##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 Commission File Number 0-26358
 AXS-ONE INC.
  Delaware
    
    13-2966911(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 301 Route 17 NorthRutherford, New Jersey
    
    07070(Address of principal executive offices)
    
    (Zip Code)
 (201) 935-3400
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
  o þ
  Class
    
    Number of Shares OutstandingCommon Stock, par value $0.01 per share
    
    40,961,425




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##### 



AXS-ONE INC.
 INDEX
 PageNumberPART I FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets
September 30, 2008 (unaudited) and December 31, 2007
    
    
    3Consolidated Statements of Operations (unaudited)
Three and nine months ended September 30, 2008 and 2007
    
    
    4Consolidated Statements of Comprehensive Loss (unaudited) Three and nine months ended September 30, 2008 and 2007
    
    
    5Consolidated Statements of Cash Flows (unaudited)
Nine months ended September 30, 2008 and 2007
    
    
    6Notes to Consolidated Interim Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    30Item 4. Controls and Procedures
    
    
    30PART II            OTHER INFORMATIONItem 6. Exhibits
    
    
    32SIGNATURESSignatures
    
    
    32EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION
  - 2 -




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 AXS-ONE INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share data)
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,157
    
    
    $
    3,362Restricted cash
    
    
    
    
    
    
    7Accounts receivable, net of allowance for doubtful accounts of $216 and $116 at September
30, 2008 and December 31, 2007, respectively
    
    
    2,619
    
    
    
    2,208Prepaid expenses and other current assets
    
    
    641
    
    
    
    831Total current assets
    
    
    4,417
    
    
    
    6,408Equipment and leasehold improvements, at cost:Computer and office equipment
    
    
    2,009
    
    
    
    2,039Furniture and fixtures
    
    
    596
    
    
    
    599Leasehold improvements
    
    
    671
    
    
    
    6723,276
    
    
    
    3,310Lessaccumulated depreciation and amortization
    
    
    3,104
    
    
    
    3,057172
    
    
    
    253Other assets
    
    
    237
    
    
    
    283$
    4,826
    
    
    $
    6,944LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Line of credit
    
    $
    949
    
    
    $
    Convertible debt, net of discount of $1,769 at September 30, 2008 (principally to related
parties)
    
    
    9,717
    
    
    
    Accounts payable
    
    
    1,016
    
    
    
    1,138Accrued expenses
    
    
    3,100
    
    
    
    3,796Deferred revenue
    
    
    3,296
    
    
    
    3,233Total current liabilities
    
    
    18,078
    
    
    
    8,167Long-term liabilities:Long-term convertible debt, net of discount of $1,918 at December 31, 2007 (principally to
related parties)
    
    
    
    
    
    
    7,037Long-term deferred revenue
    
    
    197
    
    
    
    120Other long-term liabilities
    
    
    
    
    
    
    212Total liabilities
    
    
    18,275
    
    
    
    15,536Commitments and contingencies
Stockholders deficit:Preferred stock, $.01 par value, authorized 5,000 shares, no shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.01 par value, authorized 125,000 shares; 40,961 and 39,686 shares issued
and outstanding at September 30, 2008 and December 31, 2007, respectively
    
    
    409
    
    
    
    397Additional paid-in capital
    
    
    93,182
    
    
    
    91,311Accumulated deficit
    
    
    (106,849
    )
    
    
    (100,108
    )Accumulated other comprehensive loss
    
    
    (191
    )
    
    
    (192
    )Total stockholders deficit
    
    
    (13,449
    )
    
    
    (8,592
    )$
    4,826
    
    
    $
    6,944
  3




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AXS-ONE INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:License fees
    
    $
    1,556
    
    
    $
    544
    
    
    $
    4,099
    
    
    $
    2,845Services
    
    
    2,120
    
    
    
    1,950
    
    
    
    6,872
    
    
    
    5,861Total revenues
    
    
    3,676
    
    
    
    2,494
    
    
    
    10,971
    
    
    
