2015, 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, 2014 provides a more complete discussion of our critical accounting policies and estimates. In the first quarter of fiscal 2015, we recorded an additional restructuring charge related to the lease abandonment of $150 thousand. As of October 31, 2014, our accrued liability for unpaid restructuring charges was $0.3 million and is expected to be paid at various dates through May 2016.

15

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 Ended						Six Months Ended
	October 31,						October 31,
	2014			2013			2014			2013
Revenues:
Information Governance	57.9		%	61.3		%	59.8		%	64.7		%
Migration and Development Tools	42.1			38.7			40.2			35.3
Total revenues	100.0			100.0			100.0			100.0
Operating expenses:
Direct costs of Information Governance	23.8			26.7			23.6			27.2
Direct costs of Migration and Development Tools	7.9			5.8			7.7			5.6
Product development	18.3			20.9			17.9			20.9
Selling, general and administrative	44.5			47.0			47.5			46.7
Total operating expenses	94.5			100.4			96.7			100.4
Income (loss) from operations	5.5			(0.4	)		3.3			(0.4	)
Other income (expenses)
(Loss) gain from change in fair value of common stock warrant	(0.5	)		2.7			0.5			0.7
Interest expense	(2.7	)		(4.0	)		(3.7	)		(4.6	)
Other, net	(2.1	)		0.4			(1.8	)		0.0
Total other (expenses) income	(5.3	)		(0.9	)		(5.0	)		(3.9	)
Income (loss) before income taxes	0.2			(1.3	)		(1.7	)		(4.3	)
(Benefit) provision for income taxes	(0.2	)		1.4			(0.1	)		1.1
Net Income ( loss)	0.4			(2.7	)		(1.8	)		(5.4	)

Total Revenues

We generate revenue from Information Governance software and service sales as well as maintenance, support and consulting services. Our Information Governance solutions are sold by our direct sales force in the United States and Europe. We also generate Migration and Development Tools revenue from software license sales and related services, including maintenance, support and consulting services. We sell our Migration and Development Tools 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 for the three months ended October 31, 2014 were $6.7 million, a decrease of $1.1 million or 14.0% from the second quarter of fiscal 2014. Total revenues for the six months ended October 31, 2014 were $13.3 million, a decrease of $2.4 million or 15.2% from the same period last year.

Total Information and Governance revenues for the three months ended October 31, 2014 were $3.9 million, a decrease of $0.9 million or 18.7% from the second quarter of fiscal 2014. Total Information and Governance revenues for the six months ended October 31, 2014 were $8.0 million, a decrease of $2.2 million or 21.7% from the same period last year. The revenue from Information and governance fluctuates depending on the activity of our customers’ legal matters as well as the timing of license sales and performance of professional service engagements. The decrease in Information and Governance revenue as compared to the prior year is primarily related to a reduction in our professional services and hosting revenues. We have a continued reduction in services to our largest client as the consulting services for this particular matter was substantially complete at the end of fiscal year 2014. This client, which represented 18% of our consolidated revenue during the second quarter of fiscal year 2014, has declined to 12% of consolidated revenue during the second quarter of fiscal year 2015. In addition, we have begun transitioning our business model to bring to market a single managed solution for information governance, compliance and litigation readiness. This transition is negatively impacting our revenues during the second quarter of fiscal year 2015 due to somewhat longer sales cycles with this type of business model.

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Migration and Development Tools revenues for the three months ended October 31, 2014 were $2.8 million compared to $3.0 million for the same period last year, an decrease of $0.2 million or 6.6%. Migration and Development Tools revenues for the six months ended October 31, 2014 were $5.4 million compared to $5.5 million or 3.4% lower for the same period last year. This decrease is primarily the result of timing of migration tools consulting services.

Operating Expenses

Direct Costs of Information and Governance. Direct costs of Information and Governance revenue consist primarily of expenses related to employees, facilities, third party assistance and the amortization of purchased technology from third parties that were directly related to the generation of Information Governance revenue. Direct costs of Information Governance revenue were $1.6 million for the three months ended October 31, 2014 compared to $2.1 million in the same period of fiscal 2014, a decline of $0.5 million. Direct costs of Information Governance revenue were $3.1 million for the six months ended October 31, 2014 compared to $4.3 million in the same period of fiscal 2014, a decline of $1.2 million. This decrease is a result of actions related to the organizational alignment, primarily salaries and related cost and brings cost inline with business needs during the third quarter of fiscal 2014.

Direct Costs of Migration and Development Tools Revenue. Direct costs of Migration and Development Tools revenue consist primarily of expenses related to employees, facilities, third party assistance, and royalty payments that were directly related to the generation of database and migration revenue. Direct costs of Migration and Development Tools revenue were $0.5 million and $0.4 million for the three months ended October 31, 2014, and 2013 respectively. Direct costs of Migration and Development Tools revenue were $1.0 million and $0.9 million for the six months ended October 31, 2014 and 2013, respectively. The increase in both periods is primarily related to increased travel and consulting cost.

Product Development. Product development efforts are focused on on-going enhancements and increased functionality for all of our core products: Daegis AXS-One Archive, Daegis Edge, Daegis Acumen, Team Developer, SQLBase, Report Builder, NXJ, VISION, Composer CipherSoft and Composer Notes. Within Gupta Technologies, we developed a new mobile enterprise application development product, TD Mobile. 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 three months ended October 31, 2014 were $1.2, a decrease of $0.4 million compared to the three months ended October 31, 2013. Product development costs in the six months ended October 31, 2014 were $2.4, a decrease of $0.9 million compared to the six months ended October 31, 2013. The decrease in product development expenses is primarily a result of open positions resulting from employee turnover.

Selling, General and Administrative.Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and benefits, marketing programs, travel expenses, professional services, facilities expenses, amortization of intangible assets, and bad debt expense. SG&A expenses were $3.0 million and $3.6 million for the three months ended October 31, 2014 and 2013, respectively. SG&A expenses were $6.3 million and $7.3 million for the six months ended October 31, 2014 and 2013, respectively. The decrease in SG&A expense is primarily due to a reduction in outside consulting costs and employee benefits costs.

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 October 31, 2014 resulted in a loss of $34 thousand, compared to a gain of $210 thousand in same period last year. The change in fair value of common stock warrant liability for the six months ended October 31, 2014 resulted in a gain of $61 thousand, compared to a gain of $112 thousand in same period last year. This gain and loss are due primarily to changes in our common stock share price during the periods.

Interest Expense. Interest expense for the three months ended October 31, 2014 was $0.2 million compared to $0.3 million for the same period last year. Interest expense for the six months ended October 31, 2014 was $0.5 million compared to $0.7 million for the same period last year. The decrease in interest expense in the second quarter of fiscal 2015 is due primarily to the amendment of our Revolving Credit and Term Loan Agreement with Wells Fargo in July 2014 which allowed us to move more of our debt from the higher interest bearing Term Note B to Term Note A as well as a decrease in the total outstanding debt as a result of the additional annual payment based on the Company’s free cash flow.

Other, Net. Other, net consists primarily of foreign exchange rate gains and losses and other income. Other, net was a loss of $141 thousand compared to a gain of $34 thousand for the three months ended October 31, 2014 and 2013. Other, net was a loss of $241 thousand compared to a gain of $3 thousand for the six months ended October 31, 2014 and 2013, respectively. The loss for the three and six months ended October 31, 2014 is primarily related to the impact of foreign currency exchange rate changes on our euro dominated cash account.

17

(Benefit) Provision for Income Taxes. The benefit for income taxes was $13.0 thousand compared to a provision for income taxes of $109.0 thousand for the three months ended October 31, 2014 and 3013, respectively. The benefit for income taxes was $16.0 thousand for the six months ended October 31, 2014 and was primarily related to a federal tax benefit compared to a provision for income tax was $173.0 thousand for October 31, 2013. For the three months ended October 31, 2014 and 2013, we recorded $10.8 thousand and $48.0 thousand in foreign tax expense and $24.1 thousand and $61.0 thousand in state and federal tax expense, respectively. For the six months ended October 31, 2014 and 2013, we recorded $14.2 thousand and $68.0 thousand in foreign tax expense and had income of $30.6 thousand and expense of $105.0 thousand in state and federal tax expense, respectively.

Liquidity and Capital Resources

At October 31, 2014, the Company had cash of $3.5 million compared to $7.2 million at April 30, 2014. Cash declined primarily as a result of our excess cash flow debt payments of $1.9 million and quarterly principal payments of $0.3 million and a pre-payment of $0.3 million, as well as, an increase in capital expenditure purchase of $0.3 million. The Company had net accounts receivable of $5.0 million as of October 31, 2014 compared to $6.7 million as of April 30, 2014. The decline in accounts receivable is primarily the result of collection activities as well as lower revenue during the period. The lower revenue is primarily related to the decline in work, which ended in fiscal year 2014, for our largest customer. We expect revenue related to this customer to continue to decline.

Effective July 31, 2014, the Company entered into an amendment to its Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (the “Credit Agreement”). In order to secure its obligations under the Credit Agreement, the Company has granted the lender a first priority security interest in substantially all of our assets. 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.

The Credit Agreement consisted of two term notes and a revolving credit note agreement. The amendment extended the term of the Credit Agreement through June 30, 2017, reduced the interest rate and modified certain financial covenants. This amendment, in conjunction with a prepayment made on July 31, 2014, under the Credit Agreement, reduced the outstanding principal balance on the Term A Loan to $10.1 million, and the Term B Loan, which incurred a minimum interest rate of 12.0%, has now been fully repaid. The Term Note A requires quarterly principal payments of $252,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity. 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 3.5 - 4.0% per annum with a minimum rate of 5.0%.

As of October 31, 2014 there is $9.6 million outstanding on the term note of which $0.8 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 3.5 - 4.0% per annum with a minimum rate of 5.0%. The revolver has a maturity date of June 30, 2017. As of October 31, 2014 there is $2.5 million borrowed on the revolving line of credit, none of which is current. As of October 31, 2014, the Company was eligible to borrow an additional $2.2 million.

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 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 October 31, 2014.

We believe our existing cash, along with forecasted operating cash flows and the revolving line of credit under the Wells Fargo Credit Agreement, will provide us with sufficient working capital for us to meet our operating plan for fiscal year 2015.

Operating Cash Flows. Cash used in operations was $0.6 million for the six months ended October 31, 2014 compared to cash provided by operations of $0.4 million for the same period last year. The reduction in operating cash flows was primarily the result of reduced revenue; resulting in less cash collected in the second quarter of fiscal 2015 as compared to the prior year.

Investing Cash Flows. Net cash used in investing activities was $0.3 million for the six months ended October 31, 2014 and consisted of capital expenditures. Net cash provided by investing activities was $0.3 million for the six months ended October 31, 2013 and was the result of proceeds from the sale of our Composer Mainframe product line, offset by capital expenditures.

18

Financing Cash Flows. Net cash used in used in financing activities for the six months ended October 31, 2014 was $2.8 million compared to net cash used in financing activities of $2.1 million for the same period last year and consisted primarily of principal payments on the Credit Agreement.

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

as of October 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	$	12,068	$	755	$	11,313	$	-	$	-
Estimated interest expense		1,454		548		906		-		-
Other liabilities		163		163		-		-		-
Capital lease obligations		85		85		-		-		-
Operating leases		3,068		1,491		1,577		-		-
Total contractual cash obligations	$	16,838	$	3,042	$	13,796	$	-	$	-

Other liabilities primarily include mandatory severance costs associated with a French statutory government regulated plan covering all French employees.

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 long term debt, which contains notes with variable interest rates.

The Wells Fargo Credit Agreement consists of outstanding balances of a $9.6 million Term Note A and a revolving line of credit agreement of $2.5 million. The Term Note A and revolving line of credit bear interest at LIBOR plus 3.5-4.0%. The minimum LIBOR used in the interest rate is 1.0% for Term Note A and the revolving line of credit. LIBOR at October 31, 2014 is approximately 0.23%. A hypothetical 1% increase in the LIBOR rate would have no impact on our interest expense for the six months ended October 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 our 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.

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 October 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.

19

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 October 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, 2014. 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

Employment Agreements

On December 10, 2014, the Compensation Committee of the Board of Directors of Daegis Inc. (the “Compensation Committee”) approved an executive employment agreement with our Chief Executive Officer, Mr. Timothy P. Bacci, and approved certain modifications of the executive employment agreement the Company had previously entered into upon the appointment of Ms. Susan K. Conner as Chief Financial Officer.

The executive employment agreement for Mr. Bacci provides for an annual base salary of $450,000. In addition to the base salary, the Mr. Bacci will be eligible to earn annual incentive compensation equal to 50% of his base salary, in accordance with the terms and conditions of the incentive plan approved for any given year by the Compensation Committee. Mr. Bacci may also earn additional performance compensation tied to the achievement of specific goals as may be approved by the Compensation Committee from time to time. If employment is terminated by the Company for other than cause, the employment agreement provides for the payment of twelve months of base salary for the executive, and an incentive compensation payment equal to that which the executive would have earned for the fiscal year, prorated for the number of days the executive was employed for that year. If employment is terminated within twelve months of a change in control, the employment agreement provides for the payment of twelve months of base salary for the executive, and an incentive compensation payment equal to the maximum amount payable for the fiscal year. In conjunction with his employment, the Compensation Committee has approved a grant to Mr. Bacci for options to acquire 655,378 shares of the Company’s common stock at an exercise price equal to the Company’s closing stock price on the date of grant, vesting 50% on the first anniversary date from the date of grant with the remaining 50% vesting monthly thereafter over a three year period, with accelerated vesting upon a change in control. Upon the first anniversary date from the initial grant, the agreement provides for an additional stock option grant to purchase 1% of the Company’s then outstanding common stock at an exercise price equal to the Company’s closing stock price on the date of grant, with vesting terms consistent with the initial grant. This grant is contingent upon the number of options available under the stock option plan.

20

The modifications to the executive employment agreement with Ms. Conner provide for a change in the termination pay to twelve months of her base salary when terminated for other than cause and within twelve months of a change in control. The new agreement, in the event of a termination for other than cause, now also provides for an incentive compensation payment equal to that which Ms. Conner would have earned for the fiscal year, prorated for the number of days she was employed for that year. Ms. Conner may also earn additional performance compensation tied to the achievement of specific goals as may be approved by the Compensation Committee from time to time.

In addition to the terms described above, both executive employment agreements now include customary restrictive covenants and general provisions; including, non-compete, non-solicitation of customers and non-solicitation of employee covenants, and a clawback provision.

