Room 4561
April 25, 2006
Mr. Eric N. Smit
Chief Financial Officer
eGain Communications Corporation
345 E. Middlefield Road
Mountain View, CA 94043
Re: eGain Communications Corporation
Form 8-K Filed February 8, 2006
File No. 000-30260
Dear Mr. Smit:
We have reviewed your response letter dated March 29, 2006
and
have the following additional comments. We may ask you to provide
us
with supplemental information so we may better understand your
disclosure. Please be as detailed as necessary in your
explanation.
After reviewing this information, we may raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 8-K Filed February 8, 2006
1. We note the proposed disclosure you provided in your response
to
prior comment number 5 and note that the proposed disclosures do
not
appear to sufficiently reflect the guidance in Question 8 of the
FAQ.
In this regard, we do not believe you have provided substantive
reasons why the non-GAAP measures provide useful information to
investors. Similarly, you do not appear to have disclosed the
material limitations associated with the use of the non-GAAP
measures
or the manner in which you compensate for these limitations.
Please
provide us with proposed disclosures that fully address the
concerns
raised in prior comment number 5 in the event that you intend to
present non-GAAP information in the future. Please note that any
disclosure should address, with appropriate specificity, each
measure
and adjustment presented.
2. Your proposed disclosure indicates that you have excluded items
that have no cash impact on your results and that the non-GAAP
measure is useful to "provide insight into what portion of the
company`s expenses do not have near term impact on the company`s
cash
balances." It is unclear from your response whether these are
non-
GAAP liquidity measures that should be reconciled to cash flow
from
operations calculated in accordance with GAAP. Please clarify and
revise your proposed disclosure accordingly.
3. Please explain to us why you believe the exclusion of certain
expenses helps focus on "core operating results". In this regard,
we
note that you should specifically define any reference to "core
operating results" as companies and investors may differ as to
what
this term represents and how it should be determined.
As appropriate, please amend your filing and respond to these
comments within 10 business days or tell us when you will provide
us
with a response. Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T. You
may wish to provide us with marked copies of any amendment to
expedite our review. Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information. Detailed cover letters greatly facilitate
our
review. Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filing reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
You may contact Christine Davis, Staff Accountant, at (202)
551-
3408, Mark Kronforst, Assistant Chief Accountant, at (202) 551-
3451
or me at (202) 551-3489 if you have questions regarding these
comments.
Sincerely,
Brad Skinner
Accounting Branch Chief
Mr. Eric N. Smit
eGain Communications Corporation
April 25, 2006
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