Indicate by a 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. YES ☐ NO ☒

The number of shares outstanding of the registrant’s common stock, par value $0.0001 per share, as of ~~February 3,~~August 4, 2017, was ~~11,864,812.~~14,606,418.

Cautionary Statement Pursuant to Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995

The words “Determine”, “we”, “our”, “ours”, “us”, and the “Company” refer to Determine, Inc. In addition to historical information, this quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Item 1A to Part 1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2016.~~2017. You should carefully review the risks described in other documents the Company files from time to time with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on the forward-looking statements, including statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future, which speak only as of the date of this quarterly report on Form 10-Q. The Company undertakes no obligation to release publicly any updates to the forward-looking statements included herein after the date of this document.

	December 31,			March 31,			June 30,			March 31,
	2016			2016			2017			2017
ASSETS
Current assets
Cash and cash equivalents	$	9,387		$	9,418		$	13,656		$	9,429
Accounts receivable, net of allowance for doubtful accounts of $196 and $407 as of December 31, 2016 and March 31, 2016, respectively		6,759			7,031
Accounts receivable, net of allowance for doubtful accounts of $111 and $114 as of June 30, 2017 and March 31, 2017, respectively								6,688			7,042
Restricted cash		34			34			26			34
Prepaid expenses and other current assets		1,408			1,551			1,443			1,553
Total current assets		17,588			18,034			21,813			18,058

Property and equipment, net		94			136			84			85
Capitalized software development costs, net		2,131			1,699			2,578			2,341
Goodwill		14,346			14,490			14,904			14,448
Other intangibles, net		6,346			8,011			5,441			5,860
Other assets		1,492			1,843			1,531			1,599
Total assets	$	41,997		$	44,213		$	46,351		$	42,391

LIABILITIES AND EQUITY
LIABILITIES ANDSTOCKHOLDERS’EQUITY
Current liabilities
Credit facility	$	10,861		$	9,000		$	11,861		$	11,861
Accounts payable		2,435			1,973			1,996			2,478
Accrued payroll and related liabilities		1,802			1,655			1,972			1,729
Other accrued liabilities		2,020			2,396			2,423			2,042
Deferred revenue		10,028			10,299			9,828			10,070
Income tax payable		78			14			120			23
COFACE loan		222			407			130			174
Accrued restructuring		-			403
Total current liabilities		27,446			26,147			28,330			28,377

Long-term deferred revenue		5			67			36			10
Convertible note, net of debt discount		7,374			5,420			6,845			7,599
Other long-term liabilities		1,055			1,382			1,306			1,306
Deferred tax liability, non-current		81			290
Total liabilities		35,961			33,306			36,517			37,292

Commitments and contingencies (Notes 11 and 12):
Commitments and contingencies (Notes 8 and 9):

Controlling stockholders' equity:
Common stock, $0.0001 par value: Authorized: 35,000 shares at December 31,2016 and March 31, 2016; Issued: 11,944 and 11,387 shares at December 31,2016 and March 31, 2016, respectively; Outstanding: 11,848 and 11,291 sharesat December 31, 2016 and March 31, 2016, respectively		5			5
Stockholders' equity:
Common stock, $0.0001 par value; Authorized: 35,000 shares at June 30, 2017 and March 31, 2017; Issued: 14,740 and 12,223 shares at June 30, 2017 and March 31, 2017, respectively; Outstanding: 14,595 and 12,078 shares at June 30, 2017 and March 31, 2017, respectively								7			5
Additional paid-in capital		316,541			313,674			324,009			317,367
Treasury stock at cost - 96 shares at December 31, 2016 and March 31, 2016		(472	)		(472	)
Treasury stock at cost - 145 shares at June 30, 2017 and March 31, 2017								(472	)		(472	)
Accumulated deficit		(310,040	)		(302,297	)		(313,855	)		(311,749	)
Accumulated other comprehensive loss		(147	)		(116	)
Total Determine, Inc. stockholders' equity		5,887			10,794
Non-controlling interest		149			113
Total equity		6,036			10,907
Total liabilities and equity	$	41,997		$	44,213
Accumulated other comprehensive income (loss)								145			(52	)
Total stockholders’ equity								9,834			5,099
Total liabilities and stockholders’ equity							$	46,351		$	42,391

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

	Nine Months Ended
	December 31,			December 31,			Three Months Ended
	2016			2015			June 30,			June 30,
							2017			2016

Operating activities
Net loss	$	(7,707	)	$	(9,217	)	$	(2,110	)	$	(2,342	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,478			1,868			971			772
Loss on disposition of property and equipment		-			14
Stock-based compensation expense		1,867			1,870			586			528
Deferred tax liability		(209	)		93
Interest expense paid in kind as convertible note debt								219			-
Accrued restructuring costs								-			(403	)
Income tax benefit								(17	)		(70	)
Unrealized currency translation gains								(252	)		-
Changes in assets and liabilities:
Accounts receivable, net		272			149			354			840
Prepaid expenses and other current assets		143			300			103			63
Other assets		435			(380	)		228			(104	)
Accounts payable		462			113			(482	)		(687	)
Accrued payroll and related liabilities		147			278			243			203
Accrued restructuring costs		(403	)		-
Other accrued liabilities and other long-term liabilities		(356	)		(13	)		383			91
Deferred revenue		(333	)		(281	)		(216	)		(212	)
Net cash used in operating activities		(3,204	)		(5,206	)
Net cashprovided by (used in) operating activities								10			(1,321	)

Investing activities
Purchase of property and equipment		(39	)		(6	)		(7	)		(22	)
Capitalized software		(1,267	)		(1,077	)
Purchase of business acquired, net of cash		-			(826	)
Minority stock payment		-			(133	)
Capitalized software development costs, net								(569	)		(329	)
Net cash used in investing activities		(1,306	)		(2,042	)		(576	)		(351	)

Financing activities
Proceeds from sale of common stock, preferred stock and warrants, net of issuance costs		-			310
Employee taxes in exchange for restricted stock awards forfeited		78			263
Issuance of common stock under employee stock plan		80			87
Proceeds from issuance of stock, net of issuance costs								4,939			-
Net employee withholding taxes paid in connection to issuance of restricted stock								(24	)		(20	)
Issuance of stock under employee stock purchase plan								-			4
Credit facility borrowing		3,000			885			-			3,000
Credit facility payment		(1,139	)		(347	)		-			(1,139	)
Repayment of a loan		(185	)		(25	)
Conversion of preferred stock to common stock		-			(17	)
Repayment of loan								(44	)		(58	)
Proceeds from exercise of stock options								1			-
Issuance of debt, net of costs		2,429			2,743			-			144
Net cash provided by financing activities		4,263			3,899			4,872			1,931

Effect of exchange rate changes on cash		216			11			(79	)		(26	)

Net decrease in cash and cash equivalents		(31	)		(3,338	)
Net increase in cash and cash equivalents								4,227			233
Cash and cash equivalents at beginning of the period		9,418			13,178			9,429			9,418
Cash and cash equivalents at end of the period	$	9,387		$	9,840		$	13,656		$	9,651

Supplemental disclosure of cash flow information:
Cash paid for interest	$	161		$	241		$	63		$	46
Cash paid for taxes	$	39		$	25		$	48		$	35
Beneficial conversion feature for convertible redeemable preferred stock	$	-		$	371
Accretion of preferred series stock to redemption value	$	-		$	1,000
Conversion of redeemable preferred stock to common stock	$	-		$	5,895
Issuance of shares in business combination	$	-		$	7,954
Assumption of debt in connection with business combination	$	-		$	587
Stock issued in connection with loan guarantee extension							$	169		$	-
Stock issued upon conversion of convertible note							$	973		$	-
Stock issued in connection with interest on convertible note	$	277		$	-		$	-		$	139
Stock issued in connection with interest on loan guaranty	$	524		$	-
Issuance of common stock for legal settlement	$	35		$	-		$	-		$	35
Gain (loss) from convertible note extinguishment	$	166		$	-

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

The condensed consolidated balance sheet as of ~~December~~June 30, 2017 and March 31, ~~2016,~~2017, the condensed consolidated statements of operations and comprehensive loss ~~for the three and nine months ended December 31, 2016 and 2015~~ and the condensed consolidated statements of cash flows for the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016 ~~and 2015~~ have been prepared by the Company and are unaudited. In the opinion of management, all necessary adjustments (which include normal recurring adjustments) have been made to present fairly the financial position at ~~December 31, 2016,~~June 30, 2017, and the results of operations ~~for the three and nine months ended December 31, 2016 and 2015~~ and cash flows for the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015,~~ respectively. Interim results are not necessarily indicative of the results for a full fiscal year. The condensed consolidated balance sheet as of March 31, ~~2016~~2017 has been derived from the audited consolidated financial statements at that date.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2016.~~2017.

~~On October 15, 2015, the Company amended its Certificate~~2. Summary of Incorporation and amended and restated its Bylaws to change its name from Selectica, Inc. to Determine, Inc., which became effective immediately. The Company’s common stock began trading under the ticker symbol “DTRM” on October 19, 2015.Significant Accounting Policies

There have been no significant changes to the Company’s accounting policies since it filed its audited consolidated financial statements in its Annual Report on Form 10-K for the year ended March 31, ~~2016.~~2017.

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. It also includes non-controlling interest, which is the portion of equity in a subsidiary not attributable to a parent. The non-controlling interest of the Company and its subsidiaries are not considered to be permanent equity. Non-controlling interest’s share of subsidiary earnings is reflected as net loss (income) attributable to non-controlling interest in the condensed consolidated statements of operations and comprehensive loss. Additionally, certain prior period amounts have been reclassified to conform to the current year presentation on the condensed consolidated financial statements. The reclassification of the prior period amounts were not material to the previously reported condensed consolidated financial statements.

The Company has incurred significant historical losses and negative cash flows from operations and has an accumulated deficit of $310 million at December 31, 2016. Until the Company can generate significant cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. Management intends to raise additional funds through equity and/or debt offerings until the Company has positive operating cash flows. There is no assurance that the Company will be successful in generating or raising funds, if necessary, to sustain its operations for twelve months or beyond. Should the Company be unable to generate funds or obtain future financing, the Company may have to curtail operations by delaying development programs or relinquishing employees, which may have a material adverse effect on the Company's financial position and results of operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, including, but not limited to, those related to the ~~accounts receivable and~~ allowance for doubtful accounts, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of stock-based awards, best estimate of selling price and income taxes. Actual results could differ from those estimates.