    8,706Operating expenses:Cost of license fees
    
    
    85
    
    
    
    126
    
    
    
    271
    
    
    
    371Cost of services
    
    
    1,008
    
    
    
    1,381
    
    
    
    3,367
    
    
    
    4,212Sales and marketing
    
    
    1,720
    
    
    
    2,047
    
    
    
    5,200
    
    
    
    6,106Research and development
    
    
    1,322
    
    
    
    2,200
    
    
    
    4,254
    
    
    
    5,380General and administrative
    
    
    840
    
    
    
    1,038
    
    
    
    3,037
    
    
    
    3,299Total operating expenses
    
    
    4,975
    
    
    
    6,792
    
    
    
    16,129
    
    
    
    19,368Operating loss
    
    
    (1,299
    )
    
    
    (4,298
    )
    
    
    (5,158
    )
    
    
    (10,662
    )Other income (expense):Interest income
    
    
    5
    
    
    
    46
    
    
    
    25
    
    
    
    160Interest expense
    
    
    (684
    )
    
    
    (203
    )
    
    
    (1,632
    )
    
    
    (323
    )Other income (expense), net
    
    
    (31
    )
    
    
    (82
    )
    
    
    (21
    )
    
    
    (30
    )Total other income (expense), net
    
    
    (710
    )
    
    
    (239
    )
    
    
    (1,628
    )
    
    
    (193
    )Loss before income taxes
    
    
    (2,009
    )
    
    
    (4,537
    )
    
    
    (6,786
    )
    
    
    (10,855
    )Income tax provision/(benefit)
    
    
    1
    
    
    
    39
    
    
    
    (46
    )
    
    
    39Net loss
    
    $
    (2,010
    )
    
    $
    (4,576
    )
    
    $
    (6,740
    )
    
    $
    (10,894
    )Basic & diluted net loss per common share:
    
    $
    (0.05
    )
    
    $
    (0.13
    )
    
    $
    (0.18
    )
    
    $
    (0.31
    )Weighted average basic & diluted
common shares outstanding
    
    
    38,352
    
    
    
    35,038
    
    
    
    38,034
    
    
    
    34,885
  4




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AXS-ONE INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 (In thousands)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss
    
    $
    (2,010
    )
    
    $
    (4,576
    )
    
    $
    (6,740
    )
    
    $
    (10,894
    )Foreign currency translation adjustment
    
    
    84
    
    
    
    (22
    )
    
    
    1
    
    
    
    (49
    )Comprehensive loss
    
    $
    (1,926
    )
    
    $
    (4,598
    )
    
    $
    (6,739
    )
    
    $
    (10,943
    )
  5




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AXS-ONE INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Nine Months Ended,September 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (6,740
    )
    
    $
    (10,894
    )Adjustments to reconcile net loss to net cash flows used in continuing operating activities:Depreciation and amortization
    
    
    84
    
    
    
    167Provision for doubtful accounts, net
    
    
    112
    
    
    
    8Stock based compensation expense
    
    
    876
    
    
    
    418Gain on sale of assets, AXS-One South Africa
    
    
    (38
    )
    
    
    Loss on sale of fixed assets
    
    
    
    
    
    
    65Non-cash interest expense
    
    
    1,561
    
    
    
    259Changes in assets and liabilitiesAccounts receivable
    
    
    (656
    )
    
    
    661Prepaid expenses and other current assets
    
    
    229
    
    
    
    488Change in other assets
    
    
    43
    
    
    
    (152
    )Accounts payable and accrued expenses
    
    
    (900
    )
    
    
    81Deferred revenue
    
    
    262
    
    
    
    (72
    )Net cash flows used in continuing operating activities
    
    
    (5,167
    )
    
    
    (8,971
    )Cash flows from continuing investing activities:Proceeds from sale of fixed assets
    
    
    
    
    
    
    25Purchase of equipment and leasehold improvements
    
    
    (39
    )
    
    
    (127
    )Net cash flows used in continuing investing activities
    
    
    (39
    )
    