The executive employment agreements are attached hereto as Exhibit 10.1 and 10.2.

21

Item 6. Exhibits

	Exhibits
10.1	Executive Employment Agreement by and between Timothy P. Bacci and the Registrant effective December 10, 2014.
10.2	Executive Employment Agreement by and between Susan K. Conner and the Registrant effective December 10, 2014.
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.

22

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.

December 12, 2014	Daegis Inc.
	(Registrant)
	By:
	/s/ SUSAN K. CONNER
	Susan K. Conner
	Chief Financial Officer
	(Principal Financial Officer)

23

EX-10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (“Agreement”) is made effective as of December 10, 2014 (“Effective Date”), by and between Daegis, Inc. (the “Company”) and Timothy P. Bacci (the “Executive”).

The Parties hereby agree as follows:

1. Employment. This Agreement sets forth the terms of the Executive’s continuing employment by the Company. Executive’s term of employment under this Agreement (the “Employment Term”) shall run from the effective date of this Agreement through the end of Executive’s employment with the Company, regardless of which party terminates the employment relationship or why the relationship is terminated.

2. Duties.

a. Position. Executive is employed as Chief Executive Officer, reporting to the Board of Directors, and shall have the duties and responsibilities assigned by the Company and its Board of Directors both upon initial hire and as may be assigned from time to time. Executive shall perform faithfully and diligently all duties assigned to Executive. As Chief Executive Officer, the Executive shall serve as the principal executive officer for the Company, as defined by the applicable securities laws. The Position will be based in the Dallas, TX area, and the Executive will also be expected to travel, as may be required, to the Company’s various offices and to other locations as required by the business.

b. Best Efforts/Full-Time. Executive will expend Executive’s best efforts on behalf of the Company, and will abide by all policies and decisions made by the Company, as well as applicable federal, state and local laws, regulations or ordinances, including in particular those laws applicable to the Company as a publicly-traded company. Executive will act in the best interest of the Company at all times. During the Employment Term, excluding periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during usual business hours to the business and affairs of the Company to the extent necessary to discharge the responsibilities assigned to the Executive hereunder. The Executive may (i) serve on corporate, civil or charitable boards or committees, (ii) manage personal investments and (iii) deliver lectures and teach at educational institutions, so long as such activities do not constitute a conflict of interest, create issues of independence, or interfere with the performance of the Executive’s responsibilities hereunder, as determined by the Company. It is expressly understood and agreed that to the extent any such activities have been conducted by the Executive prior to the Effective Date and have been disclosed by the Executive to the Board of Directors, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

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3. “At-Will” Employment Relationship. Executive’s employment with the Company is not for any specified period and may be terminated at any time, with or without cause or advance notice, except as notice may be otherwise required under various provisions of this Agreement, by either the Executive or the Company. In addition, the Company reserves the right to modify Executive’s position or duties to meet business needs and to use discretion in deciding on appropriate disciplinary actions; however, it is understood that at no time will the modification of the Executive’s position or duties include a diminished responsibility or authority customarily performed, undertaken and exercised by persons situated in a similar executive capacity. No representative of the Company, other than the Board of Directors, has the authority to alter the At-Will relationship and nothing in this Agreement is intended to or should be construed to contradict, modify or alter this At-Will relationship.

4. Compensation.

a. Base Salary. As compensation for Executive’s performance of Executives duties hereunder, the Company shall pay to Executive an initial Base Salary of $450,000.00 per year, as may be adjusted from time to time. Such Base Salary, less applicable withholdings and authorized deductions shall be payable in accordance with the Company’s customary practices applicable to its executives.

b. Incentive Compensation. In addition to Base Salary, Executive will be eligible to earn, for each fiscal year ending during the Employment Term, incentive compensation, in an amount up to 50% of Executive’s then-current base salary per year, in accordance with the terms and conditions of the incentive plan approved by the Compensation Committee. The actual plan terms, conditions, and any payment thereunder to be determined by the Company and the Compensation Committee, in its sole and absolute discretion. Executive may also earn additional performance bonuses tied to achievement of specific goals as approved by the Compensation Committee from time to time. All incentive compensation and additional performance bonuses that may be earned during a fiscal year by Executive are referred to herein as “Performance Bonuses.”

c. Stock Options. Subject to the timing of the Board of Directors’ approval, Executive will be granted an initial incentive stock option to purchase 4% (representing 655,378 shares) of the Company’s Common Stock under the Company’s 2010 Stock Option Plan (the “Plan”) at an exercise price equal to the fair market value of that stock on the Date of Grant (the “ Initial Option Grant”), 50% of which shall vest and become exercisable on the first anniversary of the date of grant, unless such vesting is accelerated pursuant to the terms and conditions of this Agreement. The remaining 50% shall vest and become exercisable monthly thereafter over a three year period in 36 equal periods, unless such vesting is accelerated pursuant to the terms and conditions of this Agreement. Additionally, subject to the timing of the Board of Directors’ approval, the Executive, on the first anniversary date of Executive’s Initial Option Grant, will receive an additional incentive stock option (“First Anniversary Stock Option”) to purchase 1.0% of the Company’s then-outstanding Common Stock under the Plan, or any other equity plans of the Company, at an exercise price equal to the fair market value of that stock on the Date of Grant, assuming that there is an adequate number of shares remaining (defined as a minimum of 1% of the then outstanding number of shares or 164,000 shares, whichever is greater) under The Plan to be issued. The Options granted under the First Anniversary Stock Option grant will likewise vest at 50% on the first anniversary date of the grant, with the remaining 50% vesting monthly thereafter over a three year period in 36 equal periods, unless such vesting is accelerated pursuant to the terms and conditions of this Agreement. Any Options granted to Executive will be subject to the terms and conditions of the Plan and the standard stock option agreement provided pursuant to the Plan which executive will be required to execute as a condition of receiving the Option.

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5. Benefits.

a. Customary Fringe Benefits. Executive will be eligible for all customary and usual fringe benefits generally available to other similarly situated executives of the Company, subject to the terms and conditions of the Company’s benefit plans. Company reserves the right to change or eliminate the fringe benefits on a prospective basis, at any time. Current benefits include health and welfare benefits (including vision and dental), STD/LTD, group life insurance and retirement benefits (401(k)).

b. Time Off. During the Employment Term, Executive will be eligible to accrue and use a total of 20 days paid vacation (as may be increased from time to time) and sick days in accordance with the Company’s policies as in effect from time to time. Executive shall schedule vacation so that it does not interfere in any material respect with the performance of Executive’s duties hereunder and so as to minimize disruption to the Company’s business, consulting with the Board of Directors in advance of scheduling any planned time off.

c. Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business expenses incurred in the performance of Executive’s duties on behalf of the Company. Such expenses must be in accordance with the Company’s then-current expense policies. Any requests for reimbursement must be made promptly with appropriate documentation, using the approved expense reimbursement process.

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6. Termination of Executive’s Employment.

a. Definitions. For purposes of this Agreement, the following definitions apply:

(i) Notice of Termination. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which indicates the specific termination provision in this Agreement, if any, relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, if any, and the Termination Date. For purposes of this Agreement, no purported termination of employment shall be effective without such Notice of Termination

(ii) Termination Date. For purposes of this Agreement, “Termination Date” shall mean, in the case of the Executive’s death, the date of death, or in all other cases, the effective date of the Executive’s termination of employment from all positions with the Company, as specified in the Notice of Termination, subject to the following:

(1) If the Executive’s employment is terminated by the Company for Cause, the date of the Notice of Termination;

(2) If the Executive’s employment is terminated by the Company due to Disability, the date specified in the Notice of Termination shall be at least thirty (30) days from the date the Notice of Termination is given to the Executive, except as otherwise noted in this section; and

(3) If the Executive’s employment is terminated by the Executive for Good Reason, the date specified in the Notice of Termination shall not be more than thirty (30) days from the date the Notice of Termination is given to the Company.

(iii) Cause. For purposes of this Agreement, “Cause” is defined as:

(1) the Executive’s theft, dishonesty, or falsification of any Company documents or records;

(2) the Executive’s improper use or disclosure of the Company’s confidential or proprietary information;

(3) any action, disruptive conduct or employment-related misconduct by the Executive which has a detrimental effect on the Company’s reputation or business, including, without limitation, conduct by the Executive which is intended to adversely affect overall employee morale;

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(4) the Executive’s failure or inability to perform any reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability;

(5) any material breach by the Executive of any employment agreement between the Executive and the Company, which breach is not cured pursuant to the terms of such agreement; or

(6) the Executive’s conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Executive’s ability to perform his or her duties with the Company.

(iv) Disability. The Company may terminate the Executive’s employment upon Executive’s Disability. For purposes of this Agreement, Disability means a physical or mental infirmity which, despite any legally required accommodations, impairs the Executive’s ability to substantially perform Executive’s duties under this Agreement which continues for a period of at least ninety (90) consecutive days and which is determined to be total and permanent by a physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal representative. The Executive shall be entitled to the compensation and benefits provided for under this Agreement for any period of time during the Employment Term and prior to the Termination Date resulting from the Executive being unable to work due to a physical or mental infirmity and as otherwise provided in this Agreement in connection with the Disability; provided, however, that the receipt of disability insurance payments or benefits will not result in a duplication of any other compensation or benefits otherwise provided for under this Agreement during any such period. Notwithstanding anything contained in this Agreement to the contrary, until the Termination Date specified in the Notice of Termination relating to the Executive’s Disability, in the event the Executive is no longer under a Disability, the Executive will be entitled to return to the Executive’s position on a regular basis with the Company as set forth in this Agreement, in which event no termination by reason of the Disability will be deemed to have occurred.

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(v) Good Reason. The Executive may terminate Executive’s employment for “Good Reason” within thirty (30) days following the occurrence of one or more of the events or conditions as described in this section, to which the Executive has not consented, by submitting a resignation in writing from all positions Executive then holds with the Company. For purpose of this Agreement, a resignation for “Good Reason” is defined as:

(1) A material diminution of Executive’s duties or responsibilities, unless otherwise agreed to by the Executive; Executive must provide the Company with written notice of Executive’s objection to the change in duties or responsibilities, which is not cured, to the extent susceptible to cure, within ten (10) days after notice, or the Executive will be deemed to have agreed to the changes;

(2) A material breach by the Company of any provision of this Agreement; provided however, the Executive shall first notify the Company in writing stating with reasonable specificity the breach by the Company and the Executive shall only have Good Reason to terminate Executive’s employment if the Company fails to commence action reasonably necessary to cure such breach within ten (10) days following the date of the Company’s receipt of the Executive’s written notice thereof;

(3) The failure by the Company to obtain an agreement, reasonably satisfactory to the Executive, from any successor or assign of the Company to assume and agree to perform this Agreement;

(4) Any material reduction, of 10% or greater, in Executive’s base salary or incentive compensation opportunity; or,

(5) A relocation of Executive’s place of employment by more than fifty (50) miles, if Executive routinely reports to work at a Company office.

(vi) Change in Control. A “Change in Control” is defined as any one of the following occurrences:

(1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 as amended (the “Exchange Act”), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of the securities of the Company representing more than 50% of a) the outstanding shares of common stock of the Company or b) the combined voting power of the Company’s then-outstanding securities; or,

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(2) The sale or disposition of all or substantially all of the Company’s assets (or any transaction having similar effect is consummated); or,

(3) The Company is party to a merger or consolidation that results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or,

(4) There occurs a sale to a “person” (as such term is defined in Section 13(d) of the Exchange Act) of securities of the Company representing more than fifty percent (50%) of the total number of votes that may be cast for the election of directors of the Company.

b. Severance if Termination Without Cause by Company or if Resignation for Good Reason by Executive. Although the Company or Executive may terminate this Agreement At-Will, if the Company elects to terminate Executive’s employment without “Cause” or Executive resigns for “Good Reason” (as defined herein), Executive shall be eligible to receive the following Termination Severance Benefits: i) all accrued and unpaid Base Salary earned during the Employment Term, ii) a payment equal to the product of (A) the Performance Bonuses, if any, that the Executive would have earned for that fiscal year in which the Termination Date occurs based on actual achievement against the applicable performance goals for such year and (B) a fraction, the numerator of which is the number of days the Executive was employed by the Company during the year of termination and the denominator of which is the number of days in such year (the “Pro-Rata Bonus”), to be paid on the date that annual bonuses are paid to similarly situated executives, but in no event later than two-and-one-half (2-1/2) months following the end of the fiscal year in which the Termination Date occurs; and iii) cash severance payments equivalent to twelve (12) months of the Executive’s Base Salary then in effect on the Termination Date, payable as “salary continuation” in accordance with the Company’s regular payroll cycle, commencing on the first payroll period that is 31 days following the Termination Date; and iv) the continuation of Executive’s existing health insurance benefits for a twelve (12) month period, if permitted by the Company’s health insurance plan (at the then-current contribution levels), or, if not permitted by the Company’s health insurance plan, the Company will reimburse the Executive for the cost of twelve (12) months of Executive’s COBRA health insurance continuation benefits (assuming Executive is COBRA-eligible). All other Company obligations to the Executive will be terminated and completely extinguished. Provision of the Termination Severance Benefits is contingent on a) the Executive’s continued compliance with all surviving provisions of this Agreement and b) the Executive’s execution of a full general release, releasing all claims, known and unknown, that Executive may have against the Company, arising out of or in any way related to Executive’s employment or termination of employment with the Company, on terms satisfactory to the Company, including a reciprocal non-disparagement clause in favor of both the Company and the Executive. If such a general release described in clause b) has not been executed and delivered and become irrevocable on or before the 30^th day following the Termination Date, no amounts or benefits under this Agreement shall be or become payable.