The Company generates revenues by providing its software-as-a-service solutions through subscription license arrangements and related professional services, and related software maintenance. The Company presents revenue net of sales taxes and any similar assessments.

Revenue recognition criteria. The Company recognizes revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) fees are fixed or determinable and (4) collectability is reasonably assured. If the Company determines that any one of the four criteria is not met, the Company will defer recognition of revenue until all the criteria are met.

Multiple-Deliverable Arrangements. The Company enters into arrangements with multiple-deliverables that generally include subscription, support and professional services. If a deliverable has standalone value, and delivery is probable and within the Company’s control, the Company accounts for the deliverable as a separate unit of accounting. Subscriptions to use its software solutions have standalone value as such services are often sold separately, primarily through renewals. Professional services have standalone value as the services have value to the customer on a standalone basis and are available from other vendors.

Upon separating the multiple-deliverables into separate units of accounting, the arrangement consideration is allocated to the identified separate units based on a relative selling price hierarchy. The Company determines the relative selling price for a deliverable based on the vendor-specific objective evidence of the selling price (“VSOE”), if available, or its best estimate of the selling price (“BESP”), if VSOE is not available. The Company has determined that third-party evidence of selling price (“TPE”) is not a practical alternative due to differences in its service offerings compared to other parties and the availability of relevant third-party pricing information. ~~The amount of revenue allocated to delivered items is limited by contingent revenue, if any.~~

For professional services and subscription services, the Company has not established VSOE due to lack of pricing consistency and other factors. Accordingly, the Company uses its BESP to determine the relative selling price.

The Company determined BESP by considering its price list, as well as overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, contract prices per user, the size and volume of the Company’s transactions, the customer demographic and its market strategy.

Recurring revenues. Recurring revenues consist of subscription license sales and services, maintenance revenues from previously sold perpetual licenses and hosting revenues. Recurring revenues are recognized ratably over the stated contractual period.

Non-recurring revenues. Non-recurring revenues are comprised of revenues from professional services for system implementations, enhancements and training. For professional services arrangements billed on a time-and-materials basis, services are recognized as revenue as they are rendered. For fixed-fee professional service arrangements, the Company recognizes revenue under the proportional performance method of accounting and estimates the proportional performance utilizing hours incurred to date as a percentage of total estimated hours to complete the project. If the Company does not have a sufficient basis to measure progress toward completion, revenue is recognized upon completion. The Company recognizes a loss for a fixed-fee professional service if the total estimated project costs exceed project revenues.

Reimbursements, including those related to travel and out-of-pocket expenses are included in non-recurring revenues, and an equivalent amount of reimbursable expenses are included in non-recurring cost of revenues.

Historically, a limited number of customers have accounted for a substantial portion of the Company’s revenues. However, during the three ~~and nine~~ months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015,~~ no customer accounted for 10% or more of the Company’s revenues or net accounts receivable, respectively.

International revenues are attributable to countries based on the location of the customer. For the three ~~and nine~~ months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015,~~ sales to international locations were derived primarily from France, the United Kingdom, Ireland, Norway, Australia, Canada, Switzerland, Italy, Germany, Singapore, Bermuda, the Netherlands, United Arab Emirates, Denmark, China, Hong Kong, India, Bulgaria, Finland and New Zealand.

In ~~November 2016,~~May 2017, the ~~Financial~~FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, ~~Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)~~~~No. 2016-18,~~~~Statement~~ which clarifies what constitutes a modification of ~~Cash Flows (Topic 230): Restricted Cash~~~~, which requires restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The update~~a share-based payment award. This guidance is effective for ~~the Company~~fiscal years beginning ~~April 1, 2018 and early adoption is permitted.~~after December 15, 2017. The Company does not expect the adoption of ASU ~~2016-18~~2017-09 to have a material impact on its condensed consolidated financial statements.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2017-04,Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment, and clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual reporting periods beginning after January 1, 2020 and interim periods within those fiscal years. The Company is currently assessing the potential impact of the adoption of ASC 2017-04 on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01,Clarifying the Definition of a Business. The new guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company does not expect the adoption of this update to have a material impact on its consolidated financial statements.

~~In October 2016, the FASB issued ASU 2016-16,~~~~Accounting for Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory~~, which removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The update is effective for the Company beginning April 1, 2018 and early adoption is permitted. The Company is evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230):Classification of Certain Cash Receipts and Cash Payments (Topic 230), which addresses eight specific cash flow matters with the objective of reducing diversity in practice in how certain cash receipts and cash payments are classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that fiscal year. ~~Early adoption is permitted.~~ The Company does not expect the adoption of ~~ASU 2016-15~~this update to have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.The amendments in this ASU affect all entities that issue share-based payment awards to their employees. The amendments simplify the accounting in various aspects for these types of transactions: i.e. Accounting for Income Taxes, Excess tax benefits on the Statements of Cash Flows, Forfeitures, Employee taxes and Intrinsic Value. The new guidance ~~will be~~was effective for the Company beginning on April 1, ~~2017 and earlier adoption is permitted. The Company is evaluating the impact of the adoption of the new guidance on its consolidated financial statements.~~2017.

~~In April 2015, the FASB issued ASU 2015-05,~~ ~~Intangibles−Goodwill and Other−Internal-use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,~~ providing guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. The standard update is effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.

~~In April 2015, the FASB issued ASU 2015-03,~~ ~~Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs~~ (“ASU 2015-03”). This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is applicable to the Company for fiscal years beginning after December 15, 2015. Early adoption of ASU 2015-03 is permitted. The Company adopted this guidance effective April 1, 2016. In August 2015, the FASB issued ASU 2015-15, ~~Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.~~ ASU 2015-15 supplements the requirements of ASU 2015-03 by allowing an entity to defer and present debt issuance costs related to a line of credit arrangement as an asset and subsequently amortize the deferred costs ratably over the term of the line of credit arrangement and was effective immediately. Retrospective adoption is required. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.

~~In February 2015, the FASB issued ASU 2015-02,~~ ~~Consolidation (Subtopic 810) Amendments to the Consolidation Analysis~~ to improve consolidation guidance for legal entities and affect the consolidation evaluation for reporting organizations. The standard update is effective for fiscal years beginning after December 15, 2015 and interim periods within those years and early adoption is permitted. The standard allows for adoption retrospectively or with a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, and May 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively (ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-12 collectively, “Topic 606”). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts. ASU No. 2015-14 deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. The Company is ~~evaluating~~not planning to early adopt the new standard and is continuing to assess the impact of the adoption on its financial position, results of operations, cash flows and related disclosures and whether the effect will be material. The Company preliminarily believes that the commissions accounting under the new standard is expected to be significantly different than the Company’s current capitalization policy. The new standard will result in additional types of costs that will be capitalized and amounts will be amortized over a period longer than under the Company’s current policy. The new standard also requires incremental disclosures including information about the remaining transaction price and when the Company expects to recognize revenue. The Company continues to assess the new standard along with industry trends and additional interpretive guidance onand may adjust its ~~consolidated financial statements.~~interpretation and implementation plan accordingly.

The Company has reviewed other new accounting pronouncements that were issued as of ~~December 31, 2016~~June 30, 2017 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations.

	December 31, 2016										June 30, 2017
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment		Net Carrying Value
Acquired developed technology	$	5,034	$	(2,091	)	$	(78	)	$	2,865	$	5,034	$	(2,644	)	$	66	$	2,456
Customer relationships		5,853		(2,316	)		(56	)		3,481		5,857		(2,917	)		45		2,985
	$	10,887	$	(4,407	)	$	(134	)	$	6,346	$	10,891	$	(5,561	)	$	111	$	5,441

Acquired developed technology and customer relationships are being amortized on a straight-line basis and have weighted-average remaining useful lives of ~~3.62~~3.90 years and ~~3.54~~3.24 years, respectively, as of ~~December 31, 2016.~~June 30, 2017. Amortization expense of intangible assets was ~~$0.5~~$0.6 million for both the three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015, and $1.6 million and $1.4 million for the nine months ended December 31, 2016 and 2015,~~ respectively.

	December 31,			March 31,			June 30,			March 31,
	2016			2016			2017			2017
	(in thousands)						(in thousands)
Computers and software	$	360		$	360		$	351		$	360
Furniture and equipment		298			282			251			316
Leasehold improvements		59			36			44			59
		717			678			646			735
Less: accumulated depreciation		(623	)		(542	)		(562	)		(650	)

Total property and equipment, net	$	94		$	136		$	84		$	85

Depreciation expense was approximately ~~$0.03~~$0.02 million and ~~$0.04~~$0.03 million during the three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015, respectively, and $0.08 million and $0.1 million during the nine months ended December 31, 2016 and 2015,~~ respectively.

The Company capitalizes costs for internal use software incurred during the application development stage that are included in research and development expenses. Costs related to preliminary project activities and post implementation activities are expensed as incurred. The Company capitalized ~~$0.5~~$0.6 million and $0.3 million of research and development costs during the three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015, respectively, and $1.3 million and $1.1 million during the nine months ended December 31, 2016 and 2015,~~ respectively.

Capitalized software is amortized once the product is ready for its intended use, using the straight-line method over the estimated useful lives of the assets, which is three years. Amortization expense of capitalized software is included in the product cost of revenue and was ~~$0.3~~$0.4 million and ~~$0.1~~$0.2 million ~~during~~for the three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015, respectively, and $0.8 million and $0.4 million during the nine months ended December 31, 2016 and 2015,~~ respectively. The unamortized balance of capitalized software was ~~$2.1~~$2.6 million and ~~$1.7~~$2.3 million as of ~~December 31, 2016~~June 30, 2017 and March 31, ~~2016,~~2017, respectively.