    
    (102
    )Cash flows from continuing financing activities:Proceeds from exercise of stock options and warrants
    
    
    8
    
    
    
    168Issuance of convertible debt
    
    
    2,100
    
    
    
    5,000Payment of debt issuance costs
    
    
    
    
    
    
    (129
    )Borrowing under revolving line-of-credit
    
    
    2,421
    
    
    
    1,000Repayment of revolving line-of-credit
    
    
    (1,472
    )
    
    
    (1,000
    )Net cash flows provided by continuing financing activities
    
    
    3,057
    
    
    
    5,039Cash flows from discontinued operations:Net cash used in operating activities
    
    
    
    
    
    
    (989
    )Net cash flows used in discontinued operations
    
    
    
    
    
    
    (989
    )Foreign currency exchange rate effects on cash and cash equivalents
    
    
    (56
    )
    
    
    36Net decrease in cash and cash equivalents
    
    
    (2,205
    )
    
    
    (4,987
    )Cash and cash equivalents, beginning of period
    
    
    3,362
    
    
    
    7,492Cash and cash equivalents, end of period
    
    $
    1,157
    
    
    $
    2,505Supplemental disclosures of cash flow information:Cash paid during the year for:Interest
    
    $
    62
    
    
    $
    65Income taxes
    
    $
    
    
    
    $
    (43
    )
 
 6




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(1) OPERATIONS, BUSINESS CONDITIONS AND SIGNIFICANT ACCOUNTING POLICIES
  Basis of Presentation
 Company
    7




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Revenue Recognition
     8




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Foreign Currency Translation
  Stock-Based Compensation
   9




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Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Risk-free interest rate
    
    
    n/a
    
    
    
    n/a
    
    
    
    2.80
    %
    
    
    n/aExpected dividend yield
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aExpected lives
    
    
    n/a
    
    
    
    n/a
    
    
    5 years
    
    
    n/aExpected volatility
    
    
    n/a
    
    
    
    n/a
    
    
    
    64.57
    %
    
    
    n/aForfeiture rate
    
    
    n/a
    
    
    
    n/a
    
    
    
    13.90
    %
    
    
    n/aWeighted-average grant date fair value of
    
    
    n/aoptions granted during the period
    
    
    n/a
    
    
    
    n/a
    
    
    $
    0.20
    
    
    
    n/a
  Stock Option Plans
 Form
10-K.
  10




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Weighted
    
    AggregateWeighted
    
    average
    
    intrinsic value asNumber of shares
    
    average
    
    remaining
    
    of 9/30/08(in thousands)
    
    exercise price
    
    contractual life
    
    (in thousands)Balance, December 31, 2007
    
    
    3,806
    
    
    $
    2.52Granted
    
    
    1,389
    
    
    $
    0.38Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (211
    )
    
    $
    0.75Cancelled
    
    
    (1,637
    )
    
    $
    2.61Balance, September 30, 2008
    
    
    3,347
    
    
    $
    1.70
    
    
    
    6.49
    
    
    $
    Vested and expected to vest at
September 30, 2008
    
    
    3,103
    
    
    $
    1.80Exercisable at September 30, 2008
    
    
    2,061
    
    
    $
    2.47
    
    
    
    4.68
    
    
    $
    
   Options Outstanding
    
    Options ExercisableWeightedNumber
    
    average
    
    
    
    
    
    NumberRange of
    
    outstanding
    
    remaining life
    
    Weighted average
    
    exercisable
    
    Weighted averageexercise prices
    
    (in thousands)
    
    (years)
    
    exercise price
    
    in thousands
    
    exercise price$0.30  $0.35
    
    
    688
    
    
    
    9.13
    
    
    $
    0.34
    
    
    
    48
    
    
    $
    0.34$0.44  $0.53
    
    
    820
    
    
    
    7.79
    
    
    $
    0.46
    
    
    
    243
    
    
    $
    0.51$0.63  $1.75
    
    
    681
    
    
    
    3.63
    
    
    $
    1.03
    
    
    