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c. Severance if Termination Within Twelve (12) Months Following a Change in Control. Although the Company or Executive may terminate this Agreement At-Will, if the Company elects to terminate Executive’s employment without “Cause” or Executive resigns for “Good Reason” (as defined herein) on or within a period of twelve (12) months following a Change in Control (as defined herein), Executive shall be eligible to receive the following Change in Control Severance Benefits: i) all accrued and unpaid Base Salary earned during the Employment Term, ii) cash severance payments equivalent to (A) twelve (12) months of the Executive’s Base Salary and (B) the Executive’s maximum Performance Bonuses payable for the fiscal year in effect on the Termination Date, payable as “salary continuation” in accordance with the Company’s regular payroll cycle, commencing on the first payroll period that is 31 days following the Termination Date; iii) the continuation of Executive’s existing health insurance benefits for a twelve (12) month period, if permitted by the Company’s health insurance plan (at the then-current contribution levels), or, if not permitted by the Company’s health insurance plan, the Company will reimburse the Executive for the cost of twelve (12) months of Executive’s COBRA health insurance continuation benefits (assuming Executive is COBRA-eligible); and iv) any outstanding unvested equity awards, including stock options under any Company stock option plans, shall become fully vested and exercisable as of the Termination Date. All other Company obligations to the Executive will be terminated and completely extinguished. Provision of the Change in Control Severance Benefits is contingent on a) the Executive’s continued compliance with all surviving provisions of this Agreement and b) the Executive’s execution of a full general release, releasing all claims, known and unknown, that Executive may have against the Company, arising out of or in any way related to Executive’s employment or termination of employment with the Company, on terms satisfactory to the Company, including a reciprocal non-disparagement clause in favor of both the Company and the Executive. If such a general release described in clause b) has not been executed and delivered and become irrevocable on or before the 30^th day following the Termination Date, no amounts or benefits under this Agreement shall be or become payable.

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7. Restrictive Covenants. Executive acknowledges and agrees that in reliance upon Executive’s promises and representations in this Agreement, Executive has been and shall be placed in a position of special trust and confidence wherein: (i) Executive is provided with a portion of the Confidential information (defined below) of the Company and its subsidiaries, (ii) is paid to develop goodwill and valuable business relationships on behalf of the Company, and/or (iii) is provided specialized training. The compensation to be paid to the Executive under this Agreement (including severance payment rights), and the Executive’s eligibility to receive awards of options to purchase shares of the Company’s Common Stock under the Company’s 2010 Stock Option Plan (or any other equity plans of the Company), are also expressly understood to be consideration in exchange for Executive’s promises and representations in this Agreement. Executive acknowledges that Executive’s services have been and will be of special, unique and extraordinary value to the Company and its subsidiaries, and that the restrictions provided for in this Agreement are reasonable and necessary for the protection of the Company’s legitimate business interests. Accordingly, Executive covenants and agrees:

a. Confidential Information / Nondisclosure.

(i) Confidential Information. “Confidential Information” refers to an item of information or a compilation of information, in any form (tangible or intangible), related to the Company’s business that Company has not made public or authorized public disclosure of, and that is not generally known to the public through proper means. Confidential Information includes, but is not limited to: (a) Company’s internal analysis and information regarding business opportunities, business plans, customer and prospective customer lists, marketing plans and strategies, research and development data, buying practices, financial data, operational data, methods, techniques, technical data, know-how, innovations, computer programs, un-patented inventions, and trade secrets; and (b) information about the business affairs of third parties (including, but not limited to, customers and acquisition targets) that such third parties provide to Company in confidence. Executive acknowledges that items of Confidential Information are Company’s valuable assets and have economic value, actual or potential, because they are not known by the public or others who are not obligated to keep them confidential and who could use them to their own economic benefit or to the competitive disadvantage of the Company, and thus, should be treated as Company’s trade secrets.

(ii)Nondisclosure. During employment and for so long thereafter as the information qualifies for protection as Confidential Information under this Agreement, Executive will avoid engaging in any use or disclosure of Confidential Information that is not expressly authorized in writing by the Company or required as part of Executive’s performance of his or her job duties undertaken for the benefit of the Company. Notwithstanding the foregoing, nothing herein shall be construed to prohibit the reporting of a violation of law that is protected by law, or to prohibit a disclosure of information that is compelled by law; provided, however, that to the extent allowed by law, Executive will give Company as much advance written notice as possible under the circumstances prior to such a disclosure and will cooperate with Company in any legal action undertaken to protect the confidentiality of the information.

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(iii) Property Rights. All Confidential Information shall be considered the property of the Company in its collected, compiled and stored form in the Company’s files, records, and computer systems. Company files and records (in physical and electronic or digital form) are Company property and may not be copied, removed, or destroyed without Company authorization.

(iv) Limited Computer Authorization. Executive is authorized to access only those Company computers that are designated for Executive’s use by the Company, and may only do so while in the active employment of the Company. All such authorization ends immediately upon the termination of employment. Executive is not authorized to access and use the Company’s computers, email, or related computer systems to compete or to prepare to compete, or to otherwise compromise the Company’s legitimate business interests, and any such unauthorized access to or use of the Company’s computers in violation of the foregoing understanding may subject Executive to civil and/or criminal liability.

(v) Return of Property. When Executive’s employment with Company ends, or sooner if so requested, Executive will immediately return to Company any Company property in Employee’s possession, including the following: all Confidential Information; all records related to Company’s Intellectual Property: and, all customer files, account files, price lists, product information, and training manuals whether confidential or not; and, all keys and security and credit cards; all equipment, products, samples, inventory, tools, computers, software, cell phones and other electronic devices belonging to the Company. At Company’s request, and without destroying or deleting any contents thereof, Executive shall turn over to the Company for inspection, any personal storage devices such as thumb drives, cell phones, or lap tops, Executive has used to conduct Company business or to store any information related to the Company’s business so that the Company can retrieve its property and insure that all Company materials have been returned and not copied or retained in violation of this Agreement.

(vi) Necessary Additional Protections. Executive acknowledges that the foregoing confidentiality and nondisclosure obligations are not sufficient standing alone to adequately protect the Company’s Confidential Information because some positions, services, and activities will, by their nature require or involve the use of Confidential Information, intentionally or not, that cannot be detected and addressed before irreparable harm is likely to occur; and, accordingly, the additional restrictions provided for in the remainder of this Section 7 are reasonable and necessary restrictions to avoid irreparable harm to the Company.

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b. Non-Compete Covenant. During the Employment Term and for a period of twelve (12) months thereafter (the “Restricted Period”), the Executive shall not, directly or indirectly, compete with the Company by providing, managing, or supervising services (as an employee, director, officer, owner, manager, partner, consultant or otherwise) that: (i) are the same as, or similar in nature, function or purpose to the services Executive performed for the Company in the preceding two years, or (ii) would otherwise be likely to involve the use or disclosure of the Company’s Confidential Information; for the benefit of any business enterprise directly engaged in e-discovery software for processing, search, review and production of data for litigation, compliance and regulatory matters, information archiving and information governance and related software solutions (the “Company Business”), in any state within the United States where the Company or any of its subsidiaries that Executive has material contact with or confidential information about conducts business during the Employment Term (collectively, the “Territory”). Notwithstanding the foregoing, the Executive’s passive, non-controlling ownership interest in a company solely as an investor of five percent (5%) or less of the outstanding securities of any class of any publicly-traded securities of any company shall not, by itself, be considered prohibited competition under this Agreement.

c. Non-solicitation of Customers. During the Restricted Period, the Executive shall not knowingly, directly or indirectly, solicit or attempt to solicit any customer of the Company that Executive had business-related contact with or Confidential Information about in the preceding two years for the purpose of inducing or encouraging the customer to (i) cease or reduce doing business with the Company or its subsidiaries, (ii) divert a business opportunity away from the Company or its subsidiaries, or (iii) purchase goods or services that compete with those of the Company or its subsidiaries that Executive had material involvement with or Confidential Information about in the preceding two years; nor will Executive knowingly help another person engage in such solicitation. As used herein, “customer” shall be understood to include any person or entity that has an ongoing business relationship with the Company and those with whom the Company has a reasonable expectation of doing business based on outstanding proposals or other negotiations in effect at the time Executive’s employment ends. As used herein, “solicit” means to knowingly communicate with a person or entity, whether directly or indirectly, in order to induce, cause or encourage the person or entity to engage in a particular course of conduct (such as buying a good or service), regardless of which party first initiates the communication or whether the communication is in response to an inquiry or not. This restriction is not intended to cover a general media advertisement or similar communication that advertises the services or products of a business in a general fashion without reference to any particular person and that is not targeted at a particular customer, person or entity.

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d. Non-Solicitation of Employees. During the Restricted Period, the Executive shall not knowingly, directly or indirectly, solicit or attempt to solicit an employee or independent contractor providing personal services to the Company for the purpose of inducing or encouraging that person to (i) cease providing services to the Company or terminate the parties’ business relationship, or (ii) to provide services to any person or entity that competes with the Company’s Business.

e. Mutual Non-disparagement Covenant. During the Employment Term and thereafter, the Executive shall not, directly or indirectly, take any action, or encourage others to take any action, to disparage or criticize the Company, its subsidiaries, or their employees, officers, directors, products, services, customers or owners. During the Employment Term and thereafter, the Company shall not, directly or indirectly, take any action, or encourage others to take any action, to disparage the Executive’s reputation. Nothing contained in this Section 7(e) shall preclude the Executive from enforcing his rights under this Agreement or prevent the Executive, the Company, or its employees, officers and directors, from truthfully testifying in response to legal process or a governmental inquiry.

f. Enforcement. The Executive acknowledges that a breach of the covenants contained in this Section 7 would cause irreparable damage to the Company, the exact amount of which would be difficult to ascertain, and that the remedies at law for any such breach or threatened breach would be inadequate. Accordingly, the Executive agrees that if he or she breaches or threatens to breach any of the covenants contained in this Section 7, in addition to any other remedy which may be available at law or in equity, the Company shall be entitled to: (i) institute and prosecute proceedings in any court of competent jurisdiction for specific performance and injunctive and other equitable relief to prevent the breach or any threatened breach thereof without bond or other security or a showing of irreparable harm or lack of an adequate remedy at law, and (ii) an equitable accounting by any court of competent jurisdiction of all profits or benefits arising out of such violation.

g. Scope of Covenants. The Company and the Executive further acknowledge that the time, scope, geographic area and other provisions of this Section 7 are reasonable and necessary for the protection of the interests of the Company, but if any such restriction or covenant shall be held by any court of competent jurisdiction to be void but would be valid if deleted in part or reduced in application, such restriction or covenant shall apply in such jurisdiction with such deletion or modification as may be necessary to make it valid and enforceable. The restrictions and covenants contained in each paragraph of this Section 7 shall be construed as separate and individual restrictions and covenants and shall each be capable of being reduced in application or severed without prejudice to the other restrictions and covenants or to the remaining provisions of this Agreement.

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h. Enforceability. The restrictive covenants of this Section 7 are in addition to the covenants that the Executive must comply with during and following the Executive’s employment under the Company’s applicable confidentiality, invention assignment, insider trading policy (“ITP”) and non-disclosure agreements (collectively, the “Covenants”). This Agreement shall be read to supplement and not replace or eliminate any of Executive’s obligations under the Covenants. In the event of a breach of the Covenants, the Company shall have all the remedies available thereunder in addition to the remedies under this Section 7. If any court holds any of the restrictions or covenants contained in this Section 7 to be unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company to the relief provided in this Section 7 in the courts of any other jurisdiction within the geographic scope of such restrictions and covenants.

i. Disclosure of Restrictive Covenants. The Executive agrees to disclose in advance the existence and terms of the restrictions and covenants contained in this Section 7 to any employer or other service recipient by whom the Executive may be employed or retained during the Restricted Period. Executive understands that both the Company and Executive have the right to provide another party an opinion about interpretation and/or application of this Agreement; Executive consents to such communications, and agrees not to assert a claim of wrongdoing by Company as a result of such a communication.

j. Extension of Restricted Period. If the Executive breaches a time-limited post-employment restriction created in this Section 7, then the time limitation for the violated restriction will be extended by one day for each day Executive is found to have been in violation of the restriction up to a length of time that is equal in duration to the length of restriction originally provided for so that Company gets the full benefit of compliance for the length of time originally provided for.

8. Injunctive Relief. Executive acknowledges that Executive’s breach of the Covenants would cause irreparable injury to the Company, and agrees that in the event of any such breach, the Company shall be entitled to seek temporary, preliminary and permanent injunctive relief, without the necessity of proving actual damages or posting any bond or surety.

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9. AGREEMENT TO ARBITRATE. TO THE FULLEST EXTENT PERMITTED BY LAW, EXECUTIVE AND COMPANY AGREE TO ARBITRATE ANY CONTROVERSY, CLAIM OR DISPUTE BETWEEN THEM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE EMPLOYMENT RELATIONSHIP BETWEEN THE COMPANY AND EXECUTIVE AND ANY DISPUTES UPON TERMINATION OF EMPLOYMENT, INCLUDING BUT NOT LIMITED TO BREACH OF CONTRACT, TORT, DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, DEMOTION DISCIPLINE, FAILURE TO ACCOMMODATE, FAMILY AND MEDICAL LEAVE, COMPENSATION OR BENEFITS CLAIMS, CONSTITUTIONAL CLAIMS; AND ANY CLAIMS FOR VIOLATION OF ANY LOCAL, STATE OR FEDERAL LAW, STATUTE, REGULATION, OR ORDINANCE OR COMMON LAW. CLAIMS FOR WORKERS’ COMPENSATION, UNEMPLOYMENT INSURANCE BENEFITS, BREACH OF THE COMPANY’S EXECUTIVE INNOVATIONS AND PROPRIETARY RIGHTS AGREEMENT AND OTHER CONFIDENTIALITY AGREEMENTS, AND COMPANY’S RIGHT TO OBTAIN INJUNCTIVE RELIEF PURSUANT TO SECTION 8 ARE EXCLUDED. BY ACCEPTING EMPLOYMENT WITH THE COMPANY, THE EXECUTIVE WAIVES THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY SUCH DISPUTES (EXCLUDING THOSE AFOREMENTIONED). FOR THE PURPOSE OF THIS AGREEMENT TO ARBITRATE, REFERENCES TO THE COMPANY INCLUDE ALL PARENT, SUBSIDIARY, OR RELATED ENTITIES AND THEIR EMPLOYEES, SUPERVISORS, OFFICERS, DIRECTORS, AGENTS, PENSION OR BENEFIT PLAN SPONSORS, FIDUCIARIES, ADMINISTRATORS, AFFILIATES, AND ALL SUCCESSORS AND ASSIGNS OF ANY OF THEM, AND THIS AGREEMENT SHALL APPLY TO THEM TO THE EXTENT EXECUTIVE’S CLAIMS ARISE OUT OF OR RELATE TO THEIR ACTIONS ON BEHALF OF THE COMPANY.

a. Consideration for Arbitration Agreement. The mutual promise by Company and Executive to arbitrate any and all disputes between them (except for those referenced above) rather than litigate them before the courts or other bodies, provides the consideration for this agreement to arbitrate.

b. Initiation of Arbitration. Either party may exercise the right to arbitrate by providing the other party with written notice of any and all claims forming the basis of such right in sufficient detail to inform the other party of the substance of such claims. In no event shall the request for arbitration be made after the date when institution of legal or equitable proceedings based on such claims would be barred by the applicable statutes of limitation.

c. Arbitration Procedure. The arbitration will be conducted in the state and county in which the Company is headquartered by a single neutral arbitrator and in accordance with the then-current rules for resolution of employment disputes of the American Arbitration Association (“AAA”). The parties are entitled to representation by an attorney or other representative of their choosing. The arbitrator shall have the power to enter any award that could be entered by a judge of the trial court of the state in which the Company is headquartered and shall follow the applicable law. The parties agree to abide by and perform any award rendered by the arbitrator. The arbitrator shall issue the award in writing and therein state the essential findings and conclusions on which the award is based. Judgment on the award may be entered in any court having jurisdiction thereof.

d. Costs of Arbitration. Company shall bear the costs of the arbitration filing fees; the hearing fees and cost of the arbitrator will be initially borne by the Company, but the non-prevailing party, as determined by the arbitrator, shall be responsible for the hearing fees and costs of the arbitrator.