Management continues to evaluate the capitalized software development costs across all product lines and did not identify any indicators which required impairment to be recorded during the ~~nine months ended December 31, 2016 or 2015.~~

In February 2015, pursuant to the terms of a Purchase Agreement between the Company and certain institutional funds and other accredited investors, the Company sold and issued 118,829 shares of Series F Convertible Preferred Stock (the “Series F Stock”), as described in the notes to the consolidated financial statements of the Company’s Annual Report on Form 10-K for the year ended March 31, 2016.

In May 2015, following approval by the Company’s stockholders, each whole share of Series F Stock converted automatically into ten shares of common stock. The Company recognized accretion related to the Series F Stock through the conversion date during the three months ended June 30, ~~2015.~~2017 or 2016.

In December 2009, the Company signed a stated guaranteed insurance contract with the insurance company COFACE in order to protect the Company against the financial risks of its commercial development in the United States. As part of the contract, COFACE financed part of the expenses in the United States, with the amounts to be amortized in subsequent years. As of December 31, 2016 and March 31, 2016, the amount still to be repaid was $0.2 million and $0.4 million, respectively.6. Stockholders’ Equity

The Company’s equity incentive program is a broad-based, retention program comprised of stock options, restricted stock units and an employee stock purchase plan (“ESPP”) designed to align stockholder and employee interests. For a description of the Company’s equity plans, see the notes to consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2016.~~2017.

~~The Company granted the following stock options and restricted units during the three and nine months ended December 31, 2016 and 2015:~~

~~For~~During the three ~~and nine~~ months ended ~~December 31, 2016 and 2015,~~June 30, 2017, the Company calculated the fair value of its employee stock options at the date of grant with the following weighted average assumptions:

	Period Ended
	December 31, 2015						Three Months Ended
	Three Months			Nine Months			June 30, 2017
Risk-free interest rate		1.84	%		1.79	%		1.91	%
Dividend yield		0	%		0	%		0	%
Expected volatility		52.83	%		50.51	%		54.00	%
Expected term in years		6.08			6.06			6.08
Weighted average fair value at grant date	$	1.66		$	2.15		$	1.81

The following tables summarize activity under the equity incentive plans for the three months ended ~~December 31, 2016:~~June 30, 2017:

	Options Outstanding					Restricted Stock Units Outstanding					Options Outstanding					Restricted Stock Units Outstanding
	Number of shares (in thousands)			Weighted average exercise price		Number of shares (in thousands)			Weighted average fair value		Number of shares (in thousands)			Weighted average exercise price		Number of shares (in thousands)			Weighted average fair value

Outstanding at October 1, 2016		4,298		$	3.12		181		$	4.74
Outstanding at April 1, 2017												4,530		$	3.02		181		$	3.94
Granted		247		$	2.00		69		$	2.00		65		$	3.44		-		$	-
Exercised/Released		-		$	-		(75	)	$	3.11		-		$	-		(35	)	$	3.99
Cancelled		(73	)	$	3.78		-		$	-		(21	)	$	3.95		-		$	-
Outstanding at December 31, 2016		4,472		$	3.05		175		$	4.36
Outstanding at June 30, 2017												4,574		$	3.02		146		$	3.93

Vested and expected to vest		4,022		$	3.13							4,303		$	3.07

The weighted average remaining contractual term for exercisable options is ~~7.75~~7.97 years. The intrinsic value is calculated as the difference between the market value as of ~~December 31, 2016~~June 30, 2017 and the exercise price of the shares. The market value of the Company’s common stock as of ~~December 31, 2016~~June 30, 2017 was ~~$1.95~~$2.63 as reported by the NASDAQ Capital Market. The aggregate intrinsic value of stock options outstanding at ~~December 31,~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$0.7~~$2.6 million and $0, respectively. The aggregate intrinsic value of restricted stock units outstanding at ~~December 31,~~June 30, 2017 and 2016 ~~and 2015~~ was ~~$0.3~~$0.4 million and ~~$0.7~~$0.3 million, respectively.

The options outstanding and exercisable at ~~December 31, 2016~~June 30, 2017 were in the following exercise price ranges:

The effect of recording stock-based compensation expense (including expense related to the ESPP discussed below) for each of the periods presented was as follows (in thousands):

									Three Months Ended
	Three Months Ended				Nine Months Ended
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015		June 30, 2017		June 30, 2016

Cost of revenues	$	111	$	104	$	236	$	279	$	28	$	59
Research and development		66		70		181		198		63		53
Sales and marketing		160		264		512		770		92		163
General and administrative		294		221		938		621		403		253
Impact on net loss	$	630	$	659	$	1,867	$	1,868	$	586	$	528

~~Upon the departure of our CEO in June 2015, a nominal amount of previously recognized stock-based compensation expense was reversed due to the forfeiture of stock option grants.~~ As of ~~December 31, 2016,~~June 30, 2017, the unrecorded stock-based compensation balance related to stock options and restricted stock units outstanding excluding estimated forfeitures was ~~$3.8~~$2.9 million and ~~$0.8~~$0.4 million, respectively, and will be recognized over an estimated weighted average amortization period of ~~2.88~~2.50 years for stock options and ~~1.54~~0.98 years for restricted stock units. The amortization period is based on the expected remaining vesting term of the options and restricted stock units.

The price paid for the Company’s common stock purchased under the ESPP is equal to 85% of the lower of the fair market value of the Company’s common stock at the beginning of each offering period or at the end of each offering period. The compensation expense in connection with the ESPP for the three months ended ~~December 31,~~June 30, 2017 and 2016 was $16,000 and ~~2015 was $21,000 and $21,300, respectively, and approximately $70,000 and $55,000 for the nine months ended December 31, 2016 and 2015,~~$29,000, respectively. During the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015,~~ there were ~~46,604 and 24,115~~no shares issued under the ~~ESPP, respectively.~~ESPP.

Basic and diluted net loss per share have been computed using the weighted-average number of shares of common stock outstanding during the period.

The Company excludes securities from its diluted net loss per share computation when their effect would be antidilutive to net loss per share amounts. The following common stock equivalents were excluded from the net loss per share computation:

									Three Months Ended
	Three Months Ended				Nine Months Ended
	December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015		June 30,2017		June 30,2016
	(in thousands)				(in thousands)				(in thousands)

Options		4,380		2,075		4,224		1,612		1,854		2,779
Unvested restricted stock units		108		234		135		190		69		198
Warrants		2,262		2,262		2,262		2,262		2,262		2,262
Total common stock equivalents excluded from diluted net loss per common share		6,750		4,571		6,621		4,064		4,185		5,239

The ~~following~~Company leases office space in London, United Kingdom, Aix-en-Provence, France, Paris, France, Atlanta, Georgia, the District of Columbia and, for its headquarters, in Carmel, Indiana. The leases are non-cancelable operating leases with various expirations through August 2020. Rent expense, which is recognized on a ~~summary of restructuring accrual (in thousands):~~

~~Restructuring expenses consisted of employee severance costs~~straight-line basis over the lease term, was $0.1 million and other contract termination costs incurred to improve the Company’s cost structure prospectively. As part of the process of consolidating companies and moving forward with its unified platform strategy, the Company evaluated its operations for duplication of efforts and work not in full alignment with its strategy which resulted in the elimination of eleven positions. These positions were primarily executives and included a direct report to the CEO. The Company incurred these expenses in the fiscal year ended March 31, 2016, and all payments were made$0.2 million during the three months ended June 30, ~~2016.~~2017 and 2016, respectively. The difference between the lease payments made and the lease expense recognized to date using the straight-line method is recorded as a liability and included within other accrued liabilities in the condensed consolidated balance sheets.

During the third quarter of fiscal year 2017, the Company began subleasing a portion of its rental space in the District of Columbia to a related party associated with the Chairman of the Board of Directors. The subleases are non-cancelable leases expiring in August 2018. Rental income from the subleases is recognized on a straight-line basis over the lease term. The Company recognized $13,000 in sublease income during the three months ended June 30, 2017.

In connection with the acquisition of Iasta, we assumed a lease for an office in Carmel, Indiana, which expired May 31, 2016. On April 7, 2016, the Company entered into a Lease Agreement with Atapco Carmel, Inc. for approximately 8,795 square feet of office space in a building located at 615 West Carmel Drive, Suite 100 in Carmel, Indiana. The term of the lease runs for approximately 51 months and provides for monthly rent payments of $11,727 per month for the first year of the term of the lease (with three of the months of the first-year term provided rent free), subject to annual adjustment thereafter.

In connection with the relocation of its headquarters to Carmel, Indiana, on July 22, 2016, the Company entered into a Second Amendment to Lease with 2121 SEC TT, LLC (formerly SKBGS I, L.L.C.) to terminate its lease obligation at the San Mateo, California location as of July 31, 2016. The Company paid a one-time early termination fee equal to three months’ rent which was partially offset by the security deposit refund due.

Rental expenses for office space were approximately $0.1 million and $0.2 million for the three months ended December 31, 2016 and 2015, respectively, and approximately $0.5 million and $0.6 million for the nine months ended December 31, 2016 and 2015, respectively.

From time to time the Company is subject to certain routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of its business. The Company believes that the ultimate amount of liability, if any, for any pending claims of any type (either alone or combined) will not materially affect its financial position, results of operations or liquidity.

In March 2015, a minority stockholder of b-pack Services SA, a French subsidiary of Determine SAS, which was acquired when the Company acquired b-pack SAS, initiated litigation in the Nanterre Commercial Court against b-pack SAS and its founders claiming indemnification rights for his contribution to the business of b-pack Services SA and seeking monetary damages and other relief. The Nanterre Commercial Court declined jurisdiction and sent the matter to the Tribunal de Grande Instance of Nanterre, where it is currently pending. In July 2015, the same minority shareholder also initiated litigation in the Paris Commercial Court against Determine SAS to contest the merger between b-pack SAS and Selectica France SAS, which is also pending, and seeking monetary damages and other relief. The Company believes the lawsuits are without merit and intends to defend against them vigorously. The Company did not record any provision as of December 31, 2016.

In November 2015, the Company settled outstanding litigation based upon claims the Company alleged against some of its former employees and a competitor relating to the Company’s intellectual property. In April 2016, such competitor paid the Company the remaining settlement amount of $0.6 million, which is reflected in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss for the ~~nine~~three months ended ~~December 31,~~June 30, 2016.