    641
    
    
    $
    0.99$1.80  $3.78
    
    
    254
    
    
    
    6.07
    
    
    $
    2.24
    
    
    
    225
    
    
    $
    2.27$4.21  $6.00
    
    
    904
    
    
    
    5.56
    
    
    $
    4.22
    
    
    
    904
    
    
    $
    4.223,347
    
    
    
    
    
    
    
    
    
    
    
    2,061
 Restricted Stock
  11




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WeightedNumber of shares
    
    average price(in thousands)
    
    per shareBalance, December 31, 2007
    
    
    1,996
    
    
    $
    0.89Granted
    
    
    800
    
    
    $
    0.35Vested
    
    
    (280
    )
    
    $
    1.24Forfeited
    
    
    (225
    )
    
    $
    0.60Balance, September 30, 2008
    
    
    2,291
    
    
    $
    0.69
   Warrants
   Weightedaverage price(in thousands)
    
    Number of shares
    
    per shareBalance, December 31, 2007
    
    
    4,307
    
    
    $
    0.43Granted
    
    
    4,300
    
    
    $
    0.01Exercised
    
    
    (700
    )
    
    $
    0.01Expired
    
    
    (907
    )
    
    $
    2.03Balance, September 30, 2008
    
    
    7,000
    
    
    $
    0.01
 Income Taxes
  12




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(2) REVOLVING LINES OF CREDIT
 Silicon Valley Bank
       13




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Sand Hill Finance
   (3) CONVERTIBLE NOTES
     14




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##### Table of Contents



Accrued
    
    
    Amortization
    
    
    Carrying
    
    
    CarryingFace
    
    

    Original
    
    
    interest thru
    
    
    of warrants
    
    
    amount as
    
    
    amount as of(in thousands)
    
    amount
    
    
    discount
    
    
    9/30/08
    
    
    thru 9/30/08
    
    
    of 9/30/08
    
    
    12/31/07May 29, 2007 agreement
    
    $
    5,000
    
    
    $
    (1,047
    )
    
    $
    413
    
    
    $
    671
    
    
    $
    5,037
    
    
    $
    4,410November 13, 2007 agreement
    
    
    3,750
    
    
    
    (1,238
    )
    
    
    200
    
    
    
    643
    
    
    
    3,355
    
    
    
    2,627July 24, 2008 agreement
    
    
    2,100
    
    
    
    (961
    )
    
    
    23
    
    
    
    163
    
    
    
    1,325
    
    
    
    $
    10,850
    
    
    $
    (3,246
    )
    
    $
    636
    
    
    $
    1,477
    
    
    $
    9,717
    
    
    $
    7,037
 (4) BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE
 15




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Weighted-average basic common shares
outstanding during the periods
    
    
    38,352
    
    
    
    35,038
    
    
    
    38,034
    
    
    
    34,885Dilutive effect of stock options and warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average diluted common shares
outstanding during the periods
    
    
    38,352
    
    
    
    35,038
    
    
    
    38,034
    
    
    
    34,885
 (5) CONTINGENCIES
  (6) RESTRUCTURING AND OTHER COSTS
   2008Restructuring liability at January 1, 2008
    
    $
    86Involuntary termination costs
    
    
    Cash payments
    
    
    (86
    )Restructuring liability at September 30, 2008
    
    $
    
  (7) FINANCIAL INFORMATION BY GEOGRAPHIC AREA
 16




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(in thousands)
    
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,Revenues: (1)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007United States
    
    $
    2,487
    
    
    $
    1,257
    
    
    $
    8,004
    
    
    $
    4,759United Kingdom
    
    
    465
    
    
    
    554
    
    
    
    1,314
    
    
    
    2,233Australia and Asia
    
    
    724
    
    
    
    578
    
    
    
    1,560
    
    
    
    1,279South Africa
    
    
    
    
    
    
    105
    
    
    
    93
    
    
    
    435Total Consolidated
    
    $
    3,676
    
    
    $
    2,494
    
    
    $
    10,971
    
    
    $
    8,706
 
 (1)
    