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10. General Provisions.

a. Successors and Assigns. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company and the Company shall require any successor or assign to expressly assume and agree to perform this Agreement in the same manner the Company would be required to perform if no such succession or assign had occurred. This Agreement shall automatically insure to the benefit of, and be enforceable by, the Company’s owners, parent, subsidiaries, affiliates, successors, and assigns to protect the property and interests of same as if they were the Company without the need for any further action or agreement by Executive. Executive acknowledges that the sharing of Confidential Information and intellectual property interests between these entities gives them a material property interest in the enforcement of this Agreement. This agreement may be assigned by the Company as part of any sale, transfer, merger or other disposition of the Company or its assets. Executive’s rights hereunder are personal and may not be assigned or transferred to any other person, firm, or corporation without the prior, express and written consent of the Company.

b. Section 409A of the Internal Revenue Code of 1986 (the “Code”). This Letter Agreement is intended to meet the requirements of Section 409A of the Code, and will be interpreted and construed consistent with that intent. For purposes of this Agreement, the terms “terminate,” “terminated” and “termination” mean a termination of Executive’s employment that constitutes a “separation from service” within the meaning of the default rules of Section 409A of the Code. Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment will be paid (or provided) in accordance with the following:

(i) If Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the Termination Date, then no such payment shall be made or commence during the period beginning on the Termination Date and ending on the date that is six (6) months following the Termination Date or, if earlier, on the date of Executive’s death. The amount of any payment that would otherwise be paid to Executive during this period will instead be paid on the fifteenth (15^th) day of the first calendar month following the end of the period.

(ii) Payments with respect to reimbursements of expenses, including COBRA or legal fees shall be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the requirement that the reimbursement be made on or before the last day of the calendar year following the calendar year in which the relevant expense is incurred. The amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year. In no event will any reimbursement be made following the last day of the third calendar year following the year in which termination of employment occurred.

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(iii) The right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments for purposes of Code Section 409A.

c. Excise Tax Payments. In the event of a determination that a portion of any payment or benefit to the Executive or for Executive’s benefit payable or distributable pursuant to the terms of this Agreement on account of or in connection with a Change in Control event is or will be deemed to be an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay to the Executive an amount (the “Tax Gross-Up”) sufficient to reimburse the Executive on an after-tax basis for any excise tax imposed, pursuant to Code Section 4999 or any successor provision or similar tax (“Excise Tax”), on the Executive with respect to such payments or other benefits, so that the Executive does not incur any out-of-pocket cost with respect to such Excise Tax. For this purpose, the Executive shall be deemed to be in the highest marginal rate of federal and state taxes. The Tax Gross-Up payment shall be made at the time the Excise Tax triggering the right to such payment is remitted to the appropriate tax authorities but no later than the close of the calendar year following the calendar year in which such Excise Tax is remitted to the appropriate tax authorities. As a condition of the Company’s payment of the Tax Gross-Up, the Executive agrees to cooperate with the Company to furnish such information and documents as the Company or its agents may reasonably request in order to make a determination as to the amount of the Excise Tax. Any such calculations shall be provided to the Executive for review, as well.

d. Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement). The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulations.

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e. Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement; provided, however, that if Executive claims the Company has failed to comply with any ongoing payment or benefit obligation, the failure to make a timely demand for payment or other compliance within thirty (30) days of the first due date for such an obligation shall waive the right to assert continued entitlement or to assert subsequent breaches of the same alleged obligation at a later time.

f. Attorneys’ Fees. If any arbitration or other proceeding is instituted to enforce or interpret this Agreement, the prevailing party shall be entitled to recover from the losing party in addition to statutory costs, the reasonable attorneys’ fees the prevailing party incurred in connection with such arbitration or proceeding. For purposes of enforcement of Section 7 of this Agreement, Company shall be deemed a prevailing party if Executive is found to be in violation of any restriction in this Agreement and Company secures any part of the injunctive relief or other equitable remedies it seeks to enforce this Agreement.

g. Severability. In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law. If a deemed modification is not satisfactory in the judgment of an arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

h. Interpretation; Construction. The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and to have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

i. Governing Law and Forum Selection. This Agreement shall be governed by and construed in accordance with the laws of the United States and the State of Texas without regard to conflicts of law principles. All legal disputes between the parties arising from or related to this Agreement shall be litigated in a court of competent jurisdiction (state or federal) located in Dallas County, Texas. The parties consent to, and hereby irrevocably submit to the jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

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j. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: i) by personal delivery when delivered personally; ii) by overnight courier upon written verification of receipt; or iii) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing.

If to Executive:	If to Company:
Timothy P. Bacci	Daegis, Inc.
3704 Imperial Drive	Attn: Human Resources
Flower Mound, TX 75028	600 E. Las Colinas Blvd., Suite 1500
	Irving, TX 75039

k. Survival. Sections 7 (“Restrictive Covenants”), 8 (“Injunctive Relief”), 9, (“Agreement to Arbitrate”), 10 (“General Provisions”) and 11 (“Entire Agreement”) of this Agreement shall survive Executive’s termination of employment by the Company. This Agreement will be deemed to renew and continue during any periods of renewal of Executive’s employment, including, but not limited to, periods of employment following promotions or transfers, or during any subsequent re-employment by Company. Executive understands and agrees that all the terms and obligations contained in this Agreement are independent of the existence of any claim or cause of action by Executive against the Company, and any such claims shall not constitute a defense to Executive’s obligations hereunder, or to the enforcement by the Company of this Agreement, but shall be determined separately and independently. All common law and statutory obligations of Executive to the Company as an employee shall remain in effect; this Agreement supplements, and shall not be deemed to reduce or dilute, or make inapplicable, any common law or statutory duty that Executive would otherwise have to the Company absent this Agreement

11. Entire Agreement. This Agreement, any Company option documents, and the Company’s applicable confidentiality, invention assignment, insider trading policy (“ITP”) and non-disclosure agreements constitute the entire agreement between the parties relating to this subject matter and supersede all prior or simultaneous representations, discussions, negotiations or agreements, whether written or oral. This Agreement may be amended or modified only with the written consent of the Executive and the Board of Directors of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN, INCLUDING THE AGREEMENT TO ARBITRATE DISPUTES.

By the Company, Daegis, Inc.		By the Executive
By:		By:
	Steven D. Whiteman Chairman of the Board		Timothy P. Bacci

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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EX-10.2

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (“Agreement”) is made effective as of December 10, 2014 (“Effective Date”), by and between Daegis, Inc. (the “Company”) and Susan K. Conner (the “Executive”).

The Parties hereby agree as follows:

1. Employment. This Agreement sets forth the terms of the Executive’s continuing employment by the Company. Executive’s term of employment under this Agreement (the “Employment Term”) shall run from the effective date of this Agreement through the end of Executive’s employment with the Company, regardless of which party terminates the employment relationship or why the relationship is terminated.

2. Duties.

a. Position. Executive is employed as Chief Financial Officer, reporting to the Chief Executive Officer, and shall have the duties and responsibilities assigned by the Company and its Board of Directors both upon initial hire and as may be assigned from time to time. Executive shall perform faithfully and diligently all duties assigned to Executive. As Chief Financial Officer, the Executive shall serve as the chief financial executive for the Company, as defined by the applicable securities laws. The Position will be based in the Dallas, TX area, and the Executive will also be expected to travel, as may be required by the Chief Executive Officer to the Company’s various offices and to other locations as required by the business.

b. Best Efforts/Full-Time. Executive will expend Executive’s best efforts on behalf of the Company, and will abide by all policies and decisions made by the Company, as well as applicable federal, state and local laws, regulations or ordinances, including in particular those laws applicable to the Company as a publicly-traded company. Executive will act in the best interest of the Company at all times. During the Employment Term, excluding periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during usual business hours to the business and affairs of the Company to the extent necessary to discharge the responsibilities assigned to the Executive hereunder. The Executive may (i) serve on corporate, civil or charitable boards or committees, (ii) manage personal investments and (iii) deliver lectures and teach at educational institutions, so long as such activities do not constitute a conflict of interest, create issues of independence, or interfere with the performance of the Executive’s responsibilities hereunder, as determined by the Company. It is expressly understood and agreed that to the extent any such activities have been conducted by the Executive prior to the Effective Date and have been disclosed by the Executive to the CEO, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

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3. “At-Will” Employment Relationship. Executive’s employment with the Company is not for any specified period and may be terminated at any time, with or without cause or advance notice, except as notice may be otherwise required under various provisions of this Agreement, by either the Executive or the Company. In addition, the Company reserves the right to modify Executive’s position or duties to meet business needs and to use discretion in deciding on appropriate disciplinary actions; however, it is understood that at no time will the modification of the Executive’s position or duties include a diminished responsibility or authority customarily performed, undertaken and exercised by persons situated in a similar executive capacity. No representative of the Company, other than the Chief Executive Officer, has the authority to alter the At-Will relationship and nothing in this Agreement is intended to or should be construed to contradict, modify or alter this At-Will relationship.

4. Compensation.

a. Base Salary. As compensation for Executive’s performance of Executives duties hereunder, the Company shall pay to Executive an initial Base Salary of $270,000.00 per year, as may be adjusted from time to time. Such Base Salary, less applicable withholdings and authorized deductions shall be payable in accordance with the Company’s customary practices applicable to its executives.

b. Incentive Compensation. In addition to Base Salary, Executive will be eligible to earn, for each fiscal year ending during the Employment Term, incentive compensation, in an amount up to 50% of Executive’s then-current base salary per year, in accordance with the terms and conditions of the incentive plan approved by the Compensation Committee. The actual plan terms, conditions, and any payment thereunder to be determined by the Company and the Compensation Committee, in its sole and absolute discretion. Executive may also earn additional performance bonuses tied to achievement of specific goals as approved by the Compensation Committee from time to time. All incentive compensation and additional performance bonuses that may be earned during a fiscal year by Executive are referred to herein as “Performance Bonuses.”

5. Benefits.

a. Customary Fringe Benefits. Executive will be eligible for all customary and usual fringe benefits generally available to other similarly situated executives of the Company, subject to the terms and conditions of the Company’s benefit plans. Company reserves the right to change or eliminate the fringe benefits on a prospective basis, at any time. Current benefits include health and welfare benefits (including vision and dental), STD/LTD, group life insurance and retirement benefits (401(k)).

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b. Time Off. During the Employment Term, Executive will be eligible to accrue and use a total of 20 days paid vacation (as may be increased from time to time) and sick days in accordance with the Company’s policies as in effect from time to time. Executive shall schedule vacation so that it does not interfere in any material respect with the performance of Executive’s duties hereunder and so as to minimize disruption to the Company’s business, consulting with the Chief Executive Officer in advance of scheduling any planned time off.

c. Business Expenses. Executive will be reimbursed for all reasonable out-of-pocket business expenses incurred in the performance of Executive’s duties on behalf of the Company. Such expenses must be in accordance with the Company’s then-current expense policies. Any requests for reimbursement must be made promptly with appropriate documentation, using the approved expense reimbursement process.

6. Termination of Executive’s Employment.

a. Definitions. For purposes of this Agreement, the following definitions apply:

(i) Notice of Termination. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which indicates the specific termination provision in this Agreement, if any, relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, if any, and the Termination Date. For purposes of this Agreement, no purported termination of employment shall be effective without such Notice of Termination

(ii) Termination Date. For purposes of this Agreement, “Termination Date” shall mean, in the case of the Executive’s death, the date of death, or in all other cases, the effective date of the Executive’s termination of employment from all positions with the Company, as specified in the Notice of Termination, subject to the following:

(1) If the Executive’s employment is terminated by the Company for Cause, the date of the Notice of Termination;

(2) If the Executive’s employment is terminated by the Company due to Disability, the date specified in the Notice of Termination shall be at least thirty (30) days from the date the Notice of Termination is given to the Executive, except as otherwise noted in this section; and

(3) If the Executive’s employment is terminated by the Executive for Good Reason, the date specified in the Notice of Termination shall not be more than thirty (30) days from the date the Notice of Termination is given to the Company.

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(iii) Cause. For purposes of this Agreement, “Cause” is defined as:

(1) the Executive’s theft, dishonesty, or falsification of any Company documents or records;

(2) the Executive’s improper use or disclosure of the Company’s confidential or proprietary information;

(3) any action, disruptive conduct or employment-related misconduct by the Executive which has a detrimental effect on the Company’s reputation or business, including, without limitation, conduct by the Executive which is intended to adversely affect overall employee morale;

(4) the Executive’s failure or inability to perform any reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability;

(5) any material breach by the Executive of any employment agreement between the Executive and the Company, which breach is not cured pursuant to the terms of such agreement; or

(6) the Executive’s conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Executive’s ability to perform his or her duties with the Company.

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(iv) Disability. The Company may terminate the Executive’s employment upon Executive’s Disability. For purposes of this Agreement, Disability means a physical or mental infirmity which, despite any legally required accommodations, impairs the Executive’s ability to substantially perform Executive’s duties under this Agreement which continues for a period of at least ninety (90) consecutive days and which is determined to be total and permanent by a physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal representative. The Executive shall be entitled to the compensation and benefits provided for under this Agreement for any period of time during the Employment Term and prior to the Termination Date resulting from the Executive being unable to work due to a physical or mental infirmity and as otherwise provided in this Agreement in connection with the Disability; provided, however, that the receipt of disability insurance payments or benefits will not result in a duplication of any other compensation or benefits otherwise provided for under this Agreement during any such period. Notwithstanding anything contained in this Agreement to the contrary, until the Termination Date specified in the Notice of Termination relating to the Executive’s Disability, in the event the Executive is no longer under a Disability, the Executive will be entitled to return to the Executive’s position on a regular basis with the Company as set forth in this Agreement, in which event no termination by reason of the Disability will be deemed to have occurred.