The Company’s products are generally warranted to perform substantially in accordance with the functional specifications set forth in the associated product documentation for a period of ~~at least~~ 90 days. In the event there is a failure of such warranties, the Company generally is obligated to correct the product to conform to the product documentation or, if the Company is unable to do so, the customer is entitled to seek a refund of the purchase price of the product or service. The Company has not provided for a warranty accrual as of ~~December 31, 2016~~June 30, 2017 or March 31, ~~2016.~~2017. To date, the Company has not refunded any amounts in relation to the warranty.

The Company generally agrees to indemnify its customers against legal claims that the Company’s software infringes certain third-party intellectual property rights. In the event of such a claim, the Company is obligated to defend its customer against the claim and to either settle the claim at the Company’s expense or pay damages that the customer is legally required to pay to the third-party claimant. In addition, in the event of the infringement, the Company agrees to modify or replace the infringing product, or, if those options are not reasonably possible, to refund the purchase price of the software. To date, the Company has not been required to make any payment resulting from infringement claims asserted against its customers. As such, the Company has not provided for an indemnification accrual as of ~~December 31, 2016~~June 30, 2017 or March 31, ~~2016.~~2017.

The Company maintains financing facilities and convertible note purchase agreements. For a description of the Company’s debt financing, see the notes to consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2016~~2017 and the summaries set forth below.

On ~~April 20, 2016,~~June 1, 2017, the Company and its wholly owned subsidiary, Determine Sourcing, Inc., entered into Amendment Number ~~Seven~~Ten to ~~the~~ Amended and Restated Business Financing Agreement (the “Amendment”) with Western Alliance Bank, an Arizona corporation, as successor in interest to Bridge Bank, National ~~Association.~~Association (“Western Alliance”). The Amendment extended the maturity date of the underlying credit facility to April 20, ~~2018.~~2019 and increased the interest rate to the prime rate or 4.00%, whichever is greater, plus 0.25%.

In ~~order to satisfy certain conditions for Western Alliance Bank to enter into~~connection with the Amendment, on ~~April 22, 2016,~~June 1, 2017, Lloyd I. Miller III ~~the Company’s largest stockholder,~~(“Mr. Miller”) and his affiliates MILFAM II, L.P. (“MILFAM”) and Alimco Financial Corporation, a Delaware corporation formerly known as Alliance Semiconductor Corporation (“~~ALSC”, now known as Alimco Financial Corporation), a Delaware corporation,~~ALMC”) each entered into ana further Amended and Restated Limited Guaranty (collectively, the “Amended Guaranties”) with Western Alliance. The Amended Guaranties ~~extended~~extend the term of the ~~limited guaranties~~Amended and Restated Limited Guaranties entered into by Mr. Miller and MILFAM with Western Alliance on ~~March 11, 2015,~~April 22, 2016, and the ~~limited guaranty~~Second Amended and Restated Limited Guaranty entered into by ~~ALSC~~ALMC with Western Alliance on ~~February 3, 2016,~~January 23, 2017, to April ~~20, 2018 (Mr. Miller, MILFAM and ALSC, collectively~~30, 2019. The Amended Guaranties also provide that if the ~~“Guarantors”).~~maturity date of the credit facility with Western Alliance is subsequently amended, the terms of the Amended Guaranties would automatically extend to a date ten (10) days following the extended maturity date under such credit facility, but no later than July 30, 2020.

~~On April 22, 2016, the Company and the Guarantors entered into a Second~~ Amendment to ~~2015~~ Guaranty Fee ~~Agreement and Amendment to 2016 Guaranty Fee Agreement, which (i) further amended the Guaranty Fee Agreement, dated March 11, 2015, entered into by~~Agreements

On June 1, 2017, the Company, Mr. Miller, ~~and~~ MILFAM and ~~(ii) amended the~~ALMC (the “Guarantors”) entered into a Guaranty Fee Agreement ~~dated February 3, 2016, entered into by~~(the “Fee Agreement”), pursuant to which the Company ~~and ALSC. Pursuant~~agreed to ~~this amendment,~~pay the ~~term~~Guarantors an extension fee of an aggregate of 50,000 shares of the ~~2015 Fee Agreement and~~Company’s common stock on a pro rata basis to each of the ~~2016 Fee Agreement were extended to April 20, 2018. As a condition for extending~~respective Guarantors. Additionally, if the ~~term~~maturity date under the credit facility with Western Alliance is subsequently amended such that the terms of the Amended Guaranties are further extended as described above, the Company ~~agreed to~~would pay the Guarantors an additional ~~cash~~extension fee of ~~$76,000 to Mr. Miller and MILFAM, payable by the Company within five business days following the termination or expiration~~an aggregate of ~~the Amended Guaranties, and also agreed to pay certain fees and expenses of the Guarantors related to the Amended Guaranties.~~

On December 27, 2016, the Company entered into a Junior Secured Convertible Note Purchase Agreement with MILFAM II L.P. and Alimco Financial Corporation, formerly ALSC, pursuant to which the Company issued and sold junior secured convertible promissory notes (the “2016 Notes”) in the aggregate principal amount of $2 million. The 2016 Notes are due on December 27, 2021 and accrue interest at an annual rate of 10% on the aggregate unconverted and outstanding principal amount, payable quarterly, beginning on December 31, 2016. The Company has the option to pay any amounts of interest due under the 2016 Notes by compounding and adding such interest amount to the unpaid principal amount of the 2016 Notes, based on an interest rate calculated at 12% per year, provided that the Company is not then in default under any of its debt financing agreements. Upon any default, the 2016 Notes will bear interest at the rate of 13% per year or, if less, the maximum rate allowable under the laws of the State of New York. The 2016 Notes are secured by a second-position security interest on the Company’s assets, pursuant to the terms of the Amended and Restated Security Agreement entered into by the Company and the Investors and existing noteholders on December 27, 2016 (the “Security Agreement”).

Subject to applicable NASDAQ listing rule limitations (including, if applicable, approval by the Company’s stockholders), the outstanding principal and interest under the 2016 Notes may be converted into62,500 shares of common stock of the Company at the sole option of the Investors at any time prior to the Maturity Date, at a conversion price of $3.00 per share (as may be adjusted for any subdivision by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or similar event occurring prior to such record date); provided, however, that if prior to the Maturity Date the Company offers and sells share of its common stock in a private placement primarily intended to raise capital at a price per share of $2.50 or less, then the conversion price for the Notes will be reduced to such common stock offering price plus $0.50 per share. However, the total number of shares of Common Stock that may be issued to the Investors upon conversion of the 2016 Notes may not exceed 19.99% of the Company’s ~~outstanding shares of~~ common stock ~~as of December 27, 2016.~~

~~Additionally, under the terms of an Amendment~~on a pro rata basis to Junior Secured Convertible Promissory Notes, entered into as of December 27, 2016 (the “Prior Note Amendment”), between the Company and Mr. Miller as Lenders’ Agent, the Junior Secured Convertible Promissory Notes issued by the Company on March 11, 2015 in the aggregate principal amount of $3 million and on December 16, 2015 in the aggregate principal amount of $2.5 million (collectively, the “Prior Notes”), were amended to terminate the Company’s option to pay quarterly accrued interest by conversion into shares of common stockeach of the ~~Company and to provide, instead, the same compounding interest options as described for the 2016 Notes above.~~respective Guarantors.

On June 21, 2017, Mr. Miller and two of his affiliates (the “March 2015 Investors”) elected to convert approximately $1.0 million of outstanding interest and principal payable under the ~~Prior Notes issued by the Company on December 16,~~junior secured convertible promissory notes dated as of March 11, 2015, as amended (the ~~“December~~“March 2015 Notes”) ~~were amended to reduce~~, into an aggregate of 170,733 shares of the Company’s common stock at the conversion price of $5.70 per share. To induce the March 2015 Investors to ~~$3.00 per share; provided, however, that if prior to~~convert the ~~maturity date as of the December~~March 2015 Notes, the Company ~~offers~~entered into a subscription and sells shares of its common stock in a private placement primarily intended to raise capital at a price per share of $2.50 or less, then the conversion price for the December 2015 Notes will be reduced to such common stock offering price plus $0.50 per share. As a result of the Prior Notes Amendment on the December 2015 Notes, the Company recorded a gain on debt extinguishment of approximately $166,000, which consisted of the remeasurement of the debt at fair value offset by the deferred financing costs previously associatedinvestment representation agreement with the ~~December~~March 2015 ~~Notes. As the extinguishment was with a related party, the transaction was deemed~~Investors pursuant to ~~be a capital transaction and the gain is recorded in the Company’s stockholders’ equity as of December 31, 2016.~~

Also on December 27, 2016, the Company and the Guarantors amended the 2015 and 2016 Guaranty Fee Agreements to reduce the amount of the monthly fees accrued to the ratable monthly amount of an aggregate annual fee equal to 10% of the amounts guaranteed under the guaranties entered into by the Guarantors with Bank on March 11, 2015 and February 3, 2016. Additionally,which the Company issued ~~277,248~~an additional 218,540 shares of ~~Company~~ common stock to the ~~Guarantors,~~March 2015 Investors. The shares converted and shares issued to induce the conversion together resulted in an acquisition of shares at ~~an issue~~a price ~~equal~~approximately equivalent to ~~approximately $1.89 per share, as payment for $524,000~~the price to the investors of the ~~monthly fees previously accrued under~~shares sold in the ~~agreements. These shares are not registered under~~Registered Direct Offering discussed in Note 6,Stockholders’Equity, above. As of June 30, 2017, the ~~Securities Act.~~March 2015 Notes had an outstanding principal balance of $2.3 million.

As of ~~December 31, 2016~~June 30, 2017 and March 31, ~~2016,~~2017, the Company owed ~~$10.9 million and $9.0~~$11.9 million, respectively, under the Credit Facility, and $1.1 ~~million and $3.0~~ million was available for future borrowings, respectively. The Company’s Credit Facility with Western Alliance contains certain financial covenants that require, among other things, the maintenance of an asset coverage ratio of not less than 2:00 to 1:00 at the end of each month. ~~As of December 31, 2016,~~During the three months ended June 30, 2017, the Company met all the requirements and was in compliance.