    Revenues are attributed to geographic area based on location of sales
office. September 30,
    
    
    December 31,Long-Lived Assets:
    
    2008
    
    
    2007United States
    
    $
    82
    
    
    $
    124United Kingdom
    
    
    3
    
    
    
    Australia and Asia
    
    
    87
    
    
    
    102South Africa
    
    
    
    
    
    
    27Total Consolidated
    
    $
    172
    
    
    $
    253
 (8) SALE OF SOUTH AFRICAN SUBSIDIARIES
   (9) SUBSEQUENT EVENT
  17




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Overview
   18




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19




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Results of Operations
  Three Months Ended
    
    Three Months EndedSeptember 30, 2008
    
    September 30, 2007Data as a
    
    
    
    
    
    Data as aAs
    
    % of total
    
    As
    
    % of total(in thousands)
    
    Reported
    
    revenue
    
    Reported
    
    revenue(Unaudited)
    
    (Unaudited)Revenues:License fees
    
    $
    1,556
    
    
    
    42.3
    %
    
    $
    544
    
    
    
    21.8
    %Services
    
    
    2,120
    
    
    
    57.7
    
    
    
    1,950
    
    
    
    78.2Total revenues
    
    
    3,676
    
    
    
    100.0
    
    
    
    2,494
    
    
    
    100.0Operating expenses:Cost of license fees
    
    
    85
    
    
    
    2.3
    
    
    
    126
    
    
    
    5.1Cost of services
    
    
    1,008
    
    
    
    27.4
    
    
    
    1,381
    
    
    
    55.4Sales and marketing
    
    
    1,720
    
    
    
    46.8
    
    
    
    2,047
    
    
    
    82.1Research and development
    
    
    1,322
    
    
    
    36.0
    
    
    
    2,200
    
    
    
    88.2General and administrative
    
    
    840
    
    
    
    22.9
    
    
    
    1,038
    
    
    
    41.6Total operating expenses
    
    
    4,975
    
    
    
    135.4
    
    
    
    6,792
    
    
    
    272.4Operating loss
    
    
    (1,299
    )
    
    
    (35.4
    )
    
    
    (4,298
    )
    
    
    (172.4
    )Other income (expense), net
    
    
    (710
    )
    
    
    (19.3
    )
    
    
    (239
    )
    
    
    (9.6
    )Loss before income taxes
    
    
    (2,009
    )
    
    
    (54.7
    )
    
    
    (4,537
    )
    
    
    (182.0
    )Income tax provision
    
    
    1
    
    
    
    
    
    
    
    39
    
    
    
    1.5Net loss
    
    $
    (2,010
    )
    
    
    (54.7
    )%
    
    $
    (4,576
    )
    
    
    (183.5
    )%
 20




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Nine Months Ended
    
    Nine Months EndedSeptember 30, 2008
    
    September 30, 2007Data as a
    
    
    
    
    
    Data as aAs
    
    % of total
    
    As
    
    % of total(in thousands)
    
    Reported
    
    revenue
    
    Reported
    
    revenue(Unaudited)
    
    (Unaudited)Revenues:License fees
    
    $
    4,099
    
    
    
    37.4
    %
    
    $
    2,845
    
    
    
    32.7
    %Services
    
    
    6,872
    
    
    
    62.6
    
    
    
    5,861
    
    
    
    67.3Total revenues
    
    
    10,971
    
    
    
    100.0
    
    
    
    8,706
    
    
    
    100.0Operating expenses:Cost of license fees
    
    
    271
    
    
    
    2.5
    
    
    
    371
    
    
    
    4.3Cost of services
    
    
    3,367
    
    
    
    30.7
    
    
    
    4,212
    
    
    
    48.4Sales and marketing
    
    
    5,200
    
    
    
    47.4
    
    
    
    6,106
    
    
    
    70.1Research and development
    
    
    4,254
    
    
    
    38.8
    
    
    
    5,380
    
    
    