(v) Good Reason. The Executive may terminate Executive’s employment for “Good Reason” within thirty (30) days following the occurrence of one or more of the events or conditions as described in this section, to which the Executive has not consented, by submitting a resignation in writing from all positions Executive then holds with the Company. For purpose of this Agreement, a resignation for “Good Reason” is defined as:

(1) A material diminution of Executive’s duties or responsibilities, unless otherwise agreed to by the Executive; Executive must provide the Company with written notice of Executive’s objection to the change in duties or responsibilities, which is not cured, to the extent susceptible to cure, within ten (10) days after notice, or the Executive will be deemed to have agreed to the changes;

(2) A material breach by the Company of any provision of this Agreement; provided however, the Executive shall first notify the Company in writing stating with reasonable specificity the breach by the Company and the Executive shall only have Good Reason to terminate Executive’s employment if the Company fails to commence action reasonably necessary to cure such breach within ten (10) days following the date of the Company’s receipt of the Executive’s written notice thereof;

(3) The failure by the Company to obtain an agreement, reasonably satisfactory to the Executive, from any successor or assign of the Company to assume and agree to perform this Agreement;

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(4) Any material reduction, of 10% or greater, in Executive’s base salary or incentive compensation opportunity; or,

(5) A relocation of Executive’s place of employment by more than fifty (50) miles, if Executive routinely reports to work at a Company office.

(vi) Change in Control. A “Change in Control” is defined as any one of the following occurrences:

(1) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 as amended (the “Exchange Act”), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of the securities of the Company representing more than 50% of a) the outstanding shares of common stock of the Company or b) the combined voting power of the Company’s then-outstanding securities; or,

(2) The sale or disposition of all or substantially all of the Company’s assets (or any transaction having similar effect is consummated); or,

(3) The Company is party to a merger or consolidation that results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or,

(4) There occurs a sale to a “person” (as such term is defined in Section 13(d) of the Exchange Act) of securities of the Company representing more than fifty percent (50%) of the total number of votes that may be cast for the election of directors of the Company.

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b. Severance if Termination Without Cause by Company or if Resignation for Good Reason by Executive. Although the Company or Executive may terminate this Agreement At-Will, if the Company elects to terminate Executive’s employment without “Cause” or Executive resigns for “Good Reason” (as defined herein), Executive shall be eligible to receive the following Termination Severance Benefits: i) all accrued and unpaid Base Salary earned during the Employment Term, ii) a payment equal to the product of (A) the Performance Bonuses, if any, that the Executive would have earned for that fiscal year in which the Termination Date occurs based on actual achievement against the applicable performance goals for such year and (B) a fraction, the numerator of which is the number of days the Executive was employed by the Company during the year of termination and the denominator of which is the number of days in such year (the “Pro-Rata Bonus”), to be paid on the date that annual bonuses are paid to similarly situated executives, but in no event later than two-and-one-half (2-1/2) months following the end of the fiscal year in which the Termination Date occurs; and iii) cash severance payments equivalent to twelve (12) months of the Executive’s Base Salary then in effect on the Termination Date, payable as “salary continuation” in accordance with the Company’s regular payroll cycle, commencing on the first payroll period that is 31 days following the Termination Date; and iv) the continuation of Executive’s existing health insurance benefits for a twelve (12) month period, if permitted by the Company’s health insurance plan (at the then-current contribution levels), or, if not permitted by the Company’s health insurance plan, the Company will reimburse the Executive for the cost of twelve (12) months of Executive’s COBRA health insurance continuation benefits (assuming Executive is COBRA-eligible). All other Company obligations to the Executive will be terminated and completely extinguished. Provision of the Termination Severance Benefits is contingent on a) the Executive’s continued compliance with all surviving provisions of this Agreement and b) the Executive’s execution of a full general release, releasing all claims, known and unknown, that Executive may have against the Company, arising out of or in any way related to Executive’s employment or termination of employment with the Company, on terms satisfactory to the Company, including a reciprocal non-disparagement clause in favor of both the Company and the Executive. If such a general release described in clause b) has not been executed and delivered and become irrevocable on or before the 30^th day following the Termination Date, no amounts or benefits under this Agreement shall be or become payable.

c. Severance if Termination Within Twelve (12) Months Following a Change in Control. Although the Company or Executive may terminate this Agreement At-Will, if the Company elects to terminate Executive’s employment without “Cause” or Executive resigns for “Good Reason” (as defined herein) on or within a period of twelve (12) months following a Change in Control (as defined herein), Executive shall be eligible to receive the following Change in Control Severance Benefits: i) all accrued and unpaid Base Salary earned during the Employment Term, ii) cash severance payments equivalent to (A) twelve (12) months of the Executive’s Base Salary and (B) the Executive’s maximum Performance Bonuses payable for the fiscal year in effect on the Termination Date, payable as “salary continuation” in accordance with the Company’s regular payroll cycle, commencing on the first payroll period that is 31 days following the Termination Date; iii) the continuation of Executive’s existing health insurance benefits for a twelve (12) month period, if permitted by the Company’s health insurance plan (at the then-current contribution levels), or, if not permitted by the Company’s health insurance plan, the Company will reimburse the Executive for the cost of twelve (12) months of Executive’s COBRA health insurance continuation benefits (assuming Executive is COBRA-eligible); and iv) any outstanding unvested equity awards, including stock options under any Company stock option plans, shall become fully vested and exercisable as of the Termination Date. All other Company obligations to the Executive will be terminated and completely extinguished. Provision of the Change in Control Severance Benefits is contingent on a) the Executive’s continued compliance with all surviving provisions of this Agreement and b) the Executive’s execution of a full general release, releasing all claims, known and unknown, that Executive may have against the Company, arising out of or in any way related to Executive’s employment or termination of employment with the Company, on terms satisfactory to the Company, including a reciprocal non-disparagement clause in favor of both the Company and the Executive. If such a general release described in clause b) has not been executed and delivered and become irrevocable on or before the 30^th day following the Termination Date, no amounts or benefits under this Agreement shall be or become payable.

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7. Restrictive Covenants. Executive acknowledges and agrees that in reliance upon Executive’s promises and representations in this Agreement, Executive has been and shall be placed in a position of special trust and confidence wherein: (i) Executive is provided with a portion of the Confidential information (defined below) of the Company and its subsidiaries, (ii) is paid to develop goodwill and valuable business relationships on behalf of the Company, and/or (iii) is provided specialized training. The compensation to be paid to the Executive under this Agreement (including severance payment rights), and the Executive’s eligibility to receive awards of options to purchase shares of the Company’s Common Stock under the Company’s 2010 Stock Option Plan (or any other equity plans of the Company), are also expressly understood to be consideration in exchange for Executive’s promises and representations in this Agreement. Executive acknowledges that Executive’s services have been and will be of special, unique and extraordinary value to the Company and its subsidiaries, and that the restrictions provided for in this Agreement are reasonable and necessary for the protection of the Company’s legitimate business interests. Accordingly, Executive covenants and agrees:

a. Confidential Information / Nondisclosure.

(i) Confidential Information. “Confidential Information” refers to an item of information or a compilation of information, in any form (tangible or intangible), related to the Company’s business that Company has not made public or authorized public disclosure of, and that is not generally known to the public through proper means. Confidential Information includes, but is not limited to: (a) Company’s internal analysis and information regarding business opportunities, business plans, customer and prospective customer lists, marketing plans and strategies, research and development data, buying practices, financial data, operational data, methods, techniques, technical data, know-how, innovations, computer programs, un-patented inventions, and trade secrets; and (b) information about the business affairs of third parties (including, but not limited to, customers and acquisition targets) that such third parties provide to Company in confidence. Executive acknowledges that items of Confidential Information are Company’s valuable assets and have economic value, actual or potential, because they are not known by the public or others who are not obligated to keep them confidential and who could use them to their own economic benefit or to the competitive disadvantage of the Company, and thus, should be treated as Company’s trade secrets.

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(ii)Nondisclosure. During employment and for so long thereafter as the information qualifies for protection as Confidential Information under this Agreement, Executive will avoid engaging in any use or disclosure of Confidential Information that is not expressly authorized in writing by the Company or required as part of Executive’s performance of his or her job duties undertaken for the benefit of the Company. Notwithstanding the foregoing, nothing herein shall be construed to prohibit the reporting of a violation of law that is protected by law, or to prohibit a disclosure of information that is compelled by law; provided, however, that to the extent allowed by law, Executive will give Company as much advance written notice as possible under the circumstances prior to such a disclosure and will cooperate with Company in any legal action undertaken to protect the confidentiality of the information.

(iii) Property Rights. All Confidential Information shall be considered the property of the Company in its collected, compiled and stored form in the Company’s files, records, and computer systems. Company files and records (in physical and electronic or digital form) are Company property and may not be copied, removed, or destroyed without Company authorization.

(iv) Limited Computer Authorization. Executive is authorized to access only those Company computers that are designated for Executive’s use by the Company, and may only do so while in the active employment of the Company. All such authorization ends immediately upon the termination of employment. Executive is not authorized to access and use the Company’s computers, email, or related computer systems to compete or to prepare to compete, or to otherwise compromise the Company’s legitimate business interests, and any such unauthorized access to or use of the Company’s computers in violation of the foregoing understanding may subject Executive to civil and/or criminal liability.

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(v) Return of Property. When Executive’s employment with Company ends, or sooner if so requested, Executive will immediately return to Company any Company property in Employee’s possession, including the following: all Confidential Information; all records related to Company’s Intellectual Property: and, all customer files, account files, price lists, product information, and training manuals whether confidential or not; and, all keys and security and credit cards; all equipment, products, samples, inventory, tools, computers, software, cell phones and other electronic devices belonging to the Company. At Company’s request, and without destroying or deleting any contents thereof, Executive shall turn over to the Company for inspection, any personal storage devices such as thumb drives, cell phones, or lap tops, Executive has used to conduct Company business or to store any information related to the Company’s business so that the Company can retrieve its property and insure that all Company materials have been returned and not copied or retained in violation of this Agreement.

(vi) Necessary Additional Protections. Executive acknowledges that the foregoing confidentiality and nondisclosure obligations are not sufficient standing alone to adequately protect the Company’s Confidential Information because some positions, services, and activities will, by their nature require or involve the use of Confidential Information, intentionally or not, that cannot be detected and addressed before irreparable harm is likely to occur; and, accordingly, the additional restrictions provided for in the remainder of this Section 7 are reasonable and necessary restrictions to avoid irreparable harm to the Company.

b. Non-Compete Covenant. During the Employment Term and for a period of twelve (12) months thereafter (the “Restricted Period”), the Executive shall not, directly or indirectly, compete with the Company by providing, managing, or supervising services (as an employee, director, officer, owner, manager, partner, consultant or otherwise) that: (i) are the same as, or similar in nature, function or purpose to the services Executive performed for the Company in the preceding two years, or (ii) would otherwise be likely to involve the use or disclosure of the Company’s Confidential Information; for the benefit of any business enterprise directly engaged in e-discovery software for processing, search, review and production of data for litigation, compliance and regulatory matters, information archiving and information governance and related software solutions (the “Company Business”), in any state within the United States where the Company or any of its subsidiaries that Executive has material contact with or confidential information about conducts business during the Employment Term (collectively, the “Territory”). Notwithstanding the foregoing, the Executive’s passive, non-controlling ownership interest in a company solely as an investor of five percent (5%) or less of the outstanding securities of any class of any publicly-traded securities of any company shall not, by itself, be considered prohibited competition under this Agreement.

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c. Non-solicitation of Customers. During the Restricted Period, the Executive shall not knowingly, directly or indirectly, solicit or attempt to solicit any customer of the Company that Executive had business-related contact with or Confidential Information about in the preceding two years for the purpose of inducing or encouraging the customer to (i) cease or reduce doing business with the Company or its subsidiaries, (ii) divert a business opportunity away from the Company or its subsidiaries, or (iii) purchase goods or services that compete with those of the Company or its subsidiaries that Executive had material involvement with or Confidential Information about in the preceding two years; nor will Executive knowingly help another person engage in such solicitation. As used herein, “customer” shall be understood to include any person or entity that has an ongoing business relationship with the Company and those with whom the Company has a reasonable expectation of doing business based on outstanding proposals or other negotiations in effect at the time Executive’s employment ends. As used herein, “solicit” means to knowingly communicate with a person or entity, whether directly or indirectly, in order to induce, cause or encourage the person or entity to engage in a particular course of conduct (such as buying a good or service), regardless of which party first initiates the communication or whether the communication is in response to an inquiry or not. This restriction is not intended to cover a general media advertisement or similar communication that advertises the services or products of a business in a general fashion without reference to any particular person and that is not targeted at a particular customer, person or entity.

d. Non-Solicitation of Employees. During the Restricted Period, the Executive shall not knowingly, directly or indirectly, solicit or attempt to solicit an employee or independent contractor providing personal services to the Company for the purpose of inducing or encouraging that person to (i) cease providing services to the Company or terminate the parties’ business relationship, or (ii) to provide services to any person or entity that competes with the Company’s Business.

e. Mutual Non-disparagement Covenant. During the Employment Term and thereafter, the Executive shall not, directly or indirectly, take any action, or encourage others to take any action, to disparage or criticize the Company, its subsidiaries, or their employees, officers, directors, products, services, customers or owners. During the Employment Term and thereafter, the Company shall not, directly or indirectly, take any action, or encourage others to take any action, to disparage the Executive’s reputation. Nothing contained in this Section 7(e) shall preclude the Executive from enforcing his rights under this Agreement or prevent the Executive, the Company, or its employees, officers and directors, from truthfully testifying in response to legal process or a governmental inquiry.