The ~~provision for~~benefit from income taxes is based upon loss before income taxes as follows (in thousands):

	Three Months Ended December 31, 2016			Nine Months Ended December 31, 2016			Three Months Ended June 30, 2017
Domestic pre-tax loss	$	(1,461	)	$	(5,590	)	$	(1,803	)
Foreign pre-tax loss		(743	)		(2,260	)		(324	)
Total pre-tax loss	$	(2,204	)	$	(7,850	)	$	(2,127	)

The components of the benefit from ~~(provision for)~~ income taxes are as follows (in thousands):

	Three Months Ended December 31, 2016			Nine Months Ended December 31, 2016			Three Months Ended June 30, 2017
US	$	(2	)	$	(5	)	$	(22	)
Foreign		37			148			5
Total benefit from provision for income taxes	$	35		$	143
Total provision for income taxes							$	(17	)

The Company accounts for its income taxes in accordance with ASC 740, Income Taxes. ASC 740 clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold, measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. Under ASC 740, the Company is required to recognize in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company policy is to record interest and penalties related to unrecognized tax benefits in income tax expense.

At ~~December 31, 2016,~~June 30, 2017, there was no material increase in the liability for unrecognized tax benefits nor any accrued interest and penalties related to uncertain tax positions.

In addition, at ~~December 31, 2016,~~June 30, 2017, the Company had approximately $1.4 million of unrecognized tax benefits which was netted against deferred tax assets with a full valuation allowance. If these amounts are recognized, there will be no effect on the Company’s effective tax rate due to the full valuation allowance.

ASC 740 also requires the allocation of tax benefits recorded in other components of the financial statements to be recorded in continuing operations in interim periods. During the three months ended June 30, 2017, the Company recorded a deferred tax liability in Other Comprehensive Income related to currency translation gains. Because the Company has a loss and a full valuation allowance in the United States, a tax benefit of $28,000 was recorded in continuing operations in the U.S. to record the impact of the valuation allowance release related to the currency translation gain during the three months ended June 30, 2017.

The Company’s Federal, state and foreign tax returns may be subject to examination by the tax authorities for fiscal year ended from 1998 to ~~2015~~2016 due to net operating losses and tax carryforwards unutilized from such years.

Determine SAS ~~and b-pack Services rent their~~rents its offices from SCI Donapierre, the company controlled by two of the Company’s stockholders. During the three ~~and nine~~ months ended ~~December 31,~~June 30, 2017 and 2016, Determine SAS made rental payments of approximately ~~$28,000~~$90,000 and ~~$82,000,~~$21,000, respectively, to SCI Donapierre.

The Company also maintains financing facilities and convertible note purchase agreements with related parties. For a description of the Company’s debt financing, see the notes to consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2016 and the summariesparties, as set forth in Note ~~13,~~10,Credit Facility and Convertible Notes, as well as subleases, as set forth in Note 8,Operating Lease Commitments, above. ALMC is a company for which Alan Howe, a director of the Company, serves as chief executive officer.

The Company extended the employment of Michael Brodsky by entering into an amendment dated August 10, 2017 (the “Amendment”) to his existing employment offer letter pursuant to which he would continue to serve as an employee in a non-executive capacity as Special Advisor to the CEO with an annual salary of $15,000 through September 1, 2018. Mr. Brodsky also continues to serve as Chairman of the Board of the Company. Pursuant to the Amendment, Mr. Brodsky will be granted an option to purchase 75,600 shares of the Company’s common stock and 37,800 restricted stock units under the Company’s 2015 Equity Incentive Plan (the “EIP”), subject to vesting in equal monthly installments over a 12 month period of continuous service monthly, and in each case subject to the approval of such shares by the Company’s stockholders. The options and restricted stock units will automatically accelerate and be fully vested upon a Change in Control of the Company, as defined in the EIP; provided, however, that in the event of a Change in Control prior to the approval of the underlying shares by the Company’s stockholders, the Company would provide a cash amount equal to the approximate value of the underlying equity. All of the other terms and provisions that were in effect under Mr. Brodsky’s employment offer letter immediately prior to the execution of the Amendment will continue in effect under the Amendment.

Effective August 14, 2017, the Board of Directors of the Company approved an executive bonus grant in restricted stock units under the Company’s EIP, subject to the approval of such shares by the Company’s stockholders. The restricted stock units will fully vest upon grant; provided, however, that in the event of a Change in Control prior to the approval of the underlying shares by the Company’s stockholders, the Company would provide a cash amount equal to the approximate value of the underlying equity. The bonus grants include grants to the Company’s Chief Executive Officer Patrick Stakenas in the amount of 22,059 restricted stock units and to the Company’s Chief Financial Officer John Nolan in the amount of 14,706 restricted stock units.

On January 23, 2017, the Company and its wholly owned subsidiary, Determine Sourcing Inc., entered into Amendment Number Nine to the Amended and Restated Business Financing Agreement with Western Alliance Bank, as successor in interest to Bridge Bank, N.A. (“Western Alliance Bank”). The Amendment, among other things, increased the Company’s maximum borrowing capacity under the existing credit facility with Western Alliance Bank to $13 million.

In order to satisfy certain conditions for Western Alliance Bank to lend additional funds under the Credit Facility and enter into the Amendment, on January 23, 2017, Alimco Financial Corporation, a Delaware corporation formerly known as Alliance Semiconductor Corporation (“ALMC”) and an affiliate of Lloyd I. Miller, III, the Company’s largest stockholder, entered into a Second Amended and Restated Limited Guaranty (collectively, the “Amended Guaranty”) with Western Alliance Bank to increase the amount of the limited, non-revocable guaranty of the Company’s Credit Facility provided by ALMC, from $3 million to $4 million. In connection with entering into the Amended Guaranty, ALMC provided cash collateral to Western Alliance Bank in the amount of $1 million. The term of the Amended Guaranty is two years. Western Alliance Bank, in its sole discretion, may reduce, but not increase, the additional guaranteed amount during the term. Alan Howe, a member of the Company’s board of directors, is the interim CEO of ALMC.

In connection with the Amended Guaranty, the Company entered into a Guaranty Fee Agreement with ALMC, pursuant to which the Company agrees to pay ALMC a commitment fee of $50,000 and a monthly fee during the term of the Guaranty equal to 10% of the additional guaranteed amount divided by 12. Such commitment fee and the aggregate amount of the monthly fees are payable in cash by the Company within five business days following the termination or expiration of the Amended Guaranty.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to historical information, this quarterly report contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in the “Risk Factors” in Item 1A to Part 1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2016~~2017 (the “Form 10-K”). They include the following: the level of demand for Determine’s products and services; the intensity of competition; Determine’s ability to effectively manage product transitions and to continue to expand and improve internal infrastructure; and the impact of current economic conditions on our customers and our business. For a more detailed discussion of the risks relating to our business, readers should refer to Item 1A to Part 1 in the Form 10-K entitled “Risk Factors.” Readers are cautioned not to place undue reliance on the forward-looking statements, including statements regarding our expectations, beliefs, intentions or strategies regarding the future, which speak only as of the date of this quarterly report. We assume no obligation to update these forward-looking statements

Determine, Inc. is a leading global provider of SaaS Source-to-Pay and Enterprise Contract Lifecycle Management (“ECLM”) solutions. We provide cloud-based software solutions that ~~help enable growing companies transform~~empower users across the full source-to-pay continuum, including sourcing, supplier management, contract management and procure-to-pay applications, to deliver efficiency and data insight for their operational ~~data~~business processes, third-party relationships and ~~processes into unique insights to make informed decisions that drive value and mitigate risk.~~contractual obligations.

The Determine platform is an open technology infrastructure based on smart process application models. The goal of our platform is to establish awareness of relevant data, manage business documents, embed analytical tools, create a means for collaboration, and provide advanced process management tools for fully integrating business processes through an open application program interface (“API”) infrastructure. Built on a unified and highly scalable platform, we deliver deep and innovative capabilities in strategic sourcing, supplier management, ~~enterprise contract lifecycle management,~~ECLM, e-procurement, invoicing and other business operation areas.

In addition to our source to pay and enterprise contract lifecycle management solutions suite, we also provide a powerful, patented configuration engine solution, which Global 1000 companies use to increase revenue by facilitating the right combination of products, services and price.

During the three months ended ~~December 31, 2016,~~June 30, 2017, our total revenues ~~decreased~~increased by 4%8%, or ~~$0.2~~$0.5 million, to ~~$6.9~~$7.0 million compared with total revenues of ~~$7.1~~$6.5 million for the three months ended ~~December 31, 2015.~~June 30, 2016. Recurring revenues, comprised of subscription license sales and services, maintenance sales from previously sold perpetual licenses, application services management and hosting revenues, ~~decreased~~increased slightly to $5.3 million during the three months ended June 30, 2017, compared to $5.1 million during the three months ended ~~December 31, 2016, compared to $5.4 million during the three months ended December 31, 2015.~~June 30, 2016. As a percent of total revenues, recurring revenues comprised ~~74%~~76% and ~~75%~~78% of total revenues during the three months ended ~~December 31,~~June 30, 2017 and 2016, ~~and 2015,~~ respectively. Non-recurring revenues, comprised of perpetual license sales and revenues from professional services for system implementations, enhancements and training, totaled ~~$1.8~~$1.7 million, or ~~26%~~24% of total revenues, representing an increase of ~~$0.1~~$0.3 million, or 3%19%, over the three months ended ~~December 31, 2015.~~June 30, 2016. The ~~decrease~~increase in total revenues year over year resulted primarily from ~~decreased maintenance revenues, partially offset by~~ increased revenues from professional services for system ~~implementations.~~implementations, offset by a decrease in maintenance revenues.

During the three months ended ~~December 31, 2016,~~June 30, 2017, our net loss from operations decreased ~~$1.2~~$0.2 million, or ~~41%~~8%, to ~~$1.7~~$1.9 million, compared to ~~$2.9~~$2.1 million during the three months ended ~~December 31, 2015.~~June 30, 2016. The decrease in net loss ~~relates~~is primarily due to ~~decreased labor costs, legal activity and rent expense~~an increase in our gross margin driven by non-recurring revenues in the current period, offset by a gain resulting from the settlement of outstanding litigation matters recognized during the three months ended ~~December~~June 30, 2016. ~~The decrease in rent expense resulted from the closure of our San Mateo office during the first quarter of fiscal 2017.~~ See “Results of Operations” below for further discussion on the components of our net loss.