    61.8General and administrative
    
    
    3,037
    
    
    
    27.7
    
    
    
    3,299
    
    
    
    37.9Total operating expenses
    
    
    16,129
    
    
    
    147.1
    
    
    
    19,368
    
    
    
    222.5Operating loss
    
    
    (5,158
    )
    
    
    (47.1
    )
    
    
    (10,662
    )
    
    
    (122.5
    )Other income (expense), net
    
    
    (1,628
    )
    
    
    (14.8
    )
    
    
    (193
    )
    
    
    (2.2
    )Loss before income taxes
    
    
    (6,786
    )
    
    
    (61.9
    )
    
    
    (10,855
    )
    
    
    (124.7
    )Income tax provision (benefit)
    
    
    (46
    )
    
    
    (0.4
    )
    
    
    39
    
    
    
    0.4Net loss
    
    $
    (6,740
    )
    
    
    (61.5
    )%
    
    $
    (10,894
    )
    
    
    (125.1)
    %
 Comparison of Three Months Ended September 30, 2008 to 2007
 Revenues
    21




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##### Table of Contents



Three Months Ended September 30,(dollars in thousands)
    
    2008
    
    2007% of
    
    
    
    
    
    % ofAmount
    
    Total
    
    Amount
    
    TotalMaintenance
    
    $
    1,661
    
    
    
    78.4
    %
    
    $
    1,385
    
    
    
    71.0
    %Consulting
    
    
    437
    
    
    
    20.6
    %
    
    
    427
    
    
    
    21.9
    %Subscription revenue
    
    
    22
    
    
    
    1.0
    %
    
    
    138
    
    
    
    7.1
    %Total services revenue
    
    $
    2,120
    
    
    
    100.0
    %
    
    $
    1,950
    
    
    
    100.0
    %
  Operating Expenses
      22




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##### Table of Contents



Operating Loss
  Other Income (Expense), Net
  Net loss
  Comparison of Nine Months Ended September 30, 2008 to 2007
 Revenues
    Nine Months Ended September 30,(dollars in thousands)
    
    2008
    
    2007% of
    
    
    
    
    
    % ofAmount
    
    Total
    
    Amount
    
    TotalMaintenance
    
    $
    4,688
    
    
    
    68.2
    %
    
    $
    4,029
    
    
    
    68.7
    %Consulting
    
    
    2,103
    
    
    
    30.6
    %
    
    
    1,378
    
    
    
    23.5
    %Subscription revenue
    
    
    81
    
    
    
    1.2
    %
    
    
    454
    
    
    
    7.8
    %Total services revenue
    
    $
    6,872
    
    
    
    100.0
    %
    
    $
    5,861
    
    
    
    100.0
    %
 23




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##### Table of Contents



Operating Expenses
      Operating Loss
  24




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##### Table of Contents



Other Income (Expense), Net
  Net loss
  Liquidity and Capital Resources
 Liquidity and Cash Flow
       25




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##### Table of Contents



Silicon Valley Bank Financing
    26




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##### Table of Contents



Sand
Hill Finance, LLC financing
   Secured Convertible Note Financings
   27




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##### Table of Contents



28




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##### Table of Contents



Critical Accounting Estimates
  Revenue Recognition
      29




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##### Table of Contents



Recently Issued Accounting Standards
   Certain Factors That May Affect Future Results and Financial Condition and the Market Price of
Securities
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 30




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##### Table of Contents



Evaluation of disclosure controls and procedures
   Internal controls over financial reporting
  31




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 6. Exhibits
 Exhibit
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) Certification  William P. Lyons31.2
    
    Rule 13a-14(a)/15d-14(a) Certification  Joseph P. Dwyer32
    
    Officer Certifications under 18 USC 1350
 
 SIGNATURES
  AXS-ONE INC.Date:November 13, 2008
    By:
    /s/ William P. LyonsWilliam P. LyonsChief Executive Officer and
Chairman of the Board By:
    /s/ Joseph P. DwyerJoseph P. DwyerExecutive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer) 32