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f. Enforcement. The Executive acknowledges that a breach of the covenants contained in this Section 7 would cause irreparable damage to the Company, the exact amount of which would be difficult to ascertain, and that the remedies at law for any such breach or threatened breach would be inadequate. Accordingly, the Executive agrees that if he or she breaches or threatens to breach any of the covenants contained in this Section 7, in addition to any other remedy which may be available at law or in equity, the Company shall be entitled to: (i) institute and prosecute proceedings in any court of competent jurisdiction for specific performance and injunctive and other equitable relief to prevent the breach or any threatened breach thereof without bond or other security or a showing of irreparable harm or lack of an adequate remedy at law, and (ii) an equitable accounting by any court of competent jurisdiction of all profits or benefits arising out of such violation.

g. Scope of Covenants. The Company and the Executive further acknowledge that the time, scope, geographic area and other provisions of this Section 7 are reasonable and necessary for the protection of the interests of the Company, but if any such restriction or covenant shall be held by any court of competent jurisdiction to be void but would be valid if deleted in part or reduced in application, such restriction or covenant shall apply in such jurisdiction with such deletion or modification as may be necessary to make it valid and enforceable. The restrictions and covenants contained in each paragraph of this Section 7 shall be construed as separate and individual restrictions and covenants and shall each be capable of being reduced in application or severed without prejudice to the other restrictions and covenants or to the remaining provisions of this Agreement.

h. Enforceability. The restrictive covenants of this Section 7 are in addition to the covenants that the Executive must comply with during and following the Executive’s employment under the Company’s applicable confidentiality, invention assignment, insider trading policy (“ITP”) and non-disclosure agreements (collectively, the “Covenants”). This Agreement shall be read to supplement and not replace or eliminate any of Executive’s obligations under the Covenants. In the event of a breach of the Covenants, the Company shall have all the remedies available thereunder in addition to the remedies under this Section 7. If any court holds any of the restrictions or covenants contained in this Section 7 to be unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company to the relief provided in this Section 7 in the courts of any other jurisdiction within the geographic scope of such restrictions and covenants.

i. Disclosure of Restrictive Covenants. The Executive agrees to disclose in advance the existence and terms of the restrictions and covenants contained in this Section 7 to any employer or other service recipient by whom the Executive may be employed or retained during the Restricted Period. Executive understands that both the Company and Executive have the right to provide another party an opinion about interpretation and/or application of this Agreement; Executive consents to such communications, and agrees not to assert a claim of wrongdoing by Company as a result of such a communication.

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j. Extension of Restricted Period. If the Executive breaches a time-limited post-employment restriction created in this Section 7, then the time limitation for the violated restriction will be extended by one day for each day Executive is found to have been in violation of the restriction up to a length of time that is equal in duration to the length of restriction originally provided for so that Company gets the full benefit of compliance for the length of time originally provided for.

8. Injunctive Relief. Executive acknowledges that Executive’s breach of the Covenants would cause irreparable injury to the Company, and agrees that in the event of any such breach, the Company shall be entitled to seek temporary, preliminary and permanent injunctive relief, without the necessity of proving actual damages or posting any bond or surety.

9. AGREEMENT TO ARBITRATE. TO THE FULLEST EXTENT PERMITTED BY LAW, EXECUTIVE AND COMPANY AGREE TO ARBITRATE ANY CONTROVERSY, CLAIM OR DISPUTE BETWEEN THEM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE EMPLOYMENT RELATIONSHIP BETWEEN THE COMPANY AND EXECUTIVE AND ANY DISPUTES UPON TERMINATION OF EMPLOYMENT, INCLUDING BUT NOT LIMITED TO BREACH OF CONTRACT, TORT, DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, DEMOTION DISCIPLINE, FAILURE TO ACCOMMODATE, FAMILY AND MEDICAL LEAVE, COMPENSATION OR BENEFITS CLAIMS, CONSTITUTIONAL CLAIMS; AND ANY CLAIMS FOR VIOLATION OF ANY LOCAL, STATE OR FEDERAL LAW, STATUTE, REGULATION, OR ORDINANCE OR COMMON LAW. CLAIMS FOR WORKERS’ COMPENSATION, UNEMPLOYMENT INSURANCE BENEFITS, BREACH OF THE COMPANY’S EXECUTIVE INNOVATIONS AND PROPRIETARY RIGHTS AGREEMENT AND OTHER CONFIDENTIALITY AGREEMENTS, AND COMPANY’S RIGHT TO OBTAIN INJUNCTIVE RELIEF PURSUANT TO SECTION 8 ARE EXCLUDED. BY ACCEPTING EMPLOYMENT WITH THE COMPANY, THE EXECUTIVE WAIVES THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY SUCH DISPUTES (EXCLUDING THOSE AFOREMENTIONED). FOR THE PURPOSE OF THIS AGREEMENT TO ARBITRATE, REFERENCES TO THE COMPANY INCLUDE ALL PARENT, SUBSIDIARY, OR RELATED ENTITIES AND THEIR EMPLOYEES, SUPERVISORS, OFFICERS, DIRECTORS, AGENTS, PENSION OR BENEFIT PLAN SPONSORS, FIDUCIARIES, ADMINISTRATORS, AFFILIATES, AND ALL SUCCESSORS AND ASSIGNS OF ANY OF THEM, AND THIS AGREEMENT SHALL APPLY TO THEM TO THE EXTENT EXECUTIVE’S CLAIMS ARISE OUT OF OR RELATE TO THEIR ACTIONS ON BEHALF OF THE COMPANY.

a. Consideration for Arbitration Agreement. The mutual promise by Company and Executive to arbitrate any and all disputes between them (except for those referenced above) rather than litigate them before the courts or other bodies, provides the consideration for this agreement to arbitrate.

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b. Initiation of Arbitration. Either party may exercise the right to arbitrate by providing the other party with written notice of any and all claims forming the basis of such right in sufficient detail to inform the other party of the substance of such claims. In no event shall the request for arbitration be made after the date when institution of legal or equitable proceedings based on such claims would be barred by the applicable statutes of limitation.

c. Arbitration Procedure. The arbitration will be conducted in the state and county in which the Company is headquartered by a single neutral arbitrator and in accordance with the then-current rules for resolution of employment disputes of the American Arbitration Association (“AAA”). The parties are entitled to representation by an attorney or other representative of their choosing. The arbitrator shall have the power to enter any award that could be entered by a judge of the trial court of the state in which the Company is headquartered and shall follow the applicable law. The parties agree to abide by and perform any award rendered by the arbitrator. The arbitrator shall issue the award in writing and therein state the essential findings and conclusions on which the award is based. Judgment on the award may be entered in any court having jurisdiction thereof.

d. Costs of Arbitration. Company shall bear the costs of the arbitration filing fees; the hearing fees and cost of the arbitrator will be initially borne by the Company, but the non-prevailing party, as determined by the arbitrator, shall be responsible for the hearing fees and costs of the arbitrator.

10. General Provisions.

a. Successors and Assigns. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company and the Company shall require any successor or assign to expressly assume and agree to perform this Agreement in the same manner the Company would be required to perform if no such succession or assign had occurred. This Agreement shall automatically insure to the benefit of, and be enforceable by, the Company’s owners, parent, subsidiaries, affiliates, successors, and assigns to protect the property and interests of same as if they were the Company without the need for any further action or agreement by Executive. Executive acknowledges that the sharing of Confidential Information and intellectual property interests between these entities gives them a material property interest in the enforcement of this Agreement. This agreement may be assigned by the Company as part of any sale, transfer, merger or other disposition of the Company or its assets. Executive’s rights hereunder are personal and may not be assigned or transferred to any other person, firm, or corporation without the prior, express and written consent of the Company.

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b. Section 409A of the Internal Revenue Code of 1986 (the “Code”). This Letter Agreement is intended to meet the requirements of Section 409A of the Code, and will be interpreted and construed consistent with that intent. For purposes of this Agreement, the terms “terminate,” “terminated” and “termination” mean a termination of Executive’s employment that constitutes a “separation from service” within the meaning of the default rules of Section 409A of the Code. Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment will be paid (or provided) in accordance with the following:

(i) If Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the Termination Date, then no such payment shall be made or commence during the period beginning on the Termination Date and ending on the date that is six (6) months following the Termination Date or, if earlier, on the date of Executive’s death. The amount of any payment that would otherwise be paid to Executive during this period will instead be paid on the fifteenth (15^th) day of the first calendar month following the end of the period.

(ii) Payments with respect to reimbursements of expenses, including COBRA or legal fees shall be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the requirement that the reimbursement be made on or before the last day of the calendar year following the calendar year in which the relevant expense is incurred. The amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year. In no event will any reimbursement be made following the last day of the third calendar year following the year in which termination of employment occurred.

(iii) The right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments for purposes of Code Section 409A.

c. Excise Tax Payments. In the event of a determination that a portion of any payment or benefit to the Executive or for Executive’s benefit payable or distributable pursuant to the terms of this Agreement on account of or in connection with a Change in Control event is or will be deemed to be an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay to the Executive an amount (the “Tax Gross-Up”) sufficient to reimburse the Executive on an after-tax basis for any excise tax imposed, pursuant to Code Section 4999 or any successor provision or similar tax (“Excise Tax”), on the Executive with respect to such payments or other benefits, so that the Executive does not incur any out-of-pocket cost with respect to such Excise Tax. For this purpose, the Executive shall be deemed to be in the highest marginal rate of federal and state taxes. The Tax Gross-Up payment shall be made at the time the Excise Tax triggering the right to such payment is remitted to the appropriate tax authorities but no later than the close of the calendar year following the calendar year in which such Excise Tax is remitted to the appropriate tax authorities. As a condition of the Company’s payment of the Tax Gross-Up, the Executive agrees to cooperate with the Company to furnish such information and documents as the Company or its agents may reasonably request in order to make a determination as to the amount of the Excise Tax. Any such calculations shall be provided to the Executive for review, as well.

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d. Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement). The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulations.

e. Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement; provided, however, that if Executive claims the Company has failed to comply with any ongoing payment or benefit obligation, the failure to make a timely demand for payment or other compliance within thirty (30) days of the first due date for such an obligation shall waive the right to assert continued entitlement or to assert subsequent breaches of the same alleged obligation at a later time.

f. Attorneys’ Fees. If any arbitration or other proceeding is instituted to enforce or interpret this Agreement, the prevailing party shall be entitled to recover from the losing party in addition to statutory costs, the reasonable attorneys’ fees the prevailing party incurred in connection with such arbitration or proceeding. For purposes of enforcement of Section 7 of this Agreement, Company shall be deemed a prevailing party if Executive is found to be in violation of any restriction in this Agreement and Company secures any part of the injunctive relief or other equitable remedies it seeks to enforce this Agreement.

g. Severability. In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law. If a deemed modification is not satisfactory in the judgment of an arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

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h. Interpretation; Construction. The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and to have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

i. Governing Law and Forum Selection. This Agreement shall be governed by and construed in accordance with the laws of the United States and the State of Texas without regard to conflicts of law principles. All legal disputes between the parties arising from or related to this Agreement shall be litigated in a court of competent jurisdiction (state or federal) located in Dallas County, Texas. The parties consent to, and hereby irrevocably submit to the jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

j. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: i) by personal delivery when delivered personally; ii) by overnight courier upon written verification of receipt; or iii) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing.

If to Executive:	If to Company:
Susan K. Conner	Daegis, Inc.
4107 Travis Street	Attn: Human Resources
Dallas, TX 75204	600 E. Las Colinas Blvd., Suite 1500
	Irving, TX 75039

k. Survival. Sections 7 (“Restrictive Covenants”), 8 (“Injunctive Relief”), 9, (“Agreement to Arbitrate”), 10 (“General Provisions”) and 11 (“Entire Agreement”) of this Agreement shall survive Executive’s termination of employment by the Company. This Agreement will be deemed to renew and continue during any periods of renewal of Executive’s employment, including, but not limited to, periods of employment following promotions or transfers, or during any subsequent re-employment by Company. Executive understands and agrees that all the terms and obligations contained in this Agreement are independent of the existence of any claim or cause of action by Executive against the Company, and any such claims shall not constitute a defense to Executive’s obligations hereunder, or to the enforcement by the Company of this Agreement, but shall be determined separately and independently. All common law and statutory obligations of Executive to the Company as an employee shall remain in effect; this Agreement supplements, and shall not be deemed to reduce or dilute, or make inapplicable, any common law or statutory duty that Executive would otherwise have to the Company absent this Agreement

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11. Entire Agreement. This Agreement, any Company option documents, and the Company’s applicable confidentiality, invention assignment, insider trading policy (“ITP”) and non-disclosure agreements constitute the entire agreement between the parties relating to this subject matter and supersede all prior or simultaneous representations, discussions, negotiations or agreements, whether written or oral. This Agreement may be amended or modified only with the written consent of the Executive and the Chief Executive Officer or the Board of Directors of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN, INCLUDING THE AGREEMENT TO ARBITRATE DISPUTES.

By the Company, Daegis, Inc.		By the Executive
By:		By:
	Timothy P. Bacci, CEO		Susan K. Conner

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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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

Chief Executive Officer

(Principal Executive Officer)

Dated: December 12, 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: December 12, 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 October 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy P. Bacci, 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: December 12, 2014	/s/ TIMOTHY P. BACCI
	Timothy P. Bacci
	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 October 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: December 12, 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.

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Income Taxes [Abstract]
Reserve for uncertain tax positions	$ 0
Accrued interest or penalties associated with unrecognized tax benefits	0		0
Interest expense associated with unrecognized tax benefits	$ 0	$ 0

XML

Long-Term Debt (Schedule Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jul. 31, 2014	Apr. 30, 2014
Debt Instrument [Line Items]
Capital leases	$ 85		$ 147
Total debt	12,153		14,971
Less current portion	(840)		(3,123)
Total long term debt, net	11,313		11,848
Term Note A [Member]
Debt Instrument [Line Items]
Term loan amount	9,568	10,100	11,324
Term Note B [Member]
Debt Instrument [Line Items]
Term loan amount			1,000
Wells Fargo Revolving Line Of Credit [Member]
Debt Instrument [Line Items]
Revolving line of credit	$ 2,500		$ 2,500

XML

Intangible Assets (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Intangible Assets [Abstract]
Intangible assets amortization expense	$ 400	$ 400	$ 758	$ 769

XML

Segment Information (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments			2
Revenues	$ 6,652,000	$ 7,736,000	$ 13,315,000	$ 15,700,000
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	3,900,000	5,000,000	8,100,000	10,500,000
Long-lived assets	18,000,000		18,000,000		18,800,000
All Other Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	2,800,000	2,700,000	5,200,000	5,200,000
Long-lived assets	$ 0		$ 0		$ 0

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Stock Compensation Information (Summary Of Fair Value Assumptions) (Details) (USD $)	6 Months Ended		12 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Stock Compensation Information [Abstract]
Expected term (in years)	4 years	4 years
Risk-free interest rate	1.30%	0.90%
Volatility	74.00%	52.00%
Dividend yield	0.00%	0.00%	0.00%
Weighted-average fair value of stock options granted during the period	$ 0.68	$ 0.49

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Accrued Restructuring Charge

6 Months Ended

Oct. 31, 2014

Accrued Restructuring Charge [Abstract]

Accrued Restructuring Charge

4.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 Information Governance (formerly Archive and eDiscovery) reportable segment. 