There have been no material changes to any of our critical accounting policies and estimates as disclosed in the Company’s Annual Report on Form 10-K for the year ended March 31, ~~2016.~~2017.

	Three Months Ended						Nine Months Ended						Three Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015			June 30, 2017			June 30, 2016
	(in thousands, except percentages)						(in thousands, except percentages)						(in thousands, except percentages)
Recurring revenues	$	5,054		$	5,354		$	15,267		$	15,862		$	5,300		$	5,068
Percentage of total revenues		74	%		75	%		77	%		79	%		76	%		78	%
Non-recurring revenues		1,798			1,746			4,661			4,218			1,688			1,424
Percentage of total revenues		26	%		25	%		23	%		21	%		24	%		22	%
Total revenues	$	6,852		$	7,100		$	19,928		$	20,080		$	6,988		$	6,492

Recurring revenues. Recurring revenues consist of subscription license sales and services, maintenance revenues from previously sold perpetual licenses and hosting revenues. ~~The overall decrease~~Recurring revenues increased $0.2 million, or 5%, during the three months ended June 30, 2017, in ~~recurring revenues was driven~~comparison to the three months ended June 30, 2016, due to subscription revenue growth, offset by decreased maintenance ~~revenues, offset by subscription~~revenues. Subscription revenue ~~growth.~~growth continued to drive the growth in recurring revenues. Maintenance revenues were impacted by decreased renewals of previously sold perpetual licenses, while subscription revenues increased due to ~~the acquisition of b-pack during the second quarter of 2015 and~~ new customers we entered into contract with during the current ~~periods.~~period.

~~Maintenance~~Subscription revenues ~~were $0.9~~grew to $4.4 million during the three months ended ~~December 31, 2016,~~June 30, 2017, compared to ~~$1.2 million during the three months ended December 31, 2015, a 28% decrease. Subscription revenues remained flat at~~ $4.1 million during the three months ended ~~December 31,~~June 30, 2016, ~~compared to~~representing a 7% increase, while maintenance revenues remained flat during the three months ended ~~December 31, 2015. Maintenance revenues were $2.7 million during~~June 30, 2017, slightly decreasing from the ~~nine~~three months ended December 31, 2016, compared to $4.2 million during the nine months ended December 31, 2015, a 35% decrease. Subscription revenues grew to $12.3 million during the nine months ended December 31, 2016, compared to $11.5 million for the nine months ended December 31, 2015, representing a 7% increase.June 30, 2016.

Recurring revenues continue to account for approximately ~~75%~~76% of our total revenues, and we expect this trend to continue going forward as we continue to emphasize our cloud-based solutions. This will depend in part on the number of maintenance renewals and the number and size of new subscription license contracts. In addition, maintenance renewals are extremely dependent upon economic conditions, customer satisfaction and the level of need to make changes or upgrade versions of our software by our customers.

Non-recurring revenues. Non-recurring revenues are mainly comprised of revenues from professional services for system implementations, enhancements and training. Non-recurring revenues increased by ~~$0.1~~$0.3 million, or 3%19%, during the three months ended ~~December 31, 2016,~~June 30, 2017, compared to the three months ended ~~December 31, 2015, and increased by $0.4 million, or 11%, during the nine months ended December 31, 2016, compared to the nine months ended December 31, 2015.~~June 30, 2016. This increase was primarily due ~~to the acquisition of b-pack.~~increased implementations and follow-on services resulting from our overall growth. We expect non-recurring revenues to continue to fluctuate in future periods as a percentage of total revenues and in absolute dollars. This will depend on the number and size of new software implementations and follow-on services to our existing customers.

Fluctuations in revenue are also due to the timing of revenue recognition, achievement of milestones, customer acceptance, changes in scope or renegotiated terms and additional services. In addition, we anticipate that as we continue to transition more of our business to our cloud-based solutions, revenue from our legacy software platforms will continue to decline.

Sales to foreign customers accounted for ~~27%~~28% and 29% of total revenues ~~during both the~~duringthe three ~~and nine~~ months ended ~~December 31,~~June 30, 2017 and 2016, ~~compared to 15% and 18% of total revenues during the three and nine months ended December 31, 2015,~~ respectively. The majority of these sales were denominated in US dollars. We do not anticipate that our exposure to foreign currency fluctuations will be significant in the foreseeable future.

	Three Months Ended						Nine Months Ended							Three Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015				June 30, 2017			June 30, 2016
Cost of recurring revenues	$	1,777		$	1,816		$	5,085		$	5,003		Cost of recurring revenues	$	1,786		$	1,606
Percentage of total cost of revenue		51	%		53	%		51	%		52	%	Percentage of total cost of revenue		54	%		52	%
Cost of non-recurring revenues		1,734			1,602			4,978			4,583		Cost of non-recurring revenues		1,517			1,501
Percentage of total cost of revenue		49	%		47	%		49	%		48	%	Percentage of total cost of revenue		46	%		48	%
Total cost of revenues	$	3,511		$	3,418		$	10,063		$	9,586		Total cost of revenues	$	3,303		$	3,107

Cost of recurring revenues. Cost of recurring revenues consists of costs associated with supporting our data center, a fixed allocation of our research and development costs and salaries and related expenses of our support organization. During the three months ended ~~December 31, 2016,~~June 30, 2017, cost of recurring revenues ~~remained flat~~increased $0.2 million, or 11%, compared to the three months ended ~~December 31, 2015. During the nine months ended December 31,~~June 30, 2016, ~~cost of recurring revenues increased $0.1 million, compared to the nine months ended December 31, 2015,~~ driven by ~~the~~ amortization of capitalized software ~~offset by a decrease in costs related to maintenance revenues.~~and increased data center costs.

Cost of non-recurring revenues. Cost of non-recurring revenues is comprised mainly of salaries and related expenses of our services organization, fees paid to resellers and certain allocated corporate expenses. During the three months ended ~~December 31, 2016, cost of non-recurring revenues increased $0.1 million,~~June 30, 2017, these costs remained flat compared to the three months ended ~~December 31, 2015. During the nine months ended December 31,~~June 30, 2016, ~~cost of non-recurring revenues increased $0.4 million, compared to nine months ended December 31, 2015,~~ primarily due to ~~labor costs associated with delivering our cloud-based solutions.~~managed efforts to reduce costs.

We expect ~~cost~~costs of recurring and non-recurring revenues to remain relatively flat as a percentage of recurring revenues ~~throughout~~in the ~~remainder of fiscal 2017.~~foreseeable future.

	Three Months Ended						Nine Months Ended						Three Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015			June 30, 2017			June 30, 2016
Gross margin, recurring revenues		65	%		66	%		67	%		68	%		66	%		68	%
Gross margin, non-recurring revenues		4	%		8	%		(7	%)		(9	%)		10	%		(5	%)
Gross margin, total revenues		49	%		52	%		50	%		52	%		53	%		52	%

Gross profit dollars ~~decreased~~increased $0.3 million, or 9%, during the three months ended ~~December 31, 2016,~~June 30, 2017, compared to the three months ended ~~December 31, 2015, and decreased $0.6 million, or 6%, during the nine months ended December 31, 2016, compared to the nine months ended December 31, 2015.~~June 30, 2016. As we emphasize our cloud-based solutions, and move away from our legacy software platforms, our gross profit will fluctuate due to the timing between costs associated with deploying our ~~new~~newer solutions and the related revenue recognition. Gross margins represent gross profit as a percentage of revenue and were affected by the factors discussed above under “Revenues” and “Costs of Revenues.”

We expect that our overall gross margins will continue to fluctuate primarily due to the timing of revenue recognition. The impact on our gross margin will depend on the mix of services we provide, whether the services are performed by our professional services employees or ~~third party~~third-party consultants and the overall utilization rates of our professional services organization.

	Three Months Ended						Nine Months Ended						Three Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015			June 30, 2017			June 30, 2016
Total research and development	$	1,049		$	1,230		$	3,052			2,712		$	1,066		$	947
Percentage of total revenues		15	%		17	%		15	%		14	%		15	%		15	%

Research and development expenses consist mainly of salaries and related costs of our engineering, quality assurance, technical publication efforts and certain allocated expenses. ~~The decrease~~Theincrease of ~~$0.2~~$0.1 million, or ~~15%~~13%, during the three months ended ~~December 31, 2016,~~June 30, 2017, compared to the three months ended ~~December 31, 2015, was due primarily to decreased labor costs. The increase of $0.3 million, or 13%, during the nine months ended December 31,~~June 30, 2016, ~~compared to the nine months ended December 31, 2015,~~ was due primarily to further development of our cloud-based solutions in line with our transition from our legacy software ~~platforms. Additionally,~~platforms, offset by a $0.2 million increase in capitalized research and development costs.We capitalized $0.6 million and $0.3 million of research and development costs during the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016, ~~we experienced increased expenses related to the acquisition of b-pack in July 2015.~~respectively.

We expect research and development expenditures to ~~remain relatively flat during~~slightly increase in the ~~remainder of fiscal 2017.~~foreseeable future. As we continue to invest in enhancements to our existing products, by adding new features, improving functionality and incorporating feedback and suggestions from our customers, the expenditures will be offset by our ability to capitalize the related allowable costs.

													Three Months Ended
	Three Months Ended						Nine Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015			June 30, 2017			June 30, 2016
Sales and marketing	$	2,273		$	3,310		$	7,843			10,191		$	2,496		$	2,803
Percentage of total revenues		33	%		47	%		39	%		51	%		36	%		43	%

Sales and marketing expenses consist primarily of salaries and related costs for our sales and marketing organization, sales commissions, expenses for travel and entertainment, sales materials, advertising and certain allocated expenses. During the three ~~and nine~~ months ended ~~December 31, 2016,~~June 30, 2017, sales and marketing expenses decreased ~~$1.0~~$0.3 million, or ~~31%, and $2.3 million, or 23%~~11%, compared to the three ~~and nine~~ months ended ~~December 31, 2015, respectively,~~June 30, 2016, due to lower commissions and headcount ~~and commissions.~~throughout the year.