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

								Deferred
				Lease		Asset		Rent		Other
		Severance		Abandonment		Impairment		Liability		Costs		Total
Amounts incurred and expected to be
incurred	$	420	$	933	$	127	$	(356)	$	88	$	1,212

For the three months ended October 31, 2014 we had no cost associated with the restructuring. For the six months ended October 31, 2014 we incurred total cost of $171 thousand which included $150 thousand related to lease abandonment cost and $21 thousand of other cost. 

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

				Lease
		Severance		Abandonment		Total
Accrued liability at April 30, 2014	$	96	$	464	$	560
Payments, net		(96)		(170)		(266)
Adjustments		-		33		33
Accrued liability at October 31, 2014	$	-	$	327	$	327

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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Segment Information (Schedule Of Segment Reporting Information By Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Segment Reporting Information [Line Items]
Revenues	$ 6,652	$ 7,736	$ 13,315	$ 15,700
Operating Expenses	6,283	7,770	12,888	15,758
Operating Income (Loss)	369	(34)	427	(58)
Assets	27,766		27,766		33,653
Unallocated Corporate Expenses [Member]
Segment Reporting Information [Line Items]
Operating Expenses	1,214	1,744	2,887	3,550
Operating Income (Loss)	(1,214)	(1,744)	(2,887)	(3,550)
Information Governance [Member]
Segment Reporting Information [Line Items]
Revenues	3,854	4,741	7,958	10,157
Operating Expenses	3,393	4,327	6,652	8,985
Operating Income (Loss)	461	414	1,306	1,172
Assets	25,326		25,326		28,242
Migration and Development Tools [Member]
Segment Reporting Information [Line Items]
Revenues	2,798	2,995	5,357	5,543
Operating Expenses	1,676	1,699	3,349	3,223
Operating Income (Loss)	1,122	1,296	2,008	2,320
Assets	$ 2,440		$ 2,440		$ 5,411

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Accrued Restructuring Charge (Summary Of Restructuring And Other Costs) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	$ 1,212
Severance [Member]
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	420
Lease Abandonment [Member]
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	933
Asset Impairment [Member]
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	127
Deferred Rent Liability [Member]
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	(356)
Other Costs [Member]
Restructuring Cost and Reserve [Line Items]
Amounts incurred and expected to be incurred	$ 88

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Accrued Restructuring Charges (Narrative) (Details) (USD $)	3 Months Ended	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring costs incurred	$ 0	$ 171,000
Lease Abandonment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring costs incurred		150,000
Other Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring costs incurred		$ 21,000

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Accrued Restructuring Charge (Schedule Of Accrued Liability Associated With Realignment) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014
Restructuring Cost and Reserve [Line Items]
Accrued liability at April 30, 2014	$ 560
Payments, net	(266)
Adjustments	33
Accrued liability at October 31, 2014	327
Severance [Member]
Restructuring Cost and Reserve [Line Items]
Accrued liability at April 30, 2014	96
Payments, net	(96)
Lease Abandonment [Member]
Restructuring Cost and Reserve [Line Items]
Accrued liability at April 30, 2014	464
Payments, net	(170)
Adjustments	33
Accrued liability at October 31, 2014	$ 327

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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	6 Months Ended
	Oct. 31, 2014
Fair Value Of Financial Instruments [Abstract]
Balance at April 30, 2014	$ 276
Change in fair value of common stock warrant liability	(61)
Balance at October 31, 2014	$ 215

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Intangible Assets

6 Months Ended

Oct. 31, 2014

Intangible Assets [Abstract]

Intangible Assets

3.Intangible Assets    

Intangible asset balances by major asset class are as follows (in thousands):     

		Gross				Net
		carrying		Accumulated		carrying
October 31, 2014		amount		amortization		amount
Customer-related	$	6,236	$	(4,742)	$	1,494
Technology-based		2,638		(2,190)		448
Trademarks		4,600		(1,686)		2,914
Trade name		100		(100)		-
Total	$	13,574	$	(8,718)	$	4,856
		Gross				Net
		carrying		Accumulated		carrying
April 30, 2014		amount		amortization		amount
Customer-related	$	6,236	$	(4,403)	$	1,833
Technology-based		2,638		(2,034)		604
Trademarks		4,600		(1,423)		3,177
Trade name		100		(100)		-
Total	$	13,574	$	(7,960)	$	5,614

Acquired finite-lived intangible assets are generally amortized on a straight-line basis over their estimated useful lives. The useful life of finite-lived intangible assets is the period over which the asset is expected to contribute directly or indirectly to future cash flows of the Company.  Intangible asset amortization expense for the three months endedOctober 31, 2014 and 2013 was $0.4 million, respectively.  Intangible asset amortization for the six months endedOctober 31, 2014 and 2013 was $0.8 million, respectively.  The estimated future amortization expense related to intangible assets as of October 31, 2014 is as follows (in thousands):

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	756
2016		1,096
2017		814
2018		774
2019		774
Thereafter		642
Total	$	4,856

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Long-Term Debt (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	6 Months Ended			6 Months Ended		6 Months Ended
	Jul. 31, 2014 Credit Agreement [Member] item	Oct. 31, 2014 Term Note A [Member]	Jul. 31, 2014 Term Note A [Member]	Apr. 30, 2014 Term Note A [Member]	Oct. 31, 2014 Term Note B [Member]	Apr. 30, 2014 Term Note B [Member]	Oct. 31, 2014 Minimum [Member] Term Note A [Member]	Oct. 31, 2014 Maximum [Member] Term Note A [Member]
Debt Instrument [Line Items]
Number of term loans	2
Number of revolving lines of credit	1
Maturity date	Jun. 30, 2017
Term loan amount		$ 9,568	$ 10,100	$ 11,324		$ 1,000
Stated interest rate, minimum		5.00%			12.00%
Quarterly principal payment		$ 252
Reference rate		LIBOR
Basis spread on variable reference rate							3.50%	4.00%

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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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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014
Current assets:
Cash	$ 3,506	$ 7,178
Accounts receivable, net of allowances of $118 and $211, respectively	4,982	6,657
Prepaid expenses	777	617
Other current assets	484	358
Total current assets	9,749	14,810
Property and equipment, net of accumulated depreciation of $5,257 and $4,921, respectively	1,002	1,053
Goodwill	11,706	11,706
Intangibles, net	4,856	5,614
Other assets	453	470
Total assets	27,766	33,653
Current liabilities:
Accounts payable	601	308
Current portion of long-term debt	840	3,123
Accrued compensation and related expenses	987	1,185
Other accrued liabilities	817	971
Deferred revenue	6,101	8,590
Total current liabilities	9,346	14,177
Long-term debt, net of current portion	11,313	11,848
Deferred tax liabilities, net	1,015	1,032
Common stock warrant liability	215	276
Other long-term liabilities	823	1,095
Total liabilities	22,712	28,428
Commitments and contingencies
Stockholders' equity:
Common stock	17	17
Additional paid-in capital	100,204	100,152
Accumulated other comprehensive income	280	280
Accumulated deficit	(95,447)	(95,224)
Total stockholders' equity	5,054	5,225
Total liabilities and stockholders' equity	$ 27,766	$ 33,653

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Basis Of Presentation

6 Months Ended

Oct. 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, 2014, 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.  As a result, we have restated historical results to reflect those new reporting segments.In the second quarter of fiscal 2015 we announced the Company will move from selling products through business divisions to a holistic approach by product line featuring information governance and migration and development tool solutions.  As a result we have renamed our Archive and eDiscovery segment to Information Governance and our Development, Database and Migration tools segment to Migration and Development Tools.

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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Stock Compensation Information (Narrative) (Details) (USD $)	6 Months Ended		12 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014
Stock Compensation Information [Abstract]
Dividend payments	$ 0		$ 0
Dividend yield	0.00%	0.00%	0.00%
Unrecognized compensation expense	200,000
Cost recognition, weighted-average period, years	3 years 2 months 27 days
Exercise of stock options, shares		0
Fair value of awards vested	50,000	100,000
Fair value of awards granted	$ 100,000	$ 100,000

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Income (Loss) Per Share (Tables)

6 Months Ended

Oct. 31, 2014

Income (Loss) Per Share [Abstract]

Schedule Of Earnings Per Share, Basic And Diluted

(in thousands, except  per share amounts)		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Net income (loss)	$	25	$	(210)	$	(223)	$	(843)
Dividends paid and payable on preferred stock		-		-		-		(66)
Net income (loss) available to common stockholders	$	25	$	(210)	$	(223)	$	(909)
Weighted-average shares of common stock outstanding, basic		16,384		16,384		16,384		15,841
Effect of dilutive securities		-		-		-		-
Weighted-average shares of common stock outstanding, diluted		16,384		16,384		16,384		15,841
Income (loss) per share of common stock:
Basic	$	0.00	$	(0.01)	$	(0.01)	$	(0.06)
Diluted	$	0.00	$	(0.01)	$	(0.01)	$	(0.06)
Antidilutive securities
Number of stock options		1,149		1,521		1,149		1,521
Number of warrants		719		909		719		909

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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		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	$ 25	$ 39	$ 52	$ 92
Direct Costs of Revenue [Member]
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	4	4	6	9
Product Development
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	2	6	5	19
Selling, General and Administrative[Member]
Employee Service Share-based Compensation, Allocation Of Recognized Period Costs [Line Items]
Total equity based compensation	$ 19	$ 29	$ 41	$ 64

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Basis Of Presentation (Details)	6 Months Ended
	Oct. 31, 2014 segment
Basis Of Presentation [Abstract]
Number of reportable segments	2

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Recent Accounting Pronouncements

6 Months Ended

Oct. 31, 2014

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

2.Recent Accounting Pronouncements    

In May 2014, the FASB issued Accounting Standards update No. 2014-09 Revenue from Contracts with Customers (ASU 204-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP.

The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting periods with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017.

In August 2014, the FASB issued Accounting Standards update No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The ASU requires management to assess each annual and interim period if there is substantial doubt about the entities ability to continue as a going concern; provides principals for considering the mitigating effect of management’s plans; requires certain disclosures when substantial doubt is alleviated as a result of management’s plans, and requires an express statement and other disclosures when substantial doubt is not alleviated.  The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early application permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. 

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance	$ 118	$ 211
Property and equipment, accumulated depreciation	$ 5,257	$ 4,921

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Intangible Assets (Tables)

6 Months Ended

Oct. 31, 2014

Intangible Assets [Abstract]

Schedule Of Intangible Assets And Goodwill

		Gross				Net
		carrying		Accumulated		carrying
October 31, 2014		amount		amortization		amount
Customer-related	$	6,236	$	(4,742)	$	1,494
Technology-based		2,638		(2,190)		448
Trademarks		4,600		(1,686)		2,914
Trade name		100		(100)		-
Total	$	13,574	$	(8,718)	$	4,856
		Gross				Net
		carrying		Accumulated		carrying
April 30, 2014		amount		amortization		amount
Customer-related	$	6,236	$	(4,403)	$	1,833
Technology-based		2,638		(2,034)		604
Trademarks		4,600		(1,423)		3,177
Trade name		100		(100)		-
Total	$	13,574	$	(7,960)	$	5,614

Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	756
2016		1,096
2017		814
2018		774
2019		774
Thereafter		642
Total	$	4,856

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Document And Entity Information	6 Months Ended
	Oct. 31, 2014	Dec. 12, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 31, 2014
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015
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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Accrued Restructuring Charge (Tables)

6 Months Ended

Oct. 31, 2014

Accrued Restructuring Charge [Abstract]

Summary Of Restructuring And Other Costs

								Deferred
				Lease		Asset		Rent		Other
		Severance		Abandonment		Impairment		Liability		Costs		Total
Amounts incurred and expected to be
incurred	$	420	$	933	$	127	$	(356)	$	88	$	1,212

Schedule Of Accrued Liability Associated With Realignment

				Lease
		Severance		Abandonment		Total
Accrued liability at April 30, 2014	$	96	$	464	$	560
Payments, net		(96)		(170)		(266)
Adjustments		-		33		33
Accrued liability at October 31, 2014	$	-	$	327	$	327

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Condensed Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Revenues:
Information Governance	$ 3,854	$ 4,741	$ 7,958	$ 10,157
Migration and Development Tools	2,798	2,995	5,357	5,543
Total revenues	6,652	7,736	13,315	15,700
Operating expenses:
Direct costs of Information Governance	1,582	2,066	3,139	4,266
Direct costs of Migration and Development Tools	525	445	1,028	863
Product development	1,217	1,618	2,390	3,288
Selling, general and administrative	2,959	3,641	6,331	7,341
Total operating expenses	6,283	7,770	12,888	15,758
Income (loss) from operations	369	(34)	427	(58)
Other income (expenses)
(Loss) gain from change in fair value of common stock warrant liability	(34)	210	61	112
Interest expense	(182)	(311)	(486)	(727)
Other, net	(141)	34	(241)	3
Total other (expense) income	(357)	(67)	(666)	(612)
Income (loss) before income taxes	12	(101)	(239)	(670)
(Benefit) Provision for income taxes	(13)	109	(16)	173
Net Income (loss)	$ 25	$ (210)	$ (223)	$ (843)
Income (loss) per share:
Basic	$ 0.00	$ (0.01)	$ (0.01)	$ (0.06)
Diluted	$ 0.00	$ (0.01)	$ (0.01)	$ (0.06)
Weighted-average shares used in computing income (loss) per share:
Basic	16,384	16,384	16,384	15,841
Diluted	16,384	16,384	16,384	15,841

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Stock Compensation Information

6 Months Ended

Oct. 31, 2014

Stock Compensation Information [Abstract]

Stock Compensation Information

7.Stock Compensation Information

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

		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Direct costs of revenue	$	4	$	4	$	6	$	9
Product development		2		6		5		19
Selling, general, and administrative		19		29		41		64
Total equity-based compensation	$	25	$	39	$	52	$	92

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 weighted-average input assumptions used and resulting fair values were as follows:     

		Six Months Ended
		October 31,
		2014		2013
Expected term (in years)		4.0		4.0
Risk-free interest rate		1.3	%	0.9	%
Volatility		74	%	52	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	0.68	$	0.49

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 cash dividends to common stockholders in fiscal 2014 or year to date in fiscal 2015, 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.   