We expect sales and marketing expenses to ~~slightly increase during~~increasein the ~~remainder of fiscal 2017~~foreseeable future as we increase headcount and marketing efforts to promote our cloud-based solutions.

General and administrative expenses consist mainly of personnel and related costs for general corporate functions, including finance, accounting, legal, human resources, bad debt expense and certain allocated expenses. General and administrative expense ~~decreased $0.2~~increased $0.3 million, or 9%18%, during the three months ended ~~December 31, 2016,~~June 30, 2017, compared to the three months ended ~~December 31, 2015,~~June 30, 2016, due primarily to decreased legal and bad debt reserve activity in the current period when compared to the prior period. General and administrative expenses remained decreased $0.1 million, or 2%, during the nine months ended December 31, 2016, when compared to the nine months ended December 31, 2015, as a result of a gain in the settlement of an outstanding litigation ~~offset by increases resulting from~~during the ~~acquisition of b-pack in July 2015.~~three months ended June 30, 2016.

We expect general and administrative expenses to remain ~~flat during~~flatin the ~~remainder of fiscal 2017.~~

Acquisition related expenses during the three and nine months ended December 31, 2015 consist mainly of legal and accounting related costs resulting from due diligence work performed for the acquisition of b-pack, which occurred in July 2015. There were no acquisition related expenses during the three and nine months ended December 31, 2016.foreseeable future.

Other expense, net consists primarily of interest expense on the credit facility, foreign currency transaction fluctuations and other miscellaneous expenditures. During the three ~~and nine~~ months ended ~~December 31, 2016,~~June 30, 2017, other expense ~~increased $0.3~~decreased $0.1 million, ~~and $0.8 million, respectively,~~ when compared to the ~~prior periods,~~three months ended June 30, 2016, due primarily to a gain on foreign currency transaction fluctuations for the quarter, offset by increased interest expense on our debt financing agreements, resulting from increased borrowings throughout the ~~current period, as well as increased debt issuance costs related to amendments entered into during the current period.~~latter part of fiscal year 2017.

Our primary source of liquidity consisted of approximately ~~$9.4~~$13.7 million in cash and cash equivalents as of ~~December 31, 2016,~~June 30, 2017 primarily due to ~~$10.9~~$4.9 million of ~~borrowings under~~proceeds received from a direct registration offering, net of related costs, during the three months ended June 30, 2017.

Net cash provided by operating activities for the three months ended June 30, 2017 resulted primarily from our ~~short-term credit facility,~~net loss of $2.1 million, offset by non-cash expense adjustments of $1.5 million. During the three months ended June 30, 2017, a reduction of accounts receivable and an increase ~~from~~in accrued liabilities each provided $0.4 million in cash. The reduction in accounts receivable was driven by the ~~$9.0 million received as~~timing of ~~March 31, 2016, offset~~fiscal year-end billings and subsequent collections and the increase in accrued liabilities was driven by ~~cash used in our operating activities.~~

the timing of fiscal year-end required audit and tax work. Net cash used in operating activities was ~~$3.2~~$1.3 million ~~for~~during the ~~nine~~three months ended ~~December 31,~~June 30, 2016, resulting primarily from our ~~year-to-date~~ net loss of ~~$7.7~~$2.3 million, offset by non-cash expense adjustments of ~~$4.1 million, which included stock-based compensation,~~$0.8 million. Non-cash expense adjustments typically include items such as depreciation and amortization, stock-based compensation and ~~deferred~~income tax ~~liability.~~benefit or expense.

Net cash used in investing activities for both the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016 primarily consisted of capitalized software ~~costs. For~~costs, which increased $0.2 million during the ~~nine months ended December 31, 2015, net cash used in investing activities included costs associated with~~current period, compared to the ~~acquisition of b-pack SAS in July 2015, as well as the capitalized software costs.~~prior period.

The increase in net cash provided by financing activities during the ~~nine~~three months ended ~~December 31, 2016,~~June 30, 2017, compared to the ~~nine~~three months ended ~~December 31, 2015,~~June 30, 2016, was primarily due to ~~borrowings under our short-term credit facility~~$4.9 million of proceeds received from a direct registration offering, net of related costs, during the ~~current period.~~three months ended June 30, 2017.

We expect to incur significant operating costs for the foreseeable future. We expect to fund our operating costs, as well as our future capital expenditures and liquidity needs, from a combination of available cash balances, internally generated funds and our short-term credit facility. As a result, our net cash flows will depend heavily on the level of future sales, changes in deferred revenues, and our ability to manage costs.

While we have made significant progress in reducing our expenditures, our current cash on hand and future cash flows provided by operating activities may not be sufficient to fund our working capital and general corporate needs and the non-discretionary capital expenditures without increasing cash flows through our operating activities, raising additional funds through the sale and issuance of additional securities, reducing expenditures, borrowing additional funds under our credit facility or debt arrangements, or a combination of the foregoing. There can be no guarantee that additional ~~equity~~ financing will be available to us at this time or in the future, that any available ~~equity~~ financing will be on terms favorable to the Company and its stockholders or that additional funds will be available under our credit facility.

We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.

Pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), our management, including our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the period ending ~~December 31, 2016.~~June 30, 2017. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~December 31, 2016.~~June 30, 2017.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 of the Exchange Act that was conducted during the quarter ended ~~December 31, 2016~~June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Not applicable.~~On June 1, 2017, the Company, Lloyd I. Miller, III, the Company’s largest stockholder (“Mr. Miller”), and his affiliates MILFAM II, L.P. and Alimco Financial Corporation, a Delaware corporation, formerly known as Alliance Semiconductor Corporation (the “Guarantors”) entered into a Guaranty Fee Agreement (the “Fee Agreement”), pursuant to which the Company agreed to pay the Guarantors an extension fee of an aggregate of 50,000 shares of the Company’s common stock on a pro rata basis to each of the respective Guarantors. The issuance of such shares is exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

~~Not applicable.~~Effective August 14, 2017, the Board of Directors of the Company approved an executive bonus grant in restricted stock units under the Company’s EIP, subject to the approval of such shares by the Company’s stockholders. The restricted stock units will fully vest upon grant; provided, however, that in the event of a Change in Control prior to the approval of the underlying shares by the Company’s stockholders, the Company would provide a cash amount equal to the approximate value of the underlying equity. The bonus grants include grants to the Company’s Chief Executive Officer Patrick Stakenas in the amount of 22,059 restricted stock units and to the Company’s Chief Financial Officer John Nolan in the amount of 14,706 restricted stock units.

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

~~(1) Previously filed in the Company’s report on Form 8-K filed on December 30, 2016~~

~~(2) Previously filed in the Company’s report on Form 8-K filed on January 27, 2017~~

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

~~(1) Previously filed in the Company’s report on Form 8-K filed on December 30, 2016~~

~~(2) Previously filed in the Company’s report on Form 8-K filed on January 27, 2017~~24

DELAWARE	77-0432030
(State of Incorporation)	(IRS Employer Identification No.)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ ~~(Do~~	(Do not check if a smaller reporting company)
		Smaller reporting company	☒
		Emerging growth company	☐

PART I FINANCIAL INFORMATION

~~ITEM 1: Financial Statements~~
ITEM 1:	Financial Statements
	Condensed Consolidated Balance Sheets as of ~~December 31, 2016~~June 30, 2017 and March 31, ~~2016~~2017	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2017 and 2016 ~~and 2015~~	5
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~December 31,~~June 30, 2017 and 2016 ~~and 2015~~	76
	Notes to Condensed Consolidated Financial Statements	87
ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21 16
ITEM 3:	Quantitative and Qualitative Disclosures about Market Risk	26 21
ITEM 4:	Controls and Procedures	26 21

PART II OTHER INFORMATION		2621

ITEM 1:	Legal Proceedings	26 21
ITEM 1A:	Risk Factors	26 21
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	26 21
ITEM 3:	Defaults Upon Senior Securities	26 21
ITEM 4:	Mine Safety Disclosures	26 21
ITEM 5:	Other Information	26 21
ITEM 6: ~~Exhibits~~	27 Exhibits	22
Signatures		2823

	Three Months Ended						Nine Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015


Revenues:
Recurring revenues	$	5,054		$	5,354		$	15,267		$	15,862
Non-recurring revenues		1,798			1,746			4,661			4,218
Total revenues		6,852			7,100			19,928			20,080

Cost of revenues:
Cost of recurring revenues		1,777			1,816			5,085			5,003
Cost of non-recurring revenues		1,734			1,602			4,978			4,583
Total cost of revenues		3,511			3,418			10,063			9,586

Gross profit (loss):
Recurring gross profit		3,277			3,538			10,182			10,859
Non-recurring profit (loss)		64			144			(317	)		(365	)
Total gross profit		3,341			3,682			9,865			10,494

Operating expenses:
Research and development		1,049			1,230			3,052			2,711
Sales and marketing		2,273			3,310			7,843			10,191
General and administrative		1,761			1,934			5,432			5,561
Acquisition related costs		-			138			-			912
Total operating expenses		5,083			6,612			16,327			19,375

Loss from operations		(1,742	)		(2,930	)		(6,462	)		(8,881	)

Other expense, net		(462	)		(149	)		(1,388	)		(549	)
Net loss before income tax		(2,204	)		(3,079	)		(7,850	)		(9,430	)

Benefit from income taxes		35			233			143			213
Consolidated net loss		(2,169	)		(2,846	)		(7,707	)		(9,217	)

Net loss (income) attributable to non-controlling interest		(24	)		1			(36	)		5
Net loss attributable to Determine, Inc.		(2,193	)		(2,845	)		(7,743	)		(9,212	)

Redeemable preferred stock accretion		-			-			-			1,000
Net loss attributable to common stockholders	$	(2,193	)	$	(2,845	)	$	(7,743	)	$	(10,212	)


Basic and diluted net loss per share (Note 9)	$	(0.18	)	$	(0.25	)	$	(0.67	)	$	(0.90	)

Weighted-average shares of common stock used in computing basic and diluted net loss per share attributable to common stockholders		11,944			11,244			11,466			10,212

	Three Months Ended						Nine Months Ended
	December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015