At October 31, 2014, there was approximately $0.2 million of unrecognized compensation expense related to unvested stock-based awards granted. The unrecognized expense is expected to be recognized over a weighted-average period of 3.24years.     

A summary of our stock option activity for the six months endedOctober 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, 2014	1,254,629	$	2.38	6.82	$	41,972
Granted	201,922
Exercised	-
Cancelled/expired	(307,255)
Outstanding at October 31, 2014	1,149,296		2.32	6.68		-
Exercisable at October 31, 2014	769,779	$	2.86	5.48	$	-

(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.

There were no awards exercised during the six months endedOctober 31, 2014and 2013. The total fair value of awards vested during the six months endedOctober 31, 2014and 2013 was $0.05 million and $0.1 million, respectively.  The total fair value of awards granted during the six months endedOctober 31, 2014and 2013 was $0.1 million, respectively. 

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Long-Term Debt

6 Months Ended

Oct. 31, 2014

Long-Term Debt [Abstract]

Long-Term Debt

6.Long-Term Debt

Effective July 31, 2014, the Company entered into an amendment to its Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (the “Credit Agreement”). In order to secure its obligations under the Credit Agreement, the Company has granted the lender a first priority security interest in substantially all of our assets. 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. 

The Credit Agreement consisted of two term notes and a revolving credit note agreement. The amendment extended the term of the Credit Agreement through June 30, 2017, reduced the interest rate and modified certain financial covenants. This amendment, in conjunction with a prepayment made on July 31, 2014 under the Credit Agreement, reduced the outstanding principal balance on the Term A Loan to $10.1 million, and the Term B Loan, which incurred a minimum interest rate of 12.0%, has now been fully repaid.  The Term Note A requires quarterly principal payments of $252,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity.  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 3.5-4.0% per annum with a minimum rate of 5.0%.

Our long-term debt consists of the following (in thousands):    

		October 31,		April 30,
		2014		2014
Term Note A	$	9,568	$	11,324
Term Note B		-		1,000
Revolving line of credit		2,500		2,500
Capital leases		85		147
		12,153		14,971
Less current portion		(840)		(3,123)
Total long term debt, net	$	11,313	$	11,848

The 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 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 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 October 31, 2014.  

A summary of expected future principal payments, excluding any annual principal payments based on free cash flow, on long-term debt obligations as of October 31, 2014is as follows (in thousands):    

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	304
2016		1,039
2017		1,007
2018		9,803
	$	12,153

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Segment Information (Tables)

6 Months Ended

Oct. 31, 2014

Segment Information [Abstract]

Schedule Of Segment Reporting Information, By Segment

(in thousands)		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Total revenues:
Information Governance	$	3,854	$	4,741	$	7,958	$	10,157
Migration and Development Tools		2,798		2,995		5,357		5,543
Total revenues	$	6,652	$	7,736	$	13,315	$	15,700
Operating expenses:
Information Governance	$	3,393	$	4,327	$	6,652	$	8,985
Migration and Development Tools		1,676		1,699		3,349		3,223
Unallocated corporate expenses		1,214		1,744		2,887		3,550
Total operating expenses	$	6,283	$	7,770	$	12,888	$	15,758
Income (loss) from operations:
Information Governance	$	461	$	414	$	1,306	$	1,172
Migration and Development Tools		1,122		1,296		2,008		2,320
Unallocated corporate expenses		(1,214)		(1,744)		(2,887)		(3,550)
Total income (loss) from operations	$	369	$	(34)	$	427	$	(58)
		October 31,		April 30,
		2014		2014
Total assets:
Information Governance	$	25,326	$	28,242
Migration and Development Tools		2,440		5,411
Total assets	$	27,766	$	33,653

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Fair Value Of Financial Instruments (Tables)

6 Months Ended

Oct. 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, 2014	$		276
Change in fair value of common stock warrant liability			(61)
Balance at October 31, 2014	$		215

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Income (Loss) Per Share

6 Months Ended

Oct. 31, 2014

Income (Loss) Per Share [Abstract]

Loss Per Share

10.Income (Loss) Per Share

Basic income (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 income (loss) per share is computed similar to basic 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  per share amounts)		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Net income (loss)	$	25	$	(210)	$	(223)	$	(843)
Dividends paid and payable on preferred stock		-		-		-		(66)
Net income (loss) available to common stockholders	$	25	$	(210)	$	(223)	$	(909)
Weighted-average shares of common stock outstanding, basic		16,384		16,384		16,384		15,841
Effect of dilutive securities		-		-		-		-
Weighted-average shares of common stock outstanding, diluted		16,384		16,384		16,384		15,841
Income (loss) per share of common stock:
Basic	$	0.00	$	(0.01)	$	(0.01)	$	(0.06)
Diluted	$	0.00	$	(0.01)	$	(0.01)	$	(0.06)
Antidilutive securities
Number of stock options		1,149		1,521		1,149		1,521
Number of warrants		719		909		719		909

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.  

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Income Taxes

6 Months Ended

Oct. 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, we are 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 October 31, 2014and April 30, 2014, 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 six months endedOctober 31, 2014 and 2013.

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Preferred Stock

6 Months Ended

Oct. 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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Segment Information

6 Months Ended

Oct. 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.   As a result, we have adjusted historical results to reflect those new reporting segments.In the second quarter of fiscal 2015 we announced the Company will move from selling products through business divisions to a holistic approach by product line featuring information governance, migration and development tool solutions.  As a result we have renamed our Archive and eDiscovery segment to Information Governance and our Development, Database and Migration tools segment to Migration and Development Tools.

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, 2014.  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 October 31, 2014 and 2013, total revenue from the United States was $3.9million and $5.0 million, respectively.Total revenue from all other countries for the three months ended October 31, 2014 and 2013 was $2.8 million and $2.7 million, respectively.  For the six months endedOctober 31, 2014 and 2013, total revenue from the United States was $8.1 million and $10.5 million, respectively.Total revenue from all other countries for the six months endedOctober 31, 2014 and 2013 was $5.2 million, respectively.Total long-lived assets as of October 31, 2014 and April 30, 2014, for the United States, were $18.0 million and $18.8 million, respectively. There were no long-lived assets in other countries as of October 31, 2014 and April 30, 2014.

(in thousands)		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Total revenues:
Information Governance	$	3,854	$	4,741	$	7,958	$	10,157
Migration and Development Tools		2,798		2,995		5,357		5,543
Total revenues	$	6,652	$	7,736	$	13,315	$	15,700
Operating expenses:
Information Governance	$	3,393	$	4,327	$	6,652	$	8,985
Migration and Development Tools		1,676		1,699		3,349		3,223
Unallocated corporate expenses		1,214		1,744		2,887		3,550
Total operating expenses	$	6,283	$	7,770	$	12,888	$	15,758
Income (loss) from operations:
Information Governance	$	461	$	414	$	1,306	$	1,172
Migration and Development Tools		1,122		1,296		2,008		2,320
Unallocated corporate expenses		(1,214)		(1,744)		(2,887)		(3,550)
Total income (loss) from operations	$	369	$	(34)	$	427	$	(58)
		October 31,		April 30,
		2014		2014
Total assets:
Information Governance	$	25,326	$	28,242
Migration and Development Tools		2,440		5,411
Total assets	$	27,766	$	33,653

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Long-Term Debt (Schedule Of Maturities Of Long-term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014
Long-Term Debt [Abstract]
Remainder of 2015	$ 304
2016	1,039
2017	1,007
2018	9,803
Total debt	$ 12,153

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Stock Compensation Information (Tables)

6 Months Ended

Oct. 31, 2014

Stock Compensation Information [Abstract]

Schedule Of Equity-Based Compensation Expense From Operations

		Three Months Ended				Six Months Ended
		October 31,				October 31,
		2014		2013		2014		2013
Direct costs of revenue	$	4	$	4	$	6	$	9
Product development		2		6		5		19
Selling, general, and administrative		19		29		41		64
Total equity-based compensation	$	25	$	39	$	52	$	92

Summary Of Fair Value Assumptions

		Six Months Ended
		October 31,
		2014		2013
Expected term (in years)		4.0		4.0
Risk-free interest rate		1.3	%	0.9	%
Volatility		74	%	52	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	0.68	$	0.49

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, 2014	1,254,629	$	2.38	6.82	$	41,972
Granted	201,922
Exercised	-
Cancelled/expired	(307,255)
Outstanding at October 31, 2014	1,149,296		2.32	6.68		-
Exercisable at October 31, 2014	769,779	$	2.86	5.48	$	-

(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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Intangible Assets (Schedule Of Intangible Assets And Goodwill) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross carrying amount	$ 13,574	$ 13,574
Finite-lived intangible assets, Accumulated amortization	(8,718)	(7,960)
Finite-lived intangible assets, Net carrying amount	4,856	5,614
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	(4,742)	(4,403)
Finite-lived intangible assets, Net carrying amount	1,494	1,833
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	(2,190)	(2,034)
Finite-lived intangible assets, Net carrying amount	448	604
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	(1,686)	(1,423)
Finite-lived intangible assets, Net carrying amount	2,914	3,177
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)

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Income (Loss) Per Share (Schedule Of Earnings (Loss) Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ 25	$ (210)	$ (223)	$ (843)
Dividends paid and payable on preferred stock				(66)
Net income (loss) available to common stockholders	$ 25	$ (210)	$ (223)	$ (909)
Weighted-average shares of common stock outstanding, basic	16,384	16,384	16,384	15,841
Weighted-average shares of common stock outstanding, diluted	16,384	16,384	16,384	15,841
Basic	$ 0.00	$ (0.01)	$ (0.01)	$ (0.06)
Diluted	$ 0.00	$ (0.01)	$ (0.01)	$ (0.06)
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of antidilutive securities	1,149	1,521	1,149	1,521
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of antidilutive securities	719	909	719	909

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Cash flows from operating activities:
Net income (loss)	$ (223)	$ (843)
Reconciliation of net loss to net cash provided by operating activities:
Depreciation	354	515
Amortization of intangible assets	758	769
Loss on disposal of equipment		75
Provision for doubtful accounts	(106)	(244)
Stock based compensation expense	52	92
Deferred tax liability	(17)	(15)
Gain from change in fair value of common stock warrant liability	(61)	(112)
Changes in operating assets and liabilities:
Accounts receivable	1,780	3,254
Prepaid expenses and other current assets	(285)	544
Other assets	16	124
Accounts payable	294	414
Accrued compensation and related expenses	(197)	(1,359)
Other accrued liabilities	(155)	(344)
Deferred revenue	(2,721)	(2,421)
Other long term liabilities	(40)	(79)
Net cash (used in) provided by operating activities	(551)	370
Cash flows from investing activities:
Proceeds from assets held for sale		400
Purchases of property and equipment	(303)	(95)
Net cash (used in) provided by investing activities	(303)	305
Cash flows from financing activities:
Payment of preferred stock dividends		(66)
Principal payments under debt obligations	(2,755)	(1,947)
Principal payments on capital leases	(63)	(86)
Net cash used in financing activities	(2,818)	(2,099)
Net change in cash	(3,672)	(1,424)
Cash, beginning of period	7,178	5,459
Cash, end of period	3,506	4,035
Supplemental cash flow information:
Cash paid for interest	308	613
Cash paid for income taxes	$ 7	$ 117

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Fair Value Of Financial Instruments

6 Months Ended

Oct. 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 price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, we use various valuation approaches and establish a hierarchy for inputs used in measuring fair value that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.  Observable inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company.  Unobservable inputs are inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  The hierarchy is broken down into three levels based on the observability of inputs 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.

We value our common stock warrant liability on a recurring basis based on open form option pricing models which, based on the relevant inputs, render the fair value estimate Level 3.  Changes in the fair value of the warrants are reflected in the consolidated statements of operations as “Gain (loss) from change in fair value of common stock warrant.”

Fair Value on a Recurring Basis

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

(in thousands)		Common stock warrants
Balance at April 30, 2014	$		276
Change in fair value of common stock warrant liability			(61)
Balance at October 31, 2014	$		215

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Intangible Assets (Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Apr. 30, 2014
Intangible Assets [Abstract]
Remainder of 2015	$ 756
2016	1,096
2017	814
2018	774
2019	774
Thereafter	642
Finite-lived intangible assets, Net carrying amount	$ 4,856	$ 5,614

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Stock Compensation Information (Summary Of Stock Option Activity) (Details) (USD $)	6 Months Ended			12 Months Ended
	Oct. 31, 2014		Oct. 31, 2013	Apr. 30, 2014
Stock Compensation Information [Abstract]
Shares, Outstanding at April 30, 2014	1,254,629
Shares, Granted	201,922
Shares, Exercised			0
Shares, Cancelled/expired	(307,255)
Shares, Outstanding at October 31, 2014	1,149,296			1,254,629
Shares, Exercisable at October 31, 2014	769,779
Weighted average exercise price, Outstanding at April 30, 2014	$ 2.38
Weighted average exercise price, Exercised
Weighted average exercise price, Outstanding at October 31, 2014	$ 2.32			$ 2.38
Weighted average exercise price, Exercisable at October 31, 2014	$ 2.86
Weighted average remaining contractual term (in years), Outstanding	6 years 8 months 5 days			6 years 9 months 26 days
Weighted average remaining contractual term (in years), Exercisable at October 31, 2014	5 years 5 months 23 days
Aggregate intrinsic value, Outstanding		[1]		$ 41,972	[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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Long-Term Debt (Tables)

6 Months Ended

Oct. 31, 2014

Long-Term Debt [Abstract]

Schedule Of Long-Term Debt

		October 31,		April 30,
		2014		2014
Term Note A	$	9,568	$	11,324
Term Note B		-		1,000
Revolving line of credit		2,500		2,500
Capital leases		85		147
		12,153		14,971
Less current portion		(840)		(3,123)
Total long term debt, net	$	11,313	$	11,848

Schedule Of Maturities Of Long-term Debt

Fiscal Year Ending April 30,		Amount
Remainder of 2015	$	304
2016		1,039
2017		1,007
2018		9,803
	$	12,153