Statements of comprehensive loss:
Consolidated net loss	$	(2,169	)	$	(2,846	)	$	(7,707	)	$	(9,217	)
Foreign currency translation adjustments, net		(18	)		(11	)		(31	)		(68	)
Comprehensive loss		(2,187	)		(2,857	)		(7,738	)		(9,285	)
Less: Net loss (income) attributable to non-controlling interest		(24	)		1			(36	)		5
Comprehensive loss attributable to Determine, Inc.	$	(2,211	)	$	(2,856	)	$	(7,774	)	$	(9,280	)

Balance at March 31, 2016	$	14,490
Goodwill acquired		-
Foreign currency translation adjustment		(144	)
Balance at December 31, 2016	$	14,346

Balance at March 31, 2017	$	14,448
Foreign currency translation adjustment		456
Balance at June 30, 2017	$	14,904

	March 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Acquired developed technology	$	5,034	$	(1,367	)	$	3,667
Customer relationships		5,853		(1,509	)		4,344
	$	10,887	$	(2,876	)	$	8,011

	March 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net Carrying Value
Acquired developed technology	$	5,034	$	(2,347	)	$	(50	)	$	2,637
Customer relationships		5,857		(2,599	)		(35	)		3,223
	$	10,891	$	(4,946	)	$	(85	)	$	5,860

	Shares Available for ~~for~~ Grant
	(in thousands)
Balance at ~~October~~April 1, ~~2016~~2017		~~998~~594
Options:
Granted from approved plans		(~~247~~65	)
Cancelled ~~and available for grant~~		519
~~Restricted Stock Units:~~Balance at June 30, 2017
~~Granted~~		~~(69~~	)
~~Balance at December 31, 2016~~		~~733~~538

			Options Outstanding				Options Vested
Range of Exercise Prices per share			Number of Shares (in thousands)		Weighted- Average Remaining Contractual Life (in years)		Number of Shares (inthousands)		Weighted-Average Exercise Price per Share
$1.35	—	$1.35		106		9.45		-	$	-
$1.64	—	$1.64		2,000		9.15		-	$	-
$1.80	—	$2.00		578		9.61		22	$	1.83
$3.24	—	$3.99		318		8.70		128	$	3.46
$4.32	—	$4.32		655		8.57		233	$	4.32
$5.18	—	$6.61		754		7.53		468	$	6.25
$6.83	—	$6.83		50		7.14		50	$	6.83
$7.20	—	$7.20		5		2.16		5		7.20
$11.40	—	$11.40		5		1.64		5	$	11.40
$18.90	—	$18.90		1		0.87		1	$	18.90
$1.35	—	$18.90		4,472		8.79		912	$	5.33

				Options Outstanding				Options Vested
Range of Exercise Prices per share				Number of Shares (in thousands)		Weighted- Average Remaining Contractual Life (in years)		Number of Shares(in thousands)		Weighted- Average Exercise Price per Share
	$1.35	—	$1.35		103		8.96		29	$	1.35
	$1.64	—	$1.64		2,000		8.65		660	$	1.64
	$1.75	—	$2.00		575		9.12		108	$	1.78
	$2.59	—	$3.99		460		8.81		166	$	3.48
	$4.32	—	$4.32		634		8.08		304	$	4.32
	$5.18	—	$6.61		741		7.11		531	$	6.28
	$6.83	—	$6.83		50		6.64		50	$	6.83
	$7.20	—	$7.20		5		1.66		5	$	7.20
	$11.40	—	$11.40		5		1.15		5	$	11.40
	$18.90	—	$18.90		1		0.04		1	$	18.90
	$1.35	—	$18.90		4,574		8.37		1,859	$	3.75

~~Balance at March 31, 2016~~		~~403~~
~~Payment of costs~~		~~(403~~	)
~~Balance at December 31, 2016~~	$	-

	As of
	June 30, 2017			March 31, 2017
	(in thousands)
Cash, cash equivalents and short-term investments	$	13,656		$	9,429
Working capital	$	(6,517	)	$	(10,319	)

Exhibit No.		Description

~~10.1~~ 3.1(1)		~~Letter Agreements dated November 7, 2016 amending Severance Agreement~~Amended and Restated Bylaws of ~~each~~Determine, Inc., as amended as of ~~Mr. Patrick Stakenas dated~~ June ~~3, 2015 and John Nolan dated October 7, 2015~~ 21, 2017.

~~10.2~~ 10.1(2)		~~Junior Secured Convertible Note Purchase Agreement, dated December 27, 2016(1)~~

~~10.3~~		~~Junior Secured Convertible Promissory Note, dated December 27, 2016, issued to MILFAM II L.P.(1)~~

~~10.4~~		~~Junior Secured Convertible Promissory Note, dated December 27, 2016, issued to Alimco Financial Corporation(1)~~

~~10.5~~		~~Amended and Restated Security Agreement, dated December 27, 2016(1)~~

~~10.6~~		~~Second Amended and Restated Subordination Agreement, dated December 27, 2016(1)~~

~~10.7~~		~~Amendment to Junior Secured Convertible Promissory Notes, dated December 27, 2016(1)~~

~~10.8~~		~~Third Amendment to 2015 Guaranty Fee Agreement and Second Amendment to 2016 Guaranty Fee Agreement, dated December 27, 2016(1)~~

~~10.9~~		Amendment Number ~~Nine~~Ten to Amended and Restated Business Financing Agreement, dated as of ~~January 23, 2017(2)~~ June 1, 2017.

10.2(2)		Second Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and Lloyd I. Miller, III.

10.3(2)		Second Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and MILFAM II, L.P.

10.4(2)		Third Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and Alimco Financial Corporation.

10.5(2)		Guaranty Fee Agreement, dated June 1, 2017.

10.6(1)		Form of Securities Purchase Agreement, dated as of June 21, 2017, by and among Determine, Inc. and the investors named therein.

10.7(1)		Placement Agency Agreement, dated as of June 21, 2017, by and between Determine, Inc. and Lake Street Capital Markets, LLC.

10.8(1)		Form of Subscription and Investment Representation Agreement, dated as of June 21, 2017.

~~10.10~~		~~Second Amended and Restated Limited Guaranty, dated January 23, 2017(2)~~

~~10.11~~		~~Guaranty Fee Agreement, dated January 23, 2017 (2)~~

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

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.

		101.INS** XBRL Instance
		101.SCH** XBRL Taxonomy Extension Schema
		101.CAL** XBRL Taxonomy Extension Calculation
		101.DEF** XBRL Taxonomy Extension Definition
		101.LAB** XBRL Taxonomy Extension Labels
		101.PRE** XBRL Taxonomy Extension Presentation


		** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purpose of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)		Previously filed in the Company’s report on Form 8-K filed on June 21, 2017.
(2)		Previously filed in the Company’s report on Form 8-K filed on June 6, 2017.

Date: August 11, 2017	By:	/s/ John Nolan
		John Nolan
		Chief Financial Officer

Exhibit No.		Description

3.1(1)		Amended and Restated Bylaws of Determine, Inc., as amended as of June 21, 2017.

10.1(2)		Amendment Number Ten to Amended and Restated Business Financing Agreement, dated as of June 1, 2017.

10.2(2)		Second Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and Lloyd I. Miller, III.

10.3(2)		Second Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and MILFAM II, L.P.

10.4(2)		Third Amended and Restated Limited Guaranty, dated June 1, 2017, between Western Alliance Bank and Alimco Financial Corporation.

10.5(2)		Guaranty Fee Agreement, dated June 1, 2017.

10.6(1)		Form of Securities Purchase Agreement, dated as of June 21, 2017, by and among Determine, Inc. and the investors named therein.

10.7(1)		Placement Agency Agreement, dated as of June 21, 2017, by and between Determine, Inc. and Lake Street Capital Markets, LLC.

10.8(1)		Form of Subscription and Investment Representation Agreement, dated as of June 21, 2017.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

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.

		101.INS** XBRL Instance
		101.SCH** XBRL Taxonomy Extension Schema
		101.CAL** XBRL Taxonomy Extension Calculation
		101.DEF** XBRL Taxonomy Extension Definition
		101.LAB** XBRL Taxonomy Extension Labels
		101.PRE** XBRL Taxonomy Extension Presentation

		** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purpose of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

~~Date: February 13, 2017~~	~~By:~~	~~/s/ JOHN NOLAN~~
		~~John Nolan~~
		~~Chief Financial Officer~~

~~Exhibit~~ ~~No.~~		~~Description~~

~~10.1~~		~~Letter Agreements dated November 7, 2016 amending Severance Agreement of each of Mr. Patrick Stakenas dated June 3, 2015 and John Nolan dated October 7, 2015~~

~~10.2~~	~~Junior Secured Convertible Note Purchase Agreement, dated December 27, 2016(1)~~
(1)		Previously filed in the Company’s report on Form 8-K filed on June 21, 2017.
~~10.3~~	~~Junior Secured Convertible Promissory Note, dated December 27, 2016, issued to MILFAM II L.P.(1)~~
(2)
~~10.4~~		~~Junior Secured Convertible Promissory Note, dated December 27, 2016, issued to Alimco Financial Corporation(1)~~

~~10.5~~		~~Amended and Restated Security Agreement, dated December 27, 2016(1)~~

~~10.6~~		~~Second Amended and Restated Subordination Agreement, dated December 27, 2016(1)~~

~~10.7~~		~~Amendment to Junior Secured Convertible Promissory Notes, dated December 27, 2016(1)~~

~~10.8~~		~~Third Amendment to 2015 Guaranty Fee Agreement and Second Amendment to 2016 Guaranty Fee Agreement, dated December 27, 2016(1)~~

~~10.9~~			~~Amendment Number Nine to Amended and Restated Business Financing Agreement, dated as of January 23, 2017(2)~~

~~10.10~~			~~Second Amended and Restated Limited Guaranty, dated January 23, 2017(2)~~

~~10.11~~			~~Guaranty Fee Agreement, dated January 23, 2017 (2)~~

~~31.1~~		~~Certification of Chief Executive Officer pursuant to Section 302 of~~Previously filed in the ~~Sarbanes-Oxley Act of 2002.~~

~~31.2~~		~~Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~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.~~

~~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.